Interim Results

To: Stock Exchange For immediate release: 28 September 2004 MARTIN CURRIE PORTFOLIO INVESTMENT TRUST plc Interim results for the six months to 31 July 2004 For the 12-month period ended 31 July 2004, the net asset value (NAV) per share rose by 10.0%, whereas the FTSE All-Share rose by 7.2%. A 'special' dividend of 0.71p per share, representing an additional dividend received from our holding in Martin Currie Capital Return Trust, combined with a maintained interim dividend of 0.50p. As at 27 September 2004, the discount was 7.7%, compared with 12.7% for the Global Growth sector (Source: Cazenove). Chairman's statement On 30 June, the company offered shareholders their first opportunity to redeem shares at NAV less costs. Some 44.5% of shareholders decided to accept this opportunity and received 81.67p per share, a 1.2% discount to the then NAV per share. A significant number of the redeemers appear to have been relatively short-term shareholders, who established positions in the weeks leading up to 30 June, apparently to take advantage of the narrowing in the company's discount that the redemption opportunity afforded. The Board is delighted that, proportionately, fewer private shareholders redeemed. The company's register is now more heavily populated by individual investors, for whom the company was originally designed. Over the six months to 31 July, global stockmarkets have been consolidating the strong gains made over the previous twelve months, and now await further impetus. Over the six months to 31 July 2004, the company's benchmark, the FTSE All-Share index, gained just 0.2%, whereas the company's NAV per share rose by 0.8%. Over the 12 months to 31 July, the increase in NAV per share of 10.0% was ahead of the 7.2% gain registered by the benchmark. The discount of the company's share price to its NAV per share had narrowed consistently in the period leading up to the redemption opportunity. However, it has since widened, to stand at 7.7% on 27 September 2004. Nonetheless, this compares favourably with the average discount of the Global Growth sector of 12.7% on this date (Source: Cazenove). Your Board believes that the discount, as disclosed on the Association of Investment Trust Companies' basis, should be maintained, where possible, in single figures utilising, as necessary, the company's buyback powers. From 30 June to 27 September we have bought back 2,767,941 shares, or 1.7% of the reduced share capital as at 30 June 2004. Shareholders are reminded that, in addition to the five-yearly redemption opportunity, the company has a 'trigger' whereby, if the average discount exceeds 7.5% over the 12-week period prior to each financial year-end, a further redemption opportunity should become available. Earnings per share (EPS) for the six months have increased sharply from 1.25p to 1.88p. It is likely that this increase will be more marked over the full year because we are required to use the weighted average number of shares outstanding to calculate EPS. This means that the lower number of shares outstanding post- redemption will have a greater influence over 12 twelve months than six. In addition, this year we have received a second interim dividend from our holding in Martin Currie Capital Return Trust (MCCRT) boosting our overall income receipts. Taking account of this, the Board has declared an interim dividend of 0.50p per share, together with a special dividend of 0.71p per share, representing the payment from MCCRT. These dividends will be paid on 29 October to shareholders on the register on 8 October. As part of the Board's succession planning, Ian Bodie was appointed as a director on 28 September 2004. Ian, a chartered accountant, is Group Operations Director of Amcor Flexibles, a global packaging company, and was recently Managing Director of its Nordic regional operation. He was formerly (1988-1999) Group Finance Director of Sidlaw Group plc. As such, he has extensive business, financial and accounting experience, and the directors believe that he will be a valuable addition to the Board. While overall we remain cautious about the outlook for stockmarkets, there are clear opportunities for selected companies and sectors to do well. Manager's report Review The UK stockmarket has ebbed and flowed over the last six months in a fairly tight range. It has ended almost where it started - the FTSE All-Share index was up by 0.2%. In fact, the UK market (with Japan) was one of the better performing markets. The US market fell, as did Asia's emerging markets, while returns from Europe were held back by a weakening euro. This underperformance of overseas markets held back the fund's performance. In particular, our exposure to Asian companies detracted from performance, as many of these stocks fell heavily in this six-month