Interim Results
Mid Wynd Inter Inv Trust PLC
28 February 2006
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
Results for the six months to 31 December 2005
In the six months to 31 December 2005, the Company has outperformed its
comparative index (FTSE World Index in sterling terms). Mid Wynd's net asset
value rose by 18.0% which compares with a rise in the comparative index of
15.0%.
• Good stock-picking in North America, Europe and Emerging Markets combined
with an increased Japanese weighting helped relative performance over the
period.
• Healthy dividend growth from holdings has bolstered the Company's revenue
account.
• The Board has decided to increase the interim dividend to 3.90p (31
December 2004 - 3.70p).
• Although the present trend of robust global economic growth will not
continue uninterrupted, high quality competitive companies should continue
to flourish.
The objective of Mid Wynd International Investment Trust PLC is to achieve
capital and income growth by investing on a worldwide basis. The Company has
total assets of £47.2m (before deduction of the bank loan of £1.7m).
Mid Wynd is managed by Baillie Gifford & Co, the Edinburgh based fund management
group with around £44 billion under management and advice as at 27 February
2006.
Past performance is no guarantee of future performance. The value of an
investment and any income from it is not guaranteed and may go down as well as
up and investors may not get back the amount invested. This is because the share
price is determined by the changing conditions in the relevant stockmarkets in
which the Company invests and by the supply and demand for the Company's shares.
You can find up to date performance information about Mid Wynd on the Baillie
Gifford website at www.bailliegifford.com.
27 February 2006
- ends -
For further information please contact:
Michael MacPhee, Manager
Mid Wynd International Investment Trust PLC 0131 275 2000
Mike Lord, Director
Broadgate Marketing 020 7726 6111
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
Interim Report
During the first half of the Company's financial year, net asset value rose
18.0% compared to a 15.0% rise in the FTSE World Index. Total return was 19.6%
against 16.0% for the Index. Your manager had not anticipated that things would
once again go so well for stock markets - as a result we had small allocations
in bonds and cash that reduced returns. Stock-picking in North America, Europe
and Emerging Markets together with an increased Japanese weighting have more
than offset this, however, and the overall investment result is satisfactory.
We are experiencing a truly remarkable period for corporate profits. Despite
rising input costs, most notably energy, companies are benefiting from very low
wage increases. Demand has been strong and steady for most businesses and
capital expenditure or supply disciplined, which combination would ordinarily
lead to rising prices. That we have seen only a muted inflationary response thus
far owes much to lack of pressure from developed world wage costs and growth in
cheaply made developing world imports. Emerging economies are at last living up
to their name. As ever, the conundrum is whether the future will resemble the
immediate past. The laws of probability and mean reversion suggest that robust
economic growth will not forever continue uninterrupted and that profits will
not always and everywhere enjoy a rising share of national income.
Rather than wager on economic trends, a beguiling sport at which many profess
some skill and most demonstrate little, Mid Wynd relies instead on the innate
business strengths of its holdings. This involves analysis of the particular
rather than the general and a focus upon a far narrower range of slower moving
variables. We owe much to the particular qualities of Golden West's franchise or
the hold Moody's has within its small peer group. The leading roles played by
Kone, Atlas Copco and ABB in their industries offer shareholders above average
growth in earnings and dividends over time, even if unforeseen cyclical
downturns are inevitable periodically. Few businesses in the world have been
able, over time, to translate a powerful position into earnings in the manner of
Banco Itau of Brazil - this despite historically fluctuating local economic
climes.
The small size of the Company allows for an above average proportion of small
and mid size companies. This leads to a relatively high exposure to faster
growing, less mature businesses. CKD and ARRK are examples, we believe, of
unusually well placed Japanese niche manufacturers which fit this description.
Our primary aim remains to provide a balanced spread of attractive investments
across the globe in companies of all sizes which have the opportunity and
ability to grow earnings and dividends faster than the constituents of broad
indices. The search for such businesses has tended to take the portfolio
progressively further away from those indices.
The revenue account has benefited over the period from a healthy though
unsustainable rate of dividend increase from our holdings. Earnings for the half
year rose nearly 9%; a full year outcome similar to last year is forecast. The
Board has decided upon an increased interim dividend of 3.90p (31 December 2004
- 3.70p), payable on 7 April 2006 to shareholders on the register on 10 March.
