Final Results
Murray International Trust PLC
28 February 2007
MURRAY INTERNATIONAL TRUST PLC
Preliminary Announcement of Results for the Year to 31 December 2006
Highlights
• Net Asset Value total return of 13.8% significantly ahead of benchmark
return of 9.2%
• Share Price total return of 13.3%
• Proposed increase in 2006 final dividend to 7.6p per share making a
total of 19.0p for the year, a rise of 9.8%
The Directors announce the preliminary results of Murray International Trust PLC
for the year ended 31 December 2006.
Background
2006 proved to be another eventful year for global financial markets. The
predominant economic influences were rising interest rates in the United States
and the continuation of debt financed growth. At times economic trends confused
equity markets with oscillating periods of strength and weakness reflecting
mixed signals of underlying growth and inflation. Stubbornly high oil prices
negatively impacted overall spending power as fuel costs and utility bills rose
sharply. Eventually such cost increases put upward pressure on inflation,
causing interest rates to move higher. Despite the mood of caution, equity
markets recorded above average gains, spurred on by strong corporate profit
growth and record levels of merger and acquisition activity. The net result was
the fourth consecutive year of double digit returns for most global equity
markets in sterling terms. Given the difficult macro-economic backdrop that
prevailed these were creditable financial returns.
Performance
The total return on Net Asset Value was 13.8%, comfortably ahead of the return
on the benchmark index of 9.2%, whilst the share price total return of 13.3%
reflected a slight increase over the year in the level of discount at which the
shares trade in the stock market. In this year's Annual Report the Investment
Manager's Report contains an attribution analysis which provides detailed
analysis of all factors affecting net asset performance. The key positive
influences were significant overweight positions in Asia ex Japan and Latin
America. The large underweighting in the United States contributed positively
to relative out-performance, whilst strong stock selection in Emerging Markets
enhanced capital returns.
Dividends
I am pleased to report that revenue generation from the Company's portfolio has
remained strong over the year and your Board is recommending a final dividend of
7.6p which, subject to the approval of shareholders at the Annual General
Meeting, will be paid on 18 May 2007 to shareholders on the register on 20 April
2007. Taking into account the three interim dividends of 3.8p, the total
dividend for the year will amount to 19.0p - an increase of 9.8%. B Ordinary
shares will receive a capitalisation in B Ordinary shares on 18 May 2007
amounting to 1.15043 Ordinary shares for every hundred shares held at the close
of business on 20 April 2007, which is equivalent in Net Asset Value to the
recommended final dividend for the year just ended.
Following the changes agreed at last year's AGM, with effect from 31 December
2006, the Board will announce its interim dividends quarterly (expected to be in
April, July and October). At the same time that each interim dividend is
declared, there will be a bonus issue of B Ordinary shares calculated by
reference to the net asset value of the B Ordinary shares in accordance with the
Articles of Association of the Company.
Investment Trusts as a Savings Vehicle
As we enter our centenary year (the Trust was founded in December 1907 as the
Scottish Western Investment Company) it is interesting to reflect on how well
the Investment Trust sector has served its shareholders over the years. Despite
a number of difficult periods for the economy and stock market the resilience of
the traditional Investment Trust structure has enabled the sector to fulfil its
role of providing good professional management at a cost considerably less than
that charged by other commingled vehicles. The closed end nature of an
Investment Trust means that the Manager does not have to be concerned with flows
of money into and out of the Trust which might distort policy. Gearing in the
capital structure is also a significant plus factor in rising markets although
Boards have to be alert to the adverse affect of gearing in falling markets and
manage the gearing accordingly. The discount to underlying assets at which the
shares trade does fluctuate but the ability to buy back shares now available
allows Boards to influence the discount to a greater extent than before and
also, if used, enhances the asset value for those remaining shareholders
whenever the purchases are made below asset value.
In this year's Annual Report we have included a graph comparing the performance
of the Investment Trust sector as a whole against the Unit Trust sector for the
last five years. In this graph the Investment Trust sector shows up well.
