Interim Results - Replacement

City of London Investment Trust PLC 14 February 2005 Please disregard the previous announcement made at 11.52 on 14 February 2005 under number 5655I. The correct text is shown below. 14 February 2005 THE CITY OF LONDON INVESTMENT TRUST PLC UNAUDITED INTERIM RESULTS FOR THE HALF YEAR ENDED 31 DECEMBER 2004 Total Returns Six Months to 31 December 2004 Net asset value per ordinary share * +12.27% Ordinary share price +16.53% FTSE All-Share Index * +9.74% NAV outperformance +2.53% *Source: AITC Services Limited Extracts from the Chairman's Statement Performance City of London has performed well during the six months under review. The UK equity market rose by 8.17% and produced a total return, including reinvestment of dividends, of 9.74%, as measured by the FTSE All-Share Index. The market was helped by the continuing combination of growth and low inflation from the UK economy. City of London outperformed producing a net asset value total return of 12.27% over the six months. Our overweight positions in the utility and real estates sectors were particularly helpful as was corporate activity in the building materials sector. City of London's discount to net asset value narrowed which resulted in a share price total return of 16.53%. Dividends The Board continues to recognise the importance of dividend income to shareholders and declared a second interim dividend on 9 December 2004 of 2.12p per ordinary share, an increase of 2.42% in the dividend rate compared with last year. The dividend will be paid on 28 February and the shares traded ex-dividend with regard to this payment from 26 January. THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Interim Results for the half year ended 31 December 2004 Expenses The total management fee was substantially higher than in the same period last year because a performance fee has been accrued. The performance fee crystallises at the end of the company's financial year, 30 June 2005, and the accrual is based on the assumption that the outperformance achieved in the first six months will remain unchanged for the remainder of the year. The accrued fee is currently at the limit prescribed by the cap in the Management Agreement. The actual fee to be paid to the Manager will depend on his actual performance over the remainder of the year to 30 June 2005. The total management fee for the year, including any performance fee, remains capped at 0.5% of assets under management, which is very competitive with other investment trusts and retail equity savings products. Savings City of London sets out to be an attractive and straight forward long-term savings vehicle and seeks to be one of the leading candidates for regular savings and investment. Investments can be made directly and shares can be purchased through the City of London Alliance Trust Pension, the Henderson Investment Trust Share Plan and the Henderson ISA. Outlook The UK equity market should continue to benefit from the steady growth of the economy. Fairly full employment and rising wages are likely to offset the adverse impact of higher interest rates on consumer spending. Greater confidence among companies in the prospects for the UK and overseas markets is leading to increased investment spending and we expect further profits growth from UK companies. However, the headwinds of the higher oil price and lower US dollar remain and we are concerned about the size of the US fiscal and trade deficits and their potential effects on the global economy. Although the dividend yield of UK equities of 3.0% is not particularly attractive by historic standards, dividend growth from UK companies is on an uptrend. Takeover bids from overseas companies and private equity houses also indicate the reasonable valuation of UK equities. S M de Zoete THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Interim Results for the half year ended 31 December 2004 STATEMENT OF TOTAL RETURN (incorporating the revenue account) for the half year ended 31 December 2004 (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 31 December 2004 31 December 2003 30 June 2004 Revenue Capital Total Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 --------- -------- -------- --------- -------- -------- -------- -------- -------- Total capital gains from investments - 48,987 48,987 - 46,459 46,459 - 57,718 57,718 Income from fixed asset investments 8,250 - 8,250 8,890 - 8,890 20,050 - 20,050 Other interest receivable and similar income 286 - 286 110 - 110 212 - 212 -------- -------- -------- -------- -------- -------- -------- -------- -------- Gross revenue and capital gains 8,536 48,987 57,523 9,000 46,459 55,459 20,262 57,718 77,980 Management fee (notes 1 (256) (597) (853) (234) (545) (779) (477) (1,113) (1,590) and 2) Performance fee - (1,318) (1,318) - - - (419) (107) (526) Other administrative (271) - (271) (261) - (261) (489) - (489) expenses -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return on ordinary activities before interest payable and taxation 8,009 47,072 55,081 8,505 45,914 54,419 18,877 