Interim Results
City of London Investment Trust PLC
8 February 2002
8 February 2002
THE CITY OF LONDON INVESTMENT TRUST PLC
UNAUDITED INTERIM RESULTS FOR THE HALF YEAR ENDED
31 DECEMBER 2001
Highlights
6 months 3 Years 5 Years
% % %
The City of London Investment Trust plc
Net Asset Value Total Return* -6.2 +5.3 +50.0
FTSE All-Share Index
Total Return= -6.4 +1.3 +42.5
Average UK Growth & Income Investment Trust
Net Asset Value Total Return£* -7.6 +10.5 +53.8
* Source: AITC Services Limited
= Source: Datastream
£ size weighted average
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THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Interim Results for the half year ended 31 December 2001
Chairman's Statement
Market Review
There were two phases in the performance of the UK stockmarket in the six months
to 31 December 2001. During the third quarter of the year, share prices declined
against a background of disappointing corporate news and the horrendous attack
on the World Trade Centre. The low was reached on 21 September at which point
the market had fallen by 22% from 1 July 2001. During the final quarter of the
year, the Bank of England responded to the deteriorating international climate
by cutting interest rates to 4%, the lowest level since 1962. The UK equity
market rallied and recovered a large part of its losses. Overall, the six month
period produced a negative return of 6.4%, as measured by the FTSE All-Share
Index.
Performance
City of London's objective is to deliver good performance over the longer term.
We set out to be a straightforward investment vehicle that gives an above
average yield and seeks to be one of the leading candidates for regular savings
and capital investment. For the six month period, City of London's net asset
value performance was marginally better than its benchmark, the FTSE All-Share
Index, which maintains the good long-term record and City of London's share
price benefited from a small narrowing of the discount to net asset value.
Dividends
The Board declared on 6 December 2001 a second interim dividend of 1.98p per
ordinary share, a 7.6% increase in the dividend rate compared with last year.
Expenses
Expenses have been kept under tight control. They have fallen by 11.8% compared
with the same period last year.
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THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Interim Results for the half year ended 31 December 2001
Outlook
Any sustainable general improvement in share prices is likely to require the
catalyst of better prospects for corporate profitability. Although there is
significant recovery potential for companies orientated towards overseas markets
that are currently depressed, the level of global overcapacity in some
industries remains a concern. Companies serving the UK market should continue to
benefit from strong demand. However, this is dependent on the continuing
responsiveness of UK consumers to the low level of interest rates. Overall, the
valuation of UK equities appears attractive relative to the yields available
from either fixed interest investments or cash over the medium term.
S M de Zoete
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THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Interim Results for the half year ended 31 December 2001
Statement of Total Return (incorporating the revenue account)
for the half year ended 31 December 2001
(Unaudited) (Unaudited) (Audited)
Half Year ended 31 Half Year ended 31 Year ended 30 June 2001
December 2001 December 2000
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total capital (losses)/gains from - (40,832) (40,832) - 19,697 19,697 - (6,257) (6,257)
investments
Income from fixed asset investments 7,451 - 7,451 9,739 - 9,739 19,800 - 19,800
Other interest receivable and similar 63 - 63 128 - 128 217 - 217
income
Gross revenue and capital (losses)/ 7,514(40,832) (33,318) 9,867 19,697 29,564 20,017 (6,257) 13,760
gains
Management fee (307) (718) (1,025) (360) (839) (1,199) (730) (1,704) (2,434)
Other administrative expenses (216) - (216) (208) - (208) (373) - (373)
Net return/(loss) on ordinary
activities before interest payable and
taxation 6,991 (41,550)(34,559) 9,299 18,858 28,157 18,914 (7,961) 10,953
Interest payable (648) (1,510) (2,158) (642) (1,501) (2,143) (1,286) (3,000) (4,286)
Net return/(loss) on ordinary 6,343 (43,060)(36,717) 8,657 17,357 26,014 17,628 (10,961) 6,667
activities before taxation
