Half Yearly Report

RNS Number : 2472B

Murray Income Trust PLC

15 February 2011

 



Murray Income Trust PLC

Results for the half year ended 31 December 2010

Key Facts

·     Murray Income's Net Asset Value increased by 21.4% on a total return basis.

·     Share price rose from 533.0p to 632.0p over the six-month period.

·     Second interim dividend of 5.5p will be paid on 15 April 2011.

The Directors of Murray Income Trust PLC report the unaudited results for the half year ended 31 December 2010.

Interim Board Report

Performance

The UK equity market performed strongly over the six month period to 31 December 2010, with a positive net asset value total return for the Company of 21.4%. This compares with the benchmark, the FTSE All-Share Index, which rose by 22.0%. On a total return basis, the Company's share price increased by 21.9% to 632.0p, which reflected a small narrowing of the discount to net asset value at which the shares trade.

Manager's Commentary

Background

The market continued its recovery during the interim period. Improving economic conditions and additional stimulus in the United States, coupled with robust company results benefiting from improved operating leverage, helped to drive the market forward. Risk appetite and commodity prices rallied in concert with the improving macro-economic backdrop. However, a salient reminder that the recovery was unlikely to pursue an even path occurred during November, as investors fretted over Ireland and sovereign debt concerns in other peripheral euro area countries. A further package of banking reform and fiscal consolidation in Ireland, underpinned by a broad financial support package from the European Union and the International Monetary Fund, assuaged investor concerns. Investor interest focused on mining and industrial companies which outperformed, while the more defensive areas of the market, such as pharmaceuticals and tobacco, lagged. From a size perspective, the Mid Cap Index, given its exposure to industrial and cyclical companies, outperformed both the FTSE 100 (despite the recovery in the BP share price) and the Small Cap Index.

Over the six months, domestic economic newsflow was mixed, but the rebalancing of the economy towards net exports and away from consumption continued. The UK economy maintained its recovery in the third quarter, with GDP growth ahead of expectations at 0.7%. Encouragingly, final demand, rather than stock-building, lay behind the expansion. However, initial estimates of fourth quarter GDP (released after the period end) disappointingly suggested a fall of 0.5%, highlighting that economic expansion remains challenging, even if part of the reported shortfall was due to weather effects. Unhelpfully, inflation has remained above the Bank of England's target level of 2.0%, rising to 3.7% by the end of the period. The principal reasons for this have been rising import prices reflecting the fall in Sterling, higher energy and commodity prices, driven by demand from emerging economies and, finally, the increases in VAT. The Monetary Policy Committee (MPC) remains sanguine that the level of spare capacity in the economy will return inflation to its target over the medium term. This is to some extent validated by wage settlements and average earnings increasing slowly (albeit squeezing living standards as real wage growth is negative). With still-limited signs of second-round effects, it seems likely that the MPC will endeavour to keep interest rates on hold at 0.5%, as they did throughout the period under review. As a touchstone for the approaching period of fiscal consolidation and pressure on household budgets, housing data remains weak, with little sign of an improvement in mortgage approvals.

Economic growth outside the UK was generally more encouraging, albeit regionally uneven, than expected over the second half of 2010, and this provided positive momentum to equity markets. In the United States, third quarter GDP grew by 0.6%, with other business and consumer data-points suggesting further robust growth to the year-end.  In the euro area, in the third quarter, GDP increased by 0.4%, with strength in Germany helping to counteract the weakness in certain other member countries.  Emerging markets, which now account for two-thirds of global growth, have continued to experience a strong recovery. For example, Chinese GDP growth was 9.6% on an annualised basis in the third quarter, with the most recent surveys consistent with further robust expansion.

The Company's net asset value performed broadly in line with the benchmark over the period. The equity portion of the portfolio marginally underperformed. The underweight position in the mining sector (due to the lack of dividend yield and quality concerns over a number of companies), was the principal cause of the shortfall despite strong relative returns from the oil & gas services, travel & leisure and automobiles sectors. Although the cash position (held to cover the potential assignment of put options) was a relative drag on performance, the Company's gearing, which was marginally increased over the period, provided a benefit to the net asset value performance.

