Half-yearly Report
THE EUROPEAN INVESTMENT TRUST PLC
HALF-YEARLY REPORT
FOR THE HALF YEAR ENDED 31 MARCH 2015
The Directors announce the unaudited Half-Yearly Report for the half year ended
31 March 2015 as follows:
Copies of the Half-Yearly Report can be obtained from the following websites:
www.theeuropeaninvestmenttrust.com and www.edinburghpartners.com.
FINANCIAL SUMMARY
31 March 30 September Change
2015 2014
Capital
Shareholders' funds £366.10m £336.73m 8.7%
Net asset value per ordinary share ("NAV") 870.23p 800.41p 8.7%
Share price per ordinary share 807.00p 748.75p 7.8%
Share price discount to NAV 7.3% 6.5%
Six months to Year to
31 March 30 September
2015 2014
Total return per ordinary share*
Capital return per ordinary share 81.24p 35.26p
Revenue return per ordinary share 3.58p 14.85p
Total return per ordinary share 84.82p 50.11p
* Based on the weighted average number of ordinary shares in issue during the
period.
PERFORMANCE
Six months to Year to
31 March 30 September
2015 2014
NAV Total Return 10.8% 6.4%
FTSE All-World Europe ex
UK Index Total Return* 9.3% 5.3%
* In sterling.
The NAV Total Returns are sourced from Edinburgh Partners Limited and include
dividends reinvested. The index performance figures are sourced from Thomson
Reuters Datastream.
Past performance is not a guide to future performance.
OBJECTIVE AND INVESTMENT POLICY
Objective
The objective of The European Investment Trust plc (the "Company") is to
achieve long-term capital growth through a diversified portfolio of Continental
European securities.
Investment Policy
The Board believes that investment in the diverse and increasingly accessible
markets of this region provides opportunities for capital growth over the long
term. At the same time, it considers the structure of the Company as a UK
listed investment trust, with fixed capital and an independent Board of
Directors, to be well-suited to investors seeking longer-term returns.
The Board recognises that investment in some European countries can be riskier
than in others. Investment risks are diversified through holding a wide range
of securities in different countries and industrial sectors. No more than 10%
of the value of the portfolio in aggregate may be held in securities in those
countries which are not included in the FTSE All-World European indices.
The Board has the authority to hedge the Company's exposure to movements in the
rate of exchange of currencies, principally the euro, in which the Company's
investments are denominated, against sterling, its reporting currency. However,
it is not generally the Board's practice to do this and the portfolio is not
currently hedged.
No investments in unquoted stocks can be made without the prior approval of the
Board. The level of gearing within the portfolio is agreed by the Board and
should not exceed 20% in normal market conditions.
No more than 10% of the total assets of the Company may be invested in other
listed investment companies (including investment trusts) except in such other
investment companies which themselves have stated that they will invest no more
than 15% of their total assets in other listed investment companies, in which
case the limit is 15%.
The Investment Manager's compliance with the limits set out in the investment
policy is monitored by the Board and the Alternative Investment Fund Manager.
INVESTMENT MANAGER'S REVIEW
Results
The NAV at 31 March 2015, the Company's half-year end, was 870.23p, an increase
of 8.7% on the NAV at 30 September 2014 of 800.41p. After including the special
and final dividends totalling 15.0p per share which were paid in January 2015,
the NAV total return for the six-month period was 10.8%. This is an
outperformance when compared to the total return from the FTSE All-World Europe
ex UK Index in sterling of 9.3%.
Share price and discount
During the six months to 31 March 2015, the Company's share price increased by
7.8% from 748.75p to 807.00p. The share price total return was 9.9%. The share
price discount to NAV widened from 6.5% to 7.3%.
Revenue
The net revenue return per share in the six-month period to 31 March 2015 was
3.58p, a small increase on the net revenue return per share of 3.23p received
in the six months to 31 March 2014.
In the year to 30 September 2014, the net revenue return per share was 14.85p.
As detailed in previous half-yearly reports, shareholders should be aware that
the revenue return for the half-year is not indicative of the full-year return,
as many European companies pay their dividends between April and September
while the expenses of running the Company are incurred on a more even basis
throughout the financial year.
