Final Results

Merrill Lynch World Mining Tst PLC 5 February 2001 FOR IMMEDIATE RELEASE 5 February 2001 MERRILL LYNCH WORLD MINING TRUST plc Preliminary announcement of results in respect of the year ended 31 December 2000 * The Company changed its name from Mercury World Mining Trust plc to Merrill Lynch World Mining Trust plc on 29 December 2000. Over the year to 31 December 2000 the Company has outperformed its benchmark, albeit in a falling market. Performance to 31 December 12 months (with net income 12 months (capital 2000 reinvested) only) Net asset value -5.3% -7.5% Ordinary share price -7.9% -9.2% HSBC Global Mining Index* N/A -10.6% *adjusted for exchange rates relative to sterling. Performance based on mid-market values with net income reinvested on ex-dividend date. Source: Merrill Lynch Investment Managers, Datastream. * Revenue for the year, after tax, was 1.63p per share, compared with 1.00p per share in 1999. * The Board has declared a final dividend for the year of 1.30p per share (1999, 1.20p per share). For further information please contact: Dr Graham Birch - 020 7743 2690 Ian Barby - 020 7743 5224 Mark Johnson - 020 7743 2300 Merrill Lynch Investment Managers The Chairman, Peter Wilmot-Sitwell, comments: 'After an excellent 1999, the year 2000 proved to be a volatile period for mining equities, as they succumbed to doubts about continued global economic growth. The net outcome was a disappointing fall of 11% for the sector. Against this difficult background, I am glad to say the Company has outperformed, with its net asset value per share and its share price declining by only 5% and 8% respectively. 'As you will know, a resolution for the continuation of the Company is put to shareholders at each Annual General Meeting, and we hope you will again vote in favour of this proposal. This Company is one of the few vehicles which enable investors to obtain a diversified exposure to the mining sector and thereby performs an important function. 'Lord Vinson, who has been a director of the Company since its launch in 1993, will be retiring from the Board at the forthcoming Annual General Meeting and we offer him our thanks for his valuable contribution to the development of the Company. 'As soon as is practicable after the AGM, your Board will seek to appoint another director.' Commenting upon the outlook for the Company, Graham Birch of Merrill Lynch Investment Managers, the Investment Manager, notes: 'We expect the early part of 2001 to be the weakest for metals as the adverse cyclical effects of a cooling US economy are seen in the global markets. Thereafter, the supply side discipline we have already seen should be a supportive factor and metal shortages should re-emerge, especially in aluminium and copper. The low level of inventories in LME warehouses implies that if these shortages do occur, they will quickly translate into market tightness and upward price pressure may be evident under such a scenario. 'Most base metals and diversified mining shares de-rated during 2000 and are now trading on even more attractive P/E ratios and yields than at the same stage last year. The good earnings transparency and solid asset value present in the sector are attractive features and the scope for further de-rating seems limited. Although high absolute returns may again prove elusive, the Company's portfolio is well positioned to achieve respectable performance in comparison with the broad equity markets.' CONSOLIDATED REVENUE STATEMENT for the year ended 31 December 2000 Year ended Year ended 31 December 31 December 2000 1999 £'000 £'000 (audited) (audited) (restated) Note Income 4 7,970 6,430 Less: Investment management fees 6 (1,918) (2,147) Operating expenses 7 (504) (560) ------- ------- Net return before finance costs and taxation 5,548 3,723 Finance costs (1,550) (1,027) ------- ------- Revenue on ordinary activities before taxation 3,998 2,696 Taxation (1,059) (458) ------- ------- Revenue on ordinary activities after taxation 2,939 2,238 Dividend 5 (2,198) (2,218) ------- ------- Transfer to revenue reserve 741 20 ==== ==== CONSOLIDATED STATEMENT OF TOTAL RETURN PER ORDINARY SHARE for the year ended 31 December 2000 Year ended Year ended 31 December 31 December 2000 1999 (audited) (audited) Calculated on weighted average shares: Earnings per ordinary share 1.63p 1.00p Capital return per ordinary share (10.33p) 51.02p --------- -------- Total return per ordinary share (8.70p) 52.02p ===== ===== Calculated on period end shares: Earnings per ordinary share 1.73p 1.17p Capital return per ordinary share (10.94p) 60.11p --------- -------- Total return per ordinary share (9.21p) 61.28p ===== ===== Dividend per ordinary share 1.30p 1.20p ===== ===== SUMMARISED CONSOLIDATED BALANCE SHEET as at 31 December 2000 31 December 31 December 2000 1999 £'000 £'000 (audited) (audited) Fixed assets Investments at valuation 202,114 249,412 ---------- ---------- Current assets Investments of subsidiary undertakings 2,926 1,880 Debtors 893 359 ------- ------- 3,819 2,239 ------- ------- Creditors - amounts falling due within one year Bank overdraft 15,439 24,918 Other creditors 4,406 3,307 -------- -------- 19,845 28,225 -------- -------- Net current liabilities (16,026) (25,986) --------- --------- Total assets less current liabilities 186,088 223,426 Provision for liabilities and charges 66 29 --------- --------- Net assets 186,022 223,397 ====== ====== Capital and reserves Share capital 8,505 9,548 Capital redemption reserve 22,414 21,371 Other capital reserves (58,933) (40,319) --------- --------- (28,014) (9,400) Special reserve 210,472 229,974 