Information  X 
Enter a valid email address

Manchester & London (MNL)

  Print      Mail a friend

Monday 30 March, 2015

Manchester & London

Half-yearly Report


Manchester and London Investment Trust plc ("MLIT" or the "Company")

ANNOUNCEMENT OF THE UNAUDITED INTERIM GROUP RESULTS
For the six months ended 31 January 2015

The Directors announce the unaudited interim Company results for the six months
ended 31 January 2015.

 

Trust Performance
                                                                 At       At           
                                                         31 January  31 July Percentage
                                                               2015     2014     Change
                                                                                       
Net assets attributable to Equity Shareholders (£'000)       61,753   64,361      (4.1)
                                                                                       
Net asset value per ordinary share (p)                        285.5    293.2      (2.6)
                                                                                       
Dow Jones UK Total Stock Market Index                      2,973.10 2,953.45        0.7
                                                                                       
Interim dividend declared per ordinary share (p)               1.50     5.50     (72.7)
                                                                                       
Second special dividend per ordinary share (p)                 0.25        -      100.0
                                                                                       

 

Ex-dividend date   9 April 2015
                               
Record date       10 April 2015
                               
Payment date      30 April 2015
                               

The price and net asset value is published in the Investment Companies Sector
of The Financial Times.
 

Chairman's Statement

Results for the half year ended 31 January 2015

The trust's net asset value per share dropped 2.6 per cent over the period,
against a 0.7 per cent increase in the benchmark.  This represents an
underperformance of 3.3 per cent.
 
The key contributors to this were poor positioning ahead of November's oil
slump and an under exposure to UK centric and smaller capitalisation stocks,
which have generally outperformed the rest of the benchmark.

Whilst the Investment Manager's underlying model of buying quality global blue
chip stocks is unchanged, additional emphasis has been put on buying business
models that are aligned with key forward looking trends. 

NAV performance, since the period end, has been better with an improvement in
the NAV to 296.4p per share which means the fund is now up 1.1 per cent for the
financial year to date.

Dividends

As explained last year, we have split our dividend payments to better reflect
the sources of that income.  Recurring income from dividends on our underlying
holdings has been paid out as ordinary dividends, whilst non-recurring trading
income has been paid out as special dividends.

We also explained that the exposure constraints created by AIFMD may limit our
ability to generate trading income, we have so far managed to pay 2.3p in
special dividends in respect of this year.  With these results we have
announced a further special dividend per share of 0.25p and an ordinary
dividend of 1.50p.

These are in addition to the final ordinary dividend of 1.98p and special
dividends of 5.00p and 1.27p already paid in the period in respect of the 2014
financial year.

Outlook

Performance does appear to be improving since the period end.  We hope that
this continues through to the year end.
 

Mr P H A Stanley.
Chairman
March 2015.
 

Investment Manager's Report

Investment Manager's Review
 

Performance

Our underperformance over the first half of the year was driven by our sector
exposure to Oil and Gas (contributing a material 4.4 per cent relative
underperformance), our remaining Mining exposure (contributing a 0.8 per cent
relative underperformance) and yet another dismal performance from PZ Cussons
(contributing 2.0 per cent relative underperformance).

We do not see a quick recovery in the Oil & Gas and Mining sectors and we do
not believe they are favourably exposed to key technological trends in the long
run - such as energy efficiency, improving electric vehicles and increasing
political weight put behind renewables.  Nor do these sectors traditionally
perform well in a low inflationary environment.  We were drawn to these sectors
by their seemingly appealing valuation metrics but we now see these as a value
trap.  As a result, we do not currently have a single holding in these two
sectors and we are now significantly underweight.

Overview

We believe that two key challenges have significantly altered the traditional
equity valuation framework.  Firstly, technology has rapidly disrupted many
business models, turning what were once classic value plays into value traps.

