Half-year Report

RNS Number : 3573H

Murray International Trust PLC

17 August 2016

 

MURRAY INTERNATIONAL TRUST PLC

HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2016

The Directors of Murray International Trust PLC report the unaudited results of the Company for the six months ended 30 June 2016.

INTERIM BOARD REPORT

Background

The influence of sentiment and interest rate expectations dominated financial markets over the period under review. Widespread uncertainty initially prevailed as falling oil and commodity prices coupled with anxiety over potential higher short term interest rates induced significant market volatility.  Constant evidence of lower than expected global growth and benign inflation contradicted consensus opinion of the need for tighter policy. The UK's Referendum on Europe produced a result unanticipated by pollsters or the markets, and an immediate period of market turmoil ensued, the most important outcome of which, for the Company, has been a sharp deterioration in the value of Sterling.  For now, policy makers have reacted by retreating from any imminent policy tightening and offering conciliatory statements on monetary policy. Consequently, bond yields have sunk to even deeper historical lows and a tentative mood of optimism has returned to financial markets.

Performance and Dividends

The net asset value ("NAV") total return, with net income reinvested, for the six months to 30 June 2016 increased by 30.1% compared with a total return of 10.0% on the Company's benchmark (40% FTSE World UK and 60% FTSE World ex UK).  Over the six month period the share price total return increased by 22.7% reflecting a move from a premium to a discount to NAV on which the shares traded.

Two interim dividends of 10.5p (2015: 10.5p) have been declared in respect of the period to 30 June 2016.  The first interim dividend is payable on 17 August 2016 to shareholders on the register on 8 July 2016 and the second interim dividend will be paid on 17 November 2016 to shareholders on the register on 7 October 2016.

By far the largest contributing factor to positive overall portfolio returns was Sterling's weakness; with close to ninety percent of net assets invested internationally, the currency's depreciation proved positive for returns. In addition, increased portfolio diversification from constant recycling of profits over the past two years contributed both positive absolute and relative performance.  This proved particularly relevant within the fixed income portfolio where recently established Emerging Market bonds significantly enhanced returns.  On a regional basis within equity exposures, significant overweight positions in Asia and Latin America were positive from an asset allocation basis as both regional indices significantly increased in Sterling terms.  Positive stock selection in Thailand, Taiwan, Singapore, Hong Kong, Chile and Brazil produced solid capital gains in excess of benchmark indices, as did defensively orientated exposures to the UK and North America.  Despite negative local currency returns from Japan and European markets, the portfolio's exposure to selective companies in these regions produced strong capital returns, further enhancing overall absolute and relative outperformance.

Management of Premium and Discount

The Board has continued to seek to manage the liquidity in the Company's shares. During the period under review, this has resulted in the Company purchasing in the market for treasury 756,163 Ordinary shares at a discount to the prevailing NAV (excluding income) and issuing 140,000 new Ordinary shares at a premium to the prevailing NAV (including income) per Ordinary share. Subsequent to the period end an additional 311,300 Ordinary shares have been purchased for treasury. As at the close of business on 15 August 2016, the exclusive of income NAV per share was 1136.1p and the share price was 1089.0p equating to a discount of 4.2% per Ordinary share.

The Board continues to believe that it is appropriate to seek to address temporary imbalances of supply and demand for the Company's shares which might otherwise result in a recurring material discount or premium. Subject to existing shareholder permissions (given at the last AGM) and prevailing market conditions over time, the Board intends to continue to buy back shares and issue new shares (or sell shares from treasury) if shares trade at a persistent significant discount to NAV (excluding income) or premium to NAV (including income). The Board believes that this process is in all shareholders' interests as it seeks to reduce volatility in the premium or discount to underlying NAV whilst also making a small positive contribution to the NAV.

Gearing

In May 2016 the Company agreed a new £15 million loan facility with The Royal Bank of Scotland plc ("RBS") which was drawn in full on 16 May 2016 and fixed for three years at an all-in rate of 1.467%. The new facility has been used to repay a maturing £15 million loan with RBS. At the same time the Company also repaid from its cash balances the YEN 1.6 billion loan with ING Bank N.V. At the period end the Company had net gearing of 11.9%.

