Interim Results

BRUNNER INVESTMENT TRUST PLC 22 July 1999 Announcement of Unaudited Interim Results Six months ended 31st May 1999 Net Asset Value A summary of the results for the six months ended 31st May 1999 is set out below. The Net Asset Value attributable to each Ordinary Share at 31st May 1999 was 450.0p. This compares with 393.5p at 30th November 1998 and represents an increase of 14.4% compared to an increase in the benchmark index (60% FTSE All-Share Index, +10.0%, and 40% FT/S&P World Index in sterling, +12.2%,) of 10.9%. Earnings Earnings in the six months to 31st May 1999 of 4.25p per Ordinary Share have risen by 18.1% compared with the same period last year. This primarily reflects the change in allocation of expenses between capital and revenue referred to below. Interim Dividend The Board has declared an interim dividend of 3.10p net per Ordinary Share payable on 9th September 1999 to holders on the Register of Members at the close of business on 6th August 1999, an increase of 3.3% over the 3.00p net paid as an interim dividend last year. Forecast Final Dividend It is the Board's intention to recommend a final dividend of not less than 3.80p net per Ordinary Share, making a total distribution for the year of not less than 6.90p net per Ordinary Share (1998 - 6.70p). Year 2000 Dresdner RCM have instigated a programme to establish the risks posed to the Company by the consequences of the Year 2000 date change and to address those risks. Dresdner RCM's objective is to ensure business continuity through the Year 2000 date change and for all internal systems to be Year 2000 compliant. Dresdner RCM will also require both its suppliers and the suppliers to the Trust to ensure that their systems achieve the same or equivalent standard. Costs relating to the Year 2000 programme are to be borne by Dresdner RCM. Allocation of Expenses As mentioned in my Statement in the Annual Report, your Board has reviewed the apportionment of finance costs and management fee between capital and income in the light of the anticipated relative contribution of capital gain and gross income in the Trust's total return. As a result the ratio of these expenses charged to capital and revenue has been changed from 60:40 to 70:30 with effect from 1st December 1998 and this revised ratio has therefore been applied in respect of the half-year results to 31st May 1999. Investment Review The six months to the end of May 1999 saw world stock markets regain the valuations seen before the sharp falls in the autumn of 1998. In the developing world the United States continued to see very positive economic growth but Europe and Japan saw slow conditions. One of the features of the period was the weakness of the euro versus the United States dollar and sterling as the European Central Bank allowed the euro to find its own level. All developing countries have continued to enjoy a remarkably benign inflationary environment which has allowed the Monetary Policy Committee in the UK to cut interest rates further. The best returns in the period came from Asian stock markets aided by the view that the reflationary package in Japan would at last help that economy to regain its buoyancy. The knock-on effect on other Asian economies would be positive were that to occur. Other emerging markets also rose sharply during the second half of the period as calmer conditions in Russia and also in Brazil, following the January devaluation, led to a return of confidence. Looking to the future the outlook for Europe is difficult to predict. There are some early signs that the weakness of the euro, together with continued growth in some of the smaller countries within Europe, is starting to have a positive impact on economic conditions in the European core. Although it is too early to forecast a recovery with any degree of certainty the signs seem to be in the right direction. Meanwhile United States statistics continue to show a buoyant economy whilst the bottom of the cycle might also have been seen in the UK. The problem for investors is that the continuing attractive outlook for the US economy seems to be reflected already in market prices. The European markets on the other hand have lagged and could perform well if