Secondly, a global disinflationary environment has squeezed yields to the point
where some high quality corporate debt issues have even gone into negative
yield territory.  This has a bullish read across for the equity of these "bond
proxy" equities even though they may not appear inexpensive against traditional
valuation metrics.  

Both these factors have caused large valuation differentials, which may deepen
further.   However, for now, we are no longer tempted by these value plays.

We have repositioned in the opposite direction - moving overweight Technology,
Healthcare and Consumer stocks (with bond proxy like cash flows).

We expect to be close to fully invested for the near future, though we remain
highly vigilant for market volatility.

Asset Allocation Review

Consumer

PZ Cussons has had a challenging 6 months, with FX headwinds and continued
troubles in Nigeria.  We remain attracted by the stock's long term growth
potential and relative valuation to the sector, but the company's reliance on
Nigeria and the daunting challenges this country still faces clouds the
investment case.  Therefore we have significantly reduced our exposure to PZ
Cussons and may continue to do so in H2.  In short, with the Oil and Mining
exportation model disrupted, we struggle to see how Africa will progress into
the new global manufacturing hub when power cuts last for a material part of
each day.
 
Our other consumer stocks have generally performed well.  We have tried to
position in high quality consumer brands, with stable cash flows, that could
also be bid targets.  With bonds on these types of stocks hitting historic
lows, the equity could have further to run. Stocks of this type include
Beiersdorf, Heineken, Pernod Ricard and SCA.  Diageo and Unilever have
continued to make relatively good progress, however we may trim exposure to
these names in favour of more probable M&A targets.    

Technology

We have been increasing exposure to the sector.  Two of our highest conviction
stocks in this sector are Google and Apple, which we view as technology
conglomerates with exposure to key themes likely to play out over the next 10
years, such as the Internet of Things, Wearable Devices, Driverless Cars and
AI.   We believe both companies trade at substantial discounts to their sum of
parts.  Other stocks that we see as favourably positioned for the future
include eBay, ARM Holdings and Baidu. 
 
We have 3 fund holdings in the sector - which gives us a broader exposure to
key technological trends such as Robotics and Automation, where picking
individual winners is more challenging.

We remain bullish on Agri-Science and, aside from a CHF revaluation shift,
Syngenta has generally performed well.  However, 2015 could be challenging for
Syngenta and we may trim exposure at the right price.  KWS remains a top 15
position for us in the sector and we continue to view this as a prime M&A
target for a larger player looking to increase its Seeds portfolio.

We have also taken a small position on 3D Printing, which we view as a key
technology over the next 10 years.  However, the sector is too young and
volatile for us to hold a lot of exposure in the area.

Healthcare

Smith and Nephew has performed well as takeover rumours have persisted.  We
continue to see strong logic for an acquisition by Stryker or J&J.
 
Shire has also performed well.  Although their takeover by Abbvie fell through,
we continue to see this as an attractive M&A target and the stock looks
undervalued against the rest of the sector.
 
AstraZeneca was an underperformer.  The company is currently going through a
lower growth period until their pipeline is expected to reinvigorate between
2017 and 2023.  In the meantime the relative valuation looks attractive, the
yield is good and there is a small chance that M&A could come back onto the
table.

GlaxoSmithKline is a current Top 15 holding which we believe trades at a
discount to its sum of parts whilst offering an attractive yield.  We believe
there is a small probability of a break up into the three parts of
pharmaceuticals, vaccines and over-the-counter medicines to release value.