Revenue reserve 3,564 2,823 --------- --------- Total equity shareholders' funds 186,022 223,397 ====== ====== Net asset value per ordinary share 109.36p 116.99p ====== ====== CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2000 Year ended Year ended 31 December 31 December 2000 1999 (audited) (audited) Net cash inflow from operating activities 3,790 1,672 Returns on investment and servicing of finance (1,550) (1,027) Taxation refunded 17 938 Capital expenditure and financial investment: Purchase of fixed asset investments (109,184) (66,815) Proceeds from the sale of fixed asset investments 138,111 155,996 Exchange movements on foreign currency transactions 15 (295) Equity dividends paid (2,218) (5,010) Buy-back of ordinary shares (19,502) (121,682) Continuation and share tender costs - (690) --------- ---------- Increase/(decrease) in cash 9,479 (36,913) ===== ====== RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM OPERATING ACTIVITIES Year ended Year ended 31 December 31 December 2000 1999 (audited) (audited) (restated) Operating profit 5,548 3,723 Net purchases of investments by subsidiary undertakings (299) (1,588) (Increase)/decrease in debtors (110) 548 (Decrease)/increase in creditors (67) 48 Tax on investment income included within gross income (709) (767) Profit on investment dealing by subsidiary undertakings (573) (292) ------- ------ Net cash inflow from operating activities 3,790 1,672 ==== ==== NOTES ON THE PRELIMINARY RESULTS 1. Principal activity The principal activity of the Company is that of an investment trust within the meaning of section 842 of the Income and Corporation Taxes Act 1988. The principal activity of its two subsidiary undertakings is investment dealing. 2. Basis of preparation The preliminary financial statements have been prepared on the basis of the accounting policies set out in the Company's financial statements at 31 December 2000. Income and operating expenses have been accrued in accordance with the same principles used in the preparation of the previous year's financial statements, subject to note 3 below. 3. Taxation The financial information contained in this preliminary statement follows the requirements of Financial Reporting Standard (FRS) 16 'Current Tax' to show franked investment income net of related tax credits. In addition, 'avoir fiscal' on French dividends is now classed as a tax credit and not a withholding tax and as such reduces the tax charge rather than increasing income. The figures for income and taxation in respect of prior periods have been restated accordingly. These changes have no effect on the net income or net assets previously reported for those periods. 4. Income Year ended Year ended 31 December 31 December 2000 1999 £'000 £'000 (audited) (audited) (restated) Income from investments: UK listed 626 402 Overseas listed 6,769 5,665 ------- ------- 7,395 6,067 ------- ------- Interest received and other income: Deposit interest - 69 Profit on investment dealing by subsidiary undertakings 573 292 Other income 2 2 ------- ------- 575 363 ------- ------- Total 7,970 6,430 ==== ==== 5. Dividend The directors have declared a final dividend of 1.30p per share (1999: 1.20p). The dividend will be paid on 23 April 2001 to shareholders on the register of members at the close of business on 16 February 2001. The shares will be quoted ex-dividend on 14 February 2001. 6. Investment management fees Year ended Year ended 31 December 31 December 2000 1999 £'000 £'000 (audited) (audited) Investment management fees 1,848 2,056 Irrecoverable VAT thereon 70 91 ------- ------- 1,918 2,147 ==== ==== All investment management fees are charged to revenue. 7. Operating expenses £'000 £'000 (audited) (audited) Custody fee 194 207 Administration fee 114 122 Directors' emoluments 62 58 Registrars' fee and other administrative expenses 134 173 ----- ----- 504 560 === === 8. Ordinary shares 31 December 31 December 2000 1999 The weighted number of ordinary shares in issue during each period, on which the return per ordinary share was calculated, was: 180,199,129 224,955,622 The number of ordinary shares in issue at the end of the period was: 170,099,852 190,949,852 Share price 91.50p 100.75p 9. Gearing ratio - % of NAV. As at 31 December 2000 the ratio of borrowings to net assets was 8.3% (31.12.1999 : 11.2%). 10. Publication of non-statutory accounts The financial information contained in this preliminary statement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985 11. The figures set out above have been reported upon by the auditors. The comparative figures are extracts from the audited financial statements of Merrill Lynch World Mining Trust plc for the year ended 31 December 1999, which have been filed with the Registrar of Companies. The report of the auditors for the years ended 31 December 1999 and 2000 contain no qualification or statement under section 237(2) or (3) of the Companies Act 1985. The 2000 annual report will be filed with the Registrar of Companies after the Annual General Meeting. 12. Copies of the annual report will be sent to members shortly and will be available from the registered office, c/o The Company Secretary, Merrill Lynch World Mining Trust plc, 33 King William Street, London EC4R 9AS. This report will also be available on the Merrill Lynch Investment Manager's website at www.mlim.co.uk/its 13. The Annual General Meeting of the Company will be held at Merchant Taylors' Hall, 30 Threadneedle Street, London EC2 on Wednesday 21 March 2001 at 2.30pm. 5 February 2001 33 King William Street London EC4R 9AS

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