period. Despite this, net asset value per share did marginally outperform the benchmark. In the UK, resource, industrial and utility companies have done best. Resource companies have benefited from the high prices of commodities, especially oil; industrials have been helped by increased demand in certain areas; while the utility sector has done well as a result of its steady earnings profile and strong cash flow. Information technology companies have performed very poorly, and not just in the UK. As overcapacity drives prices down, many technology companies are operating in a deflationary environment. Because their share prices generally are overvalued, we do not hold any UK technology companies. The UK continues to enjoy a healthy economy. House prices have risen by 20% over the last year and various cautions about overheating have, so far, had little effect. The consumer has been spending enthusiastically, and borrowing as enthusiastically to fund that spending. Household debt is now £1 trillion. Although base rates have risen to 4.75% (from 3.5%) over the last nine months, the healthy employment situation seems to be supporting demand despite higher interest rates. Globally, the economic slowdown in China has been prominent in the headlines during the first half of the year. In fact it, like most of the rest of the world economy, remains strong. But US interest rates have risen from 1% to just 1.5%, which remains considerably lower than what may be considered a 'neutral' level. In other words, the Federal Reserve is still worried about the economic outlook and wishes to stimulate as much growth as possible through low interest rates. This has contributed to a strong and broad-based recovery in corporate earnings. This sort of recovery would normally lead stockmarkets higher, yet they have stalled in the last six months. Our principal investment in private equity, Martin Currie Capital Return Trust plc (MCCRT), has returned significant amounts of cash by way of dividend and, to the "A" shareholders, capital distributions. It now represents 14% of the company's net assets. Outlook What is worrying investors is that growth of corporate earnings and of economies around the world is unlikely to be as good in 2005 as it is currently. At the same time, interest rates are low, especially in the US, so are likely to rise to more normal levels in 12 months' time. A combination of lower growth and higher interest rates is not usually a signal to buy equities. It is for this reason that the portfolio was ungeared at the period end, with cash offsetting the amount of the £10m loan. Since then, we have repaid the debt and established a revolving credit facility, currently undrawn. We do not believe a long term bull market is in the offing, so long term borrowing is not appropriate. However, we will endeavour to move more actively from a borrowed position to holding cash depending on the stockmarket outlook. The next year may yield fairly modest returns from equities, though of course there will always be companies that can do well in a difficult environment. For example, oil stocks are beneficiaries of the higher oil price that is so costly to many other companies and this is an area where the portfolio is overweight. We should not lose sight of the fact that the world economy is growing and, despite all the uncertainties, equity investment has a long history of providing rates of return that surpass most other asset classes. MARTIN CURRIE PORTFOLIO INVESTMENT TRUST plc Statement of total return (incorporating the revenue account*) for the six months to 31 July 2004 Unaudited Revenue Capital Total £'000 £'000 £'000 Losses on - realised - (581) (581) investments - unrealised - (13,334) (13,334) Currency gains - 82 82 Income - franked 4,789 12,128 16,917 - unfranked 1,209 - 1,209 Investment management fee (212) (423) (635) Performance fee - (161) (161) Other expenses (281) - (281) _______ _______ _______ Net return before finance costs and 5,505 (2,289) 3,216 taxation Interest payable and similar charges (259) (517) (776) _______ _______ _______ Return on ordinary activities before 5,246 (2,806) 2,440 taxation Taxation on ordinary activities (16) - (16) _______ _______ _______ Return on ordinary activities after 5,230 (2,806) 2,424 taxation for the financial year Dividends in respect of equity shares: (1,982) - (1,982) 1.21p per ordinary share _______ _______ _______ Transfer to/(from) reserves 3,248 (2,806) 442 _______ _______ _______ Return per ordinary share 1.88p (1.01p) 0.87p * The revenue column of this statement is the profit and loss account of the company. All revenue and capital items in the above statement derive from continuing operations. The directors have recommended an interim dividend of 0.50p per share plus a 0.71p per share 'special' dividend. If