Interim Results
Brunner Investment Trust PLC
12 July 2007
For immediate release
12 July 2007
THE BRUNNER INVESTMENT TRUST PLC
ANNOUNCEMENT OF INTERIM RESULTS
For the six months ended 31 May 2007
Highlights
• Net Asset Value per ordinary share of 564.6p, up 13.9% in the period,
versus 10.6% for the benchmark index.
• Earnings per ordinary share of 6.99p, up 15.5%.
• Dividend per share 4.4p (2006 - 4.0p).
Interim Results
I am pleased to report the Trust outperformed its benchmark in the first half of
its financial year with the Net Asset Value increasing by 13.9% compared with an
increase in the composite benchmark of 10.6%.
Net Asset Value
A summary of the results for the six months ended 31 May 2007 is set out below.
The Net Asset Value attributable to each Ordinary Share at 31 May 2007 was
564.6p. This compares with 495.7p at 30 November 2006, an increase of 13.9% over
the period. The capital return on the benchmark index (60% FTSE All-Share, 40%
FTSE World Index- £) was 10.6% over the period.
Earnings
Earnings in the six months to 31 May 2007 were 6.99p per Ordinary Share (2006:
6.05p).
Interim Dividend
The Board has declared an interim dividend of 4.4p net (2006: 4.0p) per Ordinary
Share payable on 23 August 2007 to holders on the Register of Members at the
close of business on 27 July 2007.
Share Buy Backs
During the period under review the Company purchased 591,577 Ordinary Shares for
cancellation. In the period since 31 May 2007, a further 153,287 Ordinary Shares
have been purchased for cancellation.
Investment Review
Equity markets made good progress in the period under review and fears that a
slowdown in the US housing market would undermine global demand have so far not
been realised. Market volatility has increased however, and various triggers -
a fall in Chinese equities, a deterioration in the US sub-prime mortgage market
and associated problems with hedge fund liquidity - have contributed to an
overall re-appraisal of risk. Further economic growth has prompted central
banks to raise interest rates in most regions, which has also impacted
medium-term bond yields. The fact that equity markets have showed resilience in
the face of a deteriorating environment for bonds reflects the strong corporate
earnings reported over the period, as well as continued takeover activity.
The portfolio remains concentrated in companies which the managers believe have
strong growth potential. In the UK, our emphasis on the mining sector proved
helpful in this period, with significant contributions from BHP Billiton,
Xstrata and Rio Tinto. We also saw strong returns from our publishing stocks,
Reed Elsevier and Reuters; the latter was the subject of a takeover bid from
Canada's Thomson Corp in May.
Within our overseas portfolio, the outperformance in the first half was
generated from a variety of holdings across a number of different sectors. One
of the top contributors was Nintendo which has developed a range of innovative
video game products, notably the Wii and DS, and continued to exceed market
expectations on sales and profitability. Porsche, the German sports car
manufacturer, was also among the top contributors; the business is expected to
benefit from further margin improvement as unit sales accelerate across its
product range.
Outlook
Global equities have performed well over the reporting period and may struggle
to make further progress in the short run, as higher interest rates remove
liquidity from the financial system. Corporate activity, however, buoyed by
strong corporate earnings and healthy balance sheets, will remain supportive of
markets. Overall, we believe that the market environment remains favourable for
growth sectors. Quality companies with strong cash returns and robust balance
sheets also look attractive on a relative basis.
Keith Percy
Chairman
Enquiries:
For further information, please contact:
RCM (UK) Limited
Simon White
Head of Investment Trusts
Tel: 020 7065 1539
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
for the six months ended 31 May 2007
Revenue Capital Total
Return
£'000s £'000s £'000s
(Note 2)
Net gains on investments at fair value - 34,073 34,073
Income from Investments 4,545 - 4,545
Other Income 297 - 297
Investment management fee (244) (569) (813)
Administrative expenses (135) (5) (140)
Net return on ordinary activities before finance costs 4,463 33,499 37,962
and taxation
Finance costs: interest payable and similar charges (704) (1,584) (2,288)
Net return on ordinary activities before taxation 3,759 31,915 35,674
Taxation
Overseas taxation (157) - (157)
UK taxation (223) 223 -
(380) 223 (157)
Net return attributable to Ordinary Shareholders 3,379 32,138 35,517
Net return per Ordinary Share (Note 1)
(basic and diluted) 6.99p 66.51p 73.50p
BALANCE SHEET
as at 31 May 2007
£'000s
Investments held at fair value through profit or loss 310,006
Net Current Assets 13,403