Investment Portfolio
As at 31 January 2015

                                                                  Value    % of
Company                                       Sector              £'000     Net
                                                                         Assets
                                                                               
PZ Cussons plc                                Consumer Goods      7,668    12.4
                                                                               
Smith & Nephew plc                            Health Care         4,430     7.2
                                                                               
Damille Investments II Ltd                    Financials          3,707     6.0
                                                                               
AstraZeneca plc                               Health Care         3,557     5.8
                                                                               
Diageo plc                                    Consumer Goods      3,014     4.9
                                                                               
Shire plc                                     Health Care         3,009     4.9
                                                                               
Heineken N.V.                                 Consumer Goods      2,966     4.8
                                                                               
Unilever plc                                  Consumer Goods      2,930     4.8
                                                                               
                                              Speciality                       
Syngenta AG                                   Chemicals           2,707     4.4
                                                                               
Beiersdorf AG                                 Consumer Goods      2,640     4.3
                                                                               
BG Group plc                                  Oil & Gas           2,612     4.2
                                                                               
Pernod Ricard SA                              Consumer Goods      2,594     4.2
                                                                               
Apple Inc.                                    Technology          2,544     4.1
                                                                               
Google Inc.                                   Technology          2,458     4.0
                                                                               
                                              Speciality                       
KWS SAAT AG                                   Chemicals           2,022     3.3
                                                                               
Davide Campari-Milano S.p.A.                  Consumer Goods      1,800     2.9
                                                                               
Tsingtao Brewery Co., Ltd.                    Consumer Goods      1,694     2.7
                                                                               
Svenska Cellulosa Aktiebolaget SCA            Consumer Goods      1,544     2.5
                                                                               
Polar Capital Technology Trust plc            Technology          1,498     2.4
                                                                               
ROBO-STOX Global Robotics and Automation GO                                    
UCITS ETF                                     Technology          1,484     2.4
                                                                               
Scottish Mortgage Investment Trust plc        Technology          1,441     2.3
                                                                               
Baidu, Inc.                                   Technology          1,290     2.1
                                                                               
eBay Inc.                                     Technology          1,051     1.7
                                                                               
ARM Holdings plc                              Technology            937     1.5
                                                                               
Stratasys Inc.                                Technology            771     1.2
                                                                               
Barry Callebaut AG                            Consumer Goods        743     1.2
                                                                               
3-D Systems Corporation                       Technology            676     1.1
                                                                               
TOD'S S.p.A.                                  Consumer Goods        621     1.0
                                                                               
Other listed investments (under 1.0%)         Various             1,677     2.7
                                                                               
                                                                            
                                                                               
Listed Investments                                               66,085   107.0
                                                                               
Other Investments                                                   183     0.3
                                                                               
Cash and Net Current Assets                                     (4,515)   (7.3)
                                                                               
Net Assets                                                       61,753   100.0
                                                                               
                                                                               
                                                                               

Investment Objective

The investment objective of the Company is to achieve capital appreciation
together with a reasonable level of income.

Investment Policy

Asset allocation

The Company's investment objective is sought to be achieved through a policy of
actively investing in a diversified portfolio, comprising UK and overseas
equities and fixed interest securities.  The Company seeks to invest in
companies whose shares are admitted to trading on a regulated market.  However,
it may invest in a small number of equities and fixed interest securities of
companies whose capital is not admitted to trading on a regulated market.
Investment in overseas equities is utilised by the Company to increase the
risk diversification of the Company's portfolio and to reduce dependence on the
UK economy in addressing the growth and income elements of the Company's
investment objective. 

The Company may invest in derivatives, money market instruments, currency
instruments, contracts for differences ("CFDs"), futures, forwards and options
for the purposes of (i) holding investments and (ii) hedging positions against
movements in, for example, equity markets, currencies and interest rates. 

There are no maximum exposure limits to any one particular classification of
equity or fixed interest security.  The Company's investments are not limited
to any one industry sector and its current investment portfolio is spread
across a range of sectors.  The Company has no specific criteria regarding
market capitalisation or credit ratings in respect of investee companies.

Risk diversification

The Company intends to maintain a relatively focused portfolio, seeking capital
growth by investing in approximately 20 to 40 securities.  The Company will not
invest more than 15 per cent of the gross assets of the Company at the time of
investment in any one security.  However, the Company may invest up to 50 per
cent of the gross assets of the Company at the time of investment in an
investment company subsidiary, subject always to other restrictions set out in
this investment policy and the Listing Rules.
 