Activity

As in previous periods, we continued to add to high-quality, generally larger companies, funded mostly through the reduction of cyclical holdings that had performed well and looked expensive, and also a small increase in gearing. This included additions to Unilever, Roche, Pearson, ENI and Sage. Reductions to holdings were mostly through the assignment of options and included Millennium & Copthorne, Weir, Amec and GKN. We introduced one new holding during the period, GDF Suez, the international utility formed from the merger of Gaz De France and Suez in 2008. The company offers an attractive and efficient mix of upstream and downstream activities with good international growth prospects. The balance sheet is strong and the shares provide a dividend yield above 5%. From an income-oriented perspective, we continued to write options, with puts on companies including Tesco, GlaxoSmithKline, Vodafone and Centrica, and calls on Weir, Whitbread and Associated British Foods.

Outlook

From an operational perspective, the holdings are generally performing well, and our meetings with management have been largely positive. In addition, although the market has recovered strongly, valuations do not look stretched on an absolute or relative basis, and corporate balance sheets are generally in good shape. Clearly, risks still exist including inflationary pressures, the pace of fiscal consolidation and European sovereign debt concerns. However, the portfolio retains exposure to high-quality companies, with strong competitive positions and healthy financial characteristics, capable of generating attractive earnings and dividend growth over the longer term. We continue to believe that these attributes are the best way to ensure good performance. Overseas equities represent 5.8% of total assets.

Dividends

A first interim dividend of 5.5p was paid on 14 January 2011 to Shareholders on the register at the close of business on 17 December 2010. A second interim dividend of 5.5p will be paid on 15 April 2011 to Shareholders on the register at the close of business on 11 March 2011. The third interim dividend of 5.5p will be paid on 15 July 2011 to Shareholders on the register at the close of business on 10 June 2011. The outlook for dividends has marginally improved over the period aided by the realisation of healthy corporate profits. The income from option writing also provides a useful fillip. Furthermore, the repayments of VAT charged on management fees will help the income account. It remains the Directors' intention to pay a total dividend for the year at least equal to that paid for the year ending 30 June 2010.

Manager

Anne Richards, Aberdeen Asset Management's Chief Investment Officer and currently co-manager of the Company with Charles Luke, will be stepping back from day to day responsibility.  The Company will continue to be managed by Charles with the support of the Manager's Pan European Equity Team. The Board wishes to thank Anne for her work on behalf of the Company and looks forward to continuing to work with Charles.

VAT on Management Fees

During the period, the Company received repayment of £1,476,057, representing VAT charged on our investment management fees for the periods 1990 to 1996, and 2001 to 2003. (As noted in previous Annual Reports, the Company has already received repayments of £818,000, representing partial repayment of VAT on management fees for the period 2001 to 2003, and £1,555,612, representing repayment of VAT on management fees for the period 2004 to 2007.) These sums have been allocated to revenue and capital in accordance with the Company's accounting policy for the periods in which the VAT was charged. In addition, the Company has accrued for a payment to it of £1,348,111, relating to simple interest on all repayments of VAT to date for the periods 1990 to 1996 and 2001 to 2007; this sum has been allocated 100% to the revenue account. The investment company industry is taking various steps to seek to recover VAT in respect of the period 1997 to 2000, and is also seeking compound interest on all VAT repaid. These initiatives have been resisted by HMRC, and it is not possible to predict whether the Company will be entitled to any further VAT or interest repayments in the future.

Alternative Investment Fund Manager (AIFM) Directive

The final version of the AIFM Directive was agreed in October 2010. Its purpose is to introduce a new authorisation and supervisory regime for all alternative investment fund managers managing alternative investment funds within the European Union, which includes investment trusts. The Board has supported the efforts of the Association of Investment Companies to mitigate the more onerous obligations proposed in the draft legislation. It is pleased that the final version has accepted most of the points made by the AIC though there are still some uncertainties, particularly related to the role envisaged for "Depositaries".

