Final Results

Embargoed for 7am 24 November 2006 PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS OF THE MAJEDIE INVESTMENTS PLC GROUP for the year ended 30 September 2006 Highlights for the Year - Total shareholder return: 14.6% - Net asset value total return: 15.0% - Investment portfolio return (total assets): 12.9% - Benchmark total return*: 13.0% - Dividend increased by 5.0% - above inflation increase for 17th consecutive year. Performance for three years ended 30 September 2006 - Total shareholder return: 88.9% - Net asset value total return: 67.6% - Investment portfolio return (total assets): 63.6% - Benchmark total return*: 59.4% - Dividend increased by 12.4% * The benchmark is 70% FTSE All-Share Index + 30% FTSE World ex UK Index and is calculated by The WM Company. Chairman's Statement I am delighted to report that over the financial year the consolidated net revenue return before tax amounted to Â£9.3m, increasing by 69% from last year's figure of Â£5.5m. Furthermore, total shareholder return during the year was 14.6% exceeding the benchmark return of 13.0%. A final dividend of 6.1 pence per share is proposed. This gives a total for the year of 9.5 pence per share representing an increase of 5.0% on last year. This is the seventeenth consecutive year in which the dividend has increased by more than the rate of inflation. The portfolio is diversified with investment holdings relating to businesses in many different countries and industries. We continue to have a leaning towards the global resources sectors since we believe the growing economies of China and India will persist in driving significant demand for industrial commodities. Our original equity investment of Â£700,000 in Majedie Asset Management four years ago has this year matured much more rapidly than expected due to the rapid and profitable growth of the business. Our original debt financing of Â£2.1m was repaid with dividends and interest and our equity shareholding has reduced to 30% as a result. Despite this the Board has revalued the investment at Â£13m compared with an Â£8m valuation of the equity last year. A special dividend from the Company amounting to Â£1.5m is due to be received and this is included within the Â£13m valuation. In May we welcomed Gerry Aherne as a new Director. He brings to the Board considerable experience of fund management and a track record of establishing and growing successful businesses. In July Paul Marsh stood down as a non-executive Director after nearly eight years. We thanked him heartily for his sound advice and wise counsel and wished him the very best for the future. The progress made this year is the result of much hard work and application on the part of the in-house team in recent years. I would like to thank them and my other fellow Board members for the conscientious manner in which all have worked to deliver such results. The current outlook is for global economic growth to slow somewhat over the coming year, interest rates are expected to be reduced - despite many, including the Bank of England, being cautious about the possibility of rising inflation. The world economy is becoming less dependent on the US as its main engine. The economy of China combined with that of India is of an increasingly significant size to affect positively the global business cycle. Henry S Barlow Chairman Chief Executive's Statement During the year the Group's net assets increased by Â£20.4m and on a total return basis delivered 15.0% beating the benchmark by 2.0%. This result was materially assisted by our long term debentures and by a strong contribution from Majedie Asset Management. Profit Group net revenue return before tax for the year was Â£9.3m, increasing by 69% from last year's figure of Â£5.5m. The Company's net revenue return before tax was Â£5.2m showing an increase of 53% over the previous year's figure of Â£3.4m. For the first seven months of the financial year the full results of Majedie Asset Management have been consolidated with the rest of the Majedie Group. From 30 April 2006 our shareholding in the company reduced to 30% and therefore for the rest of the year a single after tax figure is included in the Consolidated Income Statement as 'share of net return of associate'. This year the group income statement has been boosted by a proportion of Majedie Asset Management's net profit before tax amounting to Â£3.7m and by Â£1.5m relating to the first of four special dividends. Costs Compared with last year total group costs increased by 45% from Â£6.2m to Â£9.0m largely due to the profit sharing arrangements within Majedie Asset Management. Company costs of Â£2.5m increased by 32% over last year's Â£1.9m due to a number of factors including: a significant reimbursement last year of a prior year charge which reduced costs in 2005; Majedie Asset Management moved into separate offices in 2005 reducing the benefits from shared office costs; there were recruitment and other one-off staff related costs and advisers' fees were incurred for a project which did not proceed. 3 year performance During the last three years the investment portfolio beat the benchmark by 4.2%, NAV total return of 67.6% exceeded the benchmark return of 59.4% by 8.2%, the discount with debt at par narrowed from 19.7% to 11.9% and the total shareholder return of 88.9% outperformed by 29.5%. Majedie Asset Management As already seen from its contribution to our results the Majedie Asset Management business has continued to grow strongly and profitably during the year. Assets under management have increased from Â£2.3bn to Â£3.7bn. The business as a whole has generated a significantly greater profit before tax during the year of Â£6.2m compared with Â£2.1m for last year. The investment has been valued by the Board in the Company Balance Sheet at Â£11.5m plus a special dividend receivable of Â£1.5m totalling Â£13m. This is not reflected in the Consolidated Balance Sheet nor in the weekly announced net asset value. It compares with Â£10.1m as at 30 September 2005 in respect of a valuation of Â£8m for the equity shares and Â£2.1m relating to preference shares which were repaid during the year. The directors' valuation of the Company's equity investment in Majedie Asset Management has therefore increased by Â£3.5m compared with last year. International Financial Reporting Standards (IFRS) The financial statements within this annual report are prepared