Interim Results

Manchester & London Inv Tst PLC 09 March 2007 Manchester & London Investment Trust plc ANNOUNCEMENT OF THE UNAUDITED INTERIM GROUP RESULTS For the six months ended 31st January 2007 Attached pages 1-7 Enquiries: Manchester & London Investment Trust plc B S Sheppard Tel: 0161-228-1709 Investment Managers: Midas Investment Management Limited M B B Sheppard Tel: 0161-228-1709 Brokers: Fairfax I.S. S J Greatrex Tel: 020-7598-5368 Manchester & London Investment Trust plc Announcement of the interim group results The Directors announce the unaudited interim figures For the six months ended 31st January 2007 Chairman's Statement I am pleased to report further growth in our assets in the half year trading period to 31st January 2007 during which the net assets value per share increased by 9.38 per cent compared to the FTSE Actuaries All-Share Index figure of 6.91 per cent. Equity markets remained buoyant with share prices continuing to recover after the sharp setback seen during May 2006; in the meantime, the market remains awash with rumours of mergers and acquisitions with a fair percentage translating into reality. The diversification of our portfolio has now extended to twenty eight holdings which are substantially positioned to benefit from this trend, reflecting the continuing process of global consolidation. To facilitate these changes we realised a 33 per cent profit on our holding in Shell on the basis that the company's rehabilitation was substantially complete and fully reflected in the share price. The above comments on the Company's half year performance relates, of course, to the past, which has been overtaken by recent events, during which the FTSE Actuaries All-Share Index has fallen by approximately 6 per cent. Shareholders will be aware that we have been nervous for some time about the investment background and I can only reiterate our concern about the imbalances which continue to distort financial markets and which have surfaced during the last few days in the form of a sharp rise in the Yen brought about by weakness in the major stock markets. Whilst the events of the last week may prove to be short lived, they may also prove to be deep rooted and act as a catalyst for a change in direction, as a gradual tightening of credit starts to reflect itself in markets. So far, the US economy has mirrored the forecast of the Federal Reserve but uncertainty remains, particularly with regard to the housing market. Uncle Sam has not yet sneezed but he may be fumbling for his handkerchief! We can only hope the gyrations do not develop into a rout and that there is a controlled unravelling of a potential global financial crisis. Sterling and the US dollar (which is still the ultimate reserve currency) appear overvalued against other major currencies. Whilst it is reasonable to argue that a currency merely reflects a flow of money, it is important to differentiate between trading in assets and trading in goods. Rising affluence in emerging markets, particularly China, India, Russia (and more recently, Vietnam), is reflected in a search for physical western assets, the prime example being London housing. The supply of such assets is substantially finite as opposed to the trading surpluses of the countries generating the demand which tend to be of an erratic but permanent nature, (indicating that the pound in particular is overvalued), plus the fact that trading deficits cannot be financed indefinitely. To contend with this prospect, our policy is to have a reasonable percentage of our funds in foreign earners which inter alia, may become bid targets; Standard Chartered, SSL International, ICI and PZ Cussons are UK companies with substantial overseas earnings and assets. Against this rather speculative background, UK interest rates, whilst still rising, are likely to be at or near their peak, although it is generally accepted that they may well be nudged higher before peaking. In line with our recent policy, we declared at our Board Meeting in January 2007, an interim dividend of 2.5p per share, which will be paid on the 26th April 2007 to all shareholders on the Register at the close of business on the 29th March 2007. This does not apply to the Preference shares converted to Ordinary shares as reported in the annual accounts for 2006, which are restricted to an amount equivalent to the former Preference share dividend rate. P H A Stanley Chairman 9th March 2006 Manchester & London Investment Trust plc Largest Holdings As at 31st January 2007 Valuation % of Net Sector £'000 Assets P Z Cussons Ordinary 10p 8,505 15.88 Personal Goods Mouchel Parkman Ordinary 25p 5,242 9.78 Support Services Standard Chartered Ordinary USD 9.50 4,380 8.18 Banks Gazprom ADS (Repr 10 Ord Rub 10) 3,652 6.82 Overseas Gas Producers Scottish & Newcastle Ordinary 20p 3,258 6.08 Beverages Rank Group Ordinary 10p 2,863 5.34 Travel & Leisure Mecom Group Ordinary 2,449 4.57 Media Biffa Plc Ordinary 10p 2,289 4.27 Waste and Disposal services TDG Ordinary 10p 2,003 3.74 Industrial Transportation