Interim Results
Merrill Lynch World Mining Tst PLC
01 August 2005
FOR IMMEDIATE RELEASE 1 August 2005
MERRILL LYNCH WORLD MINING TRUST plc
Interim Results for the six months ended 30 June 2005
Performance to 30 June 2005 Six months Five years
Net asset value per share:
- capital only 9.5% 168.2%
- with net income reinvested 10.3% 188.9%
Ordinary share price:
- capital only 7.5% 190.1%
- with net income reinvested 8.6% 216.5%
HSBC Global Mining Index*:
- capital only 8.8% 81.9%
- with net income reinvested 9.9% 107.4%
* Adjusted for exchange rates relative to sterling.
Performance is based on mid-market values.
Dividends totalling 2.5p per share went ex-dividend on 23 February 2005. Where
performance has income included, it is reinvested on the ex-dividend date.
Total return performance includes the warrant reinvestment, assuming it was sold
and reinvested on the first day of trading.
Sources: Merrill Lynch Investment Managers, Datastream.
• As at 30 June 2005, the net asset value per share and share price were
267.24p and 234.25p respectively (31.12.04, NAV 244.55p, share price
218.00p).
• The interim results have been prepared under International Financial
Reporting Standards ('IFRS') for the first time. The most significant
change is the movement from mid to bid price for the valuation of
investments. The net impact of this on the Company's net asset value as
of 30 June 2005 was a decrease of 0.8p. IFRS will not make any
difference to the operating practices of the Company.
• Anthony Lea has joined the Board of directors with effect from 29 July
2005.
For further information please contact the following:
Jonathan Ruck Keene 020 7743 2178
Managing Director, Investment Trust Division
Merrill Lynch Investment Managers
Graham Birch 020 7743 2690
Fund Manager
Merrill Lynch Investment Managers
Nigel Webb 020 7743 5938
Public Relations
Merrill Lynch Investment Managers
William Clutterbuck 020 7379 5151
Maitland Consultancy
The Chairman, Peter Wilmot-Sitwell, comments:
'I am pleased to report that, despite some sharp fluctuations in the prices of
mining shares, the Company's net asset value increased by 10.3% over the first
half of the year and the share price increased from 218.00p to 234.25p.
'With very strong results being reported for the year to date, a heightened
level of merger and acquisition activity and significantly larger than expected
price increases for bulk commodities, we remain confident about our positive
view of the sector.
'The Board was particularly disappointed by the outcome of the bonus warrants
issue as we believed that a larger capital base would enhance the attractiveness
of your Company. These warrants had consistently traded at a profit and had even
been as high as 19p in March. However, the sharp but very brief sell-off of
mining shares in the spring meant that only a fraction of the warrants were
exercised on 29 April much to the detriment not only of our shareholders but
also of the Company as a whole.
'After eleven years as one of your directors, Andrew Buxton retired at the last
Annual General Meeting upon attaining 70. We are particularly grateful to him
for his contribution and will greatly miss his experience. However, we are very
pleased that Anthony Lea, Finance Director of Anglo American plc in London, one
of the world's leading mining and natural resources companies, joined the Board
at the end of July.'
Commenting upon the outlook for the Company, Graham Birch of Merrill Lynch
Investment Managers, the Investment Manager, notes:
'2005 looks set to be another record year for the industry. Sentiment has
gradually recovered after the spring sell-off in mining equities and in July the
Company's shares touched a new all-time high of 267.50p. There is a high
likelihood that we will see further improvement in dividend flow and more stock
buy backs in the sector, and both of these factors should help to support
valuations. In the longer term, we believe that it will again be the strength of
demand growth in China which will determine the direction for the sector, in
particular when it affects Chinese domestic demand. Thus far, the authorities in
China have done a good job of steering the economy on a 'middle path' between
overheating one side and recession on the other. Provided that they can remain
on this course the future for mining shares should remain attractive.'
CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2005
Revenue
(Restated see
note 5)
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2005 2004 2004
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Notes
Income
Investment income 6 6,572 3,698 8,813
Other operating income 6 1,543 909 3,859
Gains on forward currency contracts - - -
Gains/(losses) on investments held at
fair value - - -
-------- -------- --------
Total income 8,115 4,607 12,672
Expenses
Management fees 7 (2,491) (1,729) (3,797)
Other expenses 8 (333) (396) (697)
Finance costs (713) (937) (1,817)
-------- -------- --------
Total operating expenses (3,537) (3,062) (6,311)
Income/(deficit) from operations before
tax
4,578 1,545 6,361
Taxation (1,000) (256) (1,462)
-------- -------- --------
Net profit/(loss) 3,578 1,289 4,899
-------- -------- --------
Return per ordinary share 11 2.17p 0.79p 3.01p
======== ======== ========
The Consolidated Income Statement has been prepared in accordance with IFRS, and
under guidance published by the Association of Investment Trust Companies. All
items in the above statement derive from continuing operations. All income is
attributable to the equity shareholders of the parent company. There are no
minority interests.
The final dividend of 1.75p and the special dividend of 0.75p in respect of the
year ended 31 December 2004 were declared on 14 February 2005 and paid on 31
March 2005. These can be found in the Statement of Changes in Equity for the
half year ended 30 June 2005.
CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2005
Capital
(Restated see (Restated see
note 4) note 5)
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2005 2004 2004
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Notes
Income
Investment income 6 - - -
Other operating income 6 - - -
Gains on forward currency contracts 94 - 500
Gains/(losses) on investments held
at fair value 40,208 (63,440) 5,027
-------- -------- --------
Total income 40,302 (63,440) 5,527
Expenses
Management fees 7 - - -
Other expenses 8 (226) (441) (668)
Finance costs - - -
-------- -------- --------
Total operating expenses (226) (441) (668)
Income/(deficit) from operations before
tax 40,076 (63,881) 4,859
Taxation - - -
-------- -------- --------
Net profit/(loss) 40,076 (63,881) 4,859
-------- -------- --------
Return per ordinary share 11 24.34p (39.24p) 2.98p
======== ======== ========
CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2005
Total
(Restated see (Restated see
note 4) note 5)
Six months Six months ended Year ended
ended 30 June 30 June 31 December
2005 2004 2004
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Notes
Income
Investment income 6 6,572 3,698 8,813
Other operating income 6 1,543 909 3,859
Gains on forward currency contracts 94 - 500
Gains/(losses) on investments held
at fair value 40,208 (63,440) 5,027
-------- -------- --------
Total income 48,417 (58,833) 18,199
Expenses
Management fees 7 (2,491) (1,729) (3,797)
Other expenses 8 (559) (837) (1,365)
Finance costs (713) (937) (1,817)
-------- -------- --------
Total operating expenses (3,763) (3,503) (6,979)
Income/(deficit) from operations before
tax
44,654 (62,336) 11,220
Taxation (1,000) (256) (1,462)
-------- -------- --------
Net profit/(loss) 43,654 (62,592) 9,758
-------- -------- --------
Return per ordinary share 11 26.51p (38.45p) 5.99p
======== ======== ========
CONSOLIDATED BALANCE SHEET
as at 30 June 2005
(Restated see (Restated see
note 4) note 5)
30 June 30 June 31 December
Notes 2005 2004 2004
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Non current assets
Investments held at fair value 477,781 353,656 416,820
Current assets
Investments held at fair value 4,894 3,742 4,886
Due from brokers 592 1,576 1,393
Other receivables 891 898 752
---------- ---------- ----------
6,377 6,216 7,031
---------- ---------- ----------
Current liabilities
Bank overdrafts (30,918) (31,003) (19,802)
Payable to brokers (950) (1,571) (1,811)
Taxation payable (608) - (673)
Other payables (1,851) (1,470) (3,351)
---------- ---------- ----------
(34,327) (34,044) (25,637)
---------- ---------- ----------
Net current liabilities (27,950) (27,828) (18,606)
---------- ---------- ----------
Net assets less current liabilities 449,831 325,828 398,214
Non-current liabilities
Deferred tax (75) (49) (85)
---------- ---------- ----------
Net assets 449,756 325,779 398,129
========== ========== ==========
Capital and reserves
Ordinary called up share capital 8,415 8,140 8,140
Share premium 11,768 - -
Special reserve 203,244 203,244 203,244
Capital redemption reserve 22,779 22,779 22,779
Other capital reserves 193,554 84,738 153,478