Total Assets less Current Liabilities 323,409
Creditors: amount falling due after more than one year (52,132)
Total Net Assets 271,277
Called up Share Capital 12,011
Capital Redemption Reserve 3,989
Capital Reserves: Realised 183,195
Unrealised 60,291
Revenue Reserve 11,791
Equity Shareholders' Funds 271,277
Net Asset Value per Ordinary Share 564.6p
The net asset value is based on 48,045,261 Ordinary Shares in issue
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
for the six months ended 31 May 2006
Revenue Capital Total
Return
£'000s £'000s £'000s
(Note 2)
Net gains on investments at fair value - 10,648 10,648
Income from Investments 4,020 - 4,020
Other Income 397 - 397
Investment management fee (230) (537) (767)
Administrative expenses (199) (7) (206)
Net return on ordinary activities before finance costs 3,988 10,104 14,092
and taxation
Finance costs: interest payable and similar charges (714) (1,601) (2,315)
Net return on ordinary activities before taxation 3,274 8,503 11,777
Taxation
Overseas taxation (117) - (117)
UK taxation (163) 163 -
(280) 163 (117)
Net return attributable to Ordinary Shareholders 2,994 8,666 11,660
Net return per Ordinary Share (Note 1)
(basic and diluted) 6.05p 17.51p 23.56p
BALANCE SHEET
as at 31 May 2006
£'000s
Investments held at fair value through profit or loss 273,023
Net Current Assets 10,124
Total Assets less Current Liabilities 283,147
Creditors: amount falling due after more than one year (52,115)
Total Net Assets 231,032
Called up Share Capital 12,267
Capital Redemption Reserve 3,733
Capital Reserves: Realised 172,129
Unrealised 32,066
Revenue Reserve 10,837
Equity Shareholders' Funds 231,032
Net Asset Value per Ordinary Share 470.8p
The net asset value is based on 49,069,338 Ordinary Shares in issue
SUMMARY OF UNAUDITED RESULTS
INCOME STATEMENT
for the year ended 30 November 2006
Revenue Capital Total
Return
£'000s £'000s £'000s
(Note 2)
Net gains on investments at fair value - 24,248 24,248
Net losses on foreign currency - (2) (2)
Income from Investments 7,262 - 7,262
Other Income 762 - 762
Investment management fee (464) (1,083) (1,547)
Administrative expenses (324) (16) (340)
Net return on ordinary activities before finance costs 7,236 23,147 30,383
and taxation
Finance costs: interest payable and similar charges (1,509) (3,277) (4,786)
Net return on ordinary activities before taxation 5,727 19,870 25,597
Taxation
Overseas taxation (186) - (186)
UK taxation (262) 262 -
(448) 262 (186)
Net return attributable to Ordinary Shareholders 5,279 20,132 25,411
Net return per Ordinary Share (Note 1)
(basic and diluted) 10.73p 40.95p 51.68p
BALANCE SHEET
as at 30 November 2006
£'000s
Investments held at fair value through profit or loss 278,953
Net Current Assets 14,344
Total Assets less Current Liabilities 293,297
Creditors: amount falling due after more than one year (52,191)
Total Net Assets 241,106
Called up Share Capital 12,159
Capital Redemption Reserve 3,841
Capital Reserves: Realised 175,043
Unrealised 38,898
Revenue Reserve 11,165
Equity Shareholders' Funds 241,106
Net Asset Value per Ordinary Share 495.7p
The net asset value is based on 48,636,838 Ordinary Shares in issue
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Called up Capital Capital Capital
Share Redemption Reserve Reserve Revenue
Capital Reserve Realised Unrealised Reserve Total
£'000s £'000s £'000s £'000s £'000s £'000s
Six months ended 31 May 2007
Net Assets at 30 November 2006 12,159 3,841 175,043 38,898 11,165 241,106
Revenue Return - - - - 3,379 3,379
Shares repurchased during the (148) 148 (2,593) - - (2,593)
period
Dividends on Ordinary Shares - - - - (2,753) (2,753)
Capital Return - - 10,745 21,393 - 32,138
Net Assets at 31 May 2007 12,011 3,989 183,195 60,291 11,791 271,277
Six months ended 31 May 2006
Net Assets at 30 November 2005 12,491 3,509 164,055 35,226 10,418 225,699
Adjustment to record - - - (216) - (216)
investments at bid value
Revenue Return - - - - 2,994 2,994
Shares repurchased during the (224) 224 (3,536) - - (3,536)
period
Dividends on Ordinary Shares - - - - (2,575) (2,575)
Capital Return - - 11,610 (2,944) - 8,666
Net Assets at 31 May 2006 12,267 3,733 172,129 32,066 10,837 231,032
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Continued
Called up Capital Capital Capital
Share Redemption Reserve Reserve Revenue
Capital Reserve Realised Unrealised Reserve Total
£'000s £'000s £'000s £'000s £'000s £'000s
Year ended 30 November 2006
Net Assets at 30 November 2005 12,491 3,509 164,055 35,226 10,418 225,699
Adjustment to record - - - (216) - (216)
investments at bid value
Revenue Return - - - - 5,279 5,279
Shares repurchased during the (332) 332 (5,256) - - (5,256)
year
Dividends on Ordinary Shares - - - - (4,532) (4,532)
Capital Return - - 16,244 3,888 - 20,132
Net Assets at 30 November 2006 12,159 3,841 175,043 38,898 11,165 241,106
SUMMARY OF UNAUDITED RESULTS