Economic and market overview
When considering the period under review, it is worth reflecting on some fairly
significant and, some might consider, historic events that occurred:
- After much speculation, the European Central Bank (the "ECB") announced the
commencement of a quantitative easing programme. The €1.1 trillion (£834
billion) scheme will last until at least September 2016 and ECB President Mario
Draghi has offered to extend the scheme if inflation in the Eurozone does not
rise back to the ECB target of 2%.
- For the first time since its formation, the Eurozone recorded a period of
deflation.
- Partially in response to the above two points, there have been some very
substantial currency and bond market movements: the euro has weakened
considerably against most other major world currencies with which it trades;
the Swiss National Bank decided to abandon the Swiss franc peg to the euro; and
the sovereign bond yields of many European countries turned negative.
- The price of a barrel of oil fell by approximately one-half in response to
excess supply over demand and a Saudi-led OPEC decision not to reduce
production levels, with a partial recovery being seen since the half-year end.
Overall, the manifestation of the above events has seen business and consumer
confidence improve throughout the Eurozone. We have been here before in recent
years with economic expectations in Europe improving, but the expected growth
then failing to materialise. The difference is that the sheer scale of the
stimulus from quantitative easing, currency weakness and the oil price decline
makes it much more likely that, this time around, we should see a return to
economic growth within the Eurozone. Naturally, we have to hedge this with some
warnings. There are a number of important elections across Europe this year,
including those in Denmark, Portugal and Spain, which could impact sentiment.
In addition, the Ukrainian and Greek situations are highly unpredictable,
albeit contagion controls, or the promise of them, at present appear to be
ring-fencing Greece from the remainder of Europe.
The reaction in European equity markets has been unequivocally positive. The
10.8% NAV total return referred to above is stated in sterling terms, the
reporting currency of the Company. In terms of the euro, the return for the
six-month period was 19.3%.
It is worth expanding on the implications of the currency moves we have seen as
these are a contributory factor to the recent rise in European share prices.
Approximately 40% of the aggregate sales from the portfolio derive from outside
Europe, with, in order of size, North America, Asia and Latin America the three
largest locations of non-European sales.
The potential benefits of a weaker euro flow from two key impacts, the
translation effect and the transaction effect. There is a translation effect as
overseas profits are worth more in euros at the lower euro value compared to
prior periods. There is also a beneficial transaction effect for companies
which export from a weaker currency and this could result in a market share
gain due to improved price competitiveness.
We estimate that as many as half of the companies in the portfolio will benefit
from the translation effect of a weak reporting currency, whilst only a handful
(e.g., Volkswagen exporting cars from Germany) will make gains in market share,
i.e., a transaction effect. The principal reason why so few companies benefit
from a transaction effect is that, in recent decades, many of the major
European exporting companies have spent a significant amount of time and effort
re-locating production facilities out of Europe to the countries or continents
where demand is located. This means that the natural export market share gains
associated with sharp currency moves are nowhere near as significant as they
once were.
Whilst the translation effect is clearly a positive factor, there are many
additional considerations to take into account. These include whether companies
with overseas profits are able to remit cash to their country of domicile or
whether they need to reinvest locally. Taxation impacts need to be reviewed, as
do currency hedging arrangements. In addition, we have to analyse what happens
not just over the next year, but in the years beyond. Although in the short
term it is difficult to judge, our view would be that, from a longer-term
perspective, the euro will stabilise and regain some ground. This may mean that
some translation benefits may prove to be relatively short-lived. In summary,
whilst there are many positive aspects to the weakness of the euro, we would
not want to place a significant reliance on this providing a long-term boost to
earnings of European domiciled companies.
Portfolio
It is our opinion that we are in a bond market bubble. In the equity market,
this is distorting the valuation of many companies, in particular companies
whose cash flow characteristics are similar to those of a bond, collectively
'quality' or 'growth' stocks. These companies rely heavily on interest rates
for a determination of their value and as a group they now appear overvalued.