growth resumes. In emerging markets some consolidation will probably occur after the sharp rises of the last few months but valuations remain low and further recovery could take place. Against this background the Managers are devoting more and more of their efforts to sectoral research on a global basis in order to capitalise on the structural shift to a service and technology dominated global economy. Investments in telecommunications, specifically data transmission and information technology companies, are likely to be core holdings on a longer term basis. J F H Trott Chairman Enquiries For further information please contact: Simon White Dresdner RCM Global Investors Tel: 0171 475 2700 Amy Fisher Lansons Communications Tel: 0171 490 8828 SUMMARY OF UNAUDITED RESULTS STATEMENT OF TOTAL RETURN for the six months ended 31st May 1999 1999 ----------------------------------- (£'000) (£'000) (£'000) Revenue Capital Total Net gains on investments - 37,289 37,289 Income from fixed asset investments 4,045 - 4,045 Other income 206 - 206 Investment management fee (207) (484) (691) Expenses of administration (69) - (69) ------- ------- ------- Net return before finance costs and taxation 3,975 36,805 40,780 Finance costs of borrowings (686) (1,587) (2,273) ------- ------- ------- Return before taxation 3,289 35,218 38,507 Overseas Taxation (75) - (75) UK Taxation (480) 157 (323) ------- ------- ------- (555) 157 (398) ------- ------- ------- Return after taxation 2,734 35,375 38,109 Dividends on Preference Stock (11) - (11) ------- ------- ------- Return attributable to Ordinary Shareholders 2,723 35,375 38,098 Dividends on Ordinary Shares (see below) (1,984) - (1,984) ------- ------- ------- Transfer to Reserves 739 35,375 36,114 ------- ------- ------- Return per Ordinary Share 4.25p 55.27p 59.52p ------- ------- ------- The revenue column of this statement is the profit and loss of the Company. Dividends on Ordinary Shares: 1999 (£'000) Interim 3.10p (1998 - 3.00p) 1,984 ------------ NET ASSET STATEMENT at 31st May 1999 1999 (£'000) Fixed asset investments 326,596 Net current assets 13,932 ------------ 340,528 Long term borrowings (52,107) Preference share capital (450) ------------ Net assets attributable to Ordinary Shareholders 287,971 ------------ Net asset value per Ordinary Share 450.0p The net asset value is based on 64,000,000 Ordinary Shares in issue. SUMMARY OF UNAUDITED RESULTS STATEMENT OF TOTAL RETURN for the six months ended 31st May 1998 1998 ----------------------------------- (£'000) (£'000) (£'000) Revenue Capital Total Net gains on investments - 45,306 45,306 Income from fixed asset investments 3,779 - 3,779 Other income 333 - 333 Investment management fee (247) (370) (617) Expenses of administration (71) - (71) ------- ------- ------- Net return before finance costs and taxation 3,794 44,936 48,730 Finance costs of borrowings (786) (1,152) (1,938) ------- ------- ------- Return before taxation 3,008 43,784 46,792 Overseas Taxation (93) - (93) UK Taxation (604) 108 (496) ------- ------- ------- (697) 108 (589) ------- ------- ------- Return after taxation 2,311 43,892 46,203 Dividends on Preference Stock (8) - (8) ------- ------- ------- Return attributable to Ordinary Shareholders 2,303 43,892 46,195 Dividends on Ordinary Shares (see below) (1,920) - (1,920) ------- ------- ------- Transfer to Reserves 383 43,892 44,275 ------- ------- ------- Return per Ordinary Share 3.60p 68.58p 72.18p ------- ------- ------- The revenue column of this statement is the profit and loss of the Company. Dividends on Ordinary Shares: 1998 (£'000) Interim 3.00p (1997 - 2.60p) 1,920 ------------ NET ASSET STATEMENT at 31st May 1998 1998 (£'000) Fixed asset investments 319,334 Net current assets 4,492 ------------ 323,826 Long term borrowings (52,151) Preference share capital (450) ------------ Net assets attributable to Ordinary Shareholders 271,225 ------------ Net asset value per Ordinary Share 423.8p The net asset value is based on 64,000,000 Ordinary Shares in issue. SUMMARY OF UNAUDITED RESULTS STATEMENT OF TOTAL RETURN for the year ended 30th November 1998 1998 ----------------------------------- (£'000) (£'000) (£'000) Revenue Capital Total Net gains on investments - 