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Gartmore Irish (GIR)

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Wednesday 16 February, 2011

Gartmore Irish

Interim Management Statement



This interim management statement covers the period from 1 October 2010 to 31
December 2010. It has been produced for the sole purpose of providing
information to the Company's shareholders in accordance with the requirements
of the UK Listing Authority's Disclosure and Transparency Rules. It should not
be relied upon for any other purpose.

Investment Objective

The Company seeks to provide shareholders with long-term capital growth through
investment in quoted companies which are either incorporated in the Republic of
Ireland or Northern Ireland or, if elsewhere, derive the majority of their
turnover or profits from the Republic of Ireland or Northern Ireland or are
listed on the ISEQ Index.

Manager's Comments

The Company's NAV increased by 3.6% over the three-month period to 31 December
2010. This compares with a 6.6% gain for the ISEQ Index in sterling terms. As
announced on 21 December, the Manager started to create greater liquidity in
the portfolio to finance buybacks and in the expectation that shareholders
approve the dissolution of the Company (see Material Events and Transactions

Over the period the largest sector contributor to performance was our
significant underweight to banks which proved very beneficial. The sector
slumped by over 40% as Ireland's banks were bailed-out. In particular, not
owning Bank of Ireland and Allied Irish Banks as their stock prices collapsed
helped considerably. Allied Irish was the largest beneficiary of the bail-out
as it received a €3.7 billion injection from the government, effectively
placing it under state control.

One of our larger positions, Origin Enterprises, was also an important
contributor. The company posted a positive trading update for the first quarter
of its new financial year with group revenue increasing by 5%. Its joint
venture in marine proteins and oils is producing results and stronger
performance is expected from agri-services in the new year. We believe the
company is strongly positioned in a fragmented market, and the discount to
peers and the market in general seems unjustified.

Our lack of exposure to Ryanair, a heavyweight in the ISEQ, also helped as the
share price retreated when fuel prices rallied.

The largest detractor from returns versus the ISEQ was an underweight to
construction materials, most notably the lack of exposure to building materials
group CRH. The largest weighting in the ISEQ returned over 27% in the past
three months, by far the largest contributor to index returns. A company
statement announced acquisition and investments spending aimed to expand its
operations in Switzerland, the US and Germany. However we see limited upside
potential for the share price from here and the stock is trading at a
considerable premium to its average historical multiples. Pharmaceutical
companies Merrion Pharmaceuticals and United Drug also underperformed, as did
financial spreads trader Worldspreads.

Fund activity was predominantly focused on raising cash, especially towards the
end of the quarter. Among the profitable disposals were Paddy Power, Dragon
Oil, Bank of Ireland and Minco. We also realised gains from selling down Andor
Technology and Glanbia.

Investment Outlook

All eyes are on Ireland given its fiscal, economic and political troubles and
its close relationship with the Eurozone. The government has been under
increasing pressure since last year's €85 billion rescue. A general election
will now take place on 25 February 2011. Navigation of Ireland's recovery will
prove a challenge for the leadership irrespective of who is elected.
Nonetheless, we remain confident that the fundamentals that have worked for
Ireland's economy in the past, such as its well-educated population and low
corporate tax rate, still hold good on a long-term view. Our investment
emphasis has been on international businesses that pay high and sustainable
dividends and on healthy robust companies which are not related to the banking
or financial sector. Kerry, DCC and Paddy Power are examples of companies that
have a good chance of prospering in the current background. Good quality
companies are often overlooked or avoided solely on the basis of their Irish
incorporation without due regard to the business reality and it is this
tendency which we seek to benefit from.

Material Events and Transactions

On 21 December 2010, the Company announced that, following discussions with a
number of shareholders who have expressed reservations about continued exposure
to the Irish market, the Board had determined that shareholders should be
offered the opportunity to realise their investments in the Company for cash,
if they wish to do so. Accordingly, the Directors have decided that the Company
should embark on an orderly dissolution and the intention is that cash will be
returned to investors, commencing at the end of the first quarter of 2011, from
the realisation of the portfolio.