The Company intends to be fully invested whenever possible.  However, during
periods in which changes in economic conditions or other factors so warrant,
the Investment Manager may reduce the Company's exposure to one or more asset
classes and increase the Company's position in cash and/or money market
instruments.

Gearing

The Company may borrow to gear the Company's returns when the Investment
Manager believes it is in shareholders' interests to do so.  The Company's
investment policy and the Articles permit the Company to incur borrowing up to
a sum equal to two times the adjusted total of capital and reserves.  Any
change to the Company's borrowing policy will only be made with the approval of
shareholders by special resolution.

The effect of gearing may be achieved without borrowing by investing in a range
of different types of investments including derivatives.  The Company will not
enter into any investments which have the effect of increasing the Company's
net gearing beyond the above limit.

General

In addition to the above, the Company will observe the investment restrictions
imposed from time to time by the Listing Rules which are applicable to
investment companies with shares listed on the Official List of the UKLA under
Chapter 15.

In accordance with the Listing Rules, the Company will manage and invest its
assets in accordance with the Company's investment policy.  Any material
changes in the principal investment policies and restrictions (as set out
above) of the Company will only be made with the approval of shareholders by
ordinary resolution.

In the event of any breach of the investment restrictions applicable to the
Company, shareholders will be informed of the remedial actions to be taken by
the Board and the Investment Manager by an announcement issued through a
Regulatory Information Service approved by the FCA.

Benchmark Index

Performance is measured against the Dow Jones UK Total Stock Market Index.  The
Company sources index and price data from FactSet Research Systems Inc.
                                                                               
                                                                               
Consolidated Statement of Comprehensive Income
For the six months ended 31 January 2015


                      (Unaudited)             (Unaudited)             (Audited)       
                    Six months ended        Six months ended         Year ended      
                     31 January 2015        31 January 2014         31 July 2014     
                                                                                       

                  Revenue Capital Total Revenue Capital   Total Revenue Capital   Total
                    £'000   £'000 £'000   £'000   £'000   £'000   £'000   £'000   £'000
                                                                                       
                                                                                       
                                                                                       
Gains/(losses) on                                                                      
investments                                                                            
at fair value           -      14    14       - (7,569) (7,569)       - (9,052) (9,052)
                                                                                       
                                                                                       
                                                                                       
Trading income       433        -  433    1,050       -   1,050   1,377       -   1,377
                                                                                       
                                                                                       
                                                                                       
Investment income     610       -   610   1,216       -   1,216   2,431       -   2,431
                                                                                       
                                                                                       
                                                                                       
Gross return        1,043      14 1,057   2,266 (7,569) (5,303)   3,808 (9,052) (5,244)
                                                                                       
                                                                                       
                                                                                       
Expenses                                                                               
                                                                                     
                                                                                       
                                                                                       
Management fee      (158)       - (158)   (185)       -   (185)   (348)       -   (348)
                                                                                       
Transaction costs   (178)       - (178)    (39)       -    (39)   (170)       -   (170)
                                                                                       
Other expenses       (87)       -  (87)   (127)       -   (127)   (234)       -   (234)
                                                                                       
                                                                                       
                                                                                       
Total expenses      (423)       - (423)   (351)       -   (351)   (752)       -   (752)
                                                                                       
                                                                                       
                                                                                       
Finance costs        (32)   (119) (151)       -   (183)   (183)     (1)   (298)   (299)
                                                                                       
                                                                                       
                                                                                       
Profit/(loss)                                                                          
before tax            588   (105)   483   1,915 (7,752) (5,837)   3,055 (9,350) (6,295)
                                                                                       
                                                                                       
                                                                                       
Taxation                -       -     -       -       -       -       -       -       -
                                                                                       
                                                                                       
                                                                                       
Profit/(loss)                                                                          
attributable                                                                           
to equity                                                                              
shareholders          588   (105)   483   1,915 (7,752) (5,837)   3,055 (9,350) (6,295)
                                                                                       
                                                                                       
                                                                                       
Earnings/(loss)                                                                        
per share (p)        2.70  (0.48)  2.22    8.53 (34.52) (25.99)   13.63 (41.71) (28.08)
                                                                                       


The total column of this statement represents the Group's Statement of
Comprehensive Income, prepared in accordance with IFRS.  The supplementary
revenue and capital return columns are both prepared under guidance published
by the Association of Investment Companies.

