Interim Results
City of London Investment Trust PLC
2 February 2001
2 February 2001
THE CITY OF LONDON INVESTMENT TRUST PLC
UNAUDITED INTERIM RESULTS FOR THE HALF YEAR ENDED
31 DECEMBER 2000
Highlights
6 months 5 Years 10 Years
% % %
The City of London Investment Trust plc
Net Asset Value Total Return* +4.7 +90.8 +287.4
FTSE All-Share Index
Total Return* -0.5 +91.7 +317.8
Average UK Growth & Income Investment Trust
Net Asset Value Total Return£* +4.8 +87.3 +274.8
£ size weighted average
* Source: AITC Services Limited
* Dividend up 3.4% over the comparable period of 1999, thirty-fourth
annual increase.
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THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Interim Results for the half year ended 31 December 2000
Chairman's Statement
Markets
During the six months to 31 December 2000, UK economic growth maintained its
steady rate with inflation below the government's target of 2.5%. Stockmarket
sentiment was affected by profit warnings and severe share price declines for
a number of technology and telecommunications companies.
Over the last two years there has been a high level of volatility between
sectors in the UK stockmarket. Many long established companies, out of favour
in 1999 as they were perceived to be threatened by new technology, enjoyed
strong share price performances in 2000 as investors appreciated their
underlying strengths.
Performance
The Company's portfolio benefited from being underweight in the technology and
telecommunications sectors and outperformed the FTSE All-Share Index, in the
six months to 31 December 2000, by approximately five percentage points. The
Company's portfolio has now recovered almost all of its 1999 setback. In spite
of the improved asset value performance, however, there has been no narrowing
of the discount of the Company's share price to its net asset value. During
the six months to 31 December 2000, the Board authorised buy-backs of 2.37
million shares at discounts of over 10%.
Dividends
The Board declared, on 7 December 2000, a second interim dividend of 1.84p per
ordinary share. The 3.4% increase in the dividend rate compared with last year
continues the Company's unbroken record of annual dividend increases since
1966.
Expenses
Expenses remained under tight control. In the year to 30 June 2001, excluding
interest but including the portion of the management fee which is charged to
capital, expenses are expected to amount to approximately 0.45 % of assets
under management.
Prospects
UK economic growth is anticipated to continue at over 2% with the government's
fiscal stimulus likely to offset weakening private sector demand. There is
scope for the Bank of England to cut the base rate with inflation expected to
remain below target.
In spite of the dull outlook for corporate profits growth, the UK equity
market appears to be good value relative to British government bonds and other
major equity markets.
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THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Interim Results for the half year ended 31 December 2000
Statement of Total Return (incorporating the revenue account *)
for the half year ended 31 December 2000
(Unaudited) (Unaudited)
Half Year ended 31 December Half Year ended 31 December
2000 1999
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Total capital - 19,697 19,697 - 8,631 8,631
gains/(losses)
from
investments
Income from 9,739 - 9,739 8,375 - 8,375
fixed asset
investments
Other 128 - 128 119 - 119
interest
receivable
and similar
income
Gross revenue 9,867 19,697 29,564 8,494 8,631 17,125
and capital
gains/(losses)
Management (360) (839) (1,199) (726) (363) (1,089)
fee
Other (208) - (208) (213) - (213)
administrative
expenses
Net
return/(loss) 9,299 18,858 28,157 7,555 8,268 15,823
on ordinary
activities
before
interest
payable
Interest (642) (1,501) (2,143) (1,067) (1,067) (2,134)
payable
Net 8,657 17,357 26,014 6,488 7,201 13,689
return/(loss)
on ordinary
activities
before
taxation
Taxation on (60) 60 - (37) 37 -
net return on
ordinary
activities
Net return 8,597 17,417 26,014 6,451 7,238 13,689
/(loss) on
ordinary
activities
after
taxation
Dividends:
Preference (95) - (95) (95) - (95)
and preferred
ordinary
stocks
Net return /
(loss) 8,502 17,417 25,919 6,356 7,238 13,594
attributable
to the
ordinary
shares
Dividends:
Ordinary
shares
First interim (3,798) - (3,798) (3,748) - (3,748)
payment of
1.84p (1999
1.78p)
Second (3,791) - (3,791) (3,757) - (3,757)
interim
payment of
1.84p (1999
1.78p)
Third interim - - - - - -
2000: 1.78p
Fourth - - - - - -
interim 2000:
1.84p
(7,589) - (7,589) (7,505) - (7,505)
Transfer 913 17,417 18,330 (1,149) 7,238 6,089
to/(from)
reserves
Return/(loss) 4.12p 8.43p 12.55p 3.02p 3.43p 6.45p
per
