Preliminary Results

Murray Income Trust PLC 13 September 2005 MURRAY INCOME TRUST PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2005 The Directors of Murray Income Trust PLC announce the unaudited results for the year ended 30 June 2005. Key Facts • Net Asset Value on a total return basis rose 23.6%, 4.9% ahead of its benchmark, the FTSE All-Share which rose 18.7% • Proposed final dividend of 5.65p, making a total dividend of 19.15p, an increase of 4.9% on the previous year, which continues the Company's history of steadily increasing dividends. Background The UK equity market performed well during the year to 30 June 2005. Buoyant economic growth in China, South East Asia and the US lent support to the broader global economy, while domestic demand in the UK remained relatively firm on the back of low interest rates and inflation and full employment. Despite the impact of higher commodity costs, through a combination of successful hedging and tight cost control, overall levels of corporate profitability were good, with many companies electing to return excess capital to shareholders either through share buy-backs or higher dividend payments. Against this background of robust profitability, the market was given a further boost by a wave of corporate activity at the turn of the year. Bid rumours were rife and the accompanying takeover speculation helped create a fairly exuberant market environment. The main negative over the period was the retail sector where sales failed to rebound in the New Year following a poor Christmas trading season. This cast a pall over other areas of the market that are reliant on consumer spending and served to temper some of the enthusiasm that had been in evidence during the early weeks of January. With a more cautious consumer and signs that the housing market has cooled considerably, the market has now turned its attention to the prospect of lower interest rates in the second half of 2005. Performance The Net Asset Value total return for the year ended 30 June 2005 was 23.6%. This compares with the return on the FTSE All-Share Index, the Company's new benchmark, of 18.7% and the FTSE 350 Higher Yield Index, the Company's benchmark until 30 June 2004, of 22.9% Over the year ended 30 June 2005, Murray Income's Net Asset Value Total Return was ranked 8 out of 16 within the AITC UK Growth and Income sector. Attribution Analysis shows that stock and asset allocation benefited the Company by 2.0 % and 2.8 % respectively and gearing by 0.8%. It is pleasing to note that this AITC sector outperformed the comparable open-ended peer group over the same period. Objectives Your Board's aim is to provide an investment of choice in the Company's sector of the equity market. Obviously this means the provision of high-quality performance both in capital and income terms. Your investment managers are working hard to provide this and last year's results are encouraging. It also means the provision of liquidity and the limitation of discount volatility. A buyback policy has been operated for some time which has sought to address these issues. However, the Board believes that the reduction in capital committed to the marketmaking function by securities houses means that it should adopt the power to buy shares into Treasury, rather than simply for cancellation, in order to improve liquidity. Approval is being sought from Shareholders for the power to re-issue these shares at prices below Net Asset Value but with a limitation on the overall level of dilution that can take place over a year. Further details of the proposed arrangements regarding the issue of shares from Treasury will be set out in the Circular which will be sent to Shareholders. This does represent a significant change in the operation of the Company which the Board believes to be in the interests of all Shareholders. Dividends Interim dividends were paid on 17 January 2005, 15 April 2005 and 15 July 2005 each at the rate of 4.50p per Ordinary share. The Directors propose a final dividend payment of 5.65p, payable on 31 October 2005 to Shareholders on the register on 30 September 2005, making total dividends for the year ended 30 June 2005 of 19.15p. This represents an increase of 4.9% on the total dividends paid in the previous year and continues the steady increase which has taken place for more than twenty years. Last year's revenue account included the last dividends from Royal Bank of Scotland's Additional Value Shares, which have since been redeemed. After allowing for this, the underlying dividend growth in the portfolio was about 9%. At the corporate level, it is encouraging to see stronger earnings growth reflected in a rise in the rate of growth of dividends with many companies recognising shareholders' desire to allocate their own capital. Share Buybacks and Treasury Shares At the Annual General Meeting held on 27 October 2004, Shareholders approved the renewal of the authority permitting the Company to repurchase its Ordinary shares. Consequently, during the year ended 30 June 2005, the Company repurchased 2,505,000 Ordinary shares