Against this background, it is surprising that the Investment Trust sector has
received so much less attention from investors and financial advisers than Unit
Trusts. In my view, the Investment Trust sector should be the preferred vehicle
for anyone considering long term diversified investment opportunities.
Centenary Year
To celebrate the Trust's centenary year your Board has commissioned a booklet on
the Trust and its history. It will be professionally written with the cost
being met from the marketing budget. We will distribute copies to all current
shareholders when one of the regular mailings is made.
Circular
Accompanying the Annual Report and Accounts shareholders will receive a circular
which incorporates the Notice of Annual General Meeting and the resolutions to
be proposed. In addition to the usual business and in common with a number of
other companies, the Directors are proposing to amend the Articles of
Association of the Company to reflect recent changes to the Companies Acts
widening the permitted scope of an indemnity which may be granted by a company
to its directors and officers. This proposed widening of the indemnity powers
given to Directors reflects the more litigious nature of society and the need
for directors of companies to receive limited protection in respect of the role
which they perform.
The new Companies Act 2006 also allows the Trust to deal directly with
shareholders by electronic means. In particular the changes will enable the
Trust to make greater use of electronic mail and websites when communicating
Company information, including distributing annual reports and accounts and
sending out notices of meeting. Your Board is keen to encourage the use of
electronic communications but the Company currently only intends to use
electronic means where shareholders have positively elected to receive
communications in such manner.
The Board will be proposing special resolutions to facilitate electronic
communications and to approve the amendment to the Articles dealing with
Directors' indemnities. Further details of the proposed changes can be found in
the circular to shareholders accompanying the Annual Report.
Outlook
Looking forward, it is not difficult to construct a pessimistic case for Global
Equity markets given the economic uncertainty that currently prevails and the
recent long run of good market performance. We are cautious about the prospect
for growth in North America and Europe and feel that high inflation might bring
additional difficulties. Both the US and UK markets face tough challenges, but
rapidly improving economic fundamentals in Asia and Emerging markets, areas
where we are very well represented, can go a long way to picking up the slack in
the global growth. At the corporate level, the emergence of high quality,
global growth companies located increasingly in developing markets provides
plenty of opportunity for broad-based international investment.
John Trott
Chairman
27 February 2007
Murray International Trust PLC
Income Statement
For the year ended 31 December 2006
Year ended Year ended
31 December 2006 31 December 2005
(unaudited) (audited)
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Gains on investments - 61,182 61,182 - 116,018 116,018
Income 24,566 - 24,566 21,922 - 21,922
Investment management fees (910) (2,124) (3,034) (771) (1,798) (2,569)
Performance fees - (2,565) (2,565) - (2,374) (2,374)
Currency losses - (4,087) (4,087) - (3,562) (3,562)
Other expenses (1,313) - (1,313) (1,097) - (1,097)
_________ _________ _________ _________ _________ _________
Net return before finance costs and 22,343 52,406 74,749 20,054 108,284 128,338
taxation
Finance costs of borrowing (610) (1,424) (2,034) (744) (1,735) (2,479)
_________ _________ _________ _________ _________ _________
Return on ordinary activities before tax 21,733 50,982 72,715 19,310 106,549 125,859
Tax on ordinary activities (4,603) 3,147 (1,456) (4,035) 2,844 (1,191)
_________ _________ _________ _________ _________ _________
Return attributable to equity 17,130 54,129 71,259 15,275 109,393 124,668
Shareholders
_________ _________ _________ _________ _________ _________
Return per Ordinary share (pence) 19.8 62.5 82.3 17.7 126.4 144.1
_________ _________ _________ _________ _________ _________
Return per Ordinary share assuming full 19.5 61.8 81.3 17.4 124.8 142.2
conversion of the B Ordinary shares
(pence)
_________ _________ _________ _________ _________ _________
The total column of this statement represents the profit and loss account of the
Company.
A Statement of Total Recognised Gains and Losses has not been prepared as all
gains and losses are recognised in the Income Statement.