according to IFRS as required by the Companies Act and the Listing Rules as a result of EU legislation. There are three main areas where the change to IFRS from the previously followed UK GAAP affects the accounting treatment significantly: - the valuation of listed securities using closing bid prices rather than closing mid market prices - resulting in a one-off reduction in net asset value of 1.5p per share as at 1 October 2005; - the calculation and charging in the revenue account of the fair value of share options and other share based payments to employees; - the Company's dividend payments are now only recognised for accounting purposes when they are either paid during the financial year or when they have been approved by shareholders - resulting in a temporary increase in net asset value of 5.8p per share as at 1 October 2005. Business Development We continue to seek other business development opportunities in areas of specialisation which have strong prospects of generating superior investment returns - particularly where such opportunities would be complementary to, and would generate synergies with the existing business. Robert Clarke Chief Executive For further information please contact Robert Clarke, Chief Executive on 020 7645 8711; e-mail: rec@majedie.co.uk UNAUDITED CONSOLIDATED INCOME STATEMENT for the year ended 30 September 2006 Year ended 30 September 2006 Year ended 30 September 2005 Revenue Capital Total Revenue Capital Total Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Investments Gains on investments at fair value through profit or loss 22,738 22,738 40,423 40,423 Net investment result 22,738 22,738 40,423 40,423 Income Dividends and interest 6,271 6,271 4,669 4,669 Client fee income in subsidiary company 10,915 10,915 6,500 6,500 Other income 62 62 54 54 Total income 17,248 17,248 11,223 11,223 Expenses Administration expenses (7,593) (1,423) (9,016) (5,019) (1,205) (6,224) Return before finance costs, share of net return of associate and taxation 9,655 21,315 30,970 6,204 39,218 45,422 Share of net return of 340 340 associate Finance costs (699) (2,098) (2,797) (700) (2,101) (2,801) Net return before taxation 9,296 19,217 28,513 5,504 37,117 42,621 Taxation (1,331) (1,331) (43) (43) Net return after taxation for the period 7,965 19,217 27,182 5,461 37,117 42,578 Attributable to: Equity holders of the parent 6,815 19,217 26,032 4,653 37,117 41,770 Minority interest 1,150 1,150 808 808 7,965 19,217 27,182 5,461 37,117 42,578 Return per ordinary pence pence pence pence pence pence share: Basic and diluted 13.1 36.9 50.0 8.9 71.3 80.2 The total column of this statement is the Consolidated Income Statement of the Group prepared under International Financial Reporting Standards (IFRS). The supplementary revenue and capital columns are prepared under guidance published by the Association of Investment Companies. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. The comparative figures for the year ended 30 September 2005 have been adjusted for the adoption of IFRS from the original figures presented within the statutory accounts for the year ended 30 September 2005. Details of the transition are included within the Transition Statements. UNAUDITED COMPANY INCOME STATEMENT for the year ended 30 September 2006 Year ended 30 September 2006 Year ended 30 September 2005 Revenue Capital Total Revenue Capital Total Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Investments Gains on investments at fair value through profit or loss 23,706 23,706 40,521 40,521 Gain on revaluation of subsidiary 6,842 6,842 Gain on revaluation of associate 3,517 3,517 Net investment result 27,223 27,223 47,363 47,363 Income Dividends and interest 6,881 6,881 4,664 4,664 Other income 71 71 85 85 Total income 6,952 6,952 4,749 4,749 Expenses Administration expenses (1,061) (1,423) (2,484) (691) (1,205) (1,896) Return before finance costs and taxation 5,891 25,800 31,691 4,058 46,158 50,216 Finance costs (699) (2,098) (2,797) (700) (2,101) (2,801) Net return before taxation 5,192 23,702 28,894 3,358 44,057 47,415 Taxation (37) (37) (43) (43) Net return after taxation for the period 5,155 23,702 28,857 3,315 44,057 47,372 Return per ordinary share: pence pence pence pence pence pence Basic and diluted 9.9 45.6 55.5 6.4 84.6 91.0 The total column of this statement is the Income Statement of the Company prepared under International Financial Reporting Standards (IFRS). The supplementary revenue and capital columns are prepared under guidance published by the Association of Investment Companies. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. The comparative figures for the year ended 30 September 2005 have been adjusted for the adoption of IFRS from the original figures presented within the statutory accounts for the year ended 30 September 2005. Details of the transition are included within the Transition Statements. UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 30 September 2006 Share Share Capital Share Capital Capital Retained Own Equity Minority Total capital premium redemption options reserve reserve - earnings shares attributable interest reserve reserve - unrealised reserve to the realised equity holders of the parent Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Year ended 30 September 2006 At 30 September 5,253 785 56 37 89,507 57,501 26,723 (1,422) 178,440 405 178,845 2005 Net return after tax for the year 6,815 6,815 1,150 7,965 Investments at fair value through profit or loss - Increase in unrealised appreciation before transfer on disposal 18,353 18,353 18,353 - Transfer on disposal of investments 28,352 (28,352) - Net gain on realisation of investments 5,353 5,353 5,353 Loss on deemed disposal (968) (968) (968) Costs charged to capial (3,521) (3,521) (3,521) Total recognised income and expenditure 29,216 (9,999) 6,815 26,032 1,150 27,182 Share options 72 72 72 expense Dividends declared and paid in year (4,815) (4,815) (4,815) Own shares purchased/sold by Employee Incentive Trust (EIT) (24) (486) (510) (510) Adjustment due to 25% reduction in the Company's holding in Majedie Asset Management Limited 804 804 Exclusion of Company's holding in Majedie Asset Management (2,359) (2,359) Limited At 30 September 5,253 785 56 85 118,723 47,502 28,723 (1,908) 199,219 0 199,219 2006 Year ended 30 September 2005 At 30 September 5,253 785 56 18 79,498 30,393 26,627 (1,148) 141,482 (436) 141,046 2004 Net