Risks and Uncertainties

The Board has identified a number of key risks that affect its business:

-      Resource risk - like most other investment trusts, the Company has no employees. The Company therefore relies on services provided by third parties, including, in particular, the Manager, to whom responsibility for the management of the Company has been delegated under an investment management agreement (the "Agreement"). The terms of the Agreement cover the scope of the duties and obligations expected of the Manager. The Board reviews the performance of the Manager on a regular basis, and their compliance with the Agreement formally on an annual basis.

-      Investment objective - the objective of the Company is to achieve a high and growing income combined with capital growth. As a consequence, the investment portfolio may not always match that of the stock market as a whole, with a consequential impact on shareholder returns. The Board's aim is to maximise absolute returns to shareholders, while managing risk by ensuring an appropriate diversification of stocks and sectors.

-      Investment policy and gearing - a major risk affecting the Company is inappropriate sector and stock selection, leading to under-performance relative to the Company's benchmark index and peer group. In addition, the use of borrowing facilities to invest in markets may have a negative impact if markets fall. To mitigate these risks, the Manager operates within investment guidelines and agreed levels of borrowing. Performance against the benchmark index and the peer group is regularly monitored.

-      Discount volatility - investment trust shares tend to trade at a discount to their underlying net asset values, although they can also trade at a premium. Discounts and premia can fluctuate considerably. In order to seek to reduce the impact of such fluctuations, where the shares are trading at a discount, the Company has operated a share buy-back programme for a number of years. If the shares trade at a premium, the Company has the authority to issue new shares or re-issue of shares from treasury. Whilst these measures seek to mitigate volatility, it cannot be guaranteed that they will do so.

-      Foreign currency risk - a proportion of the Company's investment portfolio is invested in overseas securities and the value of the Company's investments and the income derived from them can, therefore, be affected by movements in foreign exchange rates. In addition, the earnings of the Company's other investments may also be affected by currency movements which, indirectly, could have an impact on the Company's performance.

       Regulatory risk - the Company operates in a complex regulatory environment and faces a number of related risks. A breach of Section 1158 of the Corporation Tax Act 2010 could result in the Company being subject to capital gains tax on the sale of its investments. Serious breach of other regulations, such as the UKLA Listing Rules and the Companies Act, could lead to suspension from the Stock Exchange and reputational damage. The Board receives monthly compliance reports from the Manager to monitor compliance with regulations.

Going Concern

The factors which have an impact on Going Concern are set out in the Going Concern section of the Directors' Report in the Company's Annual Report and Accounts to 30 June 2010. As at 31 December 2010, there have been no significant changes to these factors except that the borrowing facilities of £60 million which were committed to the Company until 29 September 2010 have been replaced by new borrowing facilities of £60 million which are committed to the Company until 29 September 2011. The Company will, at the appropriate time, open negotiations for a borrowing facility to follow on from the expiry of the present borrowing facility. The Directors are mindful of the principal risks and uncertainties disclosed above, and, having reviewed forecasts detailing revenue and liabilities, they believe that the Company has adequate financial resources to continue its operational existence for the foreseeable future. Accordingly, the Directors believe that it is appropriate to continue to adopt the going concern basis in preparing the Financial Statements.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the half-yearly financial report, in accordance with applicable law and regulations. The Directors confirm that, to the best of their knowledge:

-      the condensed set of financial statements within the half-yearly financial report has been prepared in accordance with the Accounting Standards Board's statement "Half-Yearly Financial Reports"; and

-      the Interim Board Report includes a fair review of the information required by 4.2.7R (indication of important events during the first six months of the year and their impact on the financial statements together with a description of the risks and uncertainties for the remaining six months of the year) and 4.2.8R (disclosure of related party transactions and changes therein) of the FSA's Disclosure and Transparency Rules.