Inspace Ordinary 2p 1,837 3.43 AIM - Industrials Other investments 16,375 30.57 --------- --------- Total investments 52,853 98.66 Net current assets 720 1.34 --------- --------- Total net assets 53,573 100.00 --------- --------- Manchester & London Investment Trust plc Consolidated Income Statement For the six months ended 31st January 2007 (Unaudited) (Unaudited) (Audited) 6 months ended 6 months ended Year ended 31st January 2007 31st January 2006 31st July 2006 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Investment Income 631 - 631 528 - 528 1,084 - 1,084 Gains Gains on investments at fair value - 6,262 6,262 - 3,443 3,443 - 2,673 2,673 ------- ------ ------ ------- ------ ------ ------- ------ ------ Total Income 631 6,262 6,893 528 3,443 3,971 1,084 2,673 3,757 ------- ------ ------ ------- ------ ------ ------- ------ ------ Expenses Investment management fee (55) (116) (171) (38) (82) (120) (88) (165) (253) Cost of investment transactions - (124) (124) - (27) (27) - (58) (58) Other operating expenses (82) - (82) (88) - (88) (183) - (183) Finance costs - - - (28) - (28) (57) - (57) ------- ------ ------ ------- ------ ------ ------- ------ ------ Total expenses (137) (240) (377) (154) (109) (263) (328) (223) (551) ------- ------ ------ ------- ------ ------ ------- ------ ------ Profit before tax 494 6,022 6,516 374 3,334 3,708 756 2,450 3,206 Taxation - - - - - - - - - ------- ------ ------ ------- ------ ------ ------- ------ ------ Profit attributable to equity shareholders 494 6,022 6,516 374 3,334 3,708 756 2,450 3,206 ======= ====== ====== ======= ====== ====== ======= ====== ====== Earnings per ordinary share (p) 3.54 43.18 46.72 3.84 31.82 35.66 7.76 23.38 31.14 ======= ====== ====== ======= ====== ====== ======= ====== ====== The total column of this statement represents the Group's Income Statement, prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations. All income is attributable to the equity holders of the parent company. There are no minority interests. Manchester & London Investment Trust plc Consolidated Statement of Changes in Equity For the six months ended 31st January 2007 Unaudited Six months ended 31st January 2007 Equity Capital Capital Retained Total Share Own Share conversion Goodwill reserve reserve earnings capital shares Premium reserve reserve unrealised realised £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1st August 2006 1,875 - - 57 (79) 8,837 22,033 3,384 36,107 Profit for the period - - - - - 4,999 1,023 494 6,516 Ordinary dividend paid - - - - - - - (525) (525) Issue of shares 1,611 - 9,921 (57) - - - - 11,475 ------- ------- ------- ------- ------- ------- ------- ------- ------- 3,486 - 9,921 - (79) 13,836 23,056 3,353 53,573 ------- ------- ------- ------- ------- ------- ------- ------- ------- Unaudited Six months ended 31st January 2006 Equity Capital Capital Retained Total Share Own Share conversion Goodwill reserve reserve earnings capital shares Premium reserve reserve unrealised realised £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1st August 2005 1,875 (3) - 57 (79) 9,454 18,966 3,341 33,611 Profit for the period - - - - 3,614 (280) 374 3,708 Ordinary dividend paid - - - - - - - (525) (525) Interim dividend declared - - - - - - - (188) (188) Purchase of own shares - (5) - - - - - - (5) ------- ------- ------- ------- ------- ------- ------- ------- ------- 1,875 (8) - 57 (79) 13,068 18,686 3,002 36,601 ------- ------- ------- ------- ------- ------- ------- ------- ------- Audited Year ended 31st July 2006 Equity Capital Capital Retained Total Share Own Share conversion Goodwill reserve reserve earnings capital shares Premium reserve reserve unrealised realised Balance at 1st August 2005 1,875 (3) - 57 (79) 9,454 18,966 3,341 33,611 Profit for the period - - - - - (617) 3,067 756 3,206 Ordinary dividend paid - - - - - - - (713) (713) Net sale of own shares - 3 - - - - - - 3 ------- ------- ------- ------- ------- ------- ------- ------- ------- 1,875 - - 57 (79) 8,837 22,033 3,384 36,107 ------- ------- ------- ------- ------- ------- ------- ------- ------- Manchester & London Investment Trust plc Consolidated Balance Sheet As at 31st January 2007 (Unaudited) (Unaudited) (Audited) 31st January 2007 31st January 2006 31st July 2006 £'000 £'000 £'000 Non-current assets Investments held at fair value through profit or loss 52,853 36,175 30,444 Current Assets Trade and other receivables 106 47 111 Cash and cash equivalents 756 1,358 6,326 -------- --------- --------- 862 1,405 6,437 Current Liabilities Trade and other payables (142) (104) (87) Interim equity dividend payable - (188) Net current assets 720 1,113 6,350 Total assets less current liabilities 53,573 37,288 36,794 Non-current liabilities Preference shares - (687) (687) -------- --------- --------- Net Assets 53,573 36,601 36,107 ======== ========= ========= Capital and Reserves Called-up Share Capital 3,486 1,875 1,875 Own shares - (8) - Share Premium 9,921 - - Equity conversion reserve - 57 57 Capital reserve - realised 23,056 18,686 