return after tax for the year 4,653 4,653 808 5,461 Investments at fair value through profit or loss -Increase in unrealised appreciation before transfer on disposal 37,107 37,107 37,107 -Transfer on disposal of investments 9,999 (9,999) -Net gain on realisation of investments 3,414 3,414 3,414 Loss on deemed (98) (98) (98) disposal Costs charged to (3,306) (3,306) (3,306) capital Total recognised income and expenditure 10,009 27,108 4,653 41,770 808 42,578 Share options 19 19 19 expense Dividends declared and paid in year (4,557) (4,557) (4,557) Own shares purchased by EIT (274) (274) (274) Adjustment due to 10% reduction in the Company's holding in Majedie Asset Management Limited 33 33 At 30 September 5,253 785 56 37 89,507 57,501 26,723 (1,422) 178,440 405 178,845 2005 The comparative figures for the year ended 30 September 2005 have been adjusted for the adoption of IFRS from the original figures presented within the statutory accounts for the year ended 30 September 2005. Details of the transition are included within the Transition Statements. UNAUDITED COMPANY STATEMENT OF CHANGES IN EQUITY for the year ended 30 September 2006 Share Share Capital Share Capital Capital Retained Own Total capital premium redemption options reserve- reserve- earnings shares reserve reserve realised unrealised reserve Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Â£000 Year ended 30 September 2006 At 30 September 5,253 785 56 37 89,574 63,537 27,763 (1,422) 185,583 2005 Net return after tax for the year 5,155 5,155 Investments at fair value through profit or loss - Increase in unrealised appreciation before transfer on disposal 18,353 18,353 - Transfer on disposal of investments 28,352 (28,352) - Net gain on realisation of investments 5,353 5,353 Revaluation of investment in associated 3,517 3,517 undertaking Costs charged to (3,521) (3,521) capital Total recognised income and expenditure 30,184 (6,482) 5,155 28,857 Share options 72 72 expense Dividends declared and paid in year (4,815) (4,815) Own shares purchased/sold by Employee Incentive Trust (EIT) (24) (486) (510) At 30 September 5,253 785 56 85 119,758 57,055 28,103 (1,908) 209,187 2006 Year ended 30 September 2005 At 30 September 5,253 785 56 18 79,467 29,587 29,005 (1,148) 143,023 2004 Net return after tax for the year 3,315 3,315 Investments at fair value through profit or loss - Increase in unrealised appreciation before transfer on disposal 37,107 37,107 - Transfer on disposal of investments 9,999 (9,999) -Net gain on realisation of investments 3,414 3,414 Revaluation of investment in subsidiary 6,842 6,842 undertaking Costs charged to (3,306) (3,306) capital Total recognised income and expenditure 10,107 33,950 3,315 47,372 Share options 19 19 expense Dividends declared and paid in year (4,557) (4,557) Own shares purchased by EIT (274) (274) At 30 September 5,253 785 56 37 89,574 63,537 27,763 (1,422) 185,583 2005 The comparative figures for the year ended 30 September 2005 have been adjusted for the adoption of IFRS from the original figures presented within the statutory accounts for the year ended 30 September 2005. Details of the transition are included within the Transition Statements. UNAUDITED CONSOLIDATED BALANCE SHEET at 30 September 2006 30 September 30 September 2006 2005 Â£000 Â£000 Non-current assets Property and equipment 89 613 Investments at fair value through profit or loss 227,085 206,434 Intangible fixed assets 360 Investment in associate 1,547 228,721 207,407 Current assets: Trade and other receivables 3,766 4,946 Cash and cash equivalents 4,546 4,421 8,312 9,367 Total assets 237,033 216,774 Current liabilities Trade and other payables (4,100) (4,174) Total assets less current liabilities 232,933 212,600 Non-current liabilities Trade and other payables (55) Debenture stock (33,714) (33,700) (33,714) (33,755) Total liabilities (37,814) (37,929) Net assets 199,219 178,845 Represented by: Ordinary share capital 5,253 5,253 Share premium 785 785 Capital redemption reserve 56 56 Share options reserve 85 37 Capital reserve - realised 118,723 89,507 Capital reserve - unrealised 47,502 57,501 Retained earnings 28,723 26,723 Own shares reserve (1,908) (1,422) Equity attributable to the equity holders of the parent 199,219 178,440 Minority interest 405 Total equity 199,219 178,845 Net asset value per share pence pence Basic and fully diluted 384.0 343.0 The comparative figures for the year ended 30 September 2005 have been adjusted for the adoption of IFRS from the original figures presented within the statutory accounts for the year ended 30 September 2005. Details of the transition are included within the Transition Statements. UNAUDITED COMPANY BALANCE SHEET at 30 September 2006 30 September 30 September 2006 2005 Â£000 Â£000 Non-current assets: Investments at fair value through profit or 227,085 206,434 loss Investment in subsidiaries 194 10,294 Investments in associate 11,517 238,796 216,728 Current assets: Trade and other receivables 3,597 2,201 Cash and cash equivalents 4,297 2,202 7,894 4,403 Total assets 246,690 221,131 Current liabilities Trade and other payables (3,789) (1,848) Total assets less current liabilities 242,901 219,283 Non-current liabilities Debenture Stock (33,714) (33,700) Total liabilities (37,503) (35,548) Net assets 209,187 185,583 Represented by: Ordinary share capital 5,253 5,253 Share premium 785 785 Capital redemption reserve 56 56 Share options reserve 85 37 Capital reserve - realised 119,758 89,574 Capital reserve - unrealised 57,055 63,537 Retained earnings 28,103 27,763 Own shares reserve (1,908) (1,422) Total equity 209,187 185,583 Net asset value per share pence pence Basic and fully diluted 403.2 356.7 The comparative figures for the year ended 30 September 2005 have been adjusted for the adoption of IFRS from the original figures presented within the statutory accounts for the year ended 30 September 2005. Details of the transition are included within the Transition Statements. UNAUDITED CONSOLIDATED CASH FLOW STATEMENT for the year ended 30 September 2006 30 September 30 September 2006 2005 Â£000 Â£000 Net cash flow operating activities Consolidated net return before taxation 28,513 42,621 Adjustments for: Gains on investments (22,738) (40,423) Share of net return of associate (340) Dividends reinvested (41) Depreciation 123 171 Loss on sale of fixed assets 1 40 Share based remuneration 72 19 5,631 2,387 Finance costs 2,797 2,801 