Revenue reserve 9,996 6,878 10,488
---------- ---------- ----------
Total equity shareholders' fund 449,756 325,779 398,129
========== ========== ==========
Net asset value per ordinary share 11 267.24p 200.11p 244.55p
========== ========== ==========
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2005
(Restated see (Restated see
note 4) note 5)
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2005 2004 2004
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Net cash inflow from operating activities 1,847 145 5,746
Investing activities
Purchases of investments (77,717) (54,161) (121,186)
Sale of investments 56,835 59,040 131,609
--------- --------- ---------
Net cash (outflow)/inflow from investing activities (20,882) 4,879 10,423
--------- --------- ---------
Net cash (outflow)/inflow before financing (19,035) 5,024 16,169
--------- --------- ---------
Financing activities
Warrant issue costs - (18) (305)
Shares issued from exercise of warrants 12,043 - -
Equity dividends paid (4,070) (2,768) (2,768)
--------- --------- ---------
Net cash inflow/(outflow) from financing 7,973 (2,786) (3,073)
--------- --------- ---------
(Decrease)/increase in cash (11,062) 2,238 13,096
Effect of foreign exchange rate changes (54) (389) (46)
--------- --------- ---------
Change in cash and cash equivalents (11,116) 1,849 13,050
Bank overdrafts at start of period (19,802) (32,852) (32,852)
--------- --------- ---------
Bank overdrafts at end of period (30,918) (31,003) (19,802)
========= ========= =========
RECONCILIATION OF NET INCOME BEFORE TAX TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
(Restated see (Restated see
note 4) note 5)
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2005 2004 2004
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Net income before tax 44,654 (62,336) 11,220
(Gains)/losses on investments including transaction
costs (39,982) 63,556 (4,664)
Net gains on forward exchange contracts (94) - (500)
Warrant issue costs - 325 305
Net sales of investments by subsidiary undertakings 738 497 2,131
Increase in other receivables (200) (560) (382)
(Decrease)/increase in other payables (1,592) (265) 2,013
Net tax paid (408) (102) (261)
Tax on investment income included within gross income (523) (243) (612)
Profit on investments held by subsidiary undertakings (746) (727) (3,504)
--------- --------- ---------
Net cash inflow from operating activities 1,847 145 5,746
========= ========= =========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2005
Capital Other
Share Share Special redemption capital Revenue
capital premium reserve reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
For the six months ended
30 June 2004
Net assets at 31 December
2003 (as restated see note 3) 8,140 - 203,244 22,779 148,619 8,357 391,139
Net (loss)/profit from operating
Activities - - - - (63,881) 1,289 (62,592)
Dividends paid and declared (^) - - - - - (2,768) (2,768)
--------- --------- ---------- --------- ---------- --------- ----------
Net Assets at 30 June 2004 8,140 - 203,244 22,779 84,738 6,878 325,779
========= ========= ========== ========= ========== ========= ==========
For the year ended
31 December 2004
Net assets at 31 December
2003 (as restated see note 3) 8,140 - 203,244 22,779 148,619 8,357 391,139
Net profit from operating
Activities - - - - 4,859 4,899 9,758
Dividends paid and declared(^) - - - - - (2,768) (2,768)
--------- --------- ---------- --------- ---------- --------- ----------
Net Assets at
31 December 2004 8,140 - 203,244 22,779 153,478 10,488 398,129
========= ========= ========== ========= ========== ========= ==========
For the six months ended
30 June 2005
Net assets at 31 December
2004 (as restated see note 5) 8,140 - 203,244 22,779 153,478 10,488 398,129
Shares issued from exercise
of warrants 275 11,768 - - - - 12,043
Net profit from operating
Activities - - - - 40,076 3,578 43,654
Dividends paid and declared* - - - - - (4,070) (4,070)
--------- --------- ---------- --------- ---------- --------- ----------
Net Assets at 30 June 2005 8,415 11,768 203,244 22,779 193,554 9,996 449,756
========= ========= ========== ========= ========== ========= ==========
(^)Final dividend for the year ended 31 December 2003, declared on 13 February
2004 and paid on 31 March 2004.
* Final and special dividends for the year ended 31 December 2004, declared on
14 February 2005 and paid on 31 March 2005.
NOTES ON THE INTERIM RESULTS
1. Principal activity
The principal activity of the Company is that of an investment trust company
within the meaning of section 842 of the Income and Corporation Taxes Act 1988.