Final Conversion of B Ordinary Shares

Following receipt of approval from shareholders at the general meetings held in April 2016, all remaining B Ordinary shares in issue on 30 June 2016 were converted into Ordinary shares with effect from 1 July 2016 and there was a bonus issue of one new Ordinary share for every 100 B Ordinary shares held.  The final conversion and bonus issue resulted in the issue of 948,124 new Ordinary shares on 1 July 2016. Going forward the Board believes that the Company's capital structure is now simpler and more straightforward for shareholders and potential shareholders to understand and there will be future cost savings achieved from the exercise.

Directorate

I would like to reiterate the Board's sincere thanks to Lady Balfour of Burleigh, CBE, following her retirement at the AGM held in April 2016.  I would also like to take this opportunity to welcome Mrs Alexandra Mackesy to the Board following her appointment on 1 May 2016. Alexandra is a former investment equity research analyst by background and, having spent the majority of her executive career in Asia, she brings further global perspective to the Board.

Outlook

Previously both the Manager and I have highlighted the extreme distortions in the financial landscape that monetary policy choices have produced over the past eight years. It is now estimated that some thirteen trillion US dollars equivalent of sovereign and corporate bonds trade at negative yields. This is unprecedented and scarcely explicable. It remains to be seen how this will play out in financial markets and the global economy, but policy makers seem certain to find it a struggle to navigate successfully the environment we are now in.

Corporate earnings globally, but particularly in the developed markets, are under some pressure, and prospects are more than usually opaque as consumers are wary of the prevailing economic and interest rate environments they are facing. The Company's portfolio emphasises holdings in nations that have favourable demographics, with reasonable growth and prosperity potential. This fact, in combination with maintained stock selection disciplines, underpins the investment positioning of the portfolio.

Kevin Carter

Chairman

16 August 2016

Principal Risks and Uncertainties

The Board has adopted a matrix of the key risks that affect the business. The major financial risks associated with the Company are detailed in note 17 to the Annual Report and Financial Statements for the year ended 31 December 2015 ("2015 Annual Report") and the other principal risks are summarised below.  These risks represent the principal risks for the remaining six months of the year.

Details of the management of the risks and the Company's internal controls are disclosed on pages 9 and 10 of the 2015 Annual Report. They can be summarised as follows:

                       Investment strategy and objectives;

                       Investment portfolio, investment management;

                       Financial obligations;

                       Financial and Regulatory; and,

                       Operational.

The result of the UK's referendum on membership of the EU may affect the Company's risk profile by introducing potentially significant new uncertainties and instability in financial markets as the United Kingdom negotiates its exit from the EU. These uncertainties could have a material direct or indirect effect on the Company, its financial condition and operations although the extent is not quantifiable at this time.

Related Party Transactions

AFML acts as Alternative Investment Fund Manager, AAM acts as Investment Manager and Aberdeen Asset Management PLC acts as Company Secretary to the Company; details of the service and fee arrangements can be found in the 2015 Annual Report, a copy of which is available on the Company's website. Details of the fees payable to Aberdeen group companies are disclosed in note 11 to the financial statements.

Going Concern

In accordance with the Financial Reporting Council's Guidance on Risk Management, Internal Control and Related Financial and Business Reporting issued in September 2014, the Directors have undertaken a rigorous review and consider both that there are no material uncertainties and that the adoption of the going concern basis of accounting is appropriate. The Company's assets consist of a diverse portfolio of listed equities and bonds which in most circumstances are realisable within a very short timescale. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

Directors' Responsibility Statement

The Directors are responsible for preparing the Half-Yearly Financial Report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge:

-     the condensed set of Financial Statements has been prepared in accordance with Financial Reporting Standard 104 (Interim Financial Reporting);

-     the Half-Yearly Board Report includes a fair review of the information required by rule 4.2.7R of the Disclosure and Transparency Rules (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of Financial Statements and a description of the principal risks and uncertainties for the remaining six months of the financial year); and

-     the Half-Yearly Board Report includes a fair review of the information required by 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period; and any changes in the related party transactions described in the last Annual Report that could do so).