27,770 27,770 Income from fixed asset investments 6,715 - 6,715 Other income 907 - 907 Investment management fee (483) (726) (1,209) Expenses of administration (135) - (135) ------- ------- ------- Net return before finance costs and taxation 7,004 27,044 34,048 Finance costs of borrowings (1,553) (2,300) (3,853) ------- ------- ------- Return on ordinary activities before taxation 5,451 24,744 30,195 Overseas Taxation (158) - (158) UK Taxation (1,180) 354 (826) ------- ------- ------- (1,338) 354 (984) ------- ------- ------- Return on ordinary activities after taxation for the financial year 4,113 25,098 29,211 Dividends on Preference Stock (16) - (16) ------- ------- ------- Return attributable to Ordinary Shareholders 4,097 25,098 29,195 Dividends on Ordinary Shares (see below) (4,288) - (4,288) ------- ------- ------- Transfer (from) to reserves (191) 25,098 24,907 ------- ------- ------- Return per Ordinary Share 6.40p 39.22p 45.62p ------- ------- ------- The revenue column of this statement is the profit and loss account of the Company. Dividends on Ordinary Share: Interim Ordinary 3.00p 1998 (£'000) Final Ordinary 1.59p FID 2.11p 1,920 ------ 6.70p 2,368 ------------ 4,288 ------------ NET ASSET STATEMENT as at 30th November 1998 1998 (£'000) Fixed asset investments 292,575 Net current assets 11,869 ------------ 304,444 Long term borrowings (52,137) Preference share capital (450) ------------ Net assets attributable to Ordinary Shareholders 251,857 ------------ Net asset value per Ordinary Share 393.5p The net asset value is based on 64,000,000 Ordinary Shares in issue. This interim statement has been neither audited nor reviewed by the Company's auditors. The interim statement has been prepared using the same accounting policies as those adopted in the annual accounts for the year ended 30th November 1998. Management fee and finance costs of borrowings have been allocated to capital and revenue on the basis of 70:30 in respect of the half year to 31st May 1999 and 60:40 in respect of the half year to 31st May 1998 and the year ended 30th November 1998. The non-statutory accounts for the year to 30th November 1998 are an extract from the latest published accounts of the Company which have been delivered to the Registrar of Companies. The auditors' opinion on those accounts was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. The Return per Ordinary Share is based on revenue or capital return to Ordinary Shareholders, as appropriate, and on 64,000,000 Ordinary Shares, being those in issue throughout the period. Following the abolition of advance corporation tax the rate of coupon on the Preference Stock has now reverted back to 5% per annum, compared with 3.5% in 1998. The Interim Report will be sent to Shareholders shortly and made available to the public at the Registered Office of the Company, 10 Fenchurch Street, London, EC3M 3LB. THE BRUNNER INVESTMENT TRUST PLC Twenty Largest Equity Holdings as at 31st May 1999 Valuation % of 31.5.1999 Fixed Asset Principal (£'000) Investments Activities British Telecom 15,464 4.7 Telecommunications BP Amoco 14,811 4.5 Integrated oil and gas Glaxo-Wellcome 10,616 3.3 Pharmaceuticals Vodafone Airtouch 10,528 3.2 Telecommunications Lloyds TSB 9,045 2.8 Banking and financial services Shell Transport & Trading 8,668 2.7 Integrated oil and gas HSBC 8,094 2.5 Banking and financial services Barclays 7,288 2.2 Banking and financial services AstraZeneca 6,606 2.0 Pharmaceuticals BG 6,534 2.0 Gas distribution National Westminster 6,516 2.0 Banking and financial services Royal Bank of Scotland 5,475 1.7 Banking and financial services Airtours 4,796 1.5 Leisure and hotels SmithKline Beecham 4,492 1.4 Pharmaceuticals Cable & Wireless Communications 4,412 1.4 Telecommunications Reuters 4,323 1.3 Media Telewest Communications 4,292 1.3 Telecommunications Dresdner RCM Emerging Markets Trust 4,288 1.3 Investment Trust Diageo 4,267 1.3 Beverages Prudential 4,115 1.3 Insurance ------- ---- 144,630 44.4 ------- ---- Portfolio Analysis as at 31st May 1999 % United Kingdom 65.3 Europe 11.2 North America 15.6 Latin America 0.7 Japan 3.0 Pacific Basin 2.5 Other Countries 1.7 ----- 100.0 -----

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