All items in the above statement are derived from continuing operations.
 

Consolidated Statement of Changes in Equity
For the six months ended 31 January 2015
 

                                                                               Unaudited     
                                                        Six months ended 31 January 2015     
                                                                                        

                                                       Capital  Capital                 
                    Share   Share Treasury    Other    Reserve  Reserve Retained        
                  Capital Premium   Shares Reserves Unrealised Realised Earnings   Total
                                                                                        
                    £'000   £'000    £'000    £'000      £'000    £'000    £'000   £'000
                                                                                        
Balance at 1 August 5,614  35,132  (1,306)     (79)     15,239    5,906    3,855  64,361
2014                                                                                    
                                                                                        
Total comprehensive     -       -        -        -          -        -      483     483
profit                                                                                  
                                                                                        
Buybacks of             -       -    (786)        -          -        -        -   (786)
ordinary shares                                                                         
                                                                                        
Transfer of capital     -       -        -        -    (4,791)    4,686      105       -
losses                                                                                  
                                                                                        
Total dividends         -       -        -        -          -        -  (2,305) (2,305)
paid                                                                                    
                                                                                        
                    5,614  35,132  (2,092)     (79)     10,448   10,592    2,138  61,753
                                                                                        
                                                                                        
                                                                                         
                                                                               Unaudited     
                                                        Six months ended 31 January 2014     
                                                                                        

                                                       Capital  Capital                 
                    Share   Share Treasury    Other    Reserve  Reserve Retained        
                  Capital Premium   Shares Reserves Unrealised Realised Earnings   Total
                                                                                        
                    £'000   £'000    £'000    £'000      £'000    £'000    £'000   £'000
                                                                                        
Balance at 1 August 5,614  35,132        -     (79)      5,596   24,899    3,888  75,050
2013                                                                                    
                                                                                        
Total comprehensive                                                                     
loss                    -       -        -        -          -        -  (5,837) (5,837)
                                                                                        
Transfer of profit                                                                      
realised on                                                                             
previous transfers      -       -        -        -      3,165  (3,165)        -       -
                                                                                        
Transfer of capital     -       -        -        -    (3,240)  (4,512)    7,752        
losses                                                                                 -
                                                                                        
Ordinary dividend       -       -        -        -          -        -  (1,853)        
paid                                                                             (1,853)
                                                                                        
                    5,614  35,132        -     (79)      5,521   17,222    3,950  67,360
                                                                                        
 

                                                                                 Audited    
                                                                 Year ended 31 July 2014    
                                                                                        

                                                       Capital  Capital                 
                    Share   Share Treasury    Other    Reserve  Reserve Retained        
                  Capital Premium   Shares Reserves Unrealised Realised Earnings   Total
                                                                                        
                    £'000   £'000    £'000    £'000      £'000    £'000    £'000   £'000
                                                                                        
Balance at 1 August 5,614  35,132        -     (79)      5,596   24,899    3,888  75,050
2013                                                                                    
                                                                                        
Total comprehensive     -       -        -        -          -        -  (6,295) (6,295)
loss                                                                                    
                                                                                        
Buybacks of             -       -  (1,306)        -          -        -        - (1,306)
ordinary shares                                                                         
                                                                                        
Transfer of capital     -       -        -        -      9,643 (18,993)    9,350       -
losses                                                                                  
                                                                                        
Ordinary dividend       -       -        -        -          -        -  (3,088) (3,088)
paid                                                                                    
                                                                                        