Operating cashflows before movements in working capital 8,428 5,188 Increase in trade and other payables 1,451 1,597 Increase in trade and other receivables (2,015) (2,095) Net cash from operating activities before tax 7,864 4,690 Tax recovered 14 4 Tax on unfranked income (43) (57) Net cash inflow from operating activities 7,835 4,637 Investing activities Purchases of investments (133,592) (119,611) Sales of investments 137,973 113,861 Purchases of tangible assets (42) (384) Exclusion of cash on MAM ceasing to be a subsidiary at 30 April 2006 (3,869) Net cash inflow/(outflow) from investing activities 470 (6,134) Financing activities Interest paid (2,783) (2,788) Equity dividends paid (4,815) (4,557) Purchases of own shares (582) (274) Net cash outflow from financing activities (8,180) (7,619) Increase/(decrease) in cash and cash equivalents for period 125 (9,116) Cash and cash equivalents at start of period 4,421 13,537 Cash and cash equivalents at end of period 4,546 4,421 The comparative figures for the year ended 30 September 2005 have been adjusted for the adoption of IFRS from the original figures presented within the statutory accounts for the year ended 30 September 2005. Details of the transition are included within the Transition Statements. UNAUDITED COMPANY CASH FLOW STATEMENT for the year ended 30 September 2006 30 September 30 September 2006 2005 Â£000 Â£000 Net cash flow operating activities Consolidated net return before taxation 28,894 47,415 Adjustments for: Gains on investments (23,706) (47,363) Gain on revaluation of associate (3,517) Dividends reinvested (41) Share based remuneration 72 19 Recharge expenses 104 1,847 30 Finance costs 2,797 2,801 Operating cashflows before movements in working capital 4,644 2,831 Increase in trade and other payables 53 (72) Increase in trade and other receivables (1,124) (116) Net cash inflow from operating activities before tax 3,573 2,643 Tax recovered 14 4 Tax on unfranked income (43) (57) Net cash inflow from operating activities 3,544 2,590 Investing activities Purchases of investments (133,592) (119,611) Sales of investments 137,973 113,861 Net cash inflow/(outflow) from investing activities 4,381 (5,750) Financing activities Repayment of preference shares and loan 2,350 - Interest paid (2,783) (2,788) Equity dividends paid (4,815) (4,557) Purchases of own shares (582) (274) Net cash outflow from financing activities (5,830) (7,619) Increase/(decrease) in cash and cash equivalents for period 2,095 (10,779) Cash and cash equivalents at start of period 2,202 12,981 Cash and cash equivalents at end of period 4,297 2,202 The comparative figures for the year ended 30 September 2005 have been adjusted for the adoption of IFRS from the original figures presented within the statutory accounts for the year ended 30 September 2005. Details of the transition are included within the Transition Statements. NOTES 1. Accounting Policies The accounts above comprise the unaudited results of the Company, its subsidiaries and associate for the year to 30 September 2006, and are presented in pounds sterling, as this is the principal currency in which the Group and Company transactions are undertaken. While the financial information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRSs in December 2006. Accounting policies under International Financial Reporting Standards Basis of accounting The accounts of the Group and Company have been prepared in accordance with International Financial Reporting Standards (IFRS) which comprise standards and interpretations approved by the International Accounting Standards Board, and International Financial Reporting Committee, interpretations approved by the International Accounting Standards Committee that remain in effect, and to the extent they have been adopted by the European Union. Where presentational guidance set out in the Statement of Recommended Practice (SORP) for investment trusts issued by the Association of Investment Companies in January 2003 (as revised in December 2005) is consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP. These are the Group's and Company's first audited results prepared in accordance with IFRS and IFRS1: First Time Adoption, has been applied. Previously accounts were prepared in accordance with UK Generally Accepted Accounting Principles (UK GAAP), including the SORP: Financial statements of investment trust companies. The effects of these changes are shown in the transition statements below. Except for the amendments required in connection with the adoption of IFRS as listed above, the accounting policies have not varied from those described in the Annual Report for the year to 30 September 2005. 2. Majedie Asset Management Limited ("MAM") In the year to 30 September 2006 following the reaching of predetermined growth targets for Majedie Asset Management Limited, the Group's holding in that Company reduced from 55% to 30%. Majedie Asset Management Limited is therefore now accounted for as an associate. The Company owned 70% of the equity of Majedie Asset Management Limited from incorporation in 2002 up until 31 March 2004. With effect from 1 April 2004, 31 July 2005, 31 December 2005 and 1 May 2006, the percentage owned reduced to 65%, 55%, 51% and finally 30% respectively, as a result of changes in shareholding based on the achievement of pre-agreed targets for the business. 3. Share Based Payments The Group has applied the requirements of IFRS 2 Share-based Payments. In accordance with the transitional provisions IFRS 2 has been applied to all grants of equity instruments after 7 November 2002 that were unvested as of 1 October 2004. The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value at the date of the grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest. Fair value is measured by use of the Black-Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. 4. Calculation of Returns per Ordinary Share Basic returns per ordinary share in each period are based on the return on ordinary activities after taxation attributable to equity shareholders. Basic returns per ordinary share are based on 52,016,698 shares, being the weighted average number of shares in issue having adjusted for the shares held by the Employee Incentive Trust (year ended 30 September 2005: 52,069,819 shares). There is no dilution to the basic return per ordinary share since share options, if exercised, would be satisfied by shares already held by the Employee Incentive Trust. 