An example of this is GEA, a company which had been in the portfolio since
2011. GEA is a supplier of process technology equipment for the food and
beverage industry. Its products are large scale mechanical equipment and GEA's
customers are the major food and beverage industry groups, such as Nestlé and
Heineken. The industry is relatively stable as demand comes from the capital
expenditure of its clients, with GEA estimating the industry growth rate at
c.5% per annum. Investors appreciate this stability as well as the recent
restructuring efforts made by the company and the shares had been rerated
accordingly. Whilst we rate the management, the company's strategy and the
future outlook for the business, the valuation at 23 times 2015 consensus
earnings and 13 times our forecast 2019 earnings was considered to be just too
high and the shares were sold. Our observation is that this is the type of
rerating that investors are currently chasing in the equity market and in many
instances these valuations have gone too far.
If you believe, as we do, that inflation and hence interest rates will
normalise, these valuation distortions will unwind and the corrections could
potentially be quite violent. The timing of when these corrections occur is
uncertain, given that it requires a reversal of a trend which has been in place
for many years, namely the decline of bond yields to their current historically
low levels.
Our experience tells us that it is critical to maintain our long-term valuation
discipline. Whenever we go through periods when valuations become detached from
the reality of economic and profit fundamental analysis, we find this to be a
challenging environment. However, we have found that maintaining investment
discipline is the best way of delivering longer-term returns.
Against the current economic backdrop, we will remain relatively fully invested
for now but we will continue to rotate out of stocks which start to suffer from
valuation distortions into companies that offer a higher 'margin of safety' in
their valuations.
Outlook
The recent strong move in equities gives us something of a valuation conundrum.
The outlook for economic growth and European corporate profits is positive. We
are still at an early stage in the economic cycle in Europe and the impact of
stimulus from the quantitative easing programme has just started. However, it
does appear to us that, in aggregate, European equities have moved to discount
many of these positive factors. We therefore expect to adopt a cautious
approach to the management of the portfolio.
Dale Robertson
Edinburgh Partners Limited
26 May 2015
Past performance is not a guide to future performance.
PORTFOLIO OF INVESTMENTS
as at 31 March 2015
Valuation % of Net
Rank Company Sector Country £'000 Assets
1 (16) Volkswagen * Consumer Goods Germany 12,423 3.4 (2.6)
2 (13) Ryanair Consumer Services Ireland 12,388 3.4 (2.7)
3 (6) PostNL Industrials Netherlands 12,136 3.3 (3.1)
4 (-) Telecom Italia Telecommunications Italy 12,118 3.3 -
5 (5) Novartis Health Care Switzerland 12,011 3.3 (3.1)
6 (17) GAM Financials Switzerland 11,636 3.2 (2.6)
7 (20) Fresenius
Medical Care Health Care Germany 11,016 3.0 (2.5)
8 (2) Roche ** Health Care Switzerland 11,011 3.0 (3.2)
9 (14) Prysmian Industrials Italy 10,911 3.0 (2.7)
10 (3) BNP Paribas Financials France 10,740 2.9 (3.2)
11 (18) United Internet Technology Germany 10,220 2.8 (2.6)
12 (8) Sanofi Health Care France 10,172 2.8 (2.9)
13 (25) Unipol Gruppo Financials Italy 10,069 2.8 (2.3)
14 (4) Gerresheimer Health Care Germany 9,833 2.7 (3.2)
15 (-) DNB Financials Norway 9,523 2.6 -
16 (12) Valeo Consumer Goods France 9,277 2.5 (2.7)
17 (31) Hexagon B Industrials Sweden 9,241 2.5 (2.1)
18 (-) Bayer Basic Materials Germany 9,115 2.5 -
19 (11) Royal Dutch
Shell A Oil & Gas Netherlands 9,051 2.5 (2.9)
20 (23) Heineken Consumer Goods Netherlands 9,030 2.5 (2.4)
21 (26) KPN Telecommunications Netherlands 8,992 2.4 (2.3)
22 (38) Leoni Industrials Germany 8,734 2.4 (1.5)
23 (33) Pirelli Consumer Goods Italy 8,725 2.4 (2.0)
