Preliminary Results

Murray Income Trust PLC 8 September 2006 MURRAY INCOME TRUST PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2006 The Directors of Murray Income Trust PLC announce the unaudited preliminary results for the year ended 30 June 2006. Key Facts • Net Asset Value total return for the year ended 30 June 2006 of 19.5% • Proposed final dividend of 7.5p per Ordinary share for the year ended 30 June 2006, an increase of 32.7% on the previous year, making a total for the year of 21.6p, an overall increase of 12.8% • Proposed interim dividends of 5p per Ordinary share for the year ending 30 June 2007, an increase of 6.4%. Background It was another good year for the UK stock market as the global economy continued to grow strongly on the back of rapid economic development in China, India and other emerging regions of the world. Corporate profitability was therefore robust, particularly for mining and industrial companies, and generally low interest rates and inflation helped support equity valuations. The UK economic environment remained broadly stable. Interest rates were cut from 4.75% to 4.5% in August 2005 and remained at that level for the period under review. This has helped to inject some life back in to the housing market, with house price inflation now running at around 8 -10% for the year to 30 June. A continuing theme in the market over the past two years has been merger and acquisition activity. The period under review saw a number of household names taken over, including BAA, Abbey National and Pilkington. Similarly to last year, corporate activity and take-over speculation helped mid-cap stocks outperform their FTSE 100 counterparts. Performance Performance in the year to 30 June 2006 was almost in line with the FTSE-All Share Index, producing a Net Asset Value total return of 19.5% compared with the return from the Index of 19.7%. As a result, Murray Income's Net Asset Value total return ranked 7 out of 24 within the AITC UK Growth and Income sector. The performance of both Murray Income and the investment trust sector continued to compare well with that of similar open-ended funds. This was the third year of substantial gains for Murray Income following returns of 23.6% and 18.7% in the two previous years as confidence in equity markets returned to investors. Taken together, this represents 20.6% compounded annual growth in the Company's Net Asset Value in the past three years, assuming dividend reinvestment. Over the same period the Company's share price compounded at 19.9% per annum. For the five year period to 30 June 2006, Net Asset Value and share price performance compounded at 5.8% and 7.7% respectively, a creditable performance in light of the poor market environment during the early part of this decade. Share Buybacks and Treasury Shares Last year's Annual Report discussed the need for liquidity in the company's shares and the reasons for proposing the introduction of Treasury shares and seeking to take the power to re-issue them at a discount. The relevant resolutions were passed at the Annual General Meeting. In addition, Shareholders approved the renewal of the authority permitting the Company to repurchase its Ordinary shares. Since that date, 1,213,000 shares have been bought back into Treasury. However, the combination of a significantly narrower discount and strong demand for the shares that would have led to re-issuance has not occurred. The powers to buy into Treasury and to re-issue at either a discount or a premium have to be renewed each year. Soundings with major shareholders have revealed a shift in the weight of opinion against re-issuance at a discount such that it is clear that renewal would be rejected and therefore such powers will not be sought at the AGM. This is disappointing since there was considerable protection against dilution and the Board still believes that this was a potentially useful way to enhance the trust's attractiveness. Dividends Interim dividends were paid on 18 January 2006, 13 April 2006 and 14 July 2006 each at the rate of 4.7p per Ordinary share. The Directors propose a final dividend payment of 7.5p, payable on 31 October 2006 to Shareholders on the register on 29 September 2006, making total dividends for the year of 21.6p. This represents an increase of 12.8% and reflects the very strong growth that we have seen in dividends from our investments in the last year. Dividend growth remains strong in the UK equity market and the Directors have therefore decided to increase the rate at which interim dividends will be paid to 5p per Ordinary share, an increase of 6.4% over the previous year. The rate of the final dividend will be decided when the results for the year are