Interim Results
Mid Wynd Inter Inv Trust PLC
6 February 2001
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
Results for the six months to 31 December 2000
6 February 2001
Salient points
* Net Asset Value per share fell by 1.7% to 761.2p, which compares
favourably with the fall of 8.4% in the FTSE World Index (in sterling
terms).
* 50% of management fees and finance costs to be charged to capital. The
Board has amended accounting policy so that in future 50% of such costs
will be charged to capital to reflect the Company's objective of combining
capital and income growth.
* Earnings for the first half of the year have risen to 4.25p as compared
to 3.35p on a restated basis.
* Increased interim dividend to 3.40p from 3.30p.
* Excellent stock selection. The main reasons for Mid Wynd's
outperformance of the comparative index is outperformance of American
stocks combined with being underweight in equities in general and Japanese
equities in particular.
* A mixed investment outlook. Weakness in the American economy is expected
to continue although monetary conditions are easing. European economic
prospects look more balanced but Japan remains fragile, with confidence
undermined by company bankruptcies and a poor political and fiscal
situation.
The objective of the Mid Wynd International Investment Trust PLC is to achieve
capital and income growth by investing on a worldwide basis. The Trust has
total assets of £40.0m.
Mid Wynd International Investment Trust PLC is managed by Baillie Gifford &
Co., the leading independent Edinburgh based fund management group with around
£22 billion under management and advice.
-ends-
For further information please contact:
Michael MacPhee, Manager
Mid Wynd International Investment Trust PLC 0131 222 4000
Mike Lord, Director
Broadgate Marketing 020 7726 6111
Baillie Gifford & Co. is regulated by IMRO.
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
Interim Report 31 December 2000
Over the six months to 31 December 2000 the Trust's net asset value per share
fell by 1.7% to 761.2p. The fall in our net asset value compares favourably
with the fall of 8.4% in the FTSE World Index (in sterling terms). Markets
fared badly over this period, driven down by a combination of increasing
worries about corporate earnings prospects and a markedly slower US economic
environment. Global telecommunications stocks suffered especially badly from
the combination of revenue uncertainties, increased capital needs and an
increasing cost of capital. Technology stocks fell, in some cases drastically,
with news of weak personal computer sales and general weakening of corporate
investment plans. Even now, following some recovery, the technology biased
American NASDAQ market has fallen by almost 50% from its peak last March.
The main reasons why Mid Wynd's asset value has fallen by significantly less
than the comparative index have been that our selection of American stocks has
outperformed the market and that throughout the period we have been
underweight in equities in general and in Japan in particular. We anticipate
continued weakness in the American economy, although monetary conditions are
easing. European economic prospects look more balanced by comparison.
Unemployment has been falling, inflation is starting to fall back, activity
has moderated at reasonable levels and consumers on the Continent can look
forward to tax cuts this year. Japan remains fragile, with confidence
undermined by news of company bankruptcies and a poor political and fiscal
situation.
The Board has decided to amend the policy of charging all management fees and
finance costs to the income account. Having regard to the Company's objective
of combining capital and income growth the Board feels that it is appropriate
to charge 50% of such costs to capital. This change in policy is increasingly
becoming common practice within the investment trust industry. On the new
accounting basis earnings for the first half of the year have risen to 4.25p
as compared to 3.35p (on a restated basis) for the same period last year. This
reflects a higher proportion of fixed income investments together with
increased levels of deposit income from higher average cash balances. The
outcome for the full year is expected to be more in line with last year. The
Board has declared a small increase in the interim dividend to 3.40p from
3.30p.
By order of the Board
Baillie Gifford & Co.
5 February 2001
The following is the interim statement for the six months ended 31 December
2000 which has been neither reviewed nor audited by the auditors. This
statement is being printed and will be sent to all shareholders on 16 February
2001. Copies will be available for inspection at the Registered Office of the
Company or may be obtained on request from the Managers and Secretaries after
that date.