24 (10) ENI Oil & Gas Italy 8,561 2.3 (2.9)
25 (29) SAP Technology Germany 8,546 2.3 (2.1)
26 (9) Delta Lloyd Financials Netherlands 8,495 2.3 (2.9)
27 (15) BBVA Financials Spain 8,405 2.3 (2.7)
28 (36) TDC Telecommunications Denmark 7,921 2.2 (1.8)
29 (37) Outotec Industrials Finland 7,919 2.2 (1.8)
30 (30) ABB Industrials Switzerland 7,889 2.2 (2.1)
31 (28) Swedbank A Financials Sweden 7,466 2.0 (2.1)
32 (-) Petroleum
Geo-Services Oil & Gas Norway 7,219 2.0 -
33 (22) Piaggio Consumer Goods Italy 6,979 1.9 (2.4)
34 (39) Ipsos Consumer Services France 6,575 1.8 (1.5)
35 (24) Orange Telecommunications France 6,270 1.7 (2.4)
36 (27) Total Oil & Gas France 6,247 1.7 (2.2)
37 (-) Rocket Internet Financials Germany 6,195 1.7 -
38 (34) Aryzta Consumer Goods Switzerland 5,988 1.6 (2.0)
39 (7) BB Biotech Health Care Switzerland 1,963 0.5 (3.0)
Prior year investments sold during the period (14.6)
Total equity investments 351,010 95.9 (99.1)
Cash and other net assets 15,092 4.1 (0.9)
Net assets 366,102 100.0 (100.0)
The figures in brackets represent the position as at 30 September 2014.
* The investment is in non-voting preference shares.
** The investment is in non-voting shares.
DISTRIBUTION OF INVESTMENTS
as at 31 March 2015 (% of net assets)
% of Net
Sector Distribution Assets
Financials 19.8
Industrials 15.6
Health Care 15.3
Consumer Goods 14.3
Telecommunications 9.6
Oil & Gas 8.5
Consumer Services 5.2
Technology 5.1
Basic Materials 2.5
Cash and other net assets 4.1
100.0
% of Net
Geographical distribution Assets
Germany 20.8
Italy 15.7
Switzerland 13.8
France 13.4
Netherlands 13.0
Norway 4.6
Sweden 4.5
Ireland 3.4
Spain 2.3
Denmark 2.2
Finland 2.2
Cash and other net assets 4.1
100.0
DIRECTORS' STATEMENT OF PRINCIPAL RISKS AND UNCERTAINTIES
The important events that have occurred during the period under review and the
key factors influencing the Financial Statements are set out in the Investment
Manager's Review above. The principal factors that could impact the remaining
six months of the financial year are also detailed in the Investment Manager's
Review. Additional Risk Factors are set out below.
The Board considers that the following are the principal risks associated with
investing in the Company: investment and strategy risk, discount volatility
risk, market risk (comprising interest rate risk, currency risk and price
risk), liquidity risk, credit risk, gearing risk, regulatory risk, operational
risk and other financial risk. These risks, and the way in which they are
managed, are described in more detail under the heading "Principal risks and
uncertainties" within the Strategic Report in the Company's Annual Report and
Financial Statements for the year ended 30 September 2014. The Company's
principal risks and uncertainties have not changed materially since the date of
that report.
DIRECTORS' STATEMENT OF RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS
The Directors confirm that to the best of their knowledge:
• The condensed set of Financial Statements has been prepared in accordance
with the statement on Half-Yearly Financial Reports issued by the UK
Accounting Standards Board and gives a true and fair view of the assets,
liabilities, financial position and profit of the Company.
• This Half-Yearly Report includes a fair review of the information required
by:
a) 4.2.7R of the Disclosure and Transparency Rules, being an indication of
important events that have occurred during the first six months of the
financial year and their impact on the condensed set of Financial
Statements; and a description of the principal risks and uncertainties for
the remaining six months of the year; and
b) 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the Company during that period; and any changes in the
related party transactions described in the last Annual Report that could
do so.
The Half-Yearly Report was approved by the Board of Directors on 26 May 2015 and
the above responsibility statement was signed on its behalf by Douglas
McDougall, Chairman.