The Half-Yearly Financial Report for the six months ended 30 June 2016 comprises the Half-Yearly Board Report, the Directors' Responsibility Statement and a condensed set of Financial Statements.

For and on behalf of the Board of Murray International Trust PLC

Kevin Carter

Chairman

16 August 2016

HIGHLIGHTS

	30 June 2016	31 December 2015	% change
Total assets{A} (£'000)	1,557,471	1,285,193	+21.2
Equity shareholders' funds (£'000)	1,372,321	1,091,019	+25.8
Share price - Ordinary share	987.5p	829.5p	+19.0
Share price - B Ordinary share{B}	825.0p	725.0p	+13.8
Net asset value per Ordinary and B Ordinary share	1072.8p	849.0p	+26.4
Discount to net asset value per Ordinary share	8.0%	2.3%
{A} Represents total assets less current liabilities (excluding bank loans).
{B} Subsequent to the period end all the B Ordinary shares in issue were converted into Ordinary shares.

PERFORMANCE (TOTAL RETURN)

	Six months ended 30 June 2016	Year ended 31 December 2015
Share price{A}	+22.7%	-15.2%
Net asset value per Ordinary and B Ordinary share	+30.1%	-7.8%
Benchmark	+10.0%	+2.6%
{A} Mid to mid.
Total return represents the capital return plus dividends reinvested.
Source: Aberdeen Asset Management, Morningstar & Lipper

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

		Six months ended			Six months ended
		30 June 2016			30 June 2015
		(unaudited)			(unaudited)
		Revenue	Capital	Total	Revenue	Capital	Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Gains/(losses) on investments		-	283,687	283,687	-	(63,572)	(63,572)
Income	3	45,056	-	45,056	41,096	-	41,096
Investment management fees	11	(1,029)	(2,402)	(3,431)	(1,074)	(2,507)	(3,581)
Other expenses		(1,004)	-	(1,004)	(1,027)	-	(1,027)
Currency losses		-	(171)	(171)	-	(182)	(182)
		_______	_______	_______	_______	_______	_______
Net return before finance costs and taxation		43,023	281,114	324,137	38,995	(66,261)	(27,266)
Finance costs		(683)	(1,593)	(2,276)	(719)	(1,678)	(2,397)
		_______	_______	_______	_______	_______	_______
Return on ordinary activities before tax		42,340	279,521	321,861	38,276	(67,939)	(29,663)
Tax on ordinary activities	2	(3,582)	357	(3,225)	(1,453)	955	(498)
		_______	_______	_______	_______	_______	_______
Return attributable to equity shareholders		38,758	279,878	318,636	36,823	(66,984)	(30,161)
		_______	_______	_______	_______	_______	_______
Return per Ordinary share assuming full conversion of the B Ordinary shares (pence)	5	30.3	218.6	248.9	28.7	(52.2)	(23.5)
		_______	_______	_______	_______	_______	_______
The total column of the Condensed Statement of Comprehensive Income is the profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations.

CONDENSED STATEMENT OF FINANCIAL POSITION

		As at	As at
		30 June 2016	31 December 2015
		(unaudited)	(audited)
	Notes	£'000	£'000
Non-current assets
Investments at fair value through profit or loss		1,535,228	1,273,121
		_______	_______
Current assets
Debtors		15,606	10,013
Cash and short-term deposits		9,595	4,648
		_______	_______
		25,201	14,661
		_______	_______
Creditors: amounts falling due within one year
Bank loans		(60,000)	(24,024)
Other creditors		(2,958)	(2,589)
		_______	_______
		(62,958)	(26,613)
		_______	_______
Net current liabilities		(37,757)	(11,952)
		_______	_______
Total assets less current liabilities		1,497,471	1,261,169
Creditors: amounts falling due after more than one year
Bank loans and Debentures		(125,150)	(170,150)
		_______	_______
Net assets		1,372,321	1,091,019
		_______	_______
Capital and reserves
Called-up share capital		32,135	32,128
Share premium account		349,541	349,338
Capital redemption reserve		8,230	8,230
Capital reserve	6	911,326	636,556
Revenue reserve		71,089	64,767
		_______	_______
Equity shareholders' funds		1,372,321	1,091,019
		_______	_______
Net asset value per Ordinary and B Ordinary share (pence)	7	1072.8	849.0
		_______	_______

