Half Yearly Results

RNS Number : 4980K

Murray International Trust PLC

22 August 2012

 



MURRAY INTERNATIONAL TRUST PLC

HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2012

The Directors of Murray International Trust PLC report the unaudited results of the Company for the six months ended 30 June 2012.

INTERIM BOARD REPORT

Background

Financial markets were exposed to extremely harsh investment conditions during the period under review, as fiscal-deficit financing concerns in the developed world periodically threatened the solvency of several European nations.  Faced with unsustainable over-indebtedness, rapidly deteriorating credit worthiness, essentially bankrupt banking systems and deteriorating economic growth prospects, policymakers were powerless to influence prevailing widespread uncertainty.  Respite was periodically secured through politically inspired promises of bailout packages and pledged assurances of unlimited financial support, but confidence remained fragile throughout.  Global equity market strength, based on unfounded optimism in the first quarter eventually evaporated during the second, as hope gave way to reality.  Positive relative returns from American equities and dollar based assets in general significantly influenced composite benchmark market returns, masking to some extent what was an extremely difficult period for numerous global equity markets.

Performance

The net asset value total return, with net income reinvested, for the six months to 30 June 2012 was 6.1% compared with a total return of 4.2% on the Trust's benchmark (40% the FTSE World UK and 60% FTSE World ex UK).  Over the six month period the share price rose by 9.6% (total return), reflecting the move to a slightly wider premium to net asset value on which the shares trade.

Absolute and relative performance was attributable to a mix of asset allocation and individual stock contributions. The large underweight position in North America proved negative on an asset allocation basis, being only slightly offset by positive stock selection in Canada.  Being overweight in Latin America proved negative from an asset allocation and currency standpoint, but this was more than offset by strong stock selection.  Significant overweight exposure to Asia contributed positively in terms of both asset allocation and stock selection, whilst European exposure proved only mildly negative, from an absolute and relative basis.  Having relatively low exposure to the UK was positive from an asset allocation basis as the UK market underperformed the composite index over the period.

On 26 April 2012, the Directors announced a first interim dividend of 9.0p per Ordinary share for the current year compared with 8.0p per share last year.  Since the end of June a second interim dividend also of 9.0p has been announced and will be paid to shareholders on 15 November 2012.

Directorate

I am very pleased to advise you of the appointment of Ms Marcia Campbell as an independent non-executive Director of the Company with effect from 27 April 2012. Ms Campbell was appointed following the culmination of a detailed and thorough search process using an external recruitment company.  Ms Campbell was, until recently, operations director at Ignis Asset Management and brings a wealth of international commercial and financial experience to the Board, having previously been group operations director and CEO Asia Pacific at Standard Life.

Issue of New Shares

During the period under review the Company issued 5.5 million new Ordinary shares at a premium to the prevailing net asset value per Ordinary share at the time of each issue. Subsequent to the period end, a further 1.4 million new Ordinary shares have been issued. Since the start of the issuance programme, over £250 million of new funds has been raised through the issue of new shares and, by issuing these shares at a premium, the Company is able to enhance slightly the net asset value per share whilst improving the liquidity of its shares.  As previously stated, such issuance is also important for Share Plan Participants and other regular purchasers of the Company's shares because it ensures that the premium is managed and does not become too large. At the AGM of the Company held on 26 April 2012, shareholders authorised the Company to issue new Ordinary shares for cash representing up to 10% of the issued share capital. The Board will continue to authorise the issue of new shares, at a premium, as and when there is unfulfilled demand in the market and subject to the overriding Listing Rule requirement not to issue more than 10% of the outstanding equity in any rolling 12 month period.

In the short term such issuance can have a dilutive impact upon the Company's earnings.  In practice this is because the dividend paid on newly issued shares may not have been earned in full. We mitigate the impact of this by paying quarterly dividends, investing the proceeds of new shares promptly and by not issuing shares during the period before a dividend is paid.  The objective is to ensure that the premium received on new shares more than covers the revenue accrued to those shares.