INCOME STATEMENT (UNAUDITED)
for the six months to 31 March 2015
Six months to Six months to Year to
31 March 2015 31 March 2014 30 September 2014
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Note £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains on investments
at fair value - 35,209 35,209 - 43,547 43,547 - 15,612 15,612
Foreign exchange losses (43) (1,033) (1,076) (8) (270) (278) (60) (779) (839)
Income 2 2,878 - 2,878 2,779 - 2,779 9,528 - 9,528
Management fee (884) - (884) (869) - (869) (1,752) - (1,752)
Other expenses (222) - (222) (194) - (194) (367) - (367)
Net return before finance
costs and taxation 1,729 34,176 35,905 1,708 43,277 44,985 7,349 14,833 22,182
Finance costs (6) - (6) (63) - (63) (95) - (95)
Net return on ordinary
activities before taxation 1,723 34,176 35,899 1,645 43,277 44,922 7,254 14,833 22,087
Taxation on ordinary
activities 3 (216) - (216) (288) - (288) (1,008) - (1,008)
Net return after taxation 1,507 34,176 35,683 1,357 43,277 44,634 6,246 14,833 21,079
pence pence pence pence pence pence pence pence pence
Return per ordinary share* 3.58 81.24 84.82 3.23 102.87 106.10 14.85 35.26 50.11
The total column of the statement is the Profit and Loss Account of the
Company. The revenue and capital columns are prepared under guidance published
by the Association of Investment Companies ("AIC").
All revenue and capital items in the above statement derive from continuing
operations.
A separate Statement of Recognised Gains and Losses has not been prepared as
all such gains and losses are included in the Income Statement.
* The return per ordinary share for the six months to 31 March 2015 is based on
the net revenue return after taxation of £1,507,000 (six months to 31 March
2014: £1,357,000; year to 30 September 2014: £6,246,000) and the net capital
return after taxation of £34,176,000 (six months to 31 March 2014: £43,277,000;
year to 30 September 2014: £14,833,000) and on 42,069,371 (six months to
31 March 2014: 42,069,371; year to 30 September 2014: 42,069,371) ordinary shares,
being the weighted average number of ordinary shares in issue during the
period.
BALANCE SHEET (UNAUDITED)
as at 31 March 2015
31 March 31 March 30 September
2015 2014 2014
Note £'000 £'000 £'000
Fixed asset investments
Investments at fair value through
profit or loss 351,010 352,246 333,696
Current assets
Debtors 565 748 30
Taxation recoverable 741 783 754
Cash at bank 14,105 10,920 5,026
15,411 12,451 5,810
Creditors: amounts falling due
within one year 319 4,413 2,777
Net current assets 15,092 8,038 3,033
Net assets 366,102 360,284 336,729
Capital and reserves
Called-up share capital 4 10,517 10,517 10,517
Share premium account 123,749 123,749 123,749
Capital redemption reserve 8,294 8,294 8,294
Capital reserve 217,754 212,022 183,578
Revenue reserve 5,788 5,702 10,591
Total equity shareholders' funds 366,102 360,284 336,729
pence pence pence
Net asset value per ordinary share 6 870.23 856.40 800.41
CASH FLOW STATEMENT (UNAUDITED)
for the six months to 31 March 2015
Six months Six months Year to
to 31 March to 31 March 30 September
2015 2014 2014
Note £'000 £'000 £'000
Operating activities
Investment income received 2,304 2,634 9,465
Other income received 2 3 3
Management fees paid (1,008) (832) (1,861)
Other cash payments (200) (218) (387)
Net cash inflow from operating
activities 7 1,098 1,587 7,220
Servicing of finance
Finance costs (6) (63) (95)
Taxation (204) (347) (1,038)
Financial investment
Purchases of investments (60,246) (83,037) (162,177)
Sales of investments 75,780 98,077 166,922
Exchange gains on settlement 363 9 39
Net cash inflow from financial
investment 15,897 15,049 4,784
Equity dividends paid 5 (6,310) (7,572) (7,572)
Net cash inflow before financing 10,475 8,654 3,299
Financing
Own shares purchased and cancelled - - -
Net cash inflow/(outflow) from
financing - - -
Increase in cash 8 10,475 8,654 3,299
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS (UNAUDITED)
for the six months to 31 March 2015
Six months Six months Year to
to 31 March to 31 March 30 September
2015 2014 2014
£'000 £'000 £'000
Opening equity shareholders' funds 336,729 323,222 323,222
Net return after taxation for the
period 35,683 44,634 21,079
Dividends paid (6,310) (7,572) (7,572)
Closing equity shareholders' funds 366,102 360,284 336,729
NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED)
for the six months to 31 March 2015
1. Accounting policies
These Financial Statements have been prepared on the basis of the accounting
policies set out in the Company's Annual Report and Financial Statements for
the year ended 30 September 2014. These accounting policies are expected to be
followed throughout the year ending 30 September 2015.