CONDENSED STATEMENT OF CHANGES IN EQUITY

Six months ended 30 June 2016 (unaudited)
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2015	32,128	349,338	8,230	636,556	64,767	1,091,019
Return on ordinary activities after taxation	-	-	-	279,878	38,758	318,636
Dividends paid (see note 4)	-	-	-	-	(32,436)	(32,436)
Purchase of own shares	-	-	-	(6,224)	-	(6,224)
Issue of new shares	7	203	-	1,116	-	1,326
	_______	_______	_______	_______	_______	_______
Balance at 30 June 2016	32,135	349,541	8,230	911,326	71,089	1,372,321
	_______	_______	_______	_______	_______	_______
Six months ended 30 June 2015 (unaudited)
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2014	32,084	348,045	8,230	787,488	64,690	1,240,537
Return on ordinary activities after taxation	-	-	-	(66,984)	36,823	(30,161)
Dividends paid (see note 4)	-	-	-	-	(31,843)	(31,843)
Issue of new shares	39	1,293	-	(6)	-	1,326
	_______	_______	_______	_______	_______	_______
Balance at 30 June 2015	32,123	349,338	8,230	720,498	69,670	1,179,859
	_______	_______	_______	_______	_______	_______

CONDENSED STATEMENT OF CASH FLOWS

	Six months ended	Six months ended
	30 June 2016	30 June 2015
	(unaudited)	(unaudited)
	£'000	£'000
Net return before finance costs and taxation	324,137	(27,266)
(Decrease)/increase in accrued expenses	(12)	73
Overseas withholding tax	(3,414)	(1,762)
Interest income	(1)	(215)
Dividend income	(35,454)	(31,425)
Fixed interest income	(9,601)	(7,751)
Realised losses/(gains) on foreign exchange transactions	1,536	(389)
Fixed interest income received	8,989	8,059
Dividends received	30,291	26,762
Interest received	1	215
Interest paid	(2,384)	(2,431)
(Gains)/losses on investments	(283,687)	63,572
Amortisation of fixed income book cost	(416)	(1,222)
Decrease in other debtors	19	26
Stock dividends included in investment income	-	(1,704)
	_______	_______
Net cash flow from operating activities	30,004	24,542
Investing activities
Purchases of investments	(118,437)	(24,862)
Sales of investments	140,923	12,570
	_______	_______
Net cash from/(used in) investing activities	22,486	(12,292)
Financing activities
Equity dividends paid	(32,436)	(31,843)
Share issue	1,326	1,326
Buyback of Ordinary shares	(6,224)	-
Loan repayment	(10,209)	(45,007)
Loan drawdown	-	50,000
	_______	_______
Net cash used in financing activities	(47,543)	(25,524)
	_______	_______
Increase/(decrease) in cash	4,947	(13,274)
	_______	_______
Analysis of changes in cash during the period
Opening balance	4,648	17,766
Increase/(decrease) in cash as above	4,947	(13,274)
	_______	_______
Closing balances	9,595	4,492
	_______	_______

NOTES TO THE FINANCIAL STATEMENTS

1.	Accounting policies
	Basis of preparation
	The condensed financial statements have been prepared in accordance with Financial Reporting Standard 104 (Interim Financial Reporting) and with the Statement of Recommended Practice for 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'. They have also been prepared on a going concern basis and on the assumption that approval as an investment trust will continue to be granted.
	The condensed interim financial statements have been prepared using the same accounting policies as the preceding annual financial statements with the following exception; the Company has early adopted Amendments to FRS 102 - Fair value hierarchy disclosures issued by the Financial Reporting Council in March 2016.