The half-yearly financial report for the six months to 31 December 2010 comprises the Interim Board Report, the Statement of Directors' Responsibilities and a condensed set of financial statements, and has not been audited or reviewed by the auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

By order of the Board

Aberdeen Asset Management PLC

Secretary

15 February 2011

MURRAY INCOME TRUST PLC

INCOME STATEMENT (UNAUDITED)

		Six months ended
		31 December 2010
		(unaudited)
		Revenue	Capital		Total
	Notes	£'000	£'000		£'000
Gains on investments		-	66,526		66,526
Currency (losses)/gains		-	(53)		(53)
Investment income	3	6,325	-		6,325
Interest receivable	3	1,429	-		1,429
Other income	3	1,373	-		1,373
Investment management fees		(533)	(533)		(1,066)
Recoverable VAT on management fees		734	742		1,476
Administrative expenses		(448)	-		(448)
		_________	_________		_________
Net return before finance costs and taxation		8,880	66,682		75,562
Finance costs		(258)	(258)		(516)
		_________	_________		_________
Net return before taxation		8,622	66,424		75,046
Taxation	4	(24)	-		(24)
		_________	_________		_________
Return on ordinary activities after taxation		8,598	66,424		75,022
		_________	_________		_________
Return per Ordinary share (pence):	5	13.3	102.7		116.0
		_________	_________		_________
The total column of this statement represents the profit and loss account of the Company.
The Company had no recognised gains or losses other than those recognised in the Income Statement.
All revenue and capital items in the above statement derive from continuing operations.
Ordinary dividends on equity shares (£'000)	2	10,997	-	10,997
		_________	_________	_________
The above dividend information does not form part of the Income Statement.

MURRAY INCOME TRUST PLC

INCOME STATEMENT (UNAUDITED)

		Six months ended
		31 December 2009
		(unaudited)
		Revenue	Capital	Total
	Notes	£'000	£'000	£'000
Gains on investments		-	87,322	87,322
Currency (losses)/gains		-	-	-
Investment income	3	6,107	-	6,107
Interest receivable	3	21	-	21
Other income	3	349	-	349
Investment management fees		(479)	(479)	(958)
Recoverable VAT on management fees		-	-	-
Administrative expenses		(423)	-	(423)
		_________	_________	_________
Net return before finance costs and taxation		5,575	86,843	92,418
Finance costs		(159)	(159)	(318)
		_________	_________	_________
Net return before taxation		5,416	86,684	92,100
Taxation	4	-	-	-
		_________	_________	_________
Return on ordinary activities after taxation		5,416	86,684	92,100
		_________	_________	_________
Return per Ordinary share (pence):	5	8.4	134.0	142.4
		_________	_________	_________
The total column of this statement represents the profit and loss account of the Company.
The Company had no recognised gains or losses other than those recognised in the Income Statement.
All revenue and capital items in the above statement derive from continuing operations.
Ordinary dividends on equity shares (£'000)	2	10,836	-	10,836
		_________	_________	_________
The above dividend information does not form part of the Income Statement.

MURRAY INCOME TRUST PLC

INCOME STATEMENT  (UNAUDITED)

		Year ended
		30 June 2010
		(audited)
		Revenue	Capital	Total
	Notes	£'000	£'000	£'000
Gains on investments		-	62,285	62,285
Currency (losses)/gains		-	30	30
Investment income	3	16,826	-	16,826
Interest receivable	3	83	-	83
Other income	3	1,348	-	1,348
Investment management fees		(988)	(988)	(1,976)
Recoverable VAT on management fees		409	409	818
Administrative expenses		(879)	-	(879)
		_________	_________	_________
Net return before finance costs and taxation		16,799	61,736	78,535
Finance costs		(375)	(375)	(750)
		_________	_________	_________
Net return before taxation		16,424	61,361	77,785
Taxation	4	-	-	-
Return on ordinary activities after taxation		16,424	61,361	77,785
		_________	_________	_________
Return per Ordinary share (pence):	5	25.4	94.8	120.2
		_________	_________	_________
The total column of this statement represents the profit and loss account of the Company.
The Company had no recognised gains or losses other than those recognised in the Income Statement.
All revenue and capital items in the above statement derive from continuing operations.
Ordinary dividends on equity shares (£'000)	2	17,930	-	17,930
		_________	_________	_________
The above dividend information does not form part of the Income Statement.