known. However, the Directors anticipate that total dividends for next year will not be less than those paid for this year. Outlook There have been three very good years for equity returns, and it is likely that the expansion of corporate profit margins that has been the main propellant for these market returns has largely run its course. Central banks worldwide are now more concerned about inflation and willing to take some risks with economic growth in order to control it. Despite these influences, the outlook for the companies quoted on the London Stock Exchange and forming part of our benchmark index, several of whom are domiciled overseas or operate largely overseas, remains benign and the rating of the market is undemanding both absolutely and compared to alternative investments. In addition, the yield of the market and anticipated dividend growth provide support. The Board remains optimistic about the long term return potential of the portfolio. MURRAY INCOME TRUST PLC INCOME STATEMENT Year ended 30 June 2006 Year ended 30 June 2005 (restated) Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Realised gains on investments - 34,502 34,502 - 14,474 14,474 Unrealised gains on investments - 29,141 29,141 - 51,671 51,671 Income 17,237 - 17,237 16,533 - 16,533 Investment management fees (1,402) (1,402) (2,804) (1,287) (1,287) (2,574) Administrative expenses (804) - (804) (881) - (881) ________ _______ _______ _______ _______ _______ Net return before finance costs and 15,031 62,241 77,272 14,365 64,858 79,223 taxation Finance costs of borrowing (606) (606) (1,212) (654) (654) (1,308) ________ _______ _______ _______ _______ _______ Return on ordinary activities before and 14,425 61,635 76,060 13,711 64,204 77,915 after taxation ________ _______ _______ _______ _______ _______ Return per Ordinary share (pence): 21.8 93.1 114.9 20.0 93.7 113.7 ________ _______ _______ _______ _______ _______ The total column of this statement represents the profit and loss of the Company. The financial statements for the year ended 30 June 2005 have been restated to reflect the change to accounting policies as set out in the accompanying notes. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. A Statement of Total Recognised Gains and Losses has not been prepared as all gains and losses are recognised in the Income Statement. Dividends Ordinary dividends on equity shares 14,207 - 14,207 12,961 - 12,961 (£'000): ________ _______ _______ _______ _______ _______ The above dividend information does not form part of the Income Statement. MURRAY INCOME TRUST PLC Balance Sheet As at As at 30 June 2006 30 June 2005 (restated) £'000 £'000 Fixed assets Investments at fair value through profit or loss 480,711 417,552 ___________ ___________ Current assets Debtors and prepayments 1,862 1,455 Cash and short term deposits 100 2,700 ___________ ___________ 1,962 4,155 ___________ ___________ Creditors: Amounts falling due within one year (959) (1,106) ___________ ___________ Net current (liabilities)/assets 1,003 3,049 ___________ ___________ Total assets less current liabilities 481,714 420,601 Creditors: Amounts falling due after more than one year Bank loans (25,000) (16,000) ___________ ___________ Net assets 456,714 404,601 ___________ ___________ Share capital and reserves Called-up share capital 16,318 16,765 Share premium account 7,955 7,955 Capital redemption reserve 5,283 4,836 Capital reserve - realised 284,030 262,455 Capital reserve - unrealised 121,862 92,721 Revenue reserve 21,266 19,869 ___________ ___________ Equity Shareholders' funds 456,714 404,601 ___________ ___________ Net asset value per Ordinary share (pence): 699.7 603.3 ___________ ___________ MURRAY INCOME TRUST PLC Reconciliation of Movements in Shareholders' funds For the year ended 30 June 2006 Share Capital Capital Capital Share premium redemption reserve reserve Revenue capital account reserve realised unrealised reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 30 June 2005 as 16,765 7,955 4,836 262,455 92,729 13,072 397,812 originally reported Restatements (see note 2) - - - - (8) 6,797 6,789 _______ _______ _______ _______ _______ _______ _______ Balance at 30 June 2005 (restated) 16,765 7,955 4,836 262,455 92,721 19,869 404,601 Repurchase of own shares (447) - 447 (10,919) - - (10,919) Dividends on Ordinary shares - - - - - (13,028) (13,028) Return on ordinary activities after - - - 32,494 29,141 14,425 76,060 taxation _______ _______ _______ _______ _______ _______ _______ Balance at 30 June 2006 16,318 7,955 5,283 284,030 121,862 21,266 456,714 _______ _______ _______ _______ _______ _______ _______ For the year ended 30 June 2005 Share Capital Capital Capital Share premium Redemption Reserve