2.	Taxation
	The taxation expense reflected in the Condensed Statement of Comprehensive Income is based on the estimated annual tax rate expected for the full financial year. The estimated annual corporation tax rate used for the year to 31 December 2016 is an effective rate of 20%. This is in line with the current corporation tax rate of 20%.

		Six months ended	Six months ended
		30 June 2016	30 June 2015
3.	Income	£'000	£'000
	Income from investments
	UK dividends	4,107	3,549
	Overseas dividends	31,347	27,876
	Overseas interest	9,601	7,751
	Stock dividends	-	1,705
		_______	_______
		45,055	40,881
		_______	_______
	Interest
	Deposit interest	1	215
		_______	_______
	Total income	45,056	41,096
		_______	_______

		Six months ended	Six months ended
		30 June 2016	30 June 2015
4.	Ordinary dividends on equity shares	£'000	£'000
	Third interim dividend 2015 of 10.50p (2014 - 10.00p)	13,398	12,736
	Final dividend 2015 of 15.00p (2014 - 15.00p)	19,038	19,107
		_______	_______
		32,436	31,843
		_______	_______
	A first interim dividend for 2016 of 10.50p (2015 - 10.50p) will be paid on 17 August 2016 to shareholders on the register on 8 July 2016. The ex-dividend date was 7 July 2016.
	A second interim dividend for 2016 of 10.50p (2015 - 10.50p) will be paid on 17 November 2016 to shareholders on the register on 7 October 2016. The ex-dividend date is 6 October 2016.

		Six months ended	Six months ended
		30 June 2016	30 June 2015
5.	Returns per share	£'000	£'000
	Based on the following figures:
	Revenue return	38,758	36,823
	Capital return	279,878	(66,984)
		_______	_______
	Total return	318,636	(30,161)
		_______	_______
	Weighted average number of Ordinary shares	127,110,700	127,388,586
	Weighted average number of B Ordinary shares	923,100	986,204
		_______	_______
	Weighted average number of Ordinary shares assuming conversion of B Ordinary shares	128,033,800	128,374,790
		___________	___________

6.	Capital reserves
	The capital reserve reflected in the Condensed Statement of Financial Position at 30 June 2016 includes gains of £414,903,000 (31 December 2015 - gains of £160,847,000) which relate to the revaluation of investments held at the reporting date.

7.	Net asset value
	The net asset value per share and the net asset value attributable to the Ordinary shares (including conversion of the B Ordinary shares) at the period end calculated in accordance with the Articles of Association were as follows:
		As at	As at
		30 June 2016	31 December 2015
	Attributable net assets (£'000)	1,372,321	1,091,019
		___________	___________
	Number of shares in issue:
	Ordinary shares	126,985,789	127,601,952
	B Ordinary shares	938,892	910,364
		___________	___________
		127,924,681	128,512,316
	Net asset value per share (pence)	1,072.8	849.0

8.	Transaction costs
	During the period expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains/(losses) on investments in the Condensed Statement of Comprehensive Income. The total costs were as follows:
		Six months ended	Six months ended
		30 June 2016	30 June 2015
		£'000	£'000
	Purchases	91	26
	Sales	112	17
		_______	_______
		203	43
		_______	_______