The principal activity of its two subsidiary undertakings, Merrill Lynch Gold
Limited and World Mining Investment Company Limited, is investment dealing.
2. Accounting Policies
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) adopted by the International Accounting
Standards Board (IASB), and interpretations issued by the International
Reporting Interpretations Committee of the IASB (IFRIC).
These are the first financial statements prepared in accordance with IFRS.
Previously the financial statements were prepared in accordance with UK
Generally Accepted Accounting Principles (UK GAAP) including the Statement of
Recommended Practice 'Financial Statements of Investment Trust Companies.' UK
GAAP differs in certain respects from IFRS. When preparing the financial
statements to 30 June 2005 the directors have amended certain accounting and
valuation methods applied in the UK GAAP financial statements to comply with
IFRS.
Reconciliations of Balance Sheet, Statement of Total Return to the Income
Statement and Cash Flow Statement at date of conversion (1 January 2004) are
shown in notes 3 to 5.
(a) Basis of preparation
The financial statements are prepared on an historical cost basis, except for
the measurement at fair value of investments and derivative instruments.
(b) Basis of consolidation
The Group accounts consolidate the accounts of the Company and its wholly owned
subsidiary undertakings, Merrill Lynch Gold Limited and World Mining Investment
Company Limited.
(c) Segmental reporting
The directors are of the opinion that the Company is engaged in a single segment
of business being investment business.
(d) Income
Dividends receivable on ordinary shares are treated as revenue for the period on
an ex-dividend basis. Where no ex-dividend date is available dividends
receivable on or before the period end are treated as revenue for the period.
Provision is made for any dividends not expected to be received. Interest
income and expenses are accounted for on an accruals basis.
(e) Expenses
All expenses are accounted for on an accruals basis. Expenses have been treated
as revenue except as follows:
- expenses which are incidental to the disposal of an investment
- expenses are treated as capital where a connection with the maintenance or
enhancement of the value of the investments can be demonstrated
(f) Taxation
Deferred tax is recognised in respect of all temporary differences that have
originated but not reversed at the balance sheet date, where transactions or
events that result in an obligation to pay more tax in the future or right to
pay less tax in the future have occurred at the balance sheet date. This is
subject to deferred tax assets only being recognised if it is considered more
likely than not that there will be suitable profits from which the future
reversal of the temporary differences can be deducted.
(g) Investments
Subsidiary and main company investments are all held at fair value with charges
taken through the Income Statement.
Listed investments are measured initially at cost and are recognised at trade
date. For financial assets acquired, the cost is the fair value of the
consideration. Subsequent to initial recognition, all listed investments are
measured at their quoted bid prices without deduction for the estimated future
selling costs.
Unlisted investments are valued by the directors using primary valuation
methodologies such as earnings multiples, recent transactions and net assets.
Where fair value cannot reliably be measured the investment will be carried at
the previous reporting date value unless there is evidence that the investment
has since been impaired. In such a case the value will be reduced to reflect
the estimated extent of impairment.
Assets are derecognised at the trade date of the disposal. Proceeds will be
measured at fair value which will be regarded as the proceeds of sale less any
transaction costs.
(h) Movements in fair value
Changes in the fair value of all held at fair value assets are taken to the
Income Statement.
On disposal, realised gains and losses are also recognised in the Income
Statement.
(i) Dividends payable
Final dividends are recognised from the date in which they are declared and
approved by shareholders.
(j) Foreign currency translation
Transactions involving foreign currencies are converted at the rate ruling at
the date of the transaction.
Foreign currency monetary assets and liabilities are translated into Sterling at
the rate ruling on the balance sheet date. Foreign exchange differences arising
on translation are recognised in the Income Statement.
3. Restatement of opening balances at 31 December 2003
At 1 January 2004 the Company adopted International Financial Reporting
Standards. In accordance with IFRS 1, First Time Adoption of Financial
Reporting Standards, the following is a reconciliation of the figures at 31
December 2003 previously reported under the applicable UK Accounting Standards
and with the Statement of Recommended Practice.