2. Income
Six months to Six months to Year to
31 March 31 March 30 September
2015 2014 2014
£'000 £'000 £'000
Income from investments
Overseas dividends 2,876 2,776 9,525
Other income 2 3 3
Total income 2,878 2,779 9,528
3. Taxation
The taxation charge for the six months to 31 March 2015 is £216,000 (six months
to 31 March 2014: £288,000; year to 30 September 2014: £1,008,000).
The taxation charge comprises a corporation tax charge for the six months to 31
March 2015 of £nil (six months to 31 March 2014: £nil; year to 30 September
2014: £nil) and irrecoverable withholding tax suffered of £216,000 (six months
to 31 March 2014: £288,000; year to 30 September 2014: £1,008,000).
4. Share capital
Allotted, called-up and fully paid
Number of shares £'000
Equity share capital
Ordinary shares of 25p each
Balance at 30 September 2014 42,069,371 10,517
Shares issued - -
Shares cancelled - -
Balance at 31 March 2015 42,069,371 10,517
During the six months to 31 March 2015, no ordinary shares were issued or
purchased and cancelled (six months to 31 March 2014 and year to 30 September
2014: no ordinary shares were issued or purchased and cancelled).
5. Dividends
Six months Six months Year to
to 31 March to 31 March 30 September
Payment 2015 2014 2014
date £'000 £'000 £'000
Final dividend for the year ended 30 January
30 September 2014 of 14.0p 2015 5,889 - -
Special dividend for the year ended 30 January
30 September 2014 of 1.0p 2015 421 - -
Final dividend for the year ended 31 January
30 September 2013 of 14.0p 2014 - 5,889 5,889
Special dividend for the year ended 31 January
30 September 2013 of 4.0p 2014 - 1,683 1,683
6,310 7,572 7,572
6. Net asset value per ordinary share
31 March 31 March 30 September
2015 2014 2014
Net assets attributable at the
period end £366,102,000 £360,284,000 £336,729,000
Number of ordinary shares in issue
at the period end 42,069,371 42,069,371 42,069,371
Net asset value per ordinary share 870.23p 856.40p 800.41p
7. Reconciliation of net return before finance costs and taxation to net cash
inflow from operating activities
Six months Six months Year to
to 31 March to 31 March 30 September
2015 2014 2014
£'000 £'000 £'000
Net return before finance costs and
taxation 35,905 44,985 22,182
Adjustment for returns from
non-operating activities:
- Gains on investments (35,209) (43,547) (15,612)
- Foreign exchange losses of a capital
nature 1,033 270 779
Return from operating activities 1,729 1,708 7,349
Adjustment for non-cash flow items:
- (Increase)/decrease in debtors and
accrued income (535) (127) 2
- (Decrease)/increase in creditors (96) 6 (131)
Net cash inflow from operating activities 1,098 1,587 7,220
8. Reconciliation of net cash flow to net cash
Six months Six months Year to
to 31 March to 31 March 30 September
2015 2014 2014
£'000 £'000 £'000
Movement in net cash resulting from
cash flows 10,475 8,654 3,299
Foreign exchange movement (1,396) (279) (818)
Movement in net cash 9,079 8,375 2,481
Net cash brought forward 5,026 2,545 2,545
Net cash carried forward 14,105 10,920 5,026
9. Exchange rates
Detailed below are the exchange rates against sterling used in the preparation
of the Financial Statements.