                    5,614  35,132  (1,306)     (79)     15,239    5,906    3,855  64,361
                                                                                        


Consolidated Statement of Financial Position
As at 31 January 2015

                                                                      Restated          
                                                       (Unaudited) (Unaudited) (Audited)
                                                        31 January  31 January   31 July
                                                              2015        2014      2014
                                                             £'000       £'000     £'000
                                                                                        
                                                                                        
Non-current assets                                                                      
                                                                                        
Investments held at fair value through profit and loss      28,313      68,736    45,664
                                                                                        
                                                            28,313      68,736    45,664
                                                                                        
                                                                                        
                                                                                        
Current assets                                                                          
                                                                                        
Unrealised derivative financial assets                       2,669       2,110       291
                                                                                        
Trade and other receivables                                     23          10       100
                                                                                        
Cash and cash equivalents                                   33,454      14,617    19,625
                                                                                        
                                                            36,146      16,737    20,016
                                                                                        
Gross assets                                                64,459      85,473    65,680
                                                                                        
Current liabilities                                                                     
                                                                                        
Unrealised derivative financial liabilities                (2,569)     (9,731)   (1,185)
                                                                                        
Borrowings                                                       -     (8,220)         -
                                                                                        
Trade and other payables                                     (137)       (162)     (134)
                                                                                        
                                                           (2,706)    (18,113)   (1,319)
                                                                                        
Net assets                                                  61,753      67,360    64,361
                                                                                        
                                                                                        
                                                                                        
Equity attributable to equity holders                                                   
                                                                                        
Ordinary share capital                                       5,614       5,614     5,614
                                                                                        
Shares held in treasury                                    (2,092)           -   (1,306)
                                                                                        
Share premium                                               35,132      35,132    35,132
                                                                                        
Capital reserves                                            21,040      22,743    21,145
                                                                                        
Goodwill reserve                                              (79)        (79)      (79)
                                                                                        
Retained earnings                                            2,138       3,950     3,855
                                                                                        
Total equity shareholders' funds                            61,753      67,360    64,361
                                                                                        
Net asset value per share (p)                                285.5       299.9     293.2
                                                                                        

 

Consolidated Statement of Cash Flows
For the six months ended 31 January 2015

                                              (Unaudited) (Unaudited) (Audited)
                                               31 January  31 January   31 July
                                                     2015        2014      2014
                                                    £'000       £'000     £'000
                                                                               
Cash flow from operating activities                                            
                                                                               
Profit/(loss) after tax                               483     (5,837)   (6,295)
                                                                               
Interest paid                                         151         183       299
                                                                               
Losses on investments                               3,298       2,231     2,208
                                                                               
Decrease in receivables                                77         180        90
                                                                               
Increase/(decrease) in payables                         3     (1,214)      (49)
                                                                               
Increase in derivative financial instruments        (994)     (2,667)  (10,587)
                                                                               
Net cash generated from/(used in) operating         3,018     (7,124)  (14,334)
activities                                                                     
                                                                               
                                                                               
Cash flow from investing activities                                            
                                                                               
Purchase of investments                          (25,564)    (12,457)  (35,015)
                                                                               
Sale of investments                                39,617      17,179    62,832
                                                                               
Net cash generated from investing activities       14,053       4,722    27,817
                                                                               
                                                                               
                                                                               
Cash flow from financing activities                                            
                                                                               
Equity dividends paid                             (2,305)     (1,853)   (3,088)
                                                                               
Buybacks of ordinary shares                         (786)           -   (1,306)
                                                                               
Repaid to loan facility                                 -     (2,747)  (10,967)
                                                                               
Interest paid                                       (151)       (183)     (299)
                                                                               
Net cash used in financing activities             (3,242)     (4,783)  (15,660)
                                                                               
                                                                               
                                                                               
Net increase/(decrease) in cash and cash                                       
equivalents                                        13,829     (7,185)   (2,177)
                                                                               