approved, these will be paid on 29 October 2004 to shareholders on the register on 8 October 2004. MARTIN CURRIE PORTFOLIO INVESTMENT TRUST plc Statement of total return (incorporating the revenue account) for the six months to 31 July 2003 Unaudited Revenue Capital Total £'000 £'000 £'000 (Losses)/gains - realised - (3,642) (3,642) on investments - unrealised - 35,767 35,767 Currency losses - (159) (159) Income - franked 3,454 - 3,454 - unfranked 1,203 - 1,203 Investment management fee (259) (517) (776) Performance fee - (278) (278) Other expenses (164) - (164) _______ _______ _______ Net return before finance costs and 4,234 31,171 35,405 taxation Interest payable and similar (393) (786) (1,179) charges _______ _______ _______ Return on ordinary activities 3,841 30,385 34,226 before taxation Taxation on ordinary activities (85) - (85) _______ _______ _______ Return attributable to equity 3,756 30,385 34,141 shareholders Dividends in respect of equity (1,484) - (1,484) shares: 0.50p per ordinary share _______ _______ _______ Transfer to reserves 2,272 30,385 32,657 _______ _______ _______ Return per ordinary share 1.25p 10.15p 11.40p MARTIN CURRIE PORTFOLIO INVESTMENT TRUST plc Statement of total return (incorporating the revenue account) for the twelve months to 31 January 2004 Audited Revenue Capital Total £'000 £'000 £'000 Gains on - realised - 1,599 1,599 investments - unrealised - 49,770 49,770 Currency losses - (218) (218) Income - franked 6,802 4,071 10,873 - unfranked 1,809 14 1,823 Investment management fee (528) (1,055) (1,583) Performance fee - (454) (454) Other expenses (416) - (416) _______ _______ _______ Net return before finance costs and 7,667 53,727 61,394 taxation Interest payable and similar (795) (1,590) (2,385) charges _______ _______ _______ Return on ordinary activities 6,872 52,137 59,009 before taxation Taxation on ordinary activities (82) - (82) _______ _______ _______ Return attributable to equity 6,790 52,137 58,927 shareholders Dividends in respect of equity (5,573) - (5,573) shares: 1.87p per ordinary share _______ _______ _______ Transfer to reserves 1,217 52,137 53,354 _______ _______ _______ Return per ordinary share 2.27p 17.44p 19.71p MARTIN CURRIE PORTFOLIO INVESTMENT TRUST PLC BALANCE SHEET 31 July 2004 31 July 2003 31 January 2004 Unaudited Unaudited Audited £000 £000 £000 £000 £000 £000 Fixed assets Investment at 137,262 255,724 265,478 market value Current assets Debtors 2,673 1,149 4,489 Cash in bank 10,547 14,973 24,376 _______ _______ _______ 13,220 16,122 28,865 Creditors Amounts falling (13,493) (34,633) (46,529) due within one year _______ _______ _______ Net current (273) (18,511) (17,664) liabilities _______ _______ _______ Total assets less 136,989 237,213 247,814 current liabilities Creditors Amounts falling - (10,000) - due after one year _______ _______ _______ Net assets 136,989 227,213 247,814 _______ _______ _______ Capital and reserves Called up 8,189 14,935 14,928 ordinary capital Share premium - 159,208 159,208 account Capital 7,828 1,082 1,089 redemption reserve Special 182,086 134,242 134,146 distributable reserve Capital reserve (67,825) (86,772) (65,020) Revenue reserve 6,711 4,518 3,463 _______ _______ _______ Equity 136,989 227,213 247,814 shareholders' funds _______ _______ _______ Net asset value 83.65p 76.07p 83.00p per ordinary share MARTIN CURRIE PORTFOLIO INVESTMENT TRUST plc STATEMENT OF CASH FLOW Year to Year to 31 July 2004 31 July 2003 (Unaudited) (Unaudited) £000 £000 £000 £000 Operating activities Net dividends and interest 15,857 3,846 received from investments Interest received from 477 541 deposits Investment management fee (871) (1,159) Cash paid to and on behalf of (59) (58) Directors Bank charges (17) (14) Net taxation recovered - 6 Other cash payments (355) (187) _______ _______ Net cash inflow from operating 15,032 2,975 activities Servicing of finance Interest paid (917) (1,190) _______ _______ Net cash outflow from (917) (1,190) servicing of finance Capital expenditure and financial investment Payments to acquire (102,994) (43,456) investments Receipts from disposal of 221,611 26,792 investments Foreign exchange differences 107 - _______ _______ Net cash inflow/(outflow) for 118,724 (16,664) capital expenditure and financial investment Equity dividends paid (4,090) (3,142) _______ _______ Net cash inflow/(outflow) 128,749 (18,021) before financing Financing Repurchase of ordinary share (111,268) (925) capital Movement in short-term (31,422) 25,037 borrowings Movement in long-term - (25,000) borrowings _______ _______ Net cash outflow from (142,690) (888) financing _______ _______ Decrease in cash (13,941) (18,909) _______ _______

Companies

Martin Currie Global Portfolio Trust (MNP)
UK 100
FTSE quotes by TradingView

Latest directors dealings

All directors dealings today