31 March 31 March 30 September
2015 2014 2014
Euro 1.3822 1.2096 1.2834
Swiss franc 1.4419 1.4727 1.5490
Norwegian krone 11.9638 9.9813 10.4122
Swedish krona 12.8025 10.8091 11.6860
Danish krone 10.3262 9.0310 9.5529
US dollar 1.4845 1.6672 1.6212
NZ dollar 1.9796 1.9213 2.0799
10. Financial information
The financial information for the six months to 31 March 2015 and for the six
months to 31 March 2014 has not been audited or reviewed by the Company's
Auditors pursuant to the Auditing Practices Board guidance on such reviews. The
financial information contained in this report does not constitute statutory
accounts within the meaning of Section 434 of the Companies Act 2006.
The latest published audited Financial Statements which have been delivered to
the Registrar of Companies are for the year ended 30 September 2014; the report
of the independent Auditors thereon was unqualified and did not contain a
statement under Section 498 of the Companies Act 2006. The information for the
year ended 30 September 2014 is an extract from those Financial Statements.
11. Status of the Company
It is the intention of the Directors to conduct the affairs of the Company so
that it continues to satisfy the conditions for approval as an investment trust
company as set out in Sections 1158 and 1159 of the Corporation Tax Act 2010.
12. Going concern
The Company's business activities, together with factors likely to affect its
future development, performance and financial performance, are set out in the
Investment Manager's Review and Directors' Statement of Responsibilities
contained in the Half-Yearly Financial Report. The Company's principal risks
are investment and strategy risk, discount volatility risk, market risk
(comprising interest rate risk, currency risk and price risk), liquidity risk,
credit risk, gearing risk, regulatory risk, operational risk and other
financial risk. The Company's assets consist principally of a diversified
portfolio of listed European equity shares, which in most circumstances are
realisable within a short period of time and exceed its current liabilities by
a significant amount. The Directors have concluded that the Company has
adequate resources to continue in operational existence for the foreseeable
future. For this reason, they have adopted the going concern basis in preparing
the Financial Statements.
13. Related party transactions
There were no related party transactions during the period.
SHAREHOLDER INFORMATION
Investing in the Company
The Company's ordinary shares are traded on the London Stock Exchange and the
New Zealand Stock Exchange and can be bought or sold through a stockbroker or
financial adviser. The ordinary shares are eligible for inclusion in New ISAs,
Junior ISAs and SIPPs. These are available through Alliance Trust Savings, who
also offer the opportunity to invest in the Company through a Dealing Account.
The Company's ordinary shares are also available on other share trading
platforms.
Frequency of NAV publication
The Company's NAV is released daily to the London Stock Exchange and the New
Zealand Stock Exchange and published on the Company's website at
www.theeuropeaninvestmenttrust.com and on the website of Edinburgh Partners at
www.edinburghpartners.com.
Share price and sources of other information
The Company's ordinary share price is quoted daily in the Financial Times, the
Daily Telegraph and The Times under "Investment Companies". Investors in New
Zealand can obtain share prices from leading newspapers in that country.
Previous day closing price, daily NAV and other portfolio information is
published on the Company's website at www.theeuropeaninvestmenttrust.com and on
the website of Edinburgh Partners at www.edinburghpartners.com. Other useful
information on investment trusts, such as prices, net asset values and company
announcements, can be found on the websites of the London Stock Exchange at
www.londonstockexchange.com and the AIC at www.theaic.co.uk.
Share register enquiries
The register for the ordinary shares is maintained by Computershare Investor
Services PLC. In the event of queries regarding your holding, please contact
the Registrar on 0870 889 4086 or email: web.queries@computershare.co.uk.
Changes of name and/or address must be notified in writing to the Registrar, at
the relevant address detailed below. You can check your shareholding and find
practical help on updating your details at www.investorcentre.co.uk.