Outlook

Deteriorating sentiment towards sovereign-deficit funding in the debt-laden developed world dominated the financial landscape over the period.  Economic growth concerns also resurfaced in response to persistently weak consumer spending and anaemic industrial activity.  Given the enormous weight of monetary stimulus pumped into the global financial system, the lack of economic traction remains of great concern.  In the absence of growth, where this leaves the very heavily indebted, mature, consumption-based economies of the United States, the UK, Europe and Japan remains the defining issue of the day, even perhaps of the decade.  This suggests low growth, periods of recession, stagnant labour markets plus contracting overall incomes and living standards for the foreseeable future.  Against this backdrop, securing positive financial returns could prove difficult near term.  However, widespread portfolio diversification throughout the world continues to give exposure to attractive long term investment opportunities in solid, high quality companies with a proven track record of delivering returns regardless of prevailing economic circumstances.

Kevin Carter

Chairman

21 August 2012

Principal Risks and Uncertainties

General

An investment in the shares is only suitable for investors who are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses which may arise therefrom (which may be equal to the whole amount invested). Such an investment should be seen as long term in nature and complementary to existing investments in a range of other financial assets.

Changes in economic conditions (including, for example, interest rates and rates of inflation), industry conditions, competition, changes in the law, political and diplomatic events and trends, tax laws and other factors can substantially and adversely affect the value of investments and therefore the Company's performance and prospects.

Past performance of the Company, and of investments managed by the Manager, is not necessarily indicative of future performance.

The Shares

The market value of, and the income derived from, the shares can fluctuate and, notwithstanding the Board's discount and premium control policy, may not always reflect the Net Asset Value per share. There can be no guarantee that any appreciation in the value of the Company's investments will occur and investors may not get back the full value of their investment. No assurance can be given that any sale of the Company's investments would realise proceeds which would be sufficient to repay any borrowings or provide funds for any capital repayment to shareholders. Shareholders will bear the rewards and risks of the success or otherwise of the Company's investments.

The market value of the shares, as well as being affected by their Net Asset Value, also takes into account their dividend yield and prevailing interest rates, supply and demand for the shares, market conditions and general investor sentiment.

Borrowings

The Company may incur borrowings for investment purposes. Whilst the use of borrowings should enhance the total return on the shares where the return on the Company's underlying assets is rising and exceeds the cost of borrowing, it will have the opposite effect where the underlying return is falling, further reducing the total return on the shares. As a result, the use of borrowings by the Company may increase the volatility of the Net Asset Value and market price per share.

There is no guarantee that any borrowings of the Company would be refinanced on their maturity either at all or on terms that are acceptable to the Company.

Dividends

The Company will only pay dividends on the Ordinary shares (and a capitalisation issue of B Ordinary shares) to the extent that it has profits (including available reserves) available for that purpose, which will largely depend on the amount of income which the Company receives on its investments and the timing of such receipt. The amount of dividends payable by the Company may fluctuate.

If under UK law or accounting rules and standards applicable to the Company, there were to be a change to the basis on which dividends could be paid by companies, this could have a negative effect on the Company's ability to pay dividends.

Investment Objective and Strategy

There is no guarantee that the Company's investment objective will be achieved.

The Company may from time to time invest in other listed investment companies. As a consequence of these investments, the Company may itself be indirectly exposed to gearing through the borrowings from time to time of these other investment companies. The Company has a policy of not investing more than 15% of its gross assets in other listed investment companies. The Net Asset Value, which is a factor in determining the market value of the shares, will be linked to the underlying share price performance of any such other investment companies.

Debt Instruments

The Company invests in fixed interest investments issued by corporate bodies and sovereign issuers. Bonds are subject to credit, liquidity and interest rate risks and in the event of a default there is a risk that the Net Asset Value may be adversely affected. Adverse changes in the financial position of an issuer of bonds or in general economic conditions may impair the ability of the issuer to make payments of principal and interest or may cause the liquidation or insolvency of an issuer. There can be no assurance as to the levels of default and/or recoveries that may be experienced with respect to bonds. Debt instruments held by the Company may be affected by changes in market sentiment or changes in interest rates that will, in turn, result in increases and decreases in the market value of those instruments. When interest rates decline, the value of the Company's investments in fixed rate debt obligations can be expected to rise and, when interest rates rise or are expected to rise, the value of those investments can be expected to decline.

