Interim Results
Murray International Trust PLC
11 August 2005
MURRAY INTERNATIONAL TRUST PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2005
The Directors of Murray International Trust PLC report the unaudited results of
the company for the six months ended 30 June 2005.
• Net Asset Value Total Return, with net income reinvested, for the six
months ended 30 June 2005 was 9.4% compared with a return of 7.6% on the
composite benchmark.
• The Board intends to recommend a final dividend of not less than 5.95p
in respect of the year ending 31 December 2005, payable in May 2006.
• Equity asset allocation remains overweight in high-growth Asia and
Emerging Markets and underweight in the UK and United States.
Background
Financial markets produced some solid gains over the six month period to 30 June
2005. In the first quarter markets were held back by fears of inflation and
higher interest rates but once these fears had subsided somewhat, good returns
were seen in both equity and bond markets in the second quarter. Over the whole
period in sterling terms, the most notable market returns came from Asia
ex-Japan and Latin America, up 13.4% and 18.7% respectively. The UK and
European markets also managed to produce respectable returns of 8.2% and 6.4%.
Although the US market struggled to make any progress in local currency terms,
dollar strength against sterling boosted equity returns to 7.2%. Japanese
market returns in sterling terms were relatively poor, with only modest gains.
Performance
The Net Asset Value total return, with net income reinvested, for the six months
to 30 June 2005 was 9.4% compared with a return of 7.6% on the composite
benchmark (40% of the FTSE World-UK and 60% of the FTSE World ex UK Indices).
Asset allocation towards equities was broadly neutral for the portfolio over the
period, with the negative effects of being overweight Japan offset by overweight
exposure in Asia and Emerging Markets. Relative asset allocations in the US, UK
and Europe had virtually no impact. Stock selection was positive in all
geographic regions except for Japan, with Asia and Emerging Market contributing
significantly to outperformance. The total portfolio performance was also
positively impacted by our allocation to bonds, resulting from our capital
structure.
Financial Statements for the six months to 30 June 2005
Rather than adopting International Financial Reporting Standards ('IFRS'), the
Board has elected to continue to adopt UK Generally Accepted Accounting
Principles ('UK GAAP') and therefore to comply with the new Financial Reporting
Standards issued as part of the programme to converge UK GAAP with IFRS. Figures
for the 6 months ended 30 June 2004 and the year ended 31 December 2004 have
been restated accordingly. Full details of the changes are provided in the
Supplementary Information at the end of the Financial Statements.
Dividends
At last years Annual General Meeting shareholders approved three interim
dividends of 3.55p per share in respect of the year ending 31 December 2005
payable on 15 August and 16 November 2005, and 15 February 2006. The Board
intends to recommend that the final dividend in respect of the year ending 31
December 2005, payable in May 2006, will not be less than 5.95p.
Outlook
Large debt-dependent deficits in the developed world suggest that a protracted
period of sub trend economic growth is required to redress Government, trade and
consumer imbalances, particularly in the United States and UK. Consequently the
outlook for corporate profits and equity markets in such mature markets remains
relatively unappealing. Conversely, the prospects for economic growth, earnings
and dividends in the saving nations in Asia and Emerging Markets remains very
attractive. It is increasingly likely that the global interest rate environment
will be supportive of international capital flows which in turn should maintain
superior relative economic growth and upward pressure on exchange rates in
selective areas of the world. The portfolio will continue to emphasise exposure
to regions and stocks where valuations relative to growth prospects are most
attractive in order to achieve the company's investment objectives of capital
growth and above average dividend yield.
Statement of Total Return
Six months
ended 30 June 2005
(unaudited)
Revenue Capital Total
£'000 £'000 £'000
Gains on investments - 33,024 33,024
Income from investments 12,170 - 12,170
Other income 63 - 63
Investment management fees (374) (872) (1,246)
Performance fees - (562) (562)
Currency losses - (1,999) (1,999)
Other expenses (513) - (513)
_________ _________ _________
Net return before finance costs and taxation 11,346 29,591 40,937
Finance costs of borrowing (375) (875) (1,250)
_________ _________ _________
Return on ordinary activities before tax 10,971 28,716 39,687
Tax on ordinary activities (2,278) 1,563 (715)
_________ _________ _________
Return on ordinary activities after tax 8,693 30,279 38,972
_________ _________ _________
Ordinary dividends on equity shares 14,364 - 14,364
_________ _________ _________
Return per Ordinary share (pence) 10.0 35.0 45.0
_________ _________ _________
Return per Ordinary share assuming full
conversion of the B Ordinary shares (pence) 9.9 34.6 44.5
_________ _________ _________
The total column of this statement represents the profit and loss account of the
Company.