MURRAY INCOME TRUST PLC

BALANCE SHEET (UNAUDITED)

		As at	As at	As at
		31 December	31 December	30 June
		2010	2009	2010
		(unaudited)	(unaudited)	(audited)
	Notes	£'000	£'000	£'000
Non-current assets
Investments at fair value through profit or loss		447,218	392,223	352,285
Current assets
Loans and receivables		3,132	1,852	2,883
Cash and short-term deposits		17,321	17,353	35,037
		_________	_________	_________
		20,453	19,205	37,920
Creditors: amounts falling due within one year
Other payables		(4,221)	(594)	(780)
Bank loans		(45,000)	(35,000)	(35,000)
		_________	_________	_________
Net current (liabilities)/assets		(28,768)	(16,389)	2,140
		_________	_________	_________
Net assets		418,450	375,834	354,425
		_________	_________	_________
Share capital and reserves
Called-up share capital		16,604	16,604	16,604
Share premium account		7,955	7,955	7,955
Capital redemption reserve		4,997	4,997	4,997
Capital reserve	6	366,499	325,398	300,075
Revenue reserve		22,395	20,880	24,794
		_________	_________	_________
Equity shareholders' funds		418,450	375,834	354,425
		_________	_________	_________
Net asset value per Ordinary share (pence):	7	646.9	581.0	547.9
		_________	_________	_________

MURRAY INCOME TRUST PLC

RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS (UNAUDITED)

Six months ended 31 December 2010 (unaudited)
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 June 2010	16,604	7,955	4,997	300,075	24,794	354,425
Return on ordinary activities after taxation	-	-	-	66,424	8,598	75,022
Dividends paid	-	-	-	-	(10,997)	(10,997)
	________	________	________	________	________	________
Balance at 31 December 2010	16,604	7,955	4,997	366,499	22,395	418,450
	________	________	________	________	________	________
Six months ended 31 December 2009 (unaudited)
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 June 2009	16,604	7,955	4,997	238,714	26,300	294,570
Return on ordinary activities after taxation	-	-	-	86,684	5,416	92,100
Dividends paid	-	-	-	-	(10,836)	(10,836)
	________	________	________	________	________	________
Balance at 31 December 2009	16,604	7,955	4,997	325,398	20,880	375,834
	________	________	________	________	________	________
Year ended 30 June 2010 (audited)
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 30 June 2009	16,604	7,955	4,997	238,714	26,300	294,570
Return on ordinary activities after taxation	-	-	-	61,361	16,424	77,785
Dividends paid	-	-	-	-	(17,930)	(17,930)
	________	________	________	________	________	________
Balance at 30 June 2010	16,604	7,955	4,997	300,075	24,794	354,425
	________	________	________	________	________	________

MURRAY INCOME TRUST PLC

CASH FLOW STATEMENT (UNAUDITED)

	Six months ended	Six months ended	Year ended
	31 December 2010	31 December 2009	30 June 2010
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Net return before finance costs and taxation	75,562	92,418	78,535
Adjustments for:
Gains on investments	(66,526)	(87,322)	(62,285)
Currency losses/(gains)	53	-	(30)
Non cash stock dividend	(59)	-	(163)
Overseas withholding tax suffered	(24)	-	-
(Increase)/decrease in accrued income	(245)	1,068	(7)
(Increase)/decrease in prepayments	(4)	(5)	39
Increase in accruals	240	157	342
	_________	_________	_________
Net cash inflow from operating activities	8,997	6,316	16,431
Servicing of finance
Interest paid	(576)	(138)	(569)
	_________	_________	_________
Net cash outflow from servicing of finance	(576)	(138)	(569)
Financial investment
Purchases of investments	(62,134)	(29,754)	(55,940)
Sales of investments	37,047	38,237	79,487
	_________	_________	_________
Net cash (outflow)/inflow from financial investment	(25,087)	8,483	23,547
Equity dividends paid	(10,997)	(10,836)	(17,930)
Financing
Drawdown of loans	10,000	-	-
	_________	_________	_________
Net cash inflow from financing	10,000	-	-
	_________	_________	_________
Net (decrease)/increase in cash	(17,663)	3,825	21,479
	_________	_________	_________