Cash and cash equivalents at the beginning of                                  
the period                                         19,625      21,802    21,802
                                                                               
Cash and cash equivalents at the end of the                                    
period                                             33,454      14,617    19,625
                                                                               

Notes to the Group Results

 
1. Accounting policies

The interim report and condensed consolidated financial statements have been
prepared in accordance with IAS 34 "Interim Financial Reporting". They do not
include all disclosures that would otherwise be required in a complete set of
financial statements and should be read in conjunction with the consolidated
financial statements for the year ended 31 July 2014.  The accounting policies
are consistent with the preceding annual accounts.

The results are based on unaudited Group consolidated accounts prepared under
the historical cost basis except where International Financial Reporting
Standards ("IFRS") require an alternative treatment.
 
2. Comparative information

The financial information contained in this interim report does not constitute
statutory accounts and, in addition, those relating to the six month periods to
31 January 2014 and 31 January 2015 have not been audited.  In 2014 the Group
amended its presentation of derivatives to improve reporting alignment to
industry standards.

The financial information for the year ended 31 July 2014 has been extracted
from the latest published audited accounts which have been filed with the
Registrar of Companies and prepared under IFRS.  The report of the auditors on
those accounts contained no qualification or statement under the provisions of
the Companies Act 2006.

3. Significant accounting policies

Investments held at fair value through profit or loss are initially recognised
at fair value.  As the entity's business is investing in financial assets with
a view to profiting from their total return in the form of interest, dividends,
or increases in fair value, listed equities and fixed income securities are
designated as at fair value through profit or loss on initial recognition.  The
entity manages and evaluates the performance of these investments on a fair
value basis in accordance with its investment strategy, and information about
the Group is provided internally on this basis to the entity's key management
personnel.

After initial recognition, investments which are classified as fair value
through profit and loss are measured at fair value.  Gains or losses on
investments designated as fair value through profit or loss are included in net
profit or loss as a capital item, and material transaction costs on acquisition
and disposal of investments are expensed and included in the revenue column of
the income statement.  For investments that are actively traded in organised
financial markets, fair value is determined by reference to the Stock Exchange
quoted market bid prices or last traded prices, depending upon the convention
of the exchange on which the investment is quoted, at the close of business at
the end of the reporting period.

In respect of unquoted investments, or where the market for a financial
investment is not active, fair value is established by using an appropriate
valuation technique.  Where a reliable fair value cannot be estimated for such
unquoted equity instruments, they are carried at cost, subject to any provision
for impairment.  All purchases and sales of investments are recognised on the
trade date i.e. the date that the Group commits to purchase or sell an asset.

Dividend income from investments is recognised as income when the shareholders'
rights to receive payment has been established, normally the ex-dividend date. 
When special dividends are received, the underlying circumstances are reviewed
on a case by case basis in determining whether the amount is capital, or
income, or a mixture of both, in nature.  Amounts recognised as income will
form part of the Company's distribution.

4. Principal risks and uncertainties

The principal risks and uncertainties associated with the Company's business
fall into the following categories: financial risk; strategic risk; and
accounting, legal and regulatory risk.  A detailed explanation of the risks and
uncertainties in each of these categories can be found in the Company's
published Annual Report and Accounts for the year ended 31 July 2014.

5. Directors' responsibilities

The Directors (P H A Stanley, D Harris and B Miller, all of whom are
non-executive) are of the opinion that it is appropriate to continue to adopt
the going concern basis in accordance with the FRCs "Going Concern and
Liquidity Risk: Guidance for Directors of UK Companies 2009" in the preparation
of the accounts as the assets of the Company consist predominantly of
securities that are readily realisable and, accordingly, the Company has
adequate financial resources to continue in operational existence for the
foreseeable future.
 
The Directors confirm that, to the best of their knowledge, this set of
condensed financial statements has been prepared in accordance with IAS 34
"Interim Financial Reporting".