To the extent that the Company invests in sub-investment grade securities, the Company may realise a higher yield than the yield offered by investment grade securities, but investment in such securities involves a greater volatility of price and a greater risk of default by the issuers of such securities, with potential loss of interest payment and principal. Sub-investment grade securities will be subject, in the judgment of a ratings agency, to uncertainties in terms of their performance in adverse conditions and will be speculative with respect to an issuer's capacity to meet interest payments and repay principal in accordance with its obligations. There can be no assurance that an issuer will not default or that the Company will be able to recover its investments in defaulted fixed interest debt instruments.

As bond investments of the Company mature, it may be difficult for the Company to obtain replacement investments having similar financial characteristics.

Market Price Risk

The fair value of equity and other financial securities held in the Company's portfolio fluctuates with changes in market prices. Prices are themselves affected by movements in currencies and interest rates and by other financial issues including the market perception of future risks.

Foreign Currency Risks

The Company's investments are principally in overseas securities. The Company accounts for its activities and reports its results in pounds sterling. The Company currently hedges most of the foreign currency exposure in respect of the liabilities attached to its borrowings. Where the Company does not hedge its currency exposure, which is currently the case with the investment portfolio, the movement of exchange rates may have a favourable or unfavourable effect on the gains and losses experienced on investments which are made or realised in currencies other than pounds sterling.

Charges to Capital

The Company currently deducts part of the management charge from capital. This increases distributable income at the expense of capital growth, which will either be eroded or constrained. The maintenance of a high level of dividend may also diminish capital values.

Discount and Premium Control Policy

The Company operates a discount and premium control policy. The operation of the discount control element of this policy could lead to a significant reduction in the size of the Company over time, which would increase the Company's total expense ratio and prejudice the ability of the Company to pay satisfactory levels of dividend to shareholders. While the Company intends to issue new shares and to resell shares held in treasury at a small premium to the Net Asset Value per share where demand exceeds supply, this will be dependent upon the Company being able to issue new shares and to resell shares held in treasury at a premium, on market conditions generally at the relevant time, upon shareholders in general meeting conferring appropriate authorities on the Board to issue further shares and, where required under the Prospectus Rules, upon a prospectus having been approved by the Financial Services Authority and published. The issue of new shares or resale of shares from treasury in accordance with the premium management policy may have a dilutive effect on the revenue reserves of the Company. The ability of the Company to operate the discount control policy will depend on the Company being able to purchase its own shares, which will be dependent upon shareholders in general meeting conferring authority on the Board to purchase its own shares. The Directors will seek renewal of this authority from shareholders annually and at other times should this prove necessary. However, there can be no guarantee that requisite shareholder approvals will be obtained.

In accordance with the Listing Rules, the extent of each buy-back authority which will be sought by the Company from shareholders in general meeting will be limited to 14.99%, of the Company's issued share capital as at the date on which such authority is granted. In order to continue purchasing its own shares once any such authority has been exhausted, the Company would be required to seek a renewal of such authority from shareholders in general meeting.

The ability of the Company to purchase its own shares will be subject to the Act and all other applicable legislation, rules and regulations of any government, regulatory body or market applicable to the Directors or the Company and, in particular, will be dependent on the availability of distributable reserves.

Cessation of Investment Trust Status

The Company attempts to conduct its business so as to satisfy the conditions for approval as an investment trust under Part 24 Chapter 4 of the Corporation Tax Act 2010. In respect of each accounting period for which approval is granted, the Company will be exempt from United Kingdom taxation on its capital gains. Any breach of the tests that a company must meet to obtain approval as an investment trust company could lead to the Company being subject to tax on capital gains.

Tax and Accounting

Any change in the Company's tax status or in taxation legislation or accounting practice could affect the value of the investments held by the Company, affect the Company's ability to provide returns to shareholders or alter the post-tax returns to shareholders. Representations in this document concerning the taxation of investors are based upon current tax law and practice which are subject to change.