Notes to the Financial Statements

1.	Accounting policies
	(a)	Basis of accounting
		The accounts have been prepared under the historical cost convention, as modified to include the revaluation of investments and in accordance with applicable UK Accounting Standards, with pronouncements on half-yearly reporting issued by the Accounting Standards Board and with the Statement of Recommended Practice for 'Financial Statements of Investment Trust Companies & Venture Capital Trusts' (issued January 2009). They have also been prepared on the assumption that approval as an investment trust will continue to be granted.
		The financial statements and the net asset value per share figures have been prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP).
		The interim accounts have been prepared using the same accounting policies as the preceding annual accounts.
	(b)	Dividends payable
		Dividends are recognised in the period in which they are paid.

2.	Ordinary dividends
	Ordinary dividends paid on equity shares deducted from reserves:
		Six months ended	Six months ended	Year ended
		31 December 2010	31 December 2009	30 June 2010
		£'000	£'000	£'000
	2009 third interim dividend - 5.50p	-	3,558	3,558
	2009 final dividend - 11.25p	-	7,278	7,278
	2010 first interim dividend - 5.50p	-	-	3,558
	2010 second interim dividend - 5.50p	-	-	3,558
	2010 third interim dividend - 5.50p	3,558	-	-
	2010 final dividend - 11.50p	7,439	-	-
	Return of unclaimed dividends	-	-	(22)
		_________	_________	_________
		10,997	10,836	17,930
		_________	_________	_________

		Six months ended	Six months ended	Year ended
		31 December 2010	31 December 2009	30 June 2010
3.	Investment income	£'000	£'000	£'000
	UK dividend income	5,274	5,511	14,687
	Overseas and unfranked income	538	-	-
	Stock dividends	59	-	163
	Bond interest	454	596	1,976
		_________	_________	_________
		6,325	6,107	16,826
		_________	_________	_________
	Interest receivable
	Deposit interest	81	21	83
	Interest on VAT refund	1,348	-	-
		_________	_________	_________
		1,429	21	83
		_________	_________	_________
		Six months ended	Six months ended	Year ended
		31 December 2010	31 December 2009	30 June 2010
	Other income	£'000	£'000	£'000
	Underwriting commission	163	114	114
	Traded option premiums	1,210	235	1,234
		_________	_________	_________
		1,373	349	1,348
		_________	_________	_________

4.	Taxation
	The taxation charge for the period represents withholding tax suffered on overseas dividend income.

		Six months ended	Six months ended	Year ended
		31 December 2010	31 December 2009	30 June 2010
5.	Return per share	p	p	p
	Revenue return	13.3	8.4	25.4
	Capital return	102.7	134.0	94.8
		_________	_________	_________
	Total return	116.0	142.4	120.2
		_________	_________	_________
	The figures are based on the following attributable amounts:
		Six months ended	Six months ended	Year ended
		31 December 2010	31 December 2009	30 June 2010
		£'000	£'000	£'000
	Revenue return	8,598	5,416	16,424
	Capital return	66,424	86,684	61,361
		_________	_________	_________
	Total return	75,022	92,100	77,785
		_________	_________	_________
	Weighted average number of Ordinary shares in issue	64,689,458	64,689,458	64,689,458
		____________	____________	__________

6.	Capital reserve
	The capital reserve reflected in the Balance Sheet at 31 December 2010 includes gains of £100,023,000 (31 December 2009 - £70,452,000; 30 June 2010 - £44,688,000) which relate to the revaluation of investments held at the reporting date.

		As at	As at	As at
7.	Net asset value per share	31 December 2010	31 December 2009	30 June 2010
	Attributable net assets (£'000)	418,450	375,834	354,425
	Number of Ordinary shares in issue	64,689,458	64,689,458	64,689,458
	Net asset value per Ordinary share (p)	646.9	581.0	547.9

8.	Transaction costs
	During the period, expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains on investments in the Income Statement. The total costs were as follows:
		Six months ended	Six months ended	Year ended
		31 December 2010	31 December 2009	30 June 2010
		£'000	£'000	£'000
	Purchases	273	85	218
	Sales	20	33	58
		_________	_________	_________
		293	118	276
		_________	_________	_________

9.	The financial information contained in this Half-Yearly Financial Report does not constitute statutory accounts as defined in Section 434-436 of the Companies Act 2006. The financial information for the six months ended 31 December 2010 and 31 December 2009 has not been audited.
	The information for the year ended 30 June 2010 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under Section 498 (2), (3) or (4) of the Companies Act 2006.