All items in the above statement derive from continuing operations.
Statement of Total Return
Six months
ended 30 June 2004
(unaudited)
(restated)
Revenue Capital Total
£'000 £'000 £'000
Gains on investments - 3,155 3,155
Income from investments 10,376 - 10,376
Other income 159 - 159
Investment management fees (329) (768) (1,097)
Currency losses - (2,168) (2,168)
Other expenses (581) - (581)
____________________________________________
Net return before finance costs and taxation 9,625 219 9,844
Finance costs of borrowing (388) (1,313) (1,701)
____________________________________________
Return on ordinary activities before tax 9,237 (1,094) 8,143
Tax on ordinary activities (1,688) 1,208 (480)
____________________________________________
Return on ordinary activities after tax 7,549 114 7,663
____________________________________________
Ordinary dividends on equity shares 14,085 - 14,085
____________________________________________
Return per Ordinary share (pence) 8.7 0.1 8.8
____________________________________________
Return per Ordinary share assuming full
conversion of the B Ordinary shares (pence) 8.6 0.1 8.7
____________________________________________
The total column of this statement represents the profit and loss account of the
Company.
All items in the above statement derive from continuing operations.
Statement of Total Return
Year ended
31 December 2004
(audited)
(restated)
Revenue Capital Total
£'000 £'000 £'000
Gains on investments - 45,340 45,340
Income from investments 19,088 - 19,088
Other income 278 - 278
Investment management fees (690) (1,610) (2,300)
Performance fees - (1,925) (1,925)
Currency losses - (4,039) (4,039)
Other expenses (1,184) - (1,184)
____________________________________________
Net return before finance costs and taxation 17,492 37,766 55,258
Finance costs of borrowing (774) (2,214) (2,988)
____________________________________________
Return on ordinary activities before tax 16,718 35,552 52,270
Tax on ordinary activities (3,070) 2,264 (806)
____________________________________________
Return on ordinary activities after tax 13,648 37,816 51,464
____________________________________________
Ordinary dividends on equity shares 14,085 - 14,085
____________________________________________
Return per Ordinary share (pence) 15.8 43.7 59.5
____________________________________________
Return per Ordinary share assuming full
conversion of the B Ordinary shares (pence) 15.6 43.2 58.8
____________________________________________
The total column of this statement represents the profit and loss account of the
Company.
All items in the above statement derive from continuing operations.
Balance Sheet
At 30 June At 30 June At 31 December
2005 2004 2004
(unaudited) (unaudited) (audited)
(restated) (restated)
£'000 £'000 £'000
Fixed assets
Investments 541,867 466,406 508,492
Current assets
Debtors 4,593 4,694 3,348
Cash and short-term deposits 5,200 8,510 9,591
_________________________________________
9,793 13,204 12,939
Creditors
Amounts falling due within one year (35,977) (25,338) (21,429)
_________________________________________
Net current liabilities (26,184) (12,134) (8,490)
_________________________________________
Total assets less current liabilities 515,683 454,272 500,002
Creditors
Amounts falling due after more than one year (77,754) (84,751) (86,680)
_________________________________________
Net assets 437,929 369,521 413,322
_________________________________________
Capital and reserves
Equity Shareholders' interest:
Called up share capital 21,911 21,901 21,901
Share premium account 23 23 23
Capital redemption reserve 8,230 8,230 8,230
Capital reserves 382,209 314,239 351,941
Revenue reserve 25,556 25,128 31,227
_________________________________________
Equity Shareholders' funds 437,929 369,521 413,322
_________________________________________
Net Asset Value per Ordinary and
B Ordinary share (pence) 499.7 421.8 471.8
_________________________________________
Cash Flow Statement
Six months ended Six months ended Year ended 31
30 June 2005 30 June 2004 December 2004
(unaudited) (unaudited) (audited)
£'000 £'000 £'000
Operating activities
Investment income received 10,865 8,982 18,400
Deposit interest received 58 156 275
Investment management fees paid (1,746) (1,082) (2,275)
Secretarial fees paid (50) (49) (99)
Cash paid to and on behalf of Directors (50) (38) (78)
Other cash payments (552) (394) (989)
_____________________________________________
Net cash inflow from operating activities 8,525 7,575 15,234
Returns on investment and servicing of finance
Interest paid (1,212) (1,383) (2,656)
Break costs on repayment of loan - (407) (407)
_____________________________________________
Net cash outflow from servicing of finance 1,212 1,790 3,063
Financial investment
Purchases of investments (58,612) (63,615) (143,536)
Sales of investments 58,905 60,197 140,329
_____________________________________________
Net cash inflow/(outflow) from financial investment 293 (3,418) (3,207)
Equity dividends paid (8,121) (8,121) (14,083)
_____________________________________________
Net cash outflow before financing (515) (5,754 ) (5,119)
Financing
Loans repaid - (11,545) (11,545)
Loans drawn down - 11,545 11,545
_____________________________________________
Net cash flow from financing - - -
_____________________________________________
Decrease in cash (515) (5,754) (5,119)
_____________________________________________
MURRAY INTERNATIONAL TRUST PLC
Six months ended 30 June 2005
SUPPLEMENTARY INFORMATION
1. The number of B Ordinary shares converted into Ordinary shares on 30 June
2005 was 64,518. The allotted Ordinary share capital as of 30 June 2005
was:
86,556,123 Ordinary shares of 25p
1,087,799 B Ordinary shares of 25p
2. Accounting policies
The accounts have been prepared under the historical cost convention, as
modified to include the revaluation of investments and in accordance with
applicable Accounting Standards and with the Statement of Recommended
Practice for 'Financial Statements of Investment Trust Companies'.