5. Goodwill Goodwill on consolidation arose from costs incurred in establishing the specialised fund management business of Majedie Asset Management Limited. Under IAS 38: 'Intangible Assets', goodwill is subject to an annual impairment review. The current year review has identified no such impairment. 6. Investments All investments held by the Company are designated as at fair value through profit or loss. For listed investments actively traded in organised financial markets, fair value is generally determined by reference to stock exchange quoted bid market prices at the close of business on the balance sheet date. Unlisted investments are stated at the Board's estimate of their fair value. 7. Net Asset Value per Ordinary Share The net asset value per share has been calculated based on equity shareholders' funds and on 51,884,274 ordinary shares (30 September 2005: 52,022,037) being the shares in issue at the period end having deducted the number of shares held by the Employee Incentive Trust. 8. Dividends In accordance with International Accounting Standard 10: 'Events After the Balance Sheet Date', interim dividends are not accounted for until paid, and final dividends are only recognised when approved in General Meeting. The following table summarises the amounts recognised as distributions to equity shareholders in the period: Year ended 30 Year ended 30 September 2006 September 2005 Â£000 Â£000 2004 Final Dividend of 5.55p paid on 25 2,892 January 2005 2005 Interim dividend of 3.2p paid on 1 1,665 July 2005 2005 Final dividend of 5.85p paid on 25 3,045 January 2006* 2006 Interim dividend of 3.4p paid on 1,770 30 June 2006 4,815 4,557 * The Employee Incentive Trust sold 30,326 shares during the period to 31 March 2006 prior to the record date for the final dividend for the year ended 30 September 2005 and therefore these shares became eligible to receive a dividend. As a result the total amount paid by the Company was Â£2,000 higher than the original proposed dividend of Â£3,043,000. The Directors propose a final dividend for 2006 of 6.1p per share, to be paid on 24 January 2007. 9. Financial information for the years ended 30 September 2006 and 2005 The preliminary unaudited figures for the year ended 30 September 2006 are an extract from the Company's latest accounts, prepared for the first time in accordance with International Financial Reporting Standards (IFRS). Where presentational guidance set out in the Statement of Recommended Practice (SORP) for Investment Trusts issued by the Association of Investment Companies in January 2003 (as revised in December 2005), is consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP. Previously accounts were prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP) including the Statement of Recommended Practice: Financial Statements of Investment Trust Companies. The effects of the relevant changes are shown in the Transition Statements which follow below. The financial information set out above does not constitute the Company's statutory accounts for the years ended 30 September 2006 or 2005. The financial information for the year ended 30 September 2005 is derived from the statutory accounts for that year (prepared according to UK GAAP) which have been delivered to the Registrar of Companies as revised for adjustments required in respect of IFRS as shown in the transition statements. The auditors have reported on those accounts; their report was unqualified and did not contain statements under Section 237(2) or Section 237(3) of the Companies Act 1985. The statutory accounts for the year ended 30 September 2006 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. GROUP TRANSITION STATEMENTS There follows below Transition Statements as required by International Financial Reporting Standard 1: First Time Adoption of International Reporting Standards. These include two reconciliations of consolidated equity as at the following dates: - 1 October 2004 - being the date of transition from UK GAAP to IFRS for comparative figures; - 30 September 2005 - being the end of the last full financial period presented under UK GAAP. The Transition Statements also include a reconciliation of consolidated income: - for the year ended 30 September 2005. Finally the Transition Statements include an explanation of material adjustments to the cash flow statement for the year ended 30 September 2005. UNAUDITED RECONCILIATION OF CONSOLIDATED EQUITY as at 1 October 2004 (date of transition) Notes UK GAAP Effect of IFRS at 1 October transition at 1 October 2004 to IFRS 2004 Â£000 Â£000 Â£000 Non-current assets Property, plant and equipment 435 435 Goodwill 425 425 Investments at fair value through 1 167,386 (303) 167,083 profit or loss 168,246 (303) 167,943 Current assets Trade and other receivables 5,159 5,159 Cash and cash equivalents 13,537 13,537 18,696 18,696 Total assets 186,942 (303) 186,639 Current liabilities Trade and other payables 2 (14,798) 2,892 (11,906) (14,798) 2,892 (11,906) Total assets less current liabilities 172,144 2,589 174,733 Non-current liabilities Debenture stock (33,687) (33,687) Total liabilities (48,485) 2,892 (45,593) Net assets 138,457 2,589 141,046 Represented by: Ordinary share capital 5,253 5,253 Share premium 785 785 Capital redemption reserve 56 56 Share options reserve 3 18 18 Capital reserve 1 110,194 (303) 109,891 Retained earnings 2,3 23,753 2,874 26,627 Own shares reserve (1,148) (1,148) Equity attributable to the equity holders of the parent 138,893 2,589 141,482 Minority interest (436) (436) 138,457 2,589 141,046 Net asset value per share pence pence pence Basic and diluted 4 266.5 5.0 271.5 Notes to the Unaudited Reconciliation of Consolidated Equity at 1 October 2004 (date of transition): 1. Investments Under UK GAAP the investments made by the Company in quoted stocks and shares were previously valued in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies at their market value. Convention suggested that where a bid and offer price existed the mid market price was the most appropriate for investment trust companies. Under IFRS, quoted investments are valued at bid price. The adjustment of Â£303,000 reflects the difference between the valuation of investments under UK GAAP and the valuation under IFRS. 2. Proposed Dividends Under UK GAAP, proposed dividends were previously treated as a current liability in the accounts and deducted from net return after tax for the period. Under IFRS dividends payable are only recorded when they become a contractual obligation. Proposed final dividend is considered to be an indication of intent by the Board of Directors, which becomes a contractual obligation in the next accounting period when a shareholders' vote determines their liability. Interim dividends however are not accounted for until paid. The adjustment of Â£2,892,000 to 'Trade and other payables' and 'Retained earnings' represents the removal of the proposed final dividend for the year ended 30 September 2004, which was subsequently approved at the Annual General Meeting on 19 January 2005. 