10.	This Half-Yearly Financial Report was approved by the Board on 15 February 2011.
11.	Copies of the Company's report for the half-year ended 31 December 2010 will be posted to shareholders in February 2011 and will be available thereafter on the Company's website: www.murray-income.co.uk and from the Secretary at the Registered Office, 40 Princes Street, Edinburgh EH2 2BY.

INVESTMENT PORTFOLIO

AS AT 31 DECEMBER 2010

		Valuation	Total assets
Investment	Sector	£'000	%
British American Tobacco	Tobacco	23,280	5.0
Centrica	Gas, Water & Multi-utilities	23,046	5.0
Royal Dutch Shell ('B' Shares)	Oil & Gas Producers	22,842	4.9
Vodafone	Mobile Telecommunications	22,401	4.8
HSBC	Banks	19,628	4.2
BP	Oil & Gas Producers	19,087	4.1
GlaxoSmithKline	Pharmaceuticals & Biotechnology	18,476	4.0
AstraZeneca	Pharmaceuticals & Biotechnology	17,444	3.8
Unilever	Food Producers	15,508	3.3
Tesco	Food & Drug Retailers	14,833	3.2
Top ten investments		196,545	42.3
National Grid	Gas, Water & Multi-utilities	14,577	3.1
Aviva	Life Insurance	13,106	2.8
BHP Billiton	Mining	12,092	2.6
Pearson	Media	11,794	2.5
ENI	Oil & Gas Producers	11,578	2.5
Provident Financial	General Financial	11,292	2.4
Morrison (WM) Supermarkets	Food & Drug Retailers	10,934	2.4
Close Bros	General Financial	10,559	2.3
Standard Chartered	Banks	10,454	2.3
Aberforth Smaller Companies Trust	Equity Investment Instruments	9,045	2.0
Top twenty investments		311,976	67.2
Associated British Foods	Food Producers	9,011	1.9
Cobham	Aerospace & Defence	8,950	1.9
Roche	Pharmaceuticals & Biotechnology	8,168	1.8
Imperial Tobacco	Tobacco	8,167	1.8
Land Securities	Real Estate	8,104	1.8
AMEC	Oil Equipment, Service & Distribution	8,096	1.8
John Wood Group	Oil Equipment, Service & Distribution	7,731	1.7
Whitbread	Travel & Leisure	7,679	1.7
Prudential	Life Insurance	7,148	1.5
Daily Mail & General Trust	Media	7,089	1.5
Top thirty investments		392,119	84.6
GDF Suez	Gas, Water & Multi-utilities	6,853	1.5
Sage Group	Software & Computer Services	6,562	1.4
Rio Tinto	Mining	5,927	1.3
Rolls Royce	Aerospace & Defence	5,728	1.2
Mothercare	General Retailers	5,658	1.2
Millennium & Copthorne Hotels	Travel & Leisure	4,748	1.0
BBA Aviation	Industrial Transportation	4,521	1.0
GKN	Automobiles & Parts	4,048	0.9
Persimmon	Household Goods & Home Construction	4,018	0.9
Dunedin Smaller Companies Investment Trust	Equity Investment Instruments	2,750	0.6
Top forty investments		442,932	95.6
Weir Group	Industrial Engineering	2,367	0.5
Barclays Bank 14% Reverse Capital Instrument	Banks	1,919	0.4
Total investments		447,218	96.5
		___________	___________
Net current assets{A}		16,232	3.5
		___________	___________
Total assets		463,450	100.0
		___________	___________
{A} excludes bank loan of £45,000,000.

 

END

 

 

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