Reserve Revenue Capital account reserve Realised Unrealised reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 30 June 2004 as 17,391 7,955 4,210 262,238 41,055 12,289 345,138 originally reported Restatements (see note 2) - - - - (5) 6,439 6,434 _______ _______ _______ _______ _______ _______ _______ Balance at 30 June 2004 (restated) 17,391 7,955 4,210 262,238 41,050 18,728 351,572 Repurchase of own shares (626) - 626 (12,316) - - (12,316) Dividends on Ordinary shares - - - - - (12,570) (12,570) Return on ordinary activities after - - - 12,533 51,671 13,711 77,915 taxation _______ _______ _______ _______ _______ _______ _______ Balance at 30 June 2005 (restated) 16,765 7,955 4,836 262,455 92,721 19,869 404,601 _______ _______ _______ _______ _______ _______ _______ The revenue reserve represents the amount of the Company's reserves distributable by way of dividend. MURRAY INCOME TRUST PLC Cash Flow Statement Year ended Year ended 30 June 2006 30 June 2005 £'000 £'000 Net return before finance costs and taxation 77,272 79,223 Adjustments for: Realised gains on investments (34,502) (14,474) Unrealised gains on investments (29,141) (51,671) (Increase)/decrease in accrued income (405) 266 Increase in prepayments (2) (5) Increase in accruals 278 31 __________ __________ Net cash inflow from operating activities 13,500 13,370 Servicing of finance Interest paid (1,218) (1,351) __________ __________ Net cash outflow from servicing of finance (1,218) (1,351) Financial investment Purchases of investments (95,275) (93,962) Sales of investments 95,744 132,887 __________ __________ Net cash inflow from financial investment 469 38,925 __________ __________ Equity dividends paid (13,028) (12,570) Management of liquid resources Cash drawn/(placed) on short term deposit 310 (104) __________ __________ Net cash inflow before financing 33 38,270 Financing Drawdown/(repayment of loans) 9,000 (24,000) Repurchase of own shares (11,323) (11,913) __________ __________ Net cash outflow from financing (2,323) (35,913) __________ __________ (Decrease)/increase in cash (2,290) 2,357 __________ __________ MURRAY INCOME TRUST PLC YEAR ENDED 30 JUNE 2006 1. Accounting policies The new Financial Reporting Standards, issued as part of the programme to enable UK GAAP to converge with International Financial Reporting Standards (IFRS), were applicable for the accounting period ended 30 June 2006 and the financial statements for the twelve months ended 30 June 2005 have also been restated. The main change arising from these revisions to UK GAAP, in relation to the Company's financial statements, is that dividends to shareholders declared after the balance sheet date are now shown in the period of payment rather than in the reporting period. Dividends were previously recognised in the Statement of Total Return (now Income Statement) but these are now dealt with as an appropriation of equity and are taken directly through equity in the Reconciliation of Movements in Shareholders' Funds. 2. Restatement for first time adoption of revised UK GAAP Figures for the years ended 30 June 2004 and 2005 have been restated and the impact of these changes are shown below. Under FRS 26 - 'Financial Instruments: Recognition and Measurement' - investments should be valued at their fair value which is deemed to be bid market prices or closing prices for SETS stocks sourced from The London Stock Exchange. Previously, listed investments (other than SETS stocks) were values at mid market prices. The financial statements for the years ended 30 June 2004 and 2005 have been restated to show investments at their fair value. Under FRS 21 - 'Events after the Balance Sheet Date' - dividends should only be accrued in the accounts if they are a liability at the Balance Sheet date, therefore they are now recognised in the period in which they are declared and authorised, not in the period in which they are proposed. No provision has therefore been made for the final dividend on Ordinary shares for the years ended 30 June 2005 and 2006. The financial statements for the years ended 30 June 2004 and 2005 have been restated to remove these dividends that were accrued at those dates. Dividends are no longer recognised through the Income Statement but rather these are taken to the Statement of Movements in Shareholders' Funds as an appropriation of equity. As at As at 30 June 2005 30 June 2004 (audited) (audited) Reconciliation of Balance Sheets £'000 £'000 Net assets as previously reported 397,812 345,138 Restatement of investments at bid value (8) (5) Reversal of provision of third interim and final dividend 6,797 6,439 ________ ________ Restated net assets 404,601 351,572 ________ ________ Year ended 30 June 2005 (audited) Reconciliation of the Income Statements £'000 Total transfer to reserves per original reported Statement of Total Return 64,990 Add originally reported 2005 dividends on Ordinary shares 12,928 Change from mid to bid basis at 30 June 2004 5 Change from mid to bid basis at 30 June 2005 (8) ________ 77,915 ________ As at As at 30 June 2005 30 June 2004 Reconciliation of Net Asset Value per share p p Net asset value as previously reported 593.2 496.2 Reversal of provision for final dividend 10.1 9.2 _______ _______ Restated net asset value 603.3 505.4 _______ _______ 3. A summary of the investment changes during the year, summary of net assets at 30 June 2006 and a list of the twenty largest investments at 30 June 2006 are attached. 4. The issued share capital at 30 June 2006 was 65,272,958 Ordinary shares of 25p each and 1,143,500 shares held in treasury of 25p each. 5 Returns per share have been based on the following weighted average number of ordinary shares in issue during each year. Weighted average number of Ordinary shares 66,222,372 6. Ordinary dividends on equity shares Year ended Year ended 30 June 2006 30 June 2005 £'000 £'000 First interim of 4.70p (2005 - 4.50p) 3,121 3,095 Second interim of 4.70p (2005 - 4.50p) 3,110 3,069 Third interim of 4.70p (2005 - 4.50p) 3,080 3,038 Final 2006 of 7.5p (2005 - 5.65p) 4,896 3,759 __________ __________ 14,207 12.961 __________ __________ 7. If approved, the proposed final dividend of 7.50p per share will be paid on 31 October 2006 to holders of Ordinary shares on the register at the close of business on 29 September 2006 In respect of the year ending 30 June 2007, three interim dividends of 5.0p per share will be paid on 19 January 2007, 15 April 2007, and 13 July 2007 to holders of Ordinary shares on the register at the close of business on 15 December 2006, 16 March 2007, and 15 June 2007 respectively, 8. The Income Statement, Balance Sheet, Reconciliation of Shareholders Movements and Cashflow statement set out above does not constitute the company's statutory financial statements as defined in Section 240 of the Companies Act 1985. The statutory financial statements for the year ended 30 June 2005 have been delivered to the Registrar of Companies and contained an audit report which was unqualified and did not constitute statements under Sections 237(2) or (3) of the Companies Act 1985. The annual results will be circulated to shareholders in the form of an Annual Report, copies of which will be available at the Company's registered office, 123 St Vincent Street, Glasgow and which will be filed with the Registrar of Companies. 9. The Annual General Meeting will be held on 30 October 2006 at the Strathclyde Suite, Glasgow Royal Concert Hall, 2 Sauchiehall Street, Glasgow, G2 3NY. By Order of the Board ABERDEEN ASSET MANAGEMENT PLC Secretary 8 September 2006 Copies of this announcement will be available to the public at the registered office of the Company at 123 St Vincent Street, Glasgow. MURRAY INCOME TRUST PLC SUMMARY OF INVESTMENT CHANGES DURING THE YEAR TO 30 JUNE 2006 Valuation 30 June 2005 Valuation (restated) Transactions Appreciation 30 June 2006 £'000 % £'000 £'000 £'000 % United Kingdom Equities 417,552 99.3 (8,589) 64,811 473,774 98.4 Fixed interest - - 4,500 (3) 4,497 0.9 FTSE options - - 3,605 (1,165) 2,440 0.5 _______ _______ _______ _______ _______ _______ Total investments 417,552 99.3 (484) 63,643 480,711 99.8 Other net assets 3,049 0.7 (2,046) - 1,033 0.2 _______ _______ _______ _______ _______ _______ Total assets 420,601 100.0 (2,530) 63,643 481,714 100.0 _______ _______ _______ _______ _______ _______ SUMMARY OF NET ASSETS Valuation 30 June 2006 £'000 % Equities 473,774 103.7 Fixed interest 4,497 1.0 FTSE options 2,440 0.5 Other net assets 1,003 0.2 Borrowings (25,000) (5.4) _______ _______ Equity Shareholders' interest 456,714 100.0 _______ _______ MURRAY INCOME TRUST PLC Twenty Largest Investments As at 30 June 2006 Total Valuation assets Investment £'000 % 1 Royal Dutch Shell 32,275 6.7 2 BP 29,791 6.2 3 HSBC Holdings 25,928 5.4 4 Barclays 20,358 4.2 5 Royal Bank of Scotland Group 19,629 4.1 6 GlaxoSmithKline 18,308 3.8 7 Aviva 15,808 3.3 8 British American Tobacco 15,606 3.2 9 Diageo* 13,475 2.8 10 Lloyds TSB 13,447 2.8 11 Slough Estates 12,169 2.5 12 BT Group 12,077 2.5 13 Centrica 12,023 2.5 14 Anglo American 11,624 2.4 15 Rio Tinto 10,292 2.1 16 Vodafone Group 9,912 2.1 17 Weir Group 8,403 1.7 18 Land Securities Group 8,120 1.7 19 Unilever 8,100 1.7 20 Resolution 8,054 1.7 Top twenty investments 305,399 63.4 * Consolidated holding This information is provided by RNS The company news service from the London Stock Exchange

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