3. Share Based Payments In accordance with the transitional provisions IFRS2 'Share-based Payment' has been applied to all grants of share options after 7 November 2002 that were unvested as of 1 October 2004. The fair value of share options awarded under the Company's Discretionary Share Option Scheme 2000 is spread over the vesting period of the relevant options resulting in a charge against 'Retained earnings' for the period of Â£18,000 and a credit to the 'Share options reserve'. The fair value of the share options is now calculated using the Black-Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. 4. Net Asset Value per Ordinary Share The net asset value per ordinary share has been calculated on equity shareholders' funds and on 52,118,669 ordinary shares, being the shares in issue at the period end having deducted the number of shares held by the Employee Incentive Trust. UNAUDITED RECONCILIATION OF CONSOLIDATED EQUITY as at 30 September 2005 (end of the last period presented under UK GAAP) Notes UK GAAP Effect of IFRS at 30 transition at 30 September to IFRS September 2005 2005 Â£000 Â£000 Â£000 Non-current assets Property, plant and equipment 613 613 Goodwill 360 360 Investments at fair value through profit 1 207,236 (802) 206,434 or loss 208,209 (802) 207,407 Current assets Trade and other receivables 4,946 4,946 Cash and cash equivalents 4,421 4,421 9,367 9,367 Total assets 217,576 (802) 216,774 Current liabilities Trade and other payables 2 (7,217) 3,043 (4,174) (7,217) 3,043 (4,174) Total assets less current liabilities 210,359 2,241 212,600 Non-current liabilities Trade and other payables (55) (55) Debenture stock (33,700) (33,700) (33,755) (33,755) Total liabilities (40,972) 3,043 (37,929) Net assets 176,604 2,241 178,845 Represented by: Ordinary share capital 5,253 5,253 Share premium 785 785 Capital redemption reserve 56 56 Share options reserve 3 37 37 Capital reserve 1 147,810 (802) 147,008 Retained earnings 2,3 23,717 3,006 26,723 Own shares reserve (1,422) (1,422) Equity attributable to the equity 176,199 2,241 178,440 holders of the parent Minority interest 405 405 176,604 2,241 178,845 Net asset value per share pence pence pence Basic and diluted 4 338.7 4.3 343.0 Notes to the unaudited Reconciliation of Consolidated Equity at 30 September 2005 (end of the last period presented under UK GAAP): 1. Investments Under UK GAAP the investments made by the Company in quoted stocks and shares were previously valued in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies at their market value. Convention suggested that where a bid and offer price existed the mid market price was the most appropriate for investment trust companies. Under IFRS, quoted investments are valued at bid price. The adjustment of Â£802,000 reflects the difference between the valuation of investments under UK GAAP and the valuation under IFRS. 2. Proposed Dividends Under UK GAAP, proposed dividends were previously treated as a current liability in the accounts and deducted from net return after tax for the period. Under IFRS dividends payable are only recorded when they become a contractual obligation. Proposed final dividend is considered to be an indication of intent by the Board of Directors, which becomes a contractual obligation in the next accounting period when a shareholders' vote determines their liability. Interim dividends however are not accounted for until paid. The adjustment of Â£3,043,000 to 'Trade and other payables' and 'Retained earnings' represents the removal of the proposed final dividend for the year ended 30 September 2005, which was subsequently approved at the Annual General Meeting on 18 January 2006. 3. Share Based Payments In accordance with the transitional provisions IFRS2 'Share-based Payment' has been applied to all grants of share options after 7 November 2002 that were unvested as of 1 October 2004. The fair value of share options awarded under the Company's Discretionary Share Option Scheme 2000 is spread over the vesting period of the relevant options resulting in a charge against 'Retained earnings' for the period of Â£37,000 and a credit to the 'Share options reserve'. The fair value of the share options is now calculated using the Black-Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. 4. Net Asset Value per Ordinary Share The net asset value per ordinary share has been calculated on equity shareholders' funds and on 52,022,037 ordinary shares, being the shares in issue at the period end having deducted the number of shares held by the Employee Incentive Trust. UNAUDITED RECONCILIATION OF CONSOLIDATED INCOME for the year ended 30 September 2005 (last period presented under UK GAAP) Notes UK GAAP Effect of IFRS year ended transition year ended 30 September to IFRS 30 September 2005 2005 Â£000 Â£000 Â£000 Investments Gains on investments at fair value 1 40,922 (499) 40,423 through profit or loss Net investment result 40,922 (499) 40,423 Income Dividends and interest 4,669 4,669 Client fee income in subsidiary company 6,500 6,500 Other income 54 54 Total income 11,223 11,223 Expenses Administration expenses 2 (6,205) (19) (6,224) Return before finance costs and taxation 45,940 (518) 45,422 Finance costs (2,801) (2,801) Net return before taxation 43,139 (518) 42,621 Taxation (43) (43) Net return after taxation for the period 43,096 (518) 42,578 Attributable to: Equity holders of the parent 42,288 (518) 41,770 Minority interest 808 808 43,096 (518) 42,578 Return per ordinary share pence pence pence Basic and diluted 81.2 (1.0) 80.2 Notes to the unaudited Reconciliation of Consolidated Income for the year ended 30 September 2005 (last period presented under UK GAAP): 1. Investments Under UK GAAP the investments