at an average price of 488.36p, representing 3.64% of the share capital at 27 October 2004, the date of renewal of the authority. These repurchases contributed marginally to an increase in the Net Asset Value of the remaining Ordinary shares. A Circular will be sent to Shareholders with the Annual Report setting out the Board's proposals regarding the introduction of Treasury shares, for which Shareholders' approval will be sought at the Annual General Meeting. To enable the Company to purchase its own shares and hold them in Treasury for subsequent resale or cancellation, it is also necessary to amend the Articles of Association of the Company. Consequently, this information will be contained in the Circular. Management Fee The management fee arrangements have been reviewed during the year and two main changes agreed, namely a move from a management fee based on gross assets to one based on net assets and also the removal of the initial fixed fee element of £37,500 each month. Accordingly from 1 July 2005, the fee charged will be as follows: a monthly fee at the rate of one twelfth of 0.55% on the first £400 million of net assets, 0.45% on the next £150 million of net assets and 0.25% on the excess over £550 million. Assuming an unchanged level of net assets from that at 30 June 2005, this would result in an overall saving to shareholders of £46,000 per annum in the management fee. The investment management fee remains chargeable 50% to revenue and 50% against realised capital reserves. The secretarial fee, which is chargeable 100% to revenue, has been increased from £50,000 to £75,000 per annum. Your Board Sir David Trippier has served just over nine years on the Board and in line with best practice has decided to retire from the Board at the AGM. The Board would like to take this opportunity to thank him for his contributions to the Board's deliberations over this time. Consultants were again appointed to help identify a new Director. The Board is pleased to have appointed Neil Honebon as a Director on 4 August 2005. He is a founder director of Fleming Family and Partners Asset Management and is responsible for the management of investment portfolios for the Fleming family and for other clients. He has over 25 years experience in investment analysis and research and while at Flemings, he was Head of Global Research and deputy chair on the asset allocation committee. Outlook The UK economy appears to be slowing down principally because of slow growth in real incomes and relatively high levels of consumer debt. For markets this may lead to a conflict between a worsening profit outlook and the benign impact of low interest rates. Given the already high levels of corporate profits and the strong performance of equity markets a quieter period may be in prospect. However, dividend levels in the portfolio appear to be secure and should help considerably to underpin share prices. MURRAY INCOME TRUST PLC Statement of Total Return (incorporating the Revenue Account*) Year ended Year ended 30 June 2005 30 June 2004 (unaudited) (audited) Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 66,148 66,148 - 44,507 44,507 Income from investments 16,333 - 16,333 16,736 - 16,736 Other income 200 - 200 91 - 91 Investment management fees (1,287) (1,287) (2,574) (1,254) (1,254) (2,508) Other expenses (881) - (881) (972) - (972) ________ _______ _______ _______ _______ _______ Net return before finance costs and 14,365 64,861 79,226 14,601 43,253 57,854 taxation Finance costs of borrowing (654) (654) (1,308) (858) (858) (1,716) ________ _______ _______ _______ _______ _______ Return attributable to equity Shareholders 13,711 64,207 77,918 13,743 42,395 56,138 Ordinary dividends on equity shares (12,928) - (12,928) (12,755) - (12,755) ________ _______ _______ _______ _______ _______ Transfer to reserves 783 64,207 64,990 988 42,395 43,383 ________ _______ _______ _______ _______ _______ Return per Ordinary share (pence): 20.0 93.7 113.7 19.6 60.5 80.1 ________ _______ _______ _______ _______ _______ * The revenue column of this statement represents the revenue account of the Company. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year MURRAY INCOME TRUST PLC Balance Sheet As at As at 30 June 30 June 2005 2004 (unaudited) (audited) £'000 £'000 Fixed assets Investments 417,560 390,004 ______________ _____________ Current assets Debtors 1,455 1,716 Cash and overnight deposits 2,700 239 ______________ _____________ 4,155 1,955 Creditors Amounts falling due within one year (7,903) (36,821) ______________ _____________ Net current liabilities (3,748) (34,866) ______________ _____________ Total assets less current liabilities 413,812 355,138 Creditors Amounts falling due after more than one year (16,000) (10,000) ______________ _____________ Total net assets 397,812 345,138 ______________ _____________ Capital and reserves Called-up share capital 16,765 17,391 Share premium account 7,955 7,955 Capital redemption reserve 4,836 4,210 Capital reserve - realised 262,455 262,238 Capital reserve - unrealised 92,729 41,055 Revenue reserve 13,072 12,289 ______________ _____________ Equity Shareholders' funds 397,812 345,138 ______________ _____________ Net Asset Value per Ordinary share (pence): 593.2p 496.2 ______________ _____________ Cash Flow Statement Year ended Year ended 30 June 2005 30 June 2004 (unaudited) (audited) £'000 £'000 £'000 £'000 Operating activities Investment income received 16,601 16,056 Deposit interest received 198 88 Underwriting commission received - 4 Investment management fees paid (2,568) (2,498) Secretarial fees paid (50) (50) Cash paid to and on behalf of Directors (72) (72) Other cash payments (739) (951) ________ _______ ________ ________ Net cash inflow from operating activities 13,370 12,577 Servicing of finance Bank and loan interest paid (1,351) (1,666) ________ _______ ________ ________ Net cash outflow from servicing of finance (1,351) (1,666) Financial investment Purchase of investments (93,962) (51,348) Sale of investments 132,887 46,605 ________ _______ ________ ________ Net cash inflow/ (outflow) from financial investment 38,925 (4,743) Equity dividends paid (12,570) (12,809) Management of liquid resources Cash (placed)/drawn on short term deposit (104) 3,478 ________ _______ ________ ________ Net cash (outflow)/inflow from management of liquid resources (104) 3,478 _______ _______ Net cash inflow/ (outflow) before financing 38,270 (3,163) Financing Repurchase of shares (11,913) (2,772) (Repayment)/Drawdown of loans (24,000) 5,000 ________ _______ ________ ________ Net cash (outflow)/inflow from financing (35,913) 2,228 ________ _______ ________ ________ Increase/(decrease) in cash 2,357 (935) ________ _______ ________ ________ MURRAY INCOME TRUST PLC YEAR ENDED 30 JUNE 2005 Year ended Year ended 30 June 2005 30 June 2004 Ordinary dividends on equity shares £'000 £'000 Over accrual in relation to 2004 (33) - First interim of 4.50p (2004 - 4.50p) 3,095 3,159 Second interim of 4.50p (2004 - 4.50p) 3,069 3,157 Third interim of 4.50p (2004 - 4.50p) 3,038 3,135 Proposed final of 5.65p (2004 - 4.75p) 3,759 3,304 _____________ ____________ 12,928 12,755 _____________ ____________ The statement of total return (incorporating the revenue account), balance sheet and cashflow statement set out above do not represent statutory accounts in accordance with Section 240 of the Companies Act 1985. The results stated above for the year ended 30 June 2004 are abridged from the full accounts for that year, which have received an unqualified report from the Auditors and were filed with the Registrar of Companies. The financial information for the year to 30 June 2005 contains an unqualified audit report and will be delivered to the Registrar of Companies. A summary of investment changes during the year and the twenty largest investments as at 30 June 2005 are attached. The Annual General Meeting will be held on 26 October 2005 at 12.30 p.m in the Strathclyde Suite, Glasgow Royal Concert Hall. By Order of the Board ABERDEEN ASSET MANAGEMENT PLC Secretary 13 September 2005 Copies of this announcement will be available to the public at the registered office of the Company at 123 St Vincent Street, Glasgow. MURRAY INCOME TRUST PLC SUMMARY OF INVESTMENT CHANGES DURING THE YEAR TO 30 JUNE 2005 Valuation Appreciation Valuation 30 June 2004 Transactions (depreciation) 30 June 2005 £'000 % £'000 £'000 £'000 % United Kingdom Equities 390,004 101.3 (38,592) 66,148 417,560 100.9 _______ _____ __________ __________ _____ _____ Total Investments 390,004 101.3 (38,592) 66,148 417,560 100.9 _______ _____ __________ __________ _____ _____ Other net liabilities (4,866) (1.3) 1,118 - (3,748) (0.9) _______ _____ __________ __________ _____ _____ Total Assets* 385,138 100.0 (37,474) 66,148 413,812 100.0 _______ _____ __________ __________ _____ _____ * Represents total assets less current liabilities, after excluding short-term loans of £30,000,000 as at 30 June 2004. Valuation Summary of net assets 30 June 2005 £'000 % Equities 417,560 105.0 Other net liabilities (3,748) (1.0) Borrowings (16,000) (4.0) ______ ______ Equity Shareholders' interest 397,812 100.0 ______ ______ MURRAY INCOME TRUST PLC TWENTY LARGEST INVESTMENTS as at 30 June 2005 Sector Valuation % of Total Assets Investment Description £'000 Royal Dutch Shell Oil & Gas 32,239 7.8 BP Oil & Gas 29,660 7.2 HSBC Holdings Banks 24,252 5.9 Barclays Banks 16,709 4.0 GlaxoSmithKline Pharmaceuticals 16,370 4.0 Aviva Life Assurance 15,115 3.6 Royal Bank of Scotland Group Banks 15,073 3.6 Diageo Beverages 12,345 3.0 British American Tobacco Tobacco 12,329 3.0 Great Universal Stores General Retailers 12,184 2.9 HBOS Banks 10,799 2.6 Slough Estates Real Estate 10,378 2.5 Anglo American Mining 10,093 2.4 Centrica Other Utilities 10,037 2.4 BBA Group Transport 8,255 2.0 Unilever Food Producers 7,972 2.0 and Processors Lloyds TSB Banks 7,852 1.9 Standard Chartered Banks 7,446 1.8 Scottish Power Electricity 7,398 1.8 P & O Transport 6,995 1.7 Top twenty investments 273,501 66.1 This information is provided by RNS The company news service from the London Stock Exchange

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