Notes Previously
reported Restated
31 December 31 December
2003 Adjustments 2003
£'000 £'000 £'000
Fixed Assets
Investments 1 423,530 (873) 422,657
Current assets 4,767 - 4,767
Creditors: amounts falling due within one year 2 (39,043) 2,768 (36,275)
----------- ----------- -----------
Total assets less current liabilities 389,254 1,895 391,149
Provision for liabilities and charges (10) - (10)
----------- ----------- -----------
389,244 1,895 391,139
=========== =========== ===========
Capital and reserves
Ordinary called up share capital 8,140 - 8,140
Special reserve 203,244 - 203,244
Capital redemption reserve 22,779 - 22,779
Other capital reserves 1 149,492 (873) 148,619
Revenue reserve 2 5,589 2,768 8,357
----------- ----------- -----------
389,244 1,895 391,139
=========== =========== ===========
Net asset value per ordinary share 239.09p 1.17p 240.26p
=========== =========== ===========
Notes to the reconciliation
1. Investments are all classified as held-at-fair-value under IFRS and are
carried at bid prices which equates to their fair value of £422,657,000.
They were carried at mid prices previously. The resultant difference of
£873,000 is included in other capital reserves.
2. No provision has been made for the final dividend on ordinary shares for
the year ended 31 December 2003 of £2,768,000. Under IFRS this is not
recognised until they are declared and approved by shareholders. This is
therefore added to revenue reserve and other payables.
4. (a) Restatement of balances at 30 June 2004
At 1 January 2004 the Company adopted International Financial Reporting
Standards.
In accordance with IFRS 1, First Time Adoption of Financial Reporting
Standards, the following is a reconciliation of the figures at 30 June 2004
previously reported under the applicable UK Accounting Standards and with
the Statement of Recommended Practice.
Previously
reported 30 Restated 30
June 2004 Adjustments June 2004
Note £'000 £'000 £'000
Fixed Assets
Investments 1 354,600 (944) 353,656
Current assets 6,216 - 6,216
Creditors: amounts falling due within one year (34,044) - (34,044)
----------- ----------- -----------
Total assets less current liabilities 326,772 (944) 325,828
Provision for liabilities and charges (49) - (49)
----------- ----------- -----------
326,723 (944) 325,779
=========== =========== ===========
Capital and reserves
Ordinary called up share capital 8,140 - 8,140
Special reserve 203,244 - 203,244
Capital redemption reserve 22,779 - 22,779
Other capital reserves 1 85,682 (944) 84,738
Revenue reserves 6,878 - 6,878
----------- ----------- -----------
326,723 (944) 325,779
=========== =========== ===========
Net asset value per ordinary share 200.69p (0.58p) 200.11p
=========== =========== ===========
Note to the reconciliation
1. Investments are all classified as held-at-fair-value under IFRS and are
carried at bid prices which equates to their fair value of £353,656,000.
They were carried at mid prices previously. The resultant difference of
£944,000 is included in other capital reserves.
(b) Reconciliation of the Statement of Total Return to the Income
Statement for the six months ended 30 June 2004
Under IFRS the Income Statement is the equivalent of the Statement of
Total Return as reported previously.
Note £'000 Per share p
Total transfer from reserve per Statement of Total Return (62,521) (38.40)
Change from mid to bid basis at 31 December 2003 1 873 0.53
Change from mid to bid basis at 30 June 2004 1 (944) (0.58)
----------- -----------
Net loss per Income Statement (62,592) (38.45)
=========== ===========
Note to the reconciliation
1. Portfolio investments at 31 December 2003 and 30 June 2004 are required to
be valued at fair value under IFRS. These values differ from the
previous valuations by £873,000 and £944,000 respectively.
(c) Reconciliation of the Cash Flow Statement for the six months ended
30 June 2004
Previously Effect of
reported cash transition to Adjusted cash
flows 2004 IFRSs flows 2004
£'000 £'000 £'000
Notes
Net cash inflow from operating activities 1,2 1,184 (1,039) 145
Returns on investments and servicing of finance 1 (937) 937 -
Taxation 2 (102) 102 -
Net cash inflow from financial investment 3 4,490 389 4,879
Equity dividends paid 4 (2,768) 2,768 -
----------- ----------- -----------
Net cash inflow before financing 1,867 3,157 5,024
Financing 4 (18) (2,768) (2,786)
----------- ----------- -----------
Increase in cash 1,849 389 2,238
----------- ----------- -----------
Transfer of foreign exchange movements to
reconciliation of cash and cash equivalents
- (389) (389)
----------- ----------- -----------
Total 1,849 - 1,849
=========== =========== ===========
Notes to reconciliation
1. Bank interest paid is now shown under operating activities rather than
servicing of finance.