made by the Company in quoted stocks and shares were previously valued in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies at their market value. Convention suggested that where a bid and offer price existed the mid market price was the most appropriate for investment trust companies. Under IFRS, quoted investments are valued at fair value, which is effectively bid price. The adjustment of Â£499,000 reflects the difference between the net gains on investments as calculated under UK GAAP for the period and net gains on investments at fair value as calculated under IFRS for the year. 2. Share Based Payments In accordance with the transitional provisions IFRS2 'Share-based Payment' has been applied to all grants of share options after 7 November 2002 that were unvested as of 1 October 2004. The fair value of share options awarded under the Company's Discretionary Share Option Scheme 2000 is spread over the vesting period of the relevant options resulting in a charge against 'Retained earnings' for the period of Â£19,000 and a credit to the 'Share options reserve'. The fair value of the share options is now calculated using the Black-Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. Explanation of material adjustments to the Cash Flow Statement Year ended 30 September 2005 Tax credits recovered on unfranked investment income of Â£4,000 are classified as operating cash flows under IFRS, but were included in a separate category of 'Taxation' under UK GAAP. Equity dividends paid to shareholders are classified under IFRS as 'Financing activities', but were included in a separate category under UK GAAP. There are no other material differences between the cash flow statement presented under IFRS and the cash flow statement presented under UK GAAP. COMPANY TRANSITION STATEMENTS There follows below Transition Statements as required by International Financial Reporting Standard 1: First Time Adoption of International Reporting Standards. These include two reconciliations of equity as at the following dates: - 1 October 2004 - being the date of transition from UK GAAP to IFRS for comparative figures; - 30 September 2005 - being the end of the last full financial period presented under UK GAAP. The Transition Statements also include a reconciliation of income: - for the year ended 30 September 2005. UNAUDITED RECONCILIATION OF EQUITY as at 1 October 2004 (date of transition) Notes UK GAAP Effect of IFRS at 1 October transition at 1 October 2004 to IFRS 2004 Â£000 Â£000 Â£000 Non-current assets Investments at fair value through 1 167,386 (303) 167,083 profit or loss Investments in subsidiary 3,452 3,452 170,838 (303) 170,535 Current assets Trade and other receivables 4,395 4,395 Cash and cash equivalents 12,982 12,982 17,377 17,377 Total assets 188,215 (303) 187,912 Current liabilities Trade and other payables 2 (14,094) 2,892 (11,202) (14,094) 2,892 (11,202) Total assets less current liabilities 174,121 2,589 176,710 Non-current liabilities Debenture stock (33,687) (33,687) Total liabilities (47,781) 2,892 (44,889) Net assets 140,434 2,589 143,023 Represented by: Ordinary share capital 5,253 5,253 Share premium 785 785 Capital redemption reserve 56 56 Share options reserve 3 18 18 Capital reserve 1 109,357 (303) 109,054 Retained earnings 2,3 26,131 2,874 29,005 Own shares reserve (1,148) (1,148) Total equity 140,434 2,589 143,023 Net asset value per share pence pence pence Basic 4 269.5 4.9 274.4 Notes to the unaudited Reconciliation of Equity at 1 October 2004 (date of transition): 1. Investments Under UK GAAP the investments made by the Company in quoted stocks and shares were previously valued in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies at their market value. Convention suggested that where a bid and offer price existed the mid market price was the most appropriate for investment trust companies. Under IFRS, quoted investments are valued at bid price. The adjustment of Â£303,000 reflects the difference between the valuation of investments under UK GAAP and the valuation under IFRS. 2. Proposed Dividends Under UK GAAP, proposed dividends were previously treated as a current liability in the accounts and deducted from net return after tax for the period. Under IFRS dividends payable are only recorded when they become a contractual obligation. Proposed final dividend is considered to be an indication of intent by the Board of Directors, which becomes a contractual obligation in the next accounting period when a shareholders' vote determines their liability. Interim dividends however are not accounted for until paid. The adjustment of Â£2,892,000 to 'Trade and other payables' and `Retained earnings' represents the removal of the proposed final dividend for the year ended 30 September 2004, which was subsequently approved at the Annual General Meeting on 19 January 2005. 3. Share Based Payments In accordance with the transitional provisions IFRS2 'Share-based Payment' has been applied to all grants of share options after 7 November 2002 that were unvested as of 1 October 2004. The fair value of share options awarded under the Company's Discretionary Share Option Scheme 2000 is spread over the vesting period of the relevant options resulting in a charge against 'Retained earnings' for the period of Â£18,000 and a credit to the 'Share options reserve'. The fair value of the share options is now calculated using the Black-Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. 