By order of the Board
Baillie Gifford & Co
27 February 2006
The following is an interim statement for the six months ended 31 December 2005
which has been neither reviewed nor audited by the auditors. This statement is
being printed and will be sent to all shareholders on 6 March 2006. 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
INCOME STATEMENT
(unaudited and incorporating the revenue account*)
For the six months ended For the six months ended For the year ended
31 December 2005 31 December 2004 30 June 2005
Revenue Capital Total* Revenue Capital Total* Revenue Capital Total*
Restated+ Restated+ Restated+ Restated+
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Realised gains/(losses)
on investments - 1,341 1,341 - (394) (394) - 617 617
Unrealised gains on
investments - 5,891 5,891 - 2,584 2,584 - 4,469 4,469
Currency (losses)/gains
(note 2) - (57) (57) - 84 84 - (147) (147)
Income (note 3) 312 - 312 280 - 280 833 - 833
Investment management fee (60) (60) (120) (46) (46) (92) (97) (97) (194)
Other administrative
expenses (84) - (84) (80) - (80) (131) - (131)
Net return before finance
costs and taxation 168 7,115 7,283 154 2,228 2,382 605 4,842 5,447
Finance costs of
borrowings (13) (13) (26) (13) (13) (26) (25) (25) (50)
Return on ordinary
activities before
taxation 155 7,102 7,257 141 2,215 2,356 580 4,817 5,397
Tax on ordinary
activities (18) - (18) (16) - (16) (105) 37 (68)
Return on ordinary
activities after taxation 137 7,102 7,239 125 2,215 2,340 475 4,854 5,329
Return per ordinary share
(note 4) 2.72p 141.26p 143.98p 2.50p 44.04p 46.54p 9.43p 96.54p 105.97p
Note:
Dividends paid and
proposed per ordinary 3.90p 3.70p 9.40p
share (note 5)
+ Various changes in accounting policies, as disclosed in note 1, have had the
cumulative effect of increasing reported net assets by £150,000 for the six
months ended 31 December 2004 and by £249,000 for the year ended 30 June 2005.
* The total 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.
A Statement of Total Recognised Gains and Losses is not required as all gains
and losses of the Company have been reflected in the above statement.
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
SUMMARISED BALANCE SHEET
at 31 December 2005
(unaudited)
31 December 2005 31 December 2004 30 June
Restated+ 2005
Restated+
£'000 £'000 £'000
FIXED ASSETS
Investments 44,951 34,457 36,887
CURRENT ASSETS
Debtors 154 110 231
Cash and short term deposits 2,240 2,829 3,187
2,394 2,939 3,418
CREDITORS
Amounts falling due within one year (105) (99) (94)
NET CURRENT ASSETS 2,289 2,840 3,324
TOTAL ASSETS (before deduction of loans and 47,240 37,297 40,211
provisions)
Bank loans (note 6) (1,747) (1,562) (1,674)
PROVISIONS FOR LIABILITIES AND CHARGES
Deferred taxation (6) (3) (2)
45,487 35,732 38,535
CAPITAL AND RESERVES
Called-up share capital 1,257 1,257 1,257
Share premium 20 20 20
Capital reserve - realised 29,041 27,037 27,883
Capital reserve - unrealised 14,409 6,671 8,465
Revenue reserve 760 747 910
EQUITY SHAREHOLDERS' FUNDS 45,487 35,732 38,535
NET ASSET VALUE PER ORDINARY SHARE 904.7p 710.7p 766.4p
Ordinary shares in issue 5,027,766 5,027,766 5,027,766
+ See note 1.