Key dates
Company's year end 30 September
Annual results announced November
Annual General Meeting January
Annual dividend paid January
Company's half-year end 31 March
Half-yearly results announced May
Portfolio updates
The Company releases details of its portfolio on a monthly basis to the London
Stock Exchange and the New Zealand Stock Exchange and these may be viewed on
the Company's website at www.theeuropeaninvestmenttrust.com and on the website
of Edinburgh partners at www.edinburghpartners.com.
Association of Investment Companies
The Company is a member of the AIC, which publishes monthly statistical
information in respect of member companies. For further details, please contact
the AIC on 020 7282 5555, enquiries@theaic.co.uk or visit the website:
www.theaic.co.uk.
RISK FACTORS
This document is not a recommendation, offer or invitation to buy, sell or hold
shares of the Company. If you wish to deal in shares of the Company, you may
wish to contact an authorised professional investment adviser.
An investment in the Company should be regarded as long term and is only
suitable for investors who are capable of evaluating the risks and merits of
such investment and who have sufficient resources to bear any loss which might
result from such investment.
The market value of, and the income derived from, the ordinary shares can
fluctuate. The Company's ordinary share price may go down as well as up. Past
performance is not a guide to future performance. There is no guarantee that
the market price of the ordinary shares will fully reflect their underlying net
asset value. Fluctuations in exchange rates will affect the value of overseas
investments (and any income received) held by the Company. Investors may not
get back the full value of their investment. There can be no guarantee that the
investment objective of the Company will be met. The levels of, and reliefs
from, taxation may change.
This Half-Yearly Report contains "forward-looking statements" with respect to
the Company's plans and its current goals and expectations relating to its
future financial condition, performance and results. By their nature, all
forward-looking statements involve risk and uncertainty because they relate to
future events that are beyond the Company's control. As a result, the Company's
actual future financial condition, performance and results may differ
materially from the plans, goals and expectations set forth in the Company's
forward-looking statements. The Company undertakes no obligation to update the
forward-looking statements contained within this Half-Yearly Report or any
other forward-looking statements it makes.
The Company is a public company. It is registered in England and Wales and its
shares are traded on the London Stock Exchange and the New Zealand Stock
Exchange. The Company is not regulated or authorised by the Financial Conduct
Authority.
The Directors of the Company, the directors of Edinburgh Partners AIFM Limited
and the directors and employees of Edinburgh Partners Limited may (subject to
applicable laws and regulations) hold shares in the Company and may buy, sell
or offer to deal in the Company's shares from time to time.
CORPORATE INFORMATION
Directors (all non-executive) Registrar - New Zealand
Douglas C P McDougall OBE (Chairman) Computershare Investor Services Limited
William D Eason Private Bag 92119, Victoria Street West
Michael B Moule Auckland 1142, New Zealand
Dr Michael T Woodward
Level 2, 159 Hurstmere Road, Takapuna
Auckland 0622, New Zealand
Company Secretary and Registered Office Solicitors
Kenneth J Greig Dickson Minto W.S.
Beaufort House 16 Charlotte Square
51 New North Road Edinburgh EH2 4DF
Exeter EX4 4EP
Alternative Investment Fund Manager Depositary
Edinburgh Partners AIFM Limited Northern Trust Global Services Limited
27-31 Melville Street 50 Bank Street
Edinburgh EH3 7JF Canary Wharf
London E14 5NT
Investment Manager Custodian
Edinburgh Partners Limited The Northern Trust Company
27-31 Melville Street 50 Bank Street
Edinburgh EH3 7JF Canary Wharf
London E14 5NT
Independent Auditors Stockbroker
PricewaterhouseCoopers LLP J.P. Morgan Securities plc
Atria One 25 Bank Street
144 Morrison Street Canary Wharf
Edinburgh EH3 8EX London E14 5JP
Registrar - UK
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Registered in England and Wales No. 1055384
An investment company as defined under Section 833 of the Companies Act 2006
The Company is a member of the Association of Investment Companies
Enquiries
Dale Robertson 0131 270 3800
Kenneth J Greig 0131 270 3800
Edinburgh Partners AIFM Limited
27-31 Melville Street
Edinburgh EH3 7JF
26 May 2015
END
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of this announcement.
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