Amendment to Valuation Method

RNS Number : 8449G

Lindsell Train Investment Trust PLC

28 October 2008

 



Lindsell Train Investment Trust plc

Amendment to the valuation of the investment held in Lindsell Train Limited

Each quarter the Directors publish an updated valuation of the Company's 25% holding in Lindsell Train Limited ('LTL'). This valuation derives from a formula adopted by the Board in October 2007, after taking the advice of an independent financial adviser, using a simple average of two different components:
 
1.     2% of LTL's most recent funds under management ('FUM') ignoring differences between types of asset class and fee structures; and

 
2.     LTL's net earnings (adjusted for a notional increase in staff costs at 45% of revenues excluding performance fees) divided by the annual average yield on 2.5% Consolidated Loan Stock plus an equity risk premium of 4.5%

  
For the quarter to end September 2008 the formula indicates a modest increase in the value of LTL, driven by an uplift in its funds under management and earnings. However, the Board is cognisant of the severe falls in the share prices of quoted fund management companies. In these circumstances, the Board believes it prudent to adjust down the funds under management component of the valuation formula from 2% to 1.5%

 
The new value of LTL is £2,773.3 per share, a decrease of 10.9%, which was included in the calculation of the Lindsell Train Investment Trust's net asset value published earlier today.
 
At 30th September LTL's FUM were £457m.

 
The board reserves the right to alter the valuation at their discretion should market conditions dictate.

 All enquires should be addressed to Michael Lindsell or Nick Train on 020 7227 8200.

Phoenix Administration Services Limited 

 

END

 

 

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