ordinary
share
(Audited)
Year ended 30 June 2000
Revenue Capital Total
£'000 £'000 £'000
Total capital gains/(losses) from - (20,709) (20,709)
investments
Income from fixed asset investments 17,892 - 17,892
Other interest receivable and similar 180 - 180
income
Gross revenue and capital gains/(losses) 18,072 (20,709) (2,637)
Management fee (1,499) (750) (2,249)
Other administrative expenses (385) - (385)
Net return/(loss) on ordinary activities
before interest payable 16,188 (21,459) (5,271)
Interest payable (2,161) (2,161) (4,322)
Net return/(loss) on ordinary activities 14,027 (23,620) (9,593)
before taxation
Taxation on net return on ordinary activities (67) 67 -
Net return /(loss) on ordinary activities 13,960 (23,553) (9,593)
after taxation
Dividends:
Preference and preferred ordinary stocks (190) - (190)
Net return / (loss) attributable to the
ordinary shares 13,770 (23,553) (9,783)
Dividends:
Ordinary shares
First interim payment of 1.84p (1999 1.78p) (3,748) - (3,748)
Second interim payment of 1.84p (1999 1.78p) (3,757) - (3,757)
Third interim 2000: 1.78p (3,743) - (3,743)
Fourth interim 2000: 1.84p (3,834) - (3,834)
(15,082) - (15,082)
Transfer to/(from) reserves (1,312) (23,553) (24,865)
Return/(loss) per 6.54p (11.19)p (4.65)p
ordinary share
* The revenue columns of this statement represent the revenue accounts of
the Company
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THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Interim Results for the half year ended 31 December 2000
Balance Sheet
As at 31 December 2000
(Unaudited) (Unaudited) (Audited)
At 31 At 31 December At 30
December June
2000 1999 2000
£'000 £'000 £'000
Fixed asset investments 617,355 642,904 608,257
Current assets
Debtors 3,559 2,418 2,050
Bank balances and short term deposits 2,274 2,396 347
5,833 4,814 2,397
Creditors : amounts falling due within (5,714) (5,712) (5,867)
one year
Net current assets/(liabilities) 119 (898) (3,470)
Total assets less current liabilities 617,474 642,006 604,787
Creditors : amounts falling due after (46,000) (46,000) (46,000)
more than one year
Total net assets 571,474 596,006 558,787
Capital and reserves
Issued share capital 53,590 54,859 54,183
Share premium account 28,249 28,249 28,249
Other capital reserves 478,341 502,353 465,974
Revenue reserve 11,294 10,545 10,381
Shareholders' funds (including
non-equity interests of £2,086,000;
1999: £2,086,000)
571,474 596,006 558,787
Net asset value per ordinary share 276.38p 281.35p 267.14p
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THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Interim Results for the half year ended 31 December 2000
Group Cash Flow Statement
For the half year ended 31 December 2000
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
31 December 2000 31 December 1999 30 June
2000
£'000 £'000 £'000
Net cash inflow from operating activities 7,824 7,944 16,489
Net cash outflow from servicing of (2,239) (2,228) (3,660)
finance
Net tax recovered/(paid) 35 30 (793)
Net cash inflow/(outflow) from purchases 9,582 (344) 5,082
and sales of investments
Equity dividends paid (7,632) (7,496) (14,996)
Net cash inflow/(outflow) before 7,570 (2,094) 2,122
financing
Net cash (outflow)/inflow from financing (5,643) 1,489 (4,776)
Increase/(decrease) in cash 1,927 (605) (2,654)
Reconciliation of operating revenue to net cash inflow from
operating activities
Net revenue before interest payable and 9,299 7,555 16,188
taxation
(Increase)/decrease in accrued income (302) 775 1,143
Increase/(decrease) in creditors and other 11 (17) (38)
accruals
Management expenses charged to other (839) (363) (750)
capital reserves
UK income tax deducted at source (35) (6) (54)
Scrip dividends included in investment (310) - -
income
Net cash inflow from operating activities 7,824 7,944 16,489
Reconciliation of net cash flow to movement in net
debt
Increase/(decrease) in cash as shown 1,927 (605) (2,654)
above
Change in net debt resulting from cash 1,927 (605) (2,654)
flows
Net debt at beginning of the period (45,653) (42,999) (42,999)
Net debt at the end of the period (43,726) (43,604) (45,653)
Represented by:
Cash at bank and short term deposits 2,274 2,396 347
Debt falling due after more than one year (46,000) (46,000) (46,000)
(43,726) (43,604) (45,653)
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THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Interim Results for the half year ended 31 December 2000
Notes
1. Expenses charged to capital
The Company charges to capital 70% of its finance costs and management
fees. All other expenses are charged wholly to revenue. Expenses which are
incidental to the purchase or sale of a fixed asset investment are
included in the cost or deducted from the proceeds of sale of investment.