2. Taxation paid is now disclosed under operating activities.
3. Foreign exchange movements now appear at the foot of the Cash Flow
Statement within the Reconciliation of Cash and Cash Equivalents.
4. Dividends paid are now disclosed under financing as there is no longer a
separate heading for equity dividends.
5. (a) Restatement of balances at 31 December 2004
At 1 January 2004 the Company adopted International Financial
Reporting Standards.
In accordance with IFRS 1, First Time Adoption of Financial Reporting
Standards, the following is a reconciliation of the figures at
31 December 2004 previously reported under the applicable UK
Accounting Standards and with the Statement of Recommended Practice.
Notes Previously
reported Restated
31 December 31 December
2004 Adjustments 2004
£'000 £'000 £'000
Fixed Assets
Investments 1 418,118 (1,298) 416,820
Current assets 7,031 - 7,031
Creditors: amounts falling due within one year 2 (29,707) 4,070 (25,637)
----------- ----------- -----------
Total assets less current liabilities 395,442 2,772 398,214
Provision for liabilities and charges (85) - (85)
----------- ----------- -----------
395,357 2,772 398,129
=========== ========== ===========
Capital and reserves
Ordinary called up share capital 8,140 - 8,140
Special reserve 203,244 - 203,244
Capital redemption reserve 22,779 - 22,779
Other capital reserves 1 154,776 (1,298) 153,478
Revenue reserve 2 6,418 4,070 10,488
----------- ----------- -----------
395,357 2,772 398,129
=========== ========== ===========
Net asset value per ordinary share 242.85p 1.70p 244.55p
=========== ========== ===========
Notes to the reconciliation
1. Investments are all classified as held at fair value under IFRS and are
carried at bid prices which equates to their fair value of £416,820,000.
They were carried at mid prices previously. The resultant difference of
£1,298,000 is included in other capital reserves.
2. No provision has been made for the final dividend on ordinary shares for
the year ended 31 December 2004 of £4,070,000. Under IFRS this is not
recognised until they are declared and approved by shareholders. This is
therefore added to revenue reserve and other payables.
(b) Reconciliation of the Statement of Total Return to the Income
Statement for the year ended 31 December 2004
Under IFRS the Income Statement is the equivalent of the Statement of
Total Return as reported previously.
Notes £'000 Per share p
Total transfer from reserve per Statement of Total Return 6,113 3.76
Add back dividends paid and proposed 1 4,070 2.50
Change from mid to bid basis at 31 December 2003 2 873 0.53
Change from mid to bid basis at 31 December 2004 2 (1,298) (0.80)
-------- --------
Net profit per Income Statement 9,758 5.99
===== =====
Notes to the reconciliation
1. All dividends approved and paid during the period are dealt with through
the Consolidated Statement of Changes in Equity.
2. Portfolio investments at 31 December 2003 and 31 December 2004 are required
to be valued at fair value under IFRS. These values differ from the
previous valuations by £873,000 and £1,298,000 respectively.
(c) Reconciliation of the Cash Flow Statement for the year ended
31 December 2004
Previously Effect of
reported cash transition to Adjusted cash
flows 2004 IFRSs flows 2004
Notes £'000 £'000 £'000
Net cash inflow from operating activities 1,2 7,824 (2,078) 5,746
Returns on investments and servicing of finance 1 (1,817) 1,817 -
Taxation 2 (261) 261 -
Net cash inflow from financial investment 3 10,377 46 10,423
Equity dividends paid 4 (2,768) 2,768 -
----------- ----------- -----------
Net cash inflow before financing 13,355 2,814 16,169
Financing 4 (305) (2,768) (3,073)
----------- ----------- -----------
Increase in cash 13,050 46 13,096
----------- ----------- -----------
Transfer of foreign exchange movements to
reconciliation of cash and cash equivalents
- (46) (46)
----------- ----------- -----------
Total 13,050 - 13,050
=========== =========== ===========
Notes to reconciliation
1. Bank interest paid is now shown under operating activities rather than
servicing of finance.