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
SUMMARISED CASH FLOW STATEMENT
(unaudited)
Six months to Six months to Year to
31 December 2005 31 December 2004 30 June 2005
£'000 £'000 £'000
NET CASH INFLOW FROM OPERATING ACTIVITIES
(note 7) 135 90 379
NET CASH OUTFLOW FROM SERVICING OF FINANCE (25) (26) (51)
TOTAL TAX PAID - - (5)
NET CASH (OUTFLOW)/INFLOW FROM FINANCIAL
INVESTMENT (770) 1,296 1,581
EQUITY DIVIDENDS PAID (287) (277) (463)
NET CASH (OUTFLOW)/INFLOW BEFORE USE OF LIQUID
RESOURCES & FINANCING (947) 1,083 1,441
Decrease/(increase) in short term deposits 950 - (950)
INCREASE IN CASH 3 1,083 491
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN
NET DEBT
Increase in cash in the period 3 1,083 491
(Decrease)/increase in short term deposits (950) - 950
Exchange movement on bank loans (73) 92 (20)
MOVEMENT IN NET FUNDS IN THE PERIOD (1,020) 1,175 1,421
NET FUNDS AT START OF THE PERIOD 1,513 92 92
NET FUNDS AT END OF THE PERIOD 493 1,267 1,513
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
for the six months ended 31 December 2005
(unaudited)
For the six For the six For the year
months ended months ended ended
31 December 2005 31 December 2004 30 June
2005
Balance at 1 July as previously stated 38,286 33,399 33,399
Prior year adjustments:
Revaluation of investments at bid prices (38) (7) (7)
Reversal of provision of final dividend 287 277 277
Balance at 1 July - restated 38,535 33,669 33,669
Total recognised gains 7,239 2,340 5,329
Dividends recognised as distributions in the period
(note 5) (287) (277) (463)
BALANCE AT 31 DECEMBER/30 JUNE 45,487 35,732 38,535
DISTRIBUTION OF TOTAL ASSETS
at 31 December 2005
(unaudited)
31 December 2005 31 December 2004 30 June 2005
Restated+ Restated+
% % %
Equities: United Kingdom 15.5 16.0 15.8
Continental Europe 24.1 21.4 23.7
North America 27.9 28.5 28.9
Japan 13.3 9.9 9.0
Asia Pacific 7.1 8.1 7.2
Other Emerging Markets 4.0 3.4 3.4
Total equities 91.9 87.3 88.0
Overseas bonds 3.4 5.1 3.7
Net liquid assets 4.7 7.6 8.3
Total assets (before deduction of bank 100.0 100.0 100.0
loans)
+ See note 1.
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
THIRTY LARGEST EQUITY HOLDINGS
at 31 December 2005
Name Region Business Market % of
value total
£'000 assets
Baillie Gifford Pacific Asia Pacific Investment fund 2,576 5.5
Fund
Golden West Financial North America Savings and loans 1,133 2.4
Moody's North America International bond rating agency 1,116 2.4
Altria North America Tobacco and food 940 2.0
MAC Japan Active
Shareholder Fund LP Japan Shareholder activist fund 862 1.8
Total Continental Europe Integrated oil 857 1.8
Danske Bank Continental Europe Banking 817 1.7
TSX North America Canadian stock exchange 733 1.6
Ultra Petroleum North America Gas production 713 1.5
Royal Bank of Scotland United Kingdom Banking 694 1.5
GlaxoSmithKline United Kingdom Pharmaceuticals 673 1.4
Vodafone United Kingdom Mobile telecommunications 624 1.3
Microsoft North America Software 619 1.3
UBS Continental Europe Investment and private banking 619 1.3
Mohawk North America Carpets 607 1.3
Walgreen North America Pharmacy chain 604 1.3
Svenska Handelsbanken Continental Europe Retail banking 601 1.3
Kone Continental Europe Engineering 573 1.2
Wellpoint North America Health care 557 1.2
Atlas Copco Continental Europe Capital goods 542 1.1
Automatic Data Processing North America Payroll processing 535 1.1
BP United Kingdom Integrated oil 511 1.1
Essilor Continental Europe Opthalmology 506 1.1
ABB Continental Europe Electrical equipment 491 1.0
CRH Continental Europe Building materials 481 1.0
SAP Continental Europe Business software 481 1.0
BHP Billiton Asia Pacific Mining 477 1.0
Schlumberger North America Oilfield services 465 1.0
Diamond City Japan Property developer 452 1.0
Imperial Tobacco United Kingdom Tobacco 451 1.0
21,310 45.2
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
NOTES
1. A number of new UK Financial Reporting Standards have been introduced with which the Company must comply
by its 30 June 2006 financial year end. These standards are part of the UK convergence programme with
International Accounting Standards and as such have required most UK listed companies to restate prior
year figures to reflect the new accounting treatment. The financial statements for the six months to 31
December 2005 have been prepared on the basis of the accounting policies set out in the Company's Annual
Financial Statements at 30 June 2005 except as detailed below:
a) investments have been valued at fair value through profit and loss in accordance with FRS 26
'Financial Instruments: Measurement'. The effect is to move from a mid to a bid basis of valuation,
resulting in a reduction in the value of investments and unrealised capital reserves of £62,000 (31
December 2004 - £36,000; 30 June 2005 - £38,000);
b) in compliance with FRS 21 'Events after the Balance Sheet Date', dividends declared after the
period end are no longer treated as a liability at the period end. The effect is to reduce creditors and
increase revenue reserves by £196,000 (31 December 2004 - £186,000; 30 June 2005 - £287,000);
c) the implementation of FRS21 and the 2005 SORP has resulted in changes in the presentation of
total returns. Previously dividends paid and payable in respect of a year were disclose on the face of
the Statement of Total Return and the revenue column of that statement was deemed to be the profit and
loss account of the Company. We now present an Income Statement which does not show on its face the
distribution in respect of equity shares and whilst it still shows information on capital and revenue
returns it is the total return column which is regarded as the profit and loss account of the Company.