Taxation on net return/(loss) on (40) 40 - (60) 60 - (117) 117 -
ordinary activities
Net return /(loss) on ordinary 6,303 (43,020)(36,717) 8,597 17,417 26,014 17,511 (10,844) 6,667
activities after taxation
Dividends:
Preference and preferred ordinary (95) - (95) (95) - (95) (190) - (190)
stocks
Net return / (loss) attributable to the
ordinary shares 6,208 (43,020) (36,812) 8,502 17,417 25,919 17,321 (10,844) 6,477
Dividends:
Ordinary shares
First interim payment of 1.98p (2000: (4,064) - (4,064) (3,798) - (3,798) (3,798) - (3,798)
1.84p)
Second interim payment of 1.98p (2000: (4,064) - (4,064) (3,791) - (3,791) (3,791) - (3,791)
1.84p)
Third interim (2001: 1.84p) - - - - - - (3,779) - (3,779)
Fourth interim (2001: 1.98p) - - - - - - (4,067) - (4,067)
(8,128) - (8,128) (7,589) - (7,589)(15,435) - (15,435)
Transfer (from)/to reserves (1,920) (43,020) (44,940) 913 17,417 18,330 1,886 (10,844) (8,958)
Return/(loss) per 3.02p (20.95)p (17.93)p 4.12p 8.43p 12.55p 8.40p (5.26)p 3.14p
ordinary share (note 2)
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 2001
Balance Sheet
At 31 December 2001
(Unaudited) (Unaudited) (Audited)
31 December 31 December 30 June
2001 2000 2001
£'000 £'000 £'000
Fixed asset investments
Listed at market value in the United Kingdom 547,007 617,008 592,747
Shares in subsidiary undertakings 347 347 347
547,354 617,355 593,094
Current assets
Debtors 1,509 3,559 2,100
Bank balances and short term deposits 966 2,274 544
2,475 5,833 2,644
Creditors : amounts falling due within one year (6,431) (5,714) (7,054)
Net current (liabilities)/assets (3,956) 119 (4,410)
Total assets less current liabilities 543,398 617,474 588,684
Creditors : amounts falling due after more than (46,000) (46,000) (46,000)
one year
Total net assets 497,398 571,474 542,684
Capital and reserves
Issued share capital 53,398 53,590 53,436
Share premium account 28,249 28,249 28,249
Other capital reserves 405,404 478,341 448,732
Revenue reserve 10,347 11,294 12,267
Shareholders' funds (including non-equity
interests of £2,086,000; 2000: £2,086,000) 497,398 571,474 542,684
Net asset value per ordinary share
(note 3) 241.32p 276.38p 263.19p
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THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Interim Results for the half year ended 31 December 2001
Cash Flow Statement
For the half year ended 31 December 2001
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
31 December 2001 31 December 2000 30 June
2001
£'000 £'000 £'000
Net cash inflow from operating activities 6,710 7,824 17,532
Net cash outflow from servicing of finance (2,253) (2,239) (3,794)
Net tax recovered/(paid) - 35 (783)
Net cash inflow from purchases and sales of 4,442 9,582 9,589
investments
Equity dividends paid (8,131) (7,632) (15,202)
Net cash inflow before financing 768 7,570 7,342
Net cash outflow from financing (346) (5,643) (7,145)
Increase in cash 422 1,927 197
Reconciliation of operating revenue to net cash inflow from operating activities
Net revenue before interest payable and 6,991 9,299 18,914
taxation
Decrease/(increase) in accrued income 591 (302) (32)
(Decrease)/increase in creditors and other accruals (154) 11 761
Management expenses charged to other capital (718) (839) (1,704)
reserves
UK income tax deducted at source - (35) (71)
Scrip dividends included in investment - (310) (336)
income
Net cash inflow from operating activities 6,710 7,824 17,532
Reconciliation of net cash flow to movement in net debt
Increase in cash as shown above 422 1,927 197
Net debt at beginning of the period (45,456) (45,653) (45,653)
Net debt at the end of the period (45,034) (43,726) (45,456)
Represented by:
Cash at bank and short term deposits 966 2,274 544
Debt falling due after more than one year (46,000) (46,000) (46,000)
(45,034) (43,726) (45,456)
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THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Interim Results for the half year ended 31 December 2001
Notes
1. Expenses charged to capital
The Company charges to capital 70% of its finance costs, management and
performance 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 £6,208,000 (half year ended 31 December 2000:
£8,502,000; year ended 30 June 2001: £17,321,000) and 205,272,758
ordinary shares being the weighted average number of ordinary shares in
issue for the period (half year 31 December 2000: 206,508,246; year
ended 30 June 2001: 206,295,670).