9.	Fair value hierarchy
	FRS 102 requires an entity to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The Company has early adopted Amendments to FRS 102 - Fair value hierarchy disclosures issued by the Financial Reporting Council in March 2016.  This has not resulted in any reclassifications in levelling and the prior year comparative has been disclosed under the new hierarchy. The fair value hierarchy shall have the following classifications:
	Level 1: unadjusted quoted prices in an active market for identical assets or liabilities that the entity can access at the measurement date.
	Level 2: inputs other than quoted prices included within Level 1 that are observable (ie developed using market data) for the asset or liability, either directly or indirectly.
	Level 3: inputs are unobservable (ie for which market data is unavailable) for the asset or liability.
	The financial assets and liabilities measured at fair value in the Condensed Statement of Financial Position are grouped into the fair value hierarchy at the reporting date as follows:
				Level 1	Level 2	Level 3	Total
	As at 30 June 2016		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	1,302,664	-	-	1,302,664
	Quoted preference shares		a)	6,823	-	-	6,823
	Quoted bonds		b)	196,685	29,056	-	225,741
				_______	_______	_______	_______
	Total			1,506,172	29,056	-	1,535,228
				_______	_______	_______	_______
	Net fair value			1,506,172	29,056	-	1,535,228
				_______	_______	_______	_______
				Level 1	Level 2	Level 3	Total
	As at 31 December 2015		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	1,107,402	-	-	1,107,402
	Quoted preference shares		a)	6,875	-	-	6,875
	Quoted bonds		b)	127,326	31,518	-	158,844
	Foreign exchange forward contracts		c)	-	351	-	351
				_______	_______	_______	_______
	Total			1,241,603	31,869	-	1,273,472
				_______	_______	_______	_______
	Net fair value			1,241,603	31,869	-	1,273,472
				_______	_______	_______	_______
	a)	Quoted equities and preference shares
		The fair value of the Company's investments in quoted equities and preference shares has been determined by reference to their quoted bid prices at the reporting date. Quoted equities and preference shares included in Fair Value Level 1 are actively traded on recognised stock exchanges.
	b)	Quoted bonds
		The fair value of the Company's investments in quoted bonds has been determined by reference to their quoted bid prices at the reporting date. Bonds included in Fair Value Levels 1 and 2 include Government Bonds and Corporate Bonds. Investments categorised as Level 2 are not considered to trade in active markets.
	c)	Foreign exchange forward contracts
		The fair value of the Company's investment in foreign exchange forward contracts has been determined in relation to models using observable market inputs and hence are categorised in Fair Value Level 2.

10.	Share capital
	As at 30 June 2016 there were 126,985,789 (31 December 2015 - 127,601,952) Ordinary shares of 25p each in issue and 938,892 (31 December 2015 - 910,364) B Ordinary shares of 25p each in issue.
	Subsequent to the period end 311,300 Ordinary shares have been bought back for treasury and, as detailed in the Interim Board Report, all remaining B Ordinary shares in issue on 30 June 2016 were converted into Ordinary shares with effect from 1 July 2016 and there was a bonus issue of one new Ordinary share for every 100 B Ordinary shares held. The final conversion and bonus issue resulted in the issue of 948,124 new Ordinary shares on 1 July 2016.
	Following the share buybacks and conversion there were 127,622,613 Ordinary shares in issue at the date this Report was approved.

11.	Transactions with the Manager
	The Company has agreements with Aberdeen Fund Managers Limited ('AFML' or the 'Manager') for the provision of investment management, secretarial, accounting and administration and promotional activity services.
	With effect from 1 January 2016, the Board and the Manager agreed a new basis for calculating the Company's management fees payable to AFML. The performance fee was discontinued and the annual management fee is now charged on net assets (i.e. excluding borrowings for investment purposes) averaged over the six previous quarters ('Net Assets'), on a tiered basis. The annual management fee is now charged at 0.575% of Net Assets up to £1,200 million, 0.5% of Net Assets between £1,200 million and £1,400 million, and 0.425% of Net Assets above £1,400 million. A fee of 1.5% per annum remains chargeable on the value of any unlisted investments. The investment management fee is chargeable 30% against revenue and 70% against realised capital reserves. During the period £3,431,000 (30 June 2015 - £3,581,000) of investment management fees were payable to the Manager, with a balance of £1,696,000 (30 June 2015 - £1,785,000) being payable to AFML at the period end.
	Included in the charge above is a secretarial fee of £100,000 per annum which is chargeable 100% to revenue. During the period £50,000 (30 June 2015 - £50,000) of secretarial fees was payable to the Manager, with a balance of £25,000 (30 June 2015 - £25,000) being payable to AFML at the period end.
	No fees are charged in the case of investments managed or advised by the Aberdeen Asset Management Group. The management agreement may be terminated by either party on the expiry of six month's written notice. On termination the Manager is entitled to receive fees which would otherwise have been due up to that date.
	The promotional activities fee is based on a current annual amount of £425,000 (30 June 2015 - £500,000), payable quarterly in arrears. During the period £214,000 (30 June 2015 - £252,000) of fees was payable, with a balance of £105,000 (30 June 2015 - £124,000) being payable to AFML at the period end.