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
STATEMENT OF TOTAL RETURN
(unaudited and incorporating the revenue account*)
for the six months ended for the six months ended
31 December 2000 31 December 1999 (restated+)
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Realised - 2,057 2,057 - 1,430 1,430
gains on
investments
Unrealised - (2,761) (2,761) - 4,410 4,410
(losses)/gains
on investments
Currency - 44 44 - (180) (180)
gains/(losses)
(note 3)
Income (note 392 - 392 326 - 326
4)
Investment (54) (54) (108) (48) (48) (96)
management fee
Other (74) - (74) (74) - (74)
administrative
expenses
Net return 264 (714) (450) 204 5,612 5,816
before
finance costs
and taxation
Finance costs (6) (6) (12) (6) (6) (12)
of borrowings
Return on 258 (720) (462) 198 5,606 5,804
ordinary
activities
before
taxation
Tax on (44) 17 (27) (30) 13 (17)
ordinary
activities
Return on 214 (703) (489) 168 5,619 5,787
ordinary
activities
after taxation
Dividends in (171) - (171) (166) - (166)
respect of
equity shares
Transfer 43 (703) (660) 2 5,619 5,621
to/(from)
reserves
Return per 4.25p (13.98p) (9.73p) 3.35p 111.76p 115.11p
ordinary
share
(note 5)
Dividend per 3.40p 3.30p
ordinary
share (note 6)
for the year ended
30 June 2000 (restated+)
Revenue Capital Total
£'000 £'000 £'000
Realised gains on investments - 5,499 5,499
Unrealised (losses)/gains on investments - 766 766
Currency gains/(losses) (note 3) - (243) (243)
Income (note 4) 804 - 804
Investment management fee (101) (101) (202)
Other administrative expenses (147) - (147)
Net return before finance costs and taxation 556 5,921 6,477
Finance costs of borrowings (13) (13) (26)
Return on ordinary activities before taxation 543 5,908 6,451
Tax on ordinary activities (111) 34 (77)
Return on ordinary activities after taxation 432 5,942 6,374
Dividends in respect of equity shares (417) - (417)
Transfer to/(from) reserves 15 5,942 5,957
Return per ordinary share 8.59p 118.19p 126.78p
(note 5)
Dividend per ordinary share (note 6) 8.30p
* 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.
+ Restated for changes in accounting policy (see note 1)
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
SUMMARISED BALANCE SHEET
at 31 December 2000
(unaudited)
31 December 30 June
2000 2000
(restated +)
£'000 £'000
NET ASSETS
Fixed asset investments 37,982 37,226
Net liquid assets 2,048 3,578
Total assets (before deduction of loan) 40,030 40,804
Bank loan (note 2) (1,759) (1,873)
38,271 38,931
CAPITAL AND RESERVES
Called-up share capital 1,257 1,257
Capital reserves 36,483 37,186
Revenue reserve 531 488
EQUITY SHAREHOLDERS' FUNDS 38,271 38,931
NET ASSET VALUE PER ORDINARY SHARE 761.2p 774.3p
Ordinary shares in issue 5,027,766 5,027,766
+ restated for change in accounting policy
(see note 1)
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
SUMMARISED CASH FLOW STATEMENT
(unaudited)
Six months to Year to
31 December 2000 30 June
2000
£'000 £'000 £'000 £'000
NET CASH INFLOW FROM OPERATING ACTIVITIES 193 343
NET CASH OUTFLOW FROM SERVICING OF FINANCE (14) (24)
TOTAL TAX PAID - -
FINANCIAL INVESTMENT
Acquisitions of investments (13,238) (22,680)
Disposals of investments 12,091 24,453
Realised currency (loss)/profit (70) 58
NET CASH (OUTFLOW)/ INFLOW FROM FINANCIAL (1,217) 1,831
INVESTMENT
EQUITY DIVIDENDS PAID (251) (417)
(DECREASE)/INCREASE IN CASH (1,289) 1,733
RECONCILIATION OF NET CASH FLOW TO MOVEMENT
IN NET FUNDS
(Decrease)/increase in cash in the period (1,289) 1,733
Exchange movement 114 (301)
MOVEMENT IN NET FUNDS IN THE PERIOD (1,175) 1,432
NET FUNDS AT 1 JULY 2000 1,699 267
NET FUNDS AT 31 DECEMBER 2000 524 1,699
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
TWENTY LARGEST EQUITY HOLDINGS
at 31 December 2000
Market % of
value total
Name Business
£'000 assets
* Philip Morris Tobacco, food and beer 1,502 3.8
* Freddie Mac Residential mortgage investor 954 2.4
* Amerada Hess Oil and gas production 895 2.2
* Golden West Savings and loans 822 2.1
Financial
* DST Systems Mutual fund computer services 816 2.0