56,498 75,375 Interest payable (640) (1,493) (2,133) (641) (1,495) (2,136) (1,282) (2,991) (4,273) -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return on ordinary activities before taxation 7,369 45,579 52,948 7,864 44,419 52,283 17,595 53,507 71,102 Taxation on net return on (34) - (34) (11) - (11) (122) - (122) ordinary activities -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return on ordinary activities after taxation 7,335 45,579 52,914 7,853 44,419 52,272 17,473 53,507 70,980 Dividends: Preference and preferred ordinary stocks (95) - (95) (95) - (95) (190) - (190) -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return attributable to the ordinary shares 7,240 45,579 52,819 7,758 44,419 52,177 17,283 53,507 70,790 -------- --------- --------- -------- -------- -------- -------- -------- -------- Dividends: Ordinary shares (note 5) First interim payment 2.12p (4,418) - (4,418) (4,343) - (4,343) (4,343) - (4,343) (2003/2004: 2.07p) Second interim payment 2.12p (4,418) - (4,418) (4,343) - (4,343) (4,343) - (4,343) (2003/2004: 2.07p) Third interim payment (2003/2004: 2.07p) - - - - - - (4,343) - (4,343) Fourth interim payment (2003/2004: 2.12p) - - - - - - (4,427) - (4,427) -------- -------- -------- -------- -------- -------- -------- -------- -------- (8,836) - (8,836) (8,686) - (8,686) (17,456) - (17,456) -------- --------- --------- -------- -------- -------- --------- -------- --------- Transfer (from)/to (1,596) 45,579 43,983 (928) 44,419 43,491 (173) 53,507 53,334 reserves ======== ========= ========= ======== ======== ======== ========= ======== ========= Return per ordinary share 3.47p 21.86p 25.33p 3.70p 21.17p 24.87p 8.24p 25.50p 33.74p (note 3) The revenue columns of this statement represent the revenue accounts of the company. THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Interim Results for the half year ended 31 December 2004 Balance Sheet as at 31 December 2004 (Unaudited) (Unaudited) (Audited) 31 December 31 December 30 June 2004 2003 2004 Â£'000 Â£'000 Â£'000 ------------- ------------- ------------- Fixed asset investments Listed at market value in the United Kingdom 517,344 483,775 483,901 AIM quoted investment at market value - - 2,000 Listed at market value overseas 21,137 10,788 14,347 Investment in FTSE 100 Index future - - (6,706) Shares in subsidiary undertaking 347 347 347 ---------- ---------- ---------- Fixed asset investments 538,828 494,910 493,889 ---------- ---------- ---------- Current assets Debtors 1,832 2,025 9,920 Bank balances and short term deposits 11,553 2,528 7,928 -------- ---------- ---------- 13,385 4,553 17,848 Creditors: amounts falling due within one year (8,229) (6,708) (9,139) ---------- ---------- ---------- Net current assets/(liabilities) 5,156 (2,155) 8,709 ---------- ---------- ---------- Total assets less current liabilities 543,984 492,755 502,598 Creditors: amounts falling due after more than one year (46,000) (46,000) (46,000) ---------- ---------- ---------- Total net assets 497,984 446,755 456,598 ---------- ---------- ---------- Capital and reserves Called-up share capital 54,189 54,539 54,539 Share premium account 35,309 35,309 35,309 Other capital reserves 399,384 346,964 356,052 Revenue reserve 9,102 9,943 10,698 ---------- ---------- ---------- Total shareholders' funds (including non-equity shares of Â£2,086,000) 497,984 446,755 456,598 ========== ========== ========== Net asset value per ordinary share (note 4) 237.94p 211.94p 216.63p THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Interim Results for the half year ended 31 December 2004 Cash Flow Statement for the half year ended 31 December 2004 (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 31 December 2004 31 December 2003 30 June 2004 Â£'000 Â£'000 Â£'000 ----------- ----------- ----------- Net cash inflow from operating activities 7,470 8,291 17,775 Net cash outflow from servicing of finance (2,227) (2,231) (4,463) Total tax recovered 40 - 51 Net cash inflow from purchases and sales of investments 9,787 2,557 9,335 Equity dividends paid (8,845) (8,686) (17,372) Cash placed on deposit (10,533) - - ----------- ----------- ----------- Net cash (outflow)/inflow before financing (4,308) (69) 5,326 Net cash outflow from financing (2,597) - - ----------- ----------- ----------- (Decrease)/increase in cash (6,905) (69) 5,326 =========== =========== =========== Reconciliation of operating revenue to net cash inflow from operating activities Net revenue before interest payable and taxation 8,009 8,505 18,877 Decrease/(increase) in accrued income 554 322 (290) Increase in other creditors 874 28 585 Management charge and performance fee taken to other capital reserves (1,915) (545) (1,220) Overseas withholding tax (52) (19) (177) ----------- ----------- ----------- Net cash inflow from operating activities 7,470 8,291 17,775 =========== =========== =========== Reconciliation of net cash flow to movement in net debt (Decrease)/increase in cash as above (6,905) (69) 5,326 Net cash outflow from movement in liquid resources 10,533 - - Exchange