12.	Related party transactions
	With effect from 1 January 2016, the Board and the Manager agreed a new basis for calculating the Company's management fees payable to AFML. Details of the new basis can be found in note 11.
	The changes to the management fee arrangements constitute a smaller related party transaction for the purpose of LR 11.1.10 R of the Financial Conduct Authority's Listing Rules.

13.	Segmental information
	The Company is engaged in a single segment of business, which is to invest in equity securities and debt instruments. All of the Company's activities are interrelated, and each activity is dependent on the others. Accordingly, all significant operating decisions are based on the Company as one segment.

14.	The financial information in this Report does not comprise statutory accounts within the meaning of Section 434 - 436 of the Companies Act 2006. The financial information for the year ended 31 December 2015 has been extracted from published accounts that have been delivered to the Registrar of Companies and on which the report of the Company's auditor was unqualified and contained no statement under Section 498 (2), (3) or (4) of the Companies Act 2006. The condensed interim financial statements have been prepared using the same accounting policies as contained within the preceding annual financial statements.
	The financial information for the six months ended 30 June 2016 has not been audited or reviewed by the Company's auditor. The financial information for the six months ended 30 June 2015 was reviewed by the Company's auditor.

15.	This Half-Yearly Financial Report was approved by the Board on 16 August 2016.

The Half Yearly Report will be printed and issued to shareholders and further copies will be available to the public at the registered office of the Company, 40 Princes Street, Edinburgh EH2 2BY and on the Company's web site murray-intl.co.uk*.

* Neither the Company's website nor the content of any website accessible from hyperlinks on it (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

By order of the Board

ABERDEEN ASSET MANAGEMENT PLC, SECRETARY

16 August 2016

SUMMARY OF INVESTMENT CHANGES

	Valuation		Appreciation		Valuation
	30 June 2016		(depreciation)	Transactions	31 December 2015
	£'000	%	£'000	£'000	£'000	%
Equities
United Kingdom	160,387	10.3	22,594	-	137,793	10.7
North America	237,858	15.3	47,023	(27,304)	218,139	17.0
Europe ex UK	192,773	12.4	11,149	(51,894)	233,518	18.2
Japan	67,922	4.4	19,935	-	47,987	3.7
Asia Pacific ex Japan	377,393	24.2	71,984	44,850	260,559	20.3
Latin America	250,271	16.1	60,771	(7,105)	196,605	15.3
Africa	16,060	1.0	3,259	-	12,801	1.0
	_______	_______	_______	_______	_______	_______
	1,302,664	83.7	236,715	(41,453)	1,107,402	86.2
	_______	_______	_______	_______	_______	_______
Fixed income
United Kingdom	6,823	0.4	(52)	-	6,875	0.5
Asia Pacific ex Japan	75,962	4.9	13,194	10,506	52,262	4.1
Latin America	133,033	8.5	30,359	9,298	93,376	7.3
Africa	16,746	1.1	3,482	58	13,206	1.0
	_______	_______	_______	_______	_______	_______
	232,564	14.9	46,983	19,862	165,719	12.9
	_______	_______	_______	_______	_______	_______
Other net assets	22,243	1.4	10,171	-	12,072	0.9
	_______	_______	_______	_______	_______	_______
Total assets{A}	1,557,471	100.0	293,869	(21,591)	1,285,193	100.0
	_______	_______	_______	_______	_______	_______
{A} Figure for 30 June 2016 excludes bank loan of £60,000,000 (31 December 2015 - £24,024,000) which is shown as a current liability in the Condensed Statement of Financial Position.

SUMMARY OF NET ASSETS

	Valuation		Valuation
	30 June 2016		31 December 2015
	£'000	%	£'000	%
Equities	1,302,664	94.9	1,107,402	101.5
Fixed income	232,564	17.0	165,719	15.2
Other net assets{A}	22,243	1.6	12,072	1.1
Bank loans and Debentures	(185,150)	(13.5)	(194,174)	(17.8)
	_______	_______	_______	_______
	1,372,321	100.0	1,091,019	100.0
	_______	_______	_______	_______
{A} Excluding short-term bank loans.