GlaxoSmithKline Pharmaceuticals 772 1.9
* Walgreen Pharmacy chain 683 1.7
Vodafone Group Mobile telecommunications 664 1.7
+ National Toll Roads Toll bridge operator 660 1.6
* Choicepoint Risk management services 610 1.5
* Total Fina Elf Integrated oil 597 1.5
* Marsh and McLennan Insurance broking, fund management 572 1.4
* Akzo Nobel Chemicals and pharmaceuticals 544 1.4
* Shering-Plough Pharmaceuticals 524 1.3
* Costco Wholesale Warehouse clubs 457 1.1
BP Amoco International oil 446 1.1
* Aventis Pharmaceuticals 445 1.1
* Novartis Pharmaceuticals 444 1.1
* EOG Resources Natural gas exploration and 444 1.1
production
* CVS Pharmacy chain 421 1.1
13,272 33.1
* Primary listing outwith the UK
+ Unlisted security
DISTRIBUTION OF ASSETS
at 31 December 2000
(unaudited)
31 December 30 June 2000
2000
%
%
Equities: United Kingdom 18.3 18.3
Continental Europe 22.2 25.2
North America 32.8 22.4
Latin America 2.6 2.6
Japan 6.2 10.1
Asia Pacific 2.5 3.2
Total equities 84.6 81.8
United Kingdom bonds 4.2 6.0
Continental European bonds 0.2 2.1
North American bonds 5.9 0.6
Latin American bonds - 0.8
Net liquid assets 5.1 8.7
Total assets (before deduction of bank loan) 100.0 100.0
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
NOTES
1.
a. The financial statements for the six months to 31 December 2000 have been
prepared on the basis of the accounting policies set out in the Company's
financial statements at 30 June 2000, with the exception of a change in
the policy for accounting for expenses connected with the maintenance or
enhancement of the value of investments. In this respect, 50% of
management fees, including related VAT, and finance costs are allocated to
realised capital reserves in accordance with the Company's objective of
combining capital and income growth. Previously, all management fees, and
related VAT, and finance costs were charged 100% to revenue. The effect of
the change in accounting policy is to increase revenue return, and to
decrease capital return, attributable to equity shareholders by £43,000
for the six months to 31 December 2000 (£41,000 for the six months to 31
December 1999 and £80,000 for the year ended 30 June 2000). There is no
impact on total return recognised in any period.
b. Franked dividends for the six months to 31 December 1999 have been restated
and are accounted for in accordance with FRS16 'Current Tax', accounting
for UK dividend income net of tax, in accordance with the change in
accounting policy adopted in the financial statements for the year to 30
June 2000. The effect of this change is to reduce gross income and
taxation equally by £9,000; the net effect has no impact on the revenue
return attributable to equity shareholders.
c. The Interim Report was approved by the Board on 5 February 2001.
2. A three year yen loan was arranged with The Royal Bank of Scotland plc in
1998. The loan expires on 12 February 2001. At 31 December 2000 and 30
June 2000 there were outstanding drawings of Y300 million.
31 December 31 December 30 June 2000
2000 1999
£'000 (restated) (restated)
£'000 £'000
3. Currency gains/
(losses)
Realised exchange (70) 67 58
differences
Movement in
unrealised
exchange 114 (247)
difference on yen (301)
loan
44 (180) (243)
4. Income
Income from
investments and
interest 392 326 804
receivable
Nil Nil Nil
Other income
5. Return per ordinary
share
214 168 432
Revenue return
(703) 5,619 5,942
Capital return
Return per ordinary share is based on the above totals of revenue and
capital and on 5,027,766 ordinary shares, being the number of ordinary
shares in issue throughout each period.
6. The interim dividend will be paid on 6 April 2001 to all shareholders on
the register at the close of business on 16 March 2001.
7. The financial information for the year ended 30 June 2000 has been
extracted from the full accounts which have been filed with the Registrar
of Companies and which contain an unqualified Auditors' Report.
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