movements (3) (2) 3 Net debt at the beginning of the period (38,072) (43,401) (43,401) ----------- ----------- ----------- Net debt at the end of the period (34,447) (43,472) (38,072) =========== =========== =========== Represented by: Cash at bank and short term deposits 11,553 2,528 7,928 Debt falling due after more than one year (46,000) (46,000) (46,000) ----------- ----------- ----------- (34,447) (43,472) (38,072) =========== =========== =========== THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Interim Results for the half year ended 31 December 2004 Notes 1. Expenses charged to capital The Company charges to capital 70% of its finance costs and base management fee. Performance fees are allocated between capital and revenue based on the outperformance attributable to capital and revenue respectively. 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. Performance fee A performance fee has been accrued, based on a full year effect of rewarding the Manager, under the terms of the Management Agreement, for outperformance achieved in the first six months. The actual fee to be paid to the Manager will depend on his actual performance over the full year to end June 2005. 3. Return per ordinary share Revenue return per ordinary share is based on the earnings attributable to the ordinary shares of Â£7,240,000 (half year ended 31 December 2003: Â£7,758,000; year ended 30 June 2004: Â£17,283,000) and 208,550,718 ordinary shares being the weighted average number of ordinary shares in issue for the period (half year ended 31 December 2003: 209,813,762; year ended 30 June 2004: 209,813,762 ordinary shares). Capital return per share is based on net capital gains of Â£45,579,000 (half year ended 31 December 2003:gains of Â£44,419,000; year ended 30 June 2004: gains of Â£53,507,000) and on the weighted average number of ordinary shares stated above. 4. Net asset value per ordinary share The net asset value per ordinary share is based on the net assets attributable to the ordinary shares of Â£495,898,000 (31 December 2003: Â£444,669,000; 30 June 2004: Â£454,512,000) and on 208,413,762 ordinary shares (31 December 2003: 209,813,762; 30 June 2004: 209,813,762) being the number of ordinary shares in issue at the end of the period. 5. Interim Dividends The first interim dividend of 2.12p was paid on 30 November 2004. The second interim dividend of 2.12p will be paid on 28 February 2005 to shareholders on the register on 28 January 2005. The ex-dividend date was 26 January 2005. 6. Accounts for the year ended 30 June 2004 The figures and financial information for the year ended 30 June 2004 are an extract from the latest published accounts of the Company and do not constitute statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included in 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. 7. Interim Report Copies of the Company's interim report for the half year ended 31 December 2004 will be posted to shareholders in March 2005 and will be available thereafter from the Secretary at the Registered Office, 4 Broadgate, London EC2M 2DA. THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Interim Results for the half year ended 31 December 2004 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 2004 31 December 2004 Â£'000 Â£'000 HSBC 33,402 Allied Domecq 4,617 BP 32,258 Smith & Nephew 4,531 Shell Transport & Trading 23,310 BPB Industries 4,259 GlaxoSmithKline 22,485 Rodamco Europe 4,135 Vodafone 21,188 Scottish Power 4,033 Barclays 19,338 Boots 4,031 Royal Bank of Scotland 17,520 Gallaher 3,958 HBOS 15,264 Liberty International 3,882 British American Tobacco 14,809 United Utilities 3,813 Lloyds TSB 14,190 BHP Billiton 3,663 Land Securities 12,250 BOC Group 3,477 Tesco 11,583 Severn Trent 3,385 Diageo 10,774 Greene King 3,340 Aviva 8,792 GUS 3,285 Scottish & Southern Energy 8,289 Cadbury Schweppes 3,153 National Grid Transco 7,440 Reckitt Benckiser 3,148 BT Group 7,105 Corio 3,051 AstraZeneca 6,234 Tomkins 3,051 Anglo American 5,852 Hammerson 3,040 Wolseley 5,841 BAE Systems 2,997 Unilever 5,806 IMI 2,953 Rio Tinto 5,749 BAA 2,920 Slough Estates 5,500 Smiths Group 2,877 Legal & General 5,500 Wereldhave 2,832 Bovis Homes 5,365 Pennon Group 2,742 Johnston Press 5,312 Rank Group 2,640 Next 4,950 Aggregate Industries 2,613 Prudential 4,945 Telecom Italia 2,535 Kingfisher 4,928 Alliance & Leicester 2,508 Imperial Tobacco 4,638 PD Ports + 2,505 These investments total Â£450,591,000 or 83.68% of the portfolio. + includes convertibles THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Interim Results for the half year ended 31 December 2004 For further information please contact : Job Curtis Portfolio Manager, The City of London Investment Trust plc Telephone: 020 7818 4367 James de Sausmarez Head of Investment Trusts, Henderson Global Investors Telephone: 020 7818 3349 or Vicki Staveacre Henderson Press Office Telephone: 020 7818 4222 - ENDS - This information is provided by RNS The company news service from the London Stock Exchange IR BDGDDDGBGGUS

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