2. Taxation paid is now disclosed under operating activities.
3. Foreign exchange movements now appear at the foot of the Cash Flow
Statement within the Reconciliation of Cash and Cash Equivalents.
4. Dividends paid are now disclosed under financing as there is no longer a
separate heading for equity dividends.
6. Income Six months Six months Year ended
ended 30 June ended 30 June 31 December
2005 2004 2004
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Income from investments
Dividends:
UK listed 1,245 660 1,446
Overseas listed 5,327 3,038 7,367
------- ------- --------
6,572 3,698 8,813
------- ------- --------
Other operating income:
Bank interest and other income 797 182 355
Profit on investments held by subsidiaries 746 727 3,504
------- ------- --------
1,543 909 3,859
------- ------- --------
Total income 8,115 4,607 12,672
======= ======= ========
7. Investment management fees Six months Six months Year ended
ended 30 June ended 30 June 31 December
2005 2004 2004
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Investment management fees 2,431 1,649 3,631
Irrecoverable VAT thereon 60 80 166
------- ------- -------
2,491 1,729 3,797
======= ======= =======
The investment management fee is levied quarterly, based on the gross assets on
the last day of each quarter. All investment management fees are charged to
revenue.
8. Expenses Six months Six months Year ended
ended 30 June ended 30 June 31 December
2005 2004 2004
£'000 £'000 £'000
(unaudited) (unaudited) (audited)
Custody fee 88 174 209
Administration fee 135 102 225
Registrar's fees and other
Administration expenses 61 85 189
Directors' emoluments 49 35 74
----- ----- -----
333 396 697
===== ===== =====
9. Dividend
The Board has not paid an interim dividend, as dividends are paid annually in
respect of each accounting period. The final (1.75p) and special (0.75p)
dividends paid in respect of the year ended 31 December 2004 were paid on
31 March 2005. Under IFRS, dividends are presented through the Consolidated
Statement of Changes in Equity rather than the Income Statement for the period
in which they are declared and approved by shareholders.
10. Gearing ratio 30 June 30 June 31 December
2005 2004 2004
(unaudited) (unaudited) (audited)
The ratio of borrowings to net assets were 6.9% 9.5% 5.0%
11. Returns per share and net asset value per ordinary share
30 June 2005 30 June 2004 31 December 2004
(unaudited) (unaudited) (audited)
Net revenue attributable to ordinary shareholders £3,578,000 £1,289,000 £4,899,000
Net capital gains/(losses) attributable to ordinary
shareholders £40,076,000 (£63,881,000)* £4,859,000**
Equity shareholders' funds £449,756,000 £325,779,000 £398,129,000**
The weighted average number of ordinary shares in
issue during each period, on which the return per
ordinary share was calculated, was: 164,683,603 162,800,000 162,800,000
The actual number of ordinary shares in issue at the
end of the period on which the net asset value per
share was calculated was: 168,298,906 162,800,000 162,800,000
Revenue return per share 2.17p 0.79p 3.01p
Capital return per share 24.34p (39.24p)* 2.98p**
Net asset value per share 267.24p 200.11p* 244.55p**
Share price 234.25p 179.50p 218.00p
* Restated - see note 3
** Restated - see note 4
12. Publication of non-statutory accounts
The financial information contained in this interim statement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The financial information for the six months ended 30 June 2005 and 2004
has not been audited.
The information for the year ended 31 December 2004 has been extracted from the
latest published audited financial statements, as restated to comply with IFRS
(see note 2), which have been filed with the Registrar of Companies. The report
of the independent auditor on those accounts contained no qualification or
statement under sections 237(2) or (3) of the Companies Act 1985.
13. Annual results
The Board expects to announce the annual results for the year ended 31 December
2005, as prepared under IFRS, in mid February 2006; copies of the preliminary
announcement can be obtained from the Secretary on 020 7743 3000. The annual
report should be available by the end of February with the Annual General
Meeting being held at the end of March 2006.
1 August 2005
33 King William Street
London EC4R 9AS
sf/MLWMT/Stock Exchange Announcements/Interim July 2005
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