2. Return/(loss) per ordinary share
Revenue return per ordinary share is based on the earnings attributable to
the ordinary shares of £8,502,000 (half year ended 31 December 1999: gains
of £6,356,000; year ended 30 June 2000: gains of £13,770,000) and
206,508,246 ordinary shares being the weighted average number of ordinary
shares in issue for the period (half year ended 31 December 1999:
210,709,425; year ended 30 June 2000: 210,454,674 ordinary shares).
Capital return per share is based on net capital gains of £17,417,000
(half year ended 31 December 1999: gains of £7,238,000; year ended 30 June
2000: losses of £23,553,000) and on the weighted average number of
ordinary shares stated above.
3 Net asset value per share
The net asset value per ordinary share is based on the net assets
attributable to the ordinary shares of £569,388,000 (half year ended 31
December 1999: £593,920,000; year ended 30 June 2000: £556,701,000) and on
206,016,018 ordinary shares (half year ended 31 December 1999:
211,094,303; year ended 30 June 2000: 208,389,303), being the number of
ordinary shares in issue at the end of the period.
4 Buy-Backs
During the half year to 31 December 2000, the Company made authorised
purchases for cancellation of 2,373,285 of its own issued ordinary shares
of 25p, representing 1.14% of its issued share capital, for an aggregate
consideration of £5,643,000.
5 Interim Dividend
The first interim dividend of 1.84p was paid on 30 November 2000. The
second interim dividend of 1.84p will be paid on 28 February 2001 to
shareholders on the register on 19 January 2001.
6 Accounts for the year ended 30 June 2000
The figures and financial information for the year ended 30 June 2000 are
an extract from the latest published accounts of the Company and do not
constitute statutory accounts for that year. These accounts have been
delivered to the Registrar of Companies and included the report of the
auditors which was unqualified and did not contain a statement under
either section 237(2) or 237(3) of the Companies Act 1985.
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THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Interim Results for the half year ended 31 December 2000
7 Interim Report
Copies of the Company's interim report for the half year ended 31
December 2000 will be posted to Shareholders mid February 2001 and will
be available thereafter from the Secretary at the Registered Office, 4
Broadgate, London, EC2M 2DA.
For further information please contact:
Job Curtis
Portfolio Manager
The City of London Investment Trust plc
Telephone: 020 7410 4367
Vicki Staveacre
The Press Office
Henderson Global Investors
Telephone: 020 710 4222
Alex Crooke
Deputy Portfolio Manager
The City of London Investment Trust plc
Telephone: 020 7410 4447
Stephen Westwood
Head of Investment Trusts
Henderson Global Investors
Telephone: 020 7410 4100
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THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Interim Results for the half year ended 31 December 2000
Largest Investments
The 80 largest investments, convertibles and all classes of equity in any one
company being treated as one investment, were as follows:
Market value Market value
31 December 2000 31 December 2000
£'000 £'000
GlaxoSmithKline 37,475 Boots 3,745
HSBC 33,982 Anglo American 3,690
Shell Transport & Trading 32,391 Reckitt Benckiser 3,614
BP Amoco 29,160 Reed International 3,500
Vodafone 27,741 BG 3,493
CGNU 19,205 WPP 3,488
Lloyds TSB 18,408 Great Universal Stores 3,416
Royal Bank of Scotland 18,182 BSkyB 3,363
AstraZeneca 15,187 Halifax 3,318
Barclays 12,950 Imperial Chemical Industries 3,312
BT 12,867 Whitbread 3,300
Diageo 11,250 Sainsbury 3,176
Prudential 10,770 Powergen UK 3,160
Marconi 10,066 BOC 3,051
Tesco 9,819 Dixons 3,032
Abbey National 9,752 Safeway 2,990
Legal & General 9,225 Associated British Ports 2,928
Cable & Wireless 9,030 Hilton 2,926
Land Securities 8,425 Next 2,818
British American Tobacco 7,646 Imperial Tobacco 2,786
GKN 7,070 Hammerson 2,769
Rio Tinto 7,068 British Airways 2,764
Bank Of Scotland 5,954 Wolseley 2,760
Unilever 5,730 BPB 2,750
Royal & Sun Alliance 5,730 Laird 2,614
Reuters 5,665 Billiton 2,580
Pearson 5,565 United News & Media 2,550
Cadbury Schweppes 5,556 Kingfisher 2,489
Granada Compass 5,315 BAA 2,472
Scottish Power 5,290 Severn Trent 2,418
Bass 5,224 Marks & Spencer 2,418
BAE Systems 5,156 Rolls Royce 2,379
EMI 4,675 Exel 2,375
National Grid 4,564 Scottish & Newcastle 2,350
Amvescap 4,122 Taylor Woodrow 2,321
Slough Estates 4,044 Lattice 2,265
Scottish & Southern Energy 4,030 Beazer 2,205
Allied Domecq 3,978 Premier Farnell 2,198
Smith & Nephew 3,805 National Express 2,169
Carlton Communications 3,766 United Utilities 2,161
These investments total £559,951,000 or 90.75% of the portfolio.
- ENDS -
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