Capital loss per share is based on net capital losses of £43,020,000
(half year ended 31 December 2000: gains of £17,417,000; year ended
30 June 2001: losses of £10,844,000) and on the weighted average number
of ordinary shares in issue as 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 £495,312,000 (31 December 2000:
£569,388,000; 30 June 2001: £540,598,000) and on 205,251,018 ordinary
shares (31 December 2000: 206,016,018; 30 June 2001: 205,401,018) being
the number of ordinary shares in issue at the end of the period.
4. Buy-Backs
During the half year to 31 December 2001, the Company made authorised
purchases for cancellation of 150,000 of its own issued ordinary shares
of 25p, representing 0.07% of its issued share capital, for an
aggregate consideration of £346,000.
5. Interim Dividend
The first interim dividend of 1.98p was paid on 30 November 2001.
The second interim dividend of 1.98p will be paid on 28 February 2002
to shareholders on the register on 18 January 2002.
6. Accounts for the year ended 30 June 2001
The figures and financial information for the year ended 30 June 2001
are an extact 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 2001
7. Interim Report
Copies of the Company's interim report for the half year ended
31 December 2001 will be posted to shareholders at the end of February
2002 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 7818 4367
Vicki Staveacre
The Press Office
Henderson Global Investors
Telephone: 020 7818 4222
Stephen Westwood
Head of Investment Trusts
Henderson Global Investors
Telephone: 020 7818 4100
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THE CITY OF LONDON INVESTMENT TRUST PLC
Unaudited Interim Results for the half year ended 31 December 2001
Largest Investments
The 60 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 2001 31 December 2001
£'000 £'000
GlaxoSmithKline 34,164 GUS 4,192
BP 32,040 Reckitt Benckiser 4,019
Vodafone 31,995 Royal & Sun Alliance 3,948
Shell Transport & Trading 27,848 National Grid 3,852
HSBC 27,807 BSkyB 3,668
AstraZeneca 18,588 Allied Domecq 3,665
Royal Bank of Scotland 18,392 Kingfisher 3,645
Barclays 17,062 Imperial Tobacco 3,624
CGNU 14,999 Marks & Spencer 3,610
Lloyds TSB 14,920 Boots 3,595
HBOS 11,940 Granada 3,588
Diageo 11,775 Slough Estates 3,500
British American Tobacco 9,320 BHP Billiton 3,490
Tesco 8,964 Wolseley 3,450
Prudential 7,960 Reuters 3,400
Legal & General 7,950 Associated British Ports 3,360
Rio Tinto 7,896 Safeway 3,200
Land Securities 7,835 Dixons 3,181
BAE Systems 5,740 BOC 3,180
Unilever 5,640 Next 3,133
Anglo American 5,205 Bovis Homes 3,076
Smith & Nephew 5,093 WPP 3,040
BT 5,060 EMI 3,035
Abbey National 4,900 Amvescap 2,973
Six Continents 4,873 Sainsbury (J) 2,928
Cadbury Schweppes 4,818 Reed International 2,850
BG 4,760 Cable & Wireless 2,809
Compass 4,635 BAA 2,753
Scottish & Southern Energy 4,575 Hammerson 2,661
Lattice 4,290 Tomkins 2,544
These investments total £471,013,000 or 86.11% of the portfolio.
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