CASH FLOW STATEMENT
Six Months Six Months Year ended
ended 31 May ended 31 May 30 November
2007 2006 2006
£'000s £'000s £'000s
Net cash inflow from operating activities 3,178 2,973 6,506
Servicing of finance
Interest paid (2,336) (2,336) (4,720)
Dividends paid on Preference Stock (11) (11) (22)
Net cash outflow from servicing of finance (2,347) (2,347) (4,742)
Financial investment
Purchases of fixed asset investments (95,966) (83,882) (154,031)
Sales of fixed asset investments 98,982 83,909 160,777
Net cash inflow from financial investment 3,016 27 6,746
Equity dividends paid (2,753) (2,575) (4,533)
Net cash inflow (outflow) before financing 1,094 (1,922) 3,977
Financing
Purchase of Ordinary Shares for cancellation (2,589) (3,536) (5,254)
Decrease in cash (1,495) (5,458) (1,277)
BRUNNER INVESTMENT TRUST plc
TOP 20 HOLDINGS AS AT 31 MAY 2007
Valuation % of
31 May 2007 Total Assets Principal Activities
£'000s *
Treasury Stock 5% 07/03/2008 19,900 6.15 UK Government Bond
Royal Dutch Shell 'B' shares 11,055 3.42 Oil and Gas
HSBC 10,786 3.34 Banking
BP 10,156 3.14 Oil and Gas
Vodafone 8,994 2.78 Mobile Telecommunication
GlaxoSmithKline 8,218 2.54 Pharmaceuticals
BHP Billiton 6,340 1.96 Mining
Barclays 5,841 1.81 Banking
Rio Tinto 5,695 1.76 Mining
HBOS 5,510 1.70 Banking
BG 5,002 1.55 Oil and Gas
Xstrata 4,909 1.52 Mining
Reuters 4,894 1.51 Media and Entertainment
Informa 4,821 1.49 Media and Entertainment
Cobham 4,809 1.49 Aerospace and Defence
BAE Systems 4,616 1.43 Aerospace and Defence
Spectris 4,307 1.33 Electronic and Electrical Equipment
International Power 4,256 1.32 Electricity
Sage 4,093 1.26 Software and Computer Services
Reed Elsevier 4,040 1.25 Media and Entertainment
138,242 42.75
* Total assets are stated net of current liabilities
PORTFOLIO ANALYSIS AS AT 31 MAY 2007
%
United Kingdom 53.16
North America 17.78
Europe 11.20
Pacific Basin 3.90
Japan 3.37
Latin America 0.29
Cash and fixed interest 10.30
Total 100.00
NOTES
Note 1
The return per Ordinary Share is based on a weighted average number of shares in
issue 48,324,168 (31 May 2006: 49,481,205; 30 November 2006: 49,167,696).
Note 2
The total column of this statement is the profit and loss account of the
Company.
All revenue and capital items derive from continuing operations. No operations
were acquired or discontinued in the period.
A Statement of Total Recognised Gains and Losses is not required as all gains
and losses of the Company have been reflected in the Income Statement.
Included in the cost of investments are transaction costs on purchases which
amounted to £208,370 (31 May 2006 - £348,154; 30 November 2006 - £511,656) and
transaction costs on sales amounting to £99,033 (31 May 2006- £147,761; 30
November 2006 - £256,132).
Note 3
Investments are designated as held at fair value through profit or loss in
accordance with FRS 26 'Financial Instruments: Measurement'. Listed investments
are valued at bid market prices.
Note 4
In accordance with FRS21 'Events after the Balance Sheet Date', the final
dividend payable on Ordinary Shares is recognised as a liability when approved
by shareholders. Interim dividends are recognised only when paid.
Dividends payable on Ordinary Shares in respect of earnings for each period are
as follows:
Six months ended Six months ended Year ended
31 May 2007 31 May 2006 30 November 2006
£'000s £'000s £'000s
Final dividend 5.70p paid 23 March 2007 (2006 - 2,753 2,575 2,575
5.20p)
Interim dividend 4.00p paid 24 August 2006 - - 1,957
2,753 2,576 4,532
Dividends payable at the period end are not recognised as a liability under FRS
21 'Events after the Balance Sheet Date'. Details of these dividends are set
out below.
Six months ended Six months ended Year ended
31 May 2007 31 May 2006 30 November 2006
£'000s £'000s £'000s
Interim proposed dividend 4.4p payable 23 August
2007 (2006 - 4.0p) 2,114 1,962 -
Final dividend 5.70p
- - 2,772
The interim and final dividend above is based on the number of shares in issue
at the period end. However, the dividend payable will be based on the number of
shares in issue on the record date and will reflect any purchases or
cancellations of shares by the Company settled subsequent to the period end.
Note 5
The interim statement has neither been audited nor reviewed by the Company's
auditors. The financial information for the year ended 30 November 2006 has been
extracted from the statutory accounts for that year which have been delivered to
the Registrar of Companies. The auditor's report on those accounts was
unqualified and did not contain a statement under either Section 237(2) or
Section 237(3) of the Companies Act 1985.
The interim report will be sent to shareholders in mid July 2007 and will be
available to members of the public from the Company's registered office at 155
Bishopsgate, London EC2M 3AD.
This information is provided by RNS
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