For the accounting period beginning on 1 January 2005 the Company had the
option to prepare its financial statements in accordance with International
Financial Reporting Standards ('IFRS'), as adopted by the International
Accounting Standards Board ('IASB'). The Board has elected to continue to
adopt UK Generally Accepted Accounting Principles ('UK GAAP') and therefore
with the new Financial Reporting Standards issued as part of the programme
to converge UK GAAP with IFRS. Figures for the 6 months ended 30 June 2004
and the year ended 31 December 2004 have been restated accordingly.
The same accounting policies used for the year ended 31 December 2004 have
been applied with the following exceptions:
(a) Investments are measured initially at cost and are recognised at trade
date. For financial assets acquired, the cost is the fair value of
the consideration. Subsequent to initial recognition investments are
valued at fair value. For listed investments this is deemed to be bid
market prices or closing prices for SETS stocks sourced from The
London Stock Exchange.
Unlisted investments are valued by Directors at fair value, in line
with the guidelines of the British Venture Capital Association.
(b) Under FRS 21 'Events after the Balance Sheet Date', dividends should
only be accrued in the accounts if they are a liability at the Balance
Sheet Date. As the final dividend for the year and the three interims
for the current financial year are approved by shareholders at the AGM
each year, no provision has been made for the final dividend for the
year ended 31 December 2003 or 31 December 2004.
The impact of these changes are shown below.
3. Reconciliation of Balance Sheets
31 December 30 June 31 December
2004 2004 2003
(audited) (unaudited) (audited)
£'000 £'000 £'000
Net assets as previously reported 408,820 370,020 371,392
Restatement of investments at bid value (645) (499) (591)
Reversal of provision for final dividend 5,147 - 5,142
___________________________________________
Restated net assets 413,322 369,521 375,943
___________________________________________
4 Reconciliation of the Statement of Total Return
Year ended Six months
31 December ended 30 June
2004 2004
(audited) (unaudited)
£000 £000
Total transfer to reserve per original reported Statement of 37,428 (1,372)
Total Return
Add 2004 interim dividends on ordinary shares - 8,943
Add 2004 dividends on ordinary shares 14,090 -
Change from mid to bid basis at 31 December 2003 591 591
Change from mid to bid basis at 31 December 2004 (645) -
Change from mid to bid basis at 30 June 2004 - (499)
____________________________
Restated total transfer to reserves 51,464 7,663
____________________________
Ordinary dividends on equity shares deducted from reserves are analysed
below:
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2005 2004 2004
(unaudited) (unaudited) (audited)
£000 £000 £000
Ordinary dividends on equity shares:
2003 final dividend - 5.95p - 5,142 5,142
2004 final dividend - 5.95p 5,147 - -
Interim dividends of 3.55p for current year 9,217 8,943 8,943
payable on 15 August, 16 November 2005 and 15
February 2006 ____________________________________________
14,364 14,085 14,085
____________________________________________
5. A summary of investment changes during the period and a schedule of the
twenty largest equity investments and ten largest fixed interest
investments at 30 June 2005 are attached.
6. The financial information for the six months ended 30 June 2005 and 30 June
2004 comprises non-statutory accounts within the meaning of Section 240 of
the Companies Act 1985. The financial information for the year ended 31
December 2004 has been abridged from published accounts that have been
delivered to the Registrar of Companies and on which the report of the
Auditors was unqualified. As described above these accounts have been
restated for the six months ended 30 June 2004 and the year ended 31
December 2004.