Where presentational guidance, set out in the Statement of Recommended Practice
("SORP") for investment trusts revised by the Association of Investment
Companies ("AIC"), is inconsistent with the requirements of IFRS, the Directors
have sought to prepare the financial statements on a basis compliant with the
recommendations of the SORP.

The Interim Management Report, in the form of the Chairman's Statement and
Investment Manager's Review, includes a fair review of the information required
by DTR 4.2.7 and 4.2.8 of the FCA's Disclosure and Transparency Rules.

6. Related party

Midas Investment Management Limited ('Midas'), a company controlled by Mr. M.
Sheppard, acts as Investment Manager to the Company.  Details of the fee
arrangements are given in note 7.  Mr. M. Sheppard is also a director of the
parent company of Manchester and London Investment Trust plc.

7. Related party transactions

The management fee charged by Midas is payable quarterly in arrears and is
equal to 0.5 per cent of the Net Asset Value of the Group on an annualised
basis.

Investment management fees are charged to revenue.

Additional fees charged by Midas include a monthly financial advisory fee and
commissions on the purchase and sale of investments. 
 
Monthly company secretarial and office administration costs incurred by the
parent company, M&M Investment Company plc, on behalf of the Company were also
recharged to the Company in the period.

There are no other related party transactions.

In accordance with DTR 4.2.9(2) of the UK Disclosure and Transparency Rules
(DTRs), it is confirmed that this publication has not been audited by auditors
pursuant to the Auditing Practices Board (APB) guidance on Review of Interim
Financial Information, but has been reviewed by the auditors pursuant to the
APB's guidance on Review of Interim Financial Information.

Responsibility Statement

We confirm that to the best of our knowledge:

a) the condensed set of financial statements has been prepared in accordance with
IAS 34 'Interim Financial Reporting';

b) the interim report includes a fair review of the information required by DTR
4.2.7R (indication of important events during the first six months and
description of principal risks and uncertainties for the remaining six months
of the year); and

c) the interim report includes a fair review of the information required by DTR
4.2.8R (disclosure of related party transactions and changes therein).


Mr D Harris
Chairman of Audit Committee


Independent Review Report to Manchester & London Investment Trust plc

Introduction

We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
January 2015 which comprise the Consolidated Statement of Comprehensive Income,
the Consolidated Statement of Changes in Equity, the Consolidated Statement of
Financial Position, the Consolidated Statement of Cash Flows and the related
condensed notes.  We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of financial statements.

This report is made solely to the Company in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim
Financial Information Performed by the Independent Auditor of the Entity"
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the Company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the Company, for our review work, for this report, or for the conclusions
we have formed.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and Transparency
Rules of the United Kingdom's Financial Conduct Authority.

The condensed set of financial statements included in this half-yearly
financial report has been prepared in accordance with International Accounting
Standard 34, "Interim Financial Reporting", as adopted by the European Union.
 
Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.

Scope of Review

We conducted our review in accordance with International Standard on Review
Engagements (UK & Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom.  A review of interim financial
information consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK & Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit.  Accordingly,
we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31 January 2015 is not prepared, in
all material respects, in accordance with International Accounting Standard 34
as adopted by the European Union and the Disclosure and Transparency Rules of
the United Kingdom's Financial Conduct Authority.

CLB Coopers, Statutory Auditors and Chartered Accountants, Manchester.
30 March 2015

This Half Yearly Report was approved by the Board on 30 March 2015.

Copies of the Half-Yearly Financial Report for the six months ended 31 January
2015 will be available from the Company's registered office at 2nd Floor,
Arthur House, Chorlton Street, Manchester, M1 3FH, as well as on the Company's
website at www.manchesterandlondon.co.uk.
 

For enquiries:

Manchester and London Investment Trust plc
Michael Kurt Camp
Company Secretary
Tel: 0161 228 2389

Midas Investment Management Limited
Mark Sheppard
Investment Manager
Tel: 0161 228 1709

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