Any change in accounting standards may adversely affect the value of the Company's assets in its books of account or restrict the ability of the Company to pay dividends.

Regulatory

It is expected that the Alternative Investment Fund Managers Directive will enter into force in 2013. The Directive may have significant consequences for the Company (and all similar investment companies) which might materially increase compliance and regulatory costs. The Directive is subject to further implementation measures, and the Board will continue to monitor the progress and likely implications of the Directive.

Reliance Upon The Manager

The ability of the Company to successfully pursue its investment policy is significantly dependent upon the expertise of the Manager and the principal members of its management team. The Company does not currently have employees or own any facilities and depends on the Manager for the day to day management and operation of its business. The loss of any of the Manager's management team could reduce the Company's ability to pursue successfully its planned investment policy.

Reliance Upon Third Party Service Providers

The Company has no employees and the Directors have all been appointed on a non-executive basis. The Company is therefore reliant upon the performance of third party service providers for its executive function. In particular, the Manager and the Secretary will be performing services which are integral to the operation of the Company. The failure by any service provider to carry out its obligations to the Company in accordance with the terms of its appointment could have a materially detrimental impact on the operation of the Company and could affect the ability of the Company to pursue successfully its investment policy.

Fluctuations In Operating Results

The Company may experience fluctuations in its operating results from period to period due to a number of factors, including changes in the values of investments made by the Company, changes in the amount of distributions, dividends or interest received  in respect of investments in the portfolio, changes in the Company's operating expenses, and general economic and market conditions. Such variability may lead to volatility in the market price of the shares and cause the Company's results for a particular period not to be indicative of its performance in a future period.

Related Party Transactions

Aberdeen Asset Managers Limited acts as 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 Annual Report for 2011 a copy of which is available on the Company's website.

Going Concern

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 this 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 contained within the Half-Yearly Financial Report has been prepared in accordance with the Accounting Standards Board's Statement "Half Yearly Financial Reports"; and

· the Interim Board Report (constituting the interim management report) includes a fair review of the information required by rule 4.2.7R of the UK Listing Authority 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 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 so do).

The Half-Yearly Report for the six months to 30 June 2012 comprises the Interim Board Report and a condensed set of financial statements, and has not been audited or reviewed by the auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

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

Kevin Carter

Chairman

21 August 2012

HIGHLIGHTS

Financial Highlights	30 June 2012	31 December 2011	% change
Total assets{A} (£'000)	1,256,314	1,176,582	+6.8
Equity shareholders' funds (£'000)	1,087,591	999,252	+8.8
Share price - Ordinary share	983.0p	916.5p	+7.3
Share price - B Ordinary share	945.0p	890.0p	+6.2
Net asset value per Ordinary and B Ordinary share	925.3p	892.2p	+3.7
Premium to net asset value per Ordinary share	6.2%	2.7%
{A} Represents total assets less current liabilities (before deducting prior charges).

Performance (total return)	Six months ended 30 June 2012	Year ended 31 December 2011
Net asset value total return per Ordinary and B Ordinary share with net income reinvested	+6.1%	-0.1%
Share price	+9.6%	+1.3%
Benchmark	+4.2%	-4.6%
Source: Aberdeen Asset Management, Morningstar & Russell Mellon

INCOME STATEMENT

		Six months ended
		30 June 2012
			(unaudited)
		Revenue	Capital	Total
	Note	£'000	£'000	£'000
Gains/(losses) on investments		-	39,044	39,044
Income	3	30,341	-	30,341
Investment management fees		(861)	(2,009)	(2,870)
Performance fees		-	(2,211)	(2,211)
Other expenses		(987)	-	(987)
Currency gains/(losses)		-	44	44
Net return before finance costs and taxation		28,493	34,868	63,361
Finance costs		(631)	(1,474)	(2,105)
Return on ordinary activities before tax		27,862	33,394	61,256
Tax on ordinary activities		(1,946)	254	(1,692)
Return attributable to equity shareholders		25,916	33,648	59,564
Return per Ordinary share (pence)	5	22.8	29.5	52.3
Return per Ordinary share assuming full conversion of the B Ordinary shares (pence)	5	22.6	29.3	51.9
The total column of the Income Statement is the profit and loss account of the Company.
A Statement of Total Recognised Gains and Losses has not been prepared as all gains or losses are recognised in the Income Statement.
All revenue and capital items in the above statement derive from continuing operations.
Ordinary dividends on equity shares (£'000)	4	23,708	-	23,708
The above dividend information does not form part of the Income Statement.