4. Net Asset Value per Ordinary Share The net asset value per ordinary share has been calculated on equity shareholders' funds and on 52,118,669 ordinary shares, being the shares in issue at the period end having deducted the number of shares held by the Employee Incentive Trust. UNAUDITED RECONCILIATION OF EQUITY as at 30 September 2005 (end of the last period presented under UK GAAP) Notes UK GAAP Effect of IFRS at 30 transition at 30 September to IFRS September 2005 2005 Â£000 Â£000 Â£000 Non-current assets Investments at fair value through profit 1 207,236 (802) 206,434 or loss Investment in subsidiary 10,294 10,294 217,530 (802) 216,728 Current assets Trade and other receivables 2,201 2,201 Cash and cash equivalents 2,202 2,202 4,403 4,403 Total assets 221,933 (802) 221,131 Current liabilities Trade and other payables 2 (4,891) 3,043 (1,848) (4,891) 3,043 (1,848) Total assets less current liabilities 217,042 2,241 219,283 Non-current liabilities Debenture stock (33,700) (33,700) Total liabilities (38,591) 3,043 (35,548) Net assets 183,342 2,241 185,583 Represented by: Ordinary share capital 5,253 5,253 Share premium 785 785 Capital redemption reserve 56 56 Share options reserve 3 37 37 Capital reserve 1 153,913 (802) 153,111 Retained earnings 2,3 24,757 3,006 27,763 Own shares reserve (1,422) (1,422) Total equity 183,342 2,241 185,583 Net asset value per share pence pence pence Basic 4 352.4 4.3 356.7 Notes to the unaudited Reconciliation of Equity at 30 September 2005 (end of the last period presented under UK GAAP): 1. Investments Under UK GAAP the investments made by the Company in quoted stocks and shares were previously valued in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies at their market value. Convention suggested that where a bid and offer price existed the mid market price was the most appropriate for investment trust companies. Under IFRS, quoted investments are valued at bid price. The adjustment of Â£802,000 reflects the difference between the valuation of investments under UK GAAP and the valuation under IFRS. 2. Proposed Dividends Under UK GAAP, proposed dividends were previously treated as a current liability in the accounts and deducted from net return after tax for the period. Under IFRS dividends payable are only recorded when they become a contractual obligation. Proposed final dividend is considered to be an indication of intent by the Board of Directors, which becomes a contractual obligation in the next accounting period when a shareholders' vote determines their liability. Interim dividends however are not accounted for until paid. The adjustment of Â£3,043,000 to 'Trade and other payables' and 'Retained earnings' represents the removal of the proposed final dividend for the year ended 30 September 2005, which was subsequently approved at the Annual General Meeting on 18 January 2006. 3. Share Based Payments In accordance with the transitional provisions IFRS2 'Share-based Payment' has been applied to all grants of share options after 7 November 2002 that were unvested as of 1 October 2004. The fair value of share options awarded under the Company's Discretionary Share Option Scheme 2000 is spread over the vesting period of the relevant options resulting in a charge against 'Retained earnings' for the period of Â£37,000 and a credit to the 'Share options reserve'. The fair value of the share options is now calculated using the Black-Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. 4. Net Asset Value per Ordinary Share The net asset value per ordinary share has been calculated on equity shareholders' funds and on 52,022,037 ordinary shares, being the shares in issue at the period end having deducted the number of shares held by the Employee Incentive Trust. UNAUDITED RECONCILIATION OF INCOME for the year ended 30 September 2005 (last period presented under UK GAAP) Notes UK GAAP Effect of IFRS year ended transition year ended 30 September to IFRS 30 September 2005 2005 Â£000 Â£000 Â£000 Investments Gains on investments at fair value 1 41,020 (499) 40,521 through profit or loss Revaluation of subsidiary 6,842 6,842 Net investment result 47,862 (499) 47,363 Income Dividends and interest 4,664 4,664 Other income 85 85 Total income 4,749 4,749 Expenses Administration expenses 2 (1,877) (19) (1,896) Return before finance costs and taxation 50,734 (518) 50,216 Finance costs (2,801) (2,801) Net return before taxation 47,933 (518) 47,415 Taxation (43) (43) Net return after taxation for the period 47,890 (518) 47,372 Return per ordinary share pence pence pence Basic and diluted 92.0 (1.0) 91.0 Notes to the unaudited Reconciliation of Income for the year ended 30 September 2005 (last period presented under UK GAAP): 1. Investments Under UK GAAP the investments made by the Company in quoted stocks and shares were previously valued in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies at their market value. Convention suggested that where a bid and offer price existed the mid market price was the most appropriate for investment trust companies. Under IFRS, quoted investments are valued at fair value, which is effectively bid price. The adjustment of Â£499,000 reflects the difference between net gains on investments as calculated under UK GAAP for the year and net gains on investments at fair value as calculated under IFRS for the year. 2. Share Based Payments In accordance with the transitional provisions IFRS2 'Share-based Payment' has been applied to all grants of share options after 7 November 2002 that were unvested as of 1 October 2004. The fair value of share options awarded under the Company's Discretionary Share Option Scheme 2000 is spread over the vesting period of the relevant options resulting in a charge against `Retained earnings' for the period of Â£19,000 and a credit to the 'Share options reserve'. The fair value of the share options is now calculated using the Black-Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. ANNUAL REPORT The annual report and accounts will be sent to shareholders on 7 December 2006 from which time copies will be available to the public at the Company's registered office: 1 Minster Court, Mincing Lane, London EC3R 7ZZ. ANNUAL GENERAL MEETING The Annual General Meeting will be held at 12.15pm on Wednesday 17 January 2007 at the London Underwriting Centre, 3 Minster Court, Mincing Lane, London EC3R 7DD. DIVIDEND The proposed final dividend of 6.1p per share will be paid on 24 January 2007 to shareholders on the register at the close of business on 5 January 2007. NOTES FOR EDITORS Majedie Investments PLC is a self managed investment trust with total portfolio assets under management of over Â£230 million. The Company's objective is to maximise total shareholder return over the long term whilst increasing dividends by more than the rate of inflation. The Company's benchmark is 70% FTSE All-Share Index and 30% FTSE World ex UK Index (Sterling) on a total return basis.

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Majedie Investments (MAJE)

Tuesday, 28th May 2024

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Private equity investment firm Intermediate Capital reported annual results showing a more than doubling in profits as it saw a huge increase in performance fee income, while assets under management rose by nearly a quarter.

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