The overall effect of the above changes is to increase equity shareholders' funds by £134,000 (31
December 2004 - £150,000; 30 June 2005 - £249,000).
Six months to Six months to Year to
31 December 2005 31 December 2004 30 June
2005
£'000 £'000 £'000
2. Currency (losses)/gains
Realised exchange difference 17 10 (24)
Realised loss on forward contract - - (103)
Unrealised loss on forward contract - (18) -
Movement in unrealised exchange difference on loans (74) 92 (20)
(57) 84 (147)
3. Income
Income from investments and interest receivable 311 279 831
Other income 1 1 2
Six months to Six months to Year to
31 December 2005 31 December 2004 30 June
2005
Restated+ Restated+
£'000 £'000 £'000
4. Return per ordinary share
Revenue return 137 125 475
Capital return 7,102 2,215 4,854
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.
+ See note 1.
MID WYND INTERNATIONAL INVESTMENT TRUST PLC
NOTES (Ctd)
Six months to Six months to Year to
31 December 2005 31 December 2004 30 June
2005
£'000 £'000 £'000
5. Dividends
Amounts recognised as distributions in the period:
Final dividend for the year ending 30 June 2005 of
5.70p (2004 - 5.50p), paid 6 October 2005 287 277 277
Interim dividend for the year ending 30 June 2005 of
3.70p, paid 7 April 2005 - - 186
287 277 463
Interim dividend for the year ending 30 June 2006 of
3.90p (2005 - 3.70p) 196 186 186
The interim dividend was declared after the period end date and has therefore not been included as a
liability in the balance sheet. It is payable on 7 April 2006 to shareholders on the register at the
close of business on 10 March 2006. The ex dividend date is 8 March 2006.
6. A US$3 million loan facility has been arranged with ING Bank N.V., expiring on 5 March 2007. At
31 December 2005 there were outstanding drawings of US$3 million (31 December 2004 and 30 June 2005 -
US$3 million).
Six months to Six months to Year to
31 December 2005 31 December 2004 30 June
2005
£'000 £'000 £'000
7. Reconciliation of net revenue before finance costs and
taxation to net cash inflow from operating activities
Net revenue before finance costs and taxation 168 154 605
Decrease/(increase) in accrued income 32 4 (71)
Increase/(decrease) in other debtors (2) 8 7
Increase/(decrease) in creditors 10 (16) (9)
Investment management fee charged to capital (60) (46) (97)
Overseas tax suffered (13) (14) (48)
Income tax suffered - - (8)
NET CASH INFLOW FROM OPERATING ACTIVITIES 135 90 379
8. The financial information contained within this interim report does not constitute statutory accounts as
defined in section 240 of the Companies Act 1985. The financial information for the year ended 30 June
2005 has been extracted from the statutory accounts and restated, as disclosed in note 1. Those
accounts, which contain an unqualified Auditors' Report and do not contain a statement under section 237
(2) or (3) of the Companies Act 1985, have been filed with the Registrar of Companies.
9. The Interim Report was approved by the Board on 27 February 2006.
None of the views expressed in this document should be construed as advice to buy or sell a particular
investment.
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