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued in the year.
Ordinary dividends on equity shares 15,623 - 15,623 14,357 - 14,357
(£'000)
_________ _________ _________ _________ _________ _________
Balance Sheet
As at 31 December 2006
As at As at
31 December 2006 31 December 2005
(unaudited) (audited)
£'000 £'000 £'000 £'000
Non-current assets
Investments listed at fair value through 655,634 603,103
profit or loss
Current assets
Debtors 3,694 4,270
Cash and short term deposits 3,870 6,816
__________ __________
7,564 11,086
__________ __________
Creditors: amounts falling due within one
year
Bank loans - (7,896)
Other creditors (8,167) (5,007)
__________ __________
(8,167) (12,903)
__________ __________
Net current liabilities (603) (1,817)
__________ __________
Total assets less current liabilities 655,031 601,286
Creditors: amounts falling due after more
than one year
Loans (72,159) (74,907)
Other creditors (3,604) (2,746)
__________ __________
(75,763) (77,653)
__________ __________
Net assets 579,268 523,633
__________ __________
Capital and reserves
Equity Shareholders' interests:
Called-up share capital 21,919 21,911
Share premium account 22 23
Capital redemption reserve 8,230 8,230
Capital reserve - realised 298,874 286,597
Capital reserve - unrealised 216,571 174,727
Revenue reserve 33,652 32,145
__________ __________
Equity Shareholders' funds 579,268 523,633
__________ __________
Net Asset Value per Ordinary and B Ordinary 660.7 597.5
share (pence)
__________ __________
Reconciliation of Movements in Shareholders' Funds
For the year ended 31 December 2006
For the year ended 31 December 2006 (unaudited)
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 31 21,911 23 8,230 286,597 174,727 32,145 523,633
December 2005
Return on ordinary - - - 12,285 41,844 17,130 71,259
activities after
taxation
Dividends paid - - - - - (15,623) (15,623)
Issue of new shares 8 (1) - (8) - - (1)
______ _______ ________ ________ ________ ________ ________
Balance at 31 21,919 22 8,230 298,874 216,571 33,652 579,268
December 2006
______ _______ ________ ________ ________ ________ ________
For the year ended 31 December 2005 (audited)
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 31 21,901 23 8,230 284,112 67,829 31,227 413,322
December 2004
Return on ordinary - - - 2,495 106,898 15,275 24,668
activities after
taxation
Dividends paid - - - - - (14,357) (14,357)
Issue of new shares 10 - - (10) - - -
________ ________ ________ ________ ________ ________ _______
Balance at 31 21,911 23 8,230 286,597 174,727 32,145 523,633
December 2005
________ ________ ________ ________ ________ ________ _______
* The revenue reserve represents the amount of the Company's reserves
distributable by way of dividend.
Cash Flow Statement
For the year ended 31 December 2006
Year ended Year ended
31 December 2006 31 December 2005
(unaudited) (audited)
£'000 £'000 £'000 £'000
Net cash inflow from operating activities 17,879 17,326
Returns on investments and servicing of finance
Interest paid (2,233) (2,421)
_________ _________
Net cash outflow from servicing of finance (2,233) (2,421)
Financial investment
Purchases of investments (100,174) (105,819)
Movement in futures - (15,501)
Sales of investments 108,267 126,614
_________ _________
Net cash inflow from financial investment 8,093 5,294
Equity dividends paid (15,404) (14,268)
_________ _________
Net cash inflow before financing 8,335 5,931
Financing
Expense of share issue (1) -
Loans repaid (7,708) -
Loans drawn down 7,708 -
_________ _________
Net cash outflow from financing (1) -
_________ _________
Increase in cash 8,334 5,931
_________ _________
Notes:
1. No changes to the accounting policies of the Company have been made in the
year to 31 December 2006.
2. A summary of the investment changes during the year and a list of the
twenty largest investments at 31 December 2006 are attached.