INVESTMENT PORTFOLIO

AS AT 30 JUNE 2016

		Valuation	Total assets
Security	Country	£'000	%
British American Tobacco{A}	UK & Malaysia	74,915	4.8
Aeroportuario del Sureste ADS	Mexico	71,490	4.6
Taiwan Semiconductor Manufacturing	Taiwan	65,367	4.2
Unilever Indonesia	Indonesia	63,801	4.1
Philip Morris International	USA	59,352	3.8
Taiwan Mobile	Taiwan	54,542	3.5
Daito Trust Construction	Japan	48,475	3.1
Verizon Communications	USA	44,194	2.9
Singapore Telecommunications	Singapore	43,508	2.8
Roche Holdings	Switzerland	39,315	2.5
Top ten investments		564,959	36.3
Telus	Canada	38,311	2.5
Total	France	36,047	2.3
Sociedad Quimica Y Minera De Chile	Chile	32,335	2.1
Pepsico	USA	31,700	2.0
Banco Bradesco{B}	Brazil	30,914	2.0
Fomento Economico Mexicano	Mexico	30,446	1.9
Kimberly Clark de Mexico	Mexico	29,695	1.9
Royal Dutch Shell	UK	28,043	1.8
Public Bank	Malaysia	27,661	1.8
Johnson & Johnson	USA	27,217	1.7
Top twenty investments		877,328	56.3
Tenaris ADR	Mexico	23,731	1.5
Casino	France	23,580	1.5
Swire Pacific 'B'	Hong Kong	23,543	1.5
Vale do Rio Doce{C}	Brazil & USA	23,525	1.5
CME Group	USA	23,301	1.5
Telefonica Brasil	Brazil	23,094	1.5
ENI	Italy	22,549	1.5
Petroleos Mexicanos 5.5% 27/06/44	Mexico	20,277	1.3
Japan Tobacco	Japan	19,447	1.3
HSBC	UK	19,102	1.2
Top thirty investments		1,099,477	70.6
Standard Chartered	UK	18,874	1.2
Novartis	Switzerland	18,452	1.2
Federal Republic of Brazil 10% 01/01/17	Brazil	18,344	1.2
Siam Commercial Bank	Thailand	17,690	1.1
MTR	Hong Kong	17,009	1.1
Republic of South Africa 7% 28/02/31	South Africa	16,746	1.1
MTN	South Africa	16,061	1.0
Vodafone Group	UK	15,936	1.0
Engie	France	15,183	1.0
BHP Billiton	Australia	15,085	1.0
Top forty investments		1,268,857	81.5
Republic of Indonesia 6.125% 15/05/28	Indonesia	14,882	1.0
Oversea-Chinese Bank	Singapore	14,473	0.9
Republic of Indonesia 7.0% 15/05/22	Indonesia	14,388	0.9
Petroleos De Venezuela 5.25% 12/04/17	Venezuela	14,080	0.9
Auckland International Airport	New Zealand	13,841	0.9
Potash Corporation of Saskatchewan	Canada	13,783	0.9
Bharti Airtel International 5.125% 11/03/23	India	13,742	0.9
Bayer	Germany	13,067	0.9
Atlas Copco	Sweden	13,038	0.8
Coca-Cola Amatil	Australia	12,863	0.8
Top fifty investments		1,407,014	90.4
Other investments		128,214	8.2
Total investments		1,535,228	98.6
Net current assets excluding bank loans		22,243	1.4
Total assets		1,557,471	100.0
{A} Holding comprises equity holdings in both UK and Malaysia, split £51,820,000 and £23,095,000 respectively.
{B} Holding comprises equity and fixed income securities, split £20,025,000 and £10,889,000 respectively.
{C} Holding comprises equity and fixed income securities, split £8,549,000 and £14,976,000 respectively.

 

END

 

 

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