22,033 Capital reserve unrealised 13,836 13,068 8,837 Goodwill reserve (79) (79) (79) Revenue reserves 3,353 3,002 3,384 -------- --------- --------- Total equity shareholders' funds 53,573 36,601 36,107 ======== ========= ========= Net Asset Value per share (pence) Ordinary shares - fully diluted 384.14 356.00 351.20 ======== ========= ========= Manchester & London Investment Trust plc Consolidated Cash Flow Statement For the six months ended 31st January 2007 (Unaudited) (Unaudited) (Audited) 6 months ended 6 months ended Year ended 31st January 2007 31st January 2006 31st July 2006 £'000 £'000 £'000 Operating activities Operating profit 6,516 3,708 3,206 Gains on investments (6,262) (3,443) (2,673) Financing costs - 28 57 Decrease (increase) in receivables 5 17 (47) Increase (decrease) in payables 55 (35) (49) --------------- --------------- -------------- Net cash inflow from operating activities 314 275 494 Investing activities Purchase of investments (23,063) (9,067) (11,643) Sale of investments 6,916 6,512 14,054 --------------- --------------- -------------- Net cash (outflow) inflow from investing activities (16,147) (2,555) 2,411 Financing activities Increase in ordinary share capital 10,788 Interest paid on borrowings - (28) (57) Equity dividends paid (525) (525) (713) --------------- --------------- -------------- Net cash inflow (outflow) from financing 10,263 (553) (770) (Decrease) increase in cash and cash equivalents (5,570) (2,833) 2,135 Cash and cash equivalent at start of period 6,326 4,191 4,191 Cash and cash equivalent at end of period 756 1,358 6,326 Manchester & London Investment Trust plc Notes to the Group Results Six months ended 31st January 2007 1 Basis of preparation The interim report has been prepared in accordance with International Financial Reporting Standards (IFRS). The accounting policies are consistent with the preceding annual accounts. The results are based on unaudited Group consolidated accounts prepared under the historical cost basis except where IFRS require an alternative treatment. 2 Comparative information The financial information contained in this interim report does not constitute statutory accounts and that relating to the six month periods to 31st January 2007 and 31st January 2006 has not been audited. The financial information for the year ended 31st July 2006 has been extracted from the latest published audited accounts which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under Section 237 (2) or (3) of the Companies Act 1985. 3 Significant accounting policies Investments held at fair value through profit or loss are initially recognized at fair value. As the entity's business is investing in financial assets with a view to profiting from their total return in the form of interest dividends or increases in fair value, listed equities and fixed income securities are designated as fair value through profit or loss on initial recognition. The entity manages and evaluates the performance of these investments on a fair value basis in accordance with its investment strategy, and information about the group is provided internally on this basis to the entity's key management personnel. After initial recognition, investments, which are classified as at fair value through profit and loss, are measured at fair value. Gains or losses on investments designated as at fair value through profit or loss are included in net profit or loss as a capital item, and material transaction costs on acquisition and disposal of investments are expensed and included in the capital column of the income statement. For investments that are actively traded in organized financial markets, fair value is determined by reference to to the Stock Exchange quoted market bid prices or last traded prices, depending upon the convention of the exchange on which the investment is quoted, at the close of business on the balance sheet date. In respect of unquoted investments, or where the market for a financial investment is not active, fair value is established by using an appropriate valuation technique. Where no reliable fair value can be estimated for such unquoted equity instruments, they are carried at cost, subject to any provision for impairment. Investments in subsidiary companies are held at directors' valuation. All purchases and sales of investments are recognized on the trade date i.e. the date that the group commits to purchase or sell an asset. Dividend income from investments is recognized as income when the shareholders' rights to receive payment has been established, normally the ex-dividend date. When special dividends are received, the underlying circumstances are reviewed on a case by case basis in determining whether the amount is capital, or income, or a mixture of both, in nature. Amounts recognized as income will form part of the company's distribution. Manchester & London Investment Trust plc This information is provided by RNS The company news service from the London Stock Exchange

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