3. The issued share capital at 31 December 2006 was 86,583,992 Ordinary
shares of 25p each and 1,092,806 B Ordinary shares of 25p each.
4 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 86,570,172
Weighted average number of B Ordinary shares 1,093,746
5. The net asset value per Ordinary and B Ordinary share has been calculated
after deducting prior charges at nominal values.
6. The next date for conversion of the B Ordinary shares to Ordinary shares
is 30 June 2007. The last date for receipt of certificates with the
conversion notice signed on the reverse is 23 June 2007.
7. If approved: (1) the proposed final dividend of 7.60p per share will be
paid on 18 May 2007 to holders of Ordinary shares on the register at the
close of business on 20 April 2007; and (2) definitive certificates in
respect of the B Ordinary capitalisation issue will be posted on 18 May
2007 to B Ordinary Shareholders on the register at the close of business on
20 April 2007.
8. The financial information contained within this Preliminary Announcement
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 31 December 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.
9. The Annual General Meeting will be held on 26 April 2007 at The Glasgow
Royal Concert Hall, Glasgow.
ABERDEEN ASSET MANAGEMENT PLC
SECRETARY
27 February 2007
MURRAY INTERNATIONAL TRUST PLC
SUMMARY OF INVESTMENT CHANGES
Valuation Appreciation/ Valuation
31 December 2005 Transactions (depreciation) 31 December 2006
£'000 % £'000 £'000 £'000 %
Equities
United Kingdom 150,828 24.8 (24,555) 24,936 151,209 23.1
North America 47,782 7.8 (1,743) 220 46,259 7.0
Europe ex UK 97,932 16.1 (10,877) 13,995 101,050 15.4
Japan 72,010 11.8 13,868 (7,995) 77,883 11.9
Asia Pacific ex Japan 89,325 14.7 19,442 8,958 117,725 18.0
Emerging Europe, Middle 59,927 9.8 (10,384) 24,330 73,873 11.3
East and Latin America
517,804 85.0 (14,249) 64,444 567,999 86.7
Fixed income
United Kingdom 56,998 9.4 2,267 (1,753) 57,512 8.8
North America 9,521 1.6 2,938 (842) 11,617 1.8
Latin America 4,577 0.7 2,149 (538) 6,188 0.9
Europe ex UK 8,755 1.4 (3,915) (75) 4,765 0.7
Asia Pacific ex Japan 5,448 0.9 2,159 (54) 7,553 1.2
85,299 14.0 5,598 (3,262) 87,635 13.4
Other net current assets / 6,079 1.0 8,049 (14,731) (603) (0.1)
(liabilities)
Total assets 609,182 100.0 (602) 46,451 655,031 100.0
Summary of Net Assets
Valuation
31 December 2006
£'000 %
Equities 567,999 98.1
Fixed income 87,635 15.1
Other net assets (603) (0.1)
Prior charges (72,159) (12.5)
Other long term creditors (3,604) (0.6)
_______ ________
Equity Shareholders' funds 579,268 100.0
_______ ________
Twenty Largest Investments
As at 31 December 2006
Valuation Total
Security £'000 assets %
Atrium Underwriting 23,027 3.5
Petrobras ADR 22,003 3.4
Resolution 20,528 3.1
Tenaris ADR 20,348 3.1
British American Tobacco 12,585 1.9
GlaxoSmithKline 12,029 1.8
Petrochina 9,412 1.4
Aeropuertos del Sureste ADS 8,664 1.3
Orix Corporation 8,260 1.3
China Mobile 7,964 1.2
Vodafone Group 7,924 1.2
BT Group 7,236 1.1
ICICI Bank 7,184 1.1
Consorcio 6,937 1.1
Deutsche Postbank 6,889 1.1
Aviva (UK) 6,888 1.1
AstraZeneca 6,860 1.1
Souza Cruz 6,830 1.0
Scottish Power 6,801 1.0
Weir Group 6,675 1.0
Top twenty investments 215,044 32.8
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 31st May 2024
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