INCOME STATEMENT (Cont'd)

		Six months ended
		30 June 2011
			(unaudited)
		Revenue	Capital	Total
	Note	£'000	£'000	£'000
Gains/(losses) on investments		-	11,781	11,781
Income	3	32,020	-	32,020
Investment management fees		(771)	(1,798)	(2,569)
Performance fees		-	(777)	(777)
Other expenses		(893)	-	(893)
Currency gains/(losses)		-	(145)	(145)
Net return before finance costs and taxation		30,356	9,061	39,417
Finance costs		(605)	(1,410)	(2,015)
Return on ordinary activities before tax		29,751	7,651	37,402
Tax on ordinary activities		(2,555)	461	(2,094)
Return attributable to equity shareholders		27,196	8,112	35,308
Return per Ordinary share (pence)	5	26.0	7.7	33.7
Return per Ordinary share assuming full conversion of the B Ordinary shares (pence)	5	25.8	7.7	33.5
The total column of the Income Statement is the profit and loss account of the Company.
A Statement of Total Recognised Gains and Losses has not been prepared as all gains or losses are recognised in the Income Statement.
All revenue and capital items in the above statement derive from continuing operations.
Ordinary dividends on equity shares (£'000)	4	21,778	-	21,778
The above dividend information does not form part of the Income Statement.

INCOME STATEMENT (Cont'd)

		Year ended
		31 December 2011
			(audited)
		Revenue	Capital	Total
	Note	£'000	£'000	£'000
Gains/(losses) on investments		-	(37,470)	(37,470)
Income	3	55,128	-	55,128
Investment management fees		(1,585)	(3,698)	(5,283)
Performance fees		-	(3,830)	(3,830)
Other expenses		(1,850)	-	(1,850)
Currency gains/(losses)		-	(1,478)	(1,478)
Net return before finance costs and taxation		51,693	(46,476)	5,217
Finance costs		(1,261)	(2,944)	(4,205)
Return on ordinary activities before tax		50,432	(49,420)	1,012
Tax on ordinary activities		(3,632)	822	(2,810)
Return attributable to equity shareholders		46,800	(48,598)	(1,798)
Return per Ordinary share (pence)	5	43.9	(45.6)	(1.7)
Return per Ordinary share assuming full conversion of the B Ordinary shares (pence)	5	43.6	(45.2)	(1.6)
The total column of the Income Statement is the profit and loss account of the Company.
A Statement of Total Recognised Gains and Losses has not been prepared as all gains or losses are recognised in the Income Statement.
All revenue and capital items in the above statement derive from continuing operations.
Ordinary dividends on equity shares (£'000)	4	38,858	-	38,858
The above dividend information does not form part of the Income Statement.

BALANCE SHEET

		As at	As at	As at
		30 June 2012	30 June 2011	31 December 2011
		(unaudited)	(unaudited)	(audited)
	Notes	£'000	£'000	£'000
Non-current assets
Investments at fair value through profit or loss		1,247,272	1,150,625	1,140,963
Current assets
Debtors		6,681	10,546	9,450
Cash and short-term deposits		10,855	17,650	32,600
		17,536	28,196	42,050
Creditors: amounts falling due within one year
Bank loans		(65,728)	-	-
Other creditors		(8,494)	(5,938)	(6,431)
Net current (liabilities)/assets		(56,686)	22,258	35,619
Total assets less current liabilities		1,190,586	1,172,883	1,176,582
Creditors: amounts falling due after more than one year
Bank loans and debentures		(98,435)	(158,459)	(171,808)
Other creditors		(4,560)	