By order of the Board
ABERDEEN ASSET MANAGEMENT PLC, SECRETARY
11 August 2005
Copies of this announcement will be printed and issued to Shareholders and will
be available to the public at the registered office of the Company, 123 St
Vincent Street, Glasgow.
MURRAY INTERNATIONAL TRUST PLC
SUMMARY OF INVESTMENT CHANGES
Valuation Transactions Appreciation/ Valuation
31 December (depreciation) 30 June
2004 2005
£'000 % £'000 £'000 £'000 £'000
Equities
United Kingdom 143,469 28.7 (11,926) 10,113 141,656 27.5
Americas 87,905 17.6 3,948 10,661 102,514 19.9
Europe & Africa 85,542 17.1 1,436 6,319 93,297 18.1
Japan 38,639 7.7 10,051 (590) 48,100 9.3
Middle East, Far East 55,690 11.2 (206) 9,069 64,553 12.5
& Australasia ____________________________________________________________________________________
411,245 82.3 3,303 35,572 450,120 87.3
____________________________________________________________________________________
Fixed income
United Kingdom 61,163 12.2 (4,953) 460 56,670 11.0
Europe & Africa 26,098 5.2 3,592 (1,325) 28,365 5.5
Americas 5,140 1.0 962 (2,031) 4,071 0.8
Middle East, Far East 4,846 1.0 (2,553) 348 2,641 0.5
& Australasia ____________________________________________________________________________________
97,247 19.4 (2,952) (2,548) 91,747 17.8
____________________________________________________________________________________
Other net liabilities (8,490) (1.7) (14,900) (2,794) (26,184) (5.1)
____________________________________________________________________________________
Total assets 500,002 100.0 (14,549) 30,230 515,683 100.0
____________________________________________________________________________________
Note: 2004 opening position has been restated to reflect change in accounting
practices.
Valuation
Summary of Net Assets 30 June
2005
£000 %
Equities 450,120 102.8
Fixed Income 91,747 21.0
Other net liabilities (26,184) (6.0)
Prior charges (77,754) (17.8)
_____________________
Equity Shareholders' funds 437,929 100.0
_____________________
Twenty Largest Equity Investments
As at 30 June 2005
Investment Valuation % of total
Security Area £'000 assets
Atrium Underwriting UK 19,772 3.8
September 2005 S&P Index Future* USA 16,674 3.2
GlaxoSmithKline UK 12,091 2.3
Petrobras Brazil 10,243 2.0
Tenaris Mexico 9,218 1.8
Vodafone Group UK 8,704 1.7
Shell Transport & Trading** UK & Netherlands 8,126 1.6
British American Tobacco** UK & Malaysia 8,063 1.6
Resolution Life UK 7,500 1.5
Aeropuertos del Sureste Mexico 5,820 1.1
AstraZeneca UK 5,778 1.1
BT Group UK 5,520 1.1
ICICI Bank India 5,404 1.0
Petrochina Co. China 5,318 1.0
Aviva UK 5,212 1.0
Hyundai Motor South Korea 4,966 1.0
Unilever** UK & Indonesia 4,854 0.9
ENI Italy 4,595 0.9
Total France 4,593 0.9
Samsung Electronics South Korea 4,575 0.9
___________________________________________________________________________________________________________
Top twenty investments 157,026 30.4
___________________________________________________________________________________________________________
* Provides exposure to the S&P 500 Index in the United States
** Holding also comprises associated companies
Ten Largest Fixed Interest Investments
As at 30 June 2005
Security Investment Area Valuation % of total
£'000 assets
___________________________________________________________________________________________________________
Govt. of Mexico 10.5% 14/07/2011 Mexico 4,071 0.8
Sunamerica Institutional Fund 5.375% 07/12/2009 International 3,604 0.7
General Accident 7.875% Cum Irrd Pref UK 3,463 0.7
Govt. of Poland 8.5% 12/11/2006 Europe 3,332 0.6
Abbey National 10.375% Non Cum Irrd Pref UK 3,299 0.6
PEMEX 7.75% 29/09/2049 Mexico 3,156 0.6
UK Treasury 5% 07/03/2012 UK 3,153 0.6
UK Treasury 9% 12/07/2011 UK 3,149 0.6
UK Treasury 4% 07/03/2009 UK 3,052 0.6
UK Treasury 6.25% 25/11/2010 UK 3,049 0.6
___________________________________________________________________________________________________________
Top ten investments 33,328 6.4
___________________________________________________________________________________________________________
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