Progress is being made in creating liquidity in the portfolio and as at 10
February 2011, the Company's estimated net assets include net cash and cash
equivalents of approximately £32.0 million or 64.8% of estimated net assets. In
a rising market, the increased liquidity will inevitably lead to
underperformance versus the market.

The Company expects to send a circular to Shareholders shortly to seek approval
of the proposed dissolution. The circular is expected to include an open-ended
rollover alternative.

Over the three months to 31 December 2010 the Company repurchased 322,776
Ordinary shares at prices ranging from 660.64p to 698.61p per share excluding
expenses (at discounts to net asset value including current period revenue of
between 9.72% and 13.10%). No shares have been repurchased subsequent to the
end of the period under review. The shares in issue now total 6,311,858, none
of which are held in Treasury.

Financial Position:                              As at 31.12.         As at  
                                                           10       30.09.10 
                                                  (unaudited)     (unaudited)
                                                           £m             £m 
Investments                                             29.70          40.86 
Cash                                                    19.41           9.51 
Other net current assets / (liabilities) *               0.25          (0.24)
Net assets                                              49.36          50.13 
Net assets attributable to Ordinary shares**            49.36          50.13 
                                                        pence          pence 
Net asset value per Ordinary share**                   782.00         755.62 

* Includes £157,000 unrealised gain on CFDs

** Includes current period revenue.


The Manager is authorised to gear the portfolio to make additional investments.
Gearing can fluctuate between zero and 25% of shareholders' funds, with timing
determined on the basis of market circumstances and investment opportunities.
The Manager is authorised to use and is using contracts for difference ("CFDs")
for gearing purposes. The level of gearing is regularly monitored by the Board.
Alternatively, cash is held when the Manager has negative views on share

As at 31 December 2010 the Company held two CFDs with a notional value of £
6,935,000, and an unrealised gain of £157,000.


                             As at          % increase/(decrease) over         
                          31.12.10  3 months  1 year  3 years  5 years 10 years
Net asset value per       782.00p       3.56    8.66   (8.24)    15.11   190.09
Ordinary share**                                                               
Share price - Ordinary    720.00p       7.46   19.01   (5.51)    10.26   228.77
Discount                    (7.93)%                                            

* Source: Thomson Financial Datastream. Basis: Capital performance only, debt
at par.

** With effect from 31 March 2008 NAV's include current period revenue. Prior
period figures exclude current period revenue and are therefore not directly

Price and Performance Information

The Company's Ordinary shares are listed on the London and Irish Stock
Exchanges and the price is published in the Financial Times and The Daily
Telegraph under `Investment Companies'. Real-time share price information is
available on 09058 171 690. Calls are charged at 75p per minute from a BT

The Company's net asset value is calculated daily and can be viewed on the
London Stock Exchange website at and via a link
from the Company's website at

Information on the Company is available on the Gartmore internet site, The Company's discrete area on the site can be accessed via
the "Fund range" menu or directly using This
information includes the latest annual and interim reports and fact sheets,
together with the latest regulatory news announcements and net asset values.

Further information can be obtained from Gartmore Investment Limited, as

Free investor helpline: 0800 289 336

Internet address:

Email address: [email protected]

Other than as stated above, the Directors are not aware of any significant
events or transactions which have occurred between 31 December 2010 and the
date of publication of this statement which have had a material impact on the
financial position of the Company. For latest performance information, please
refer to the Company's website.

The information provided in this statement should not be considered as a
financial promotion.

By order of the Board

Capita Sinclair Henderson Limited

(trading as Capita Financial Group - Specialist Fund Services)

Company Secretary

16 February 2011

Neither the contents of the Company's or Gartmore's website nor the contents of
any website accessible from hyperlinks on these websites (or any other website)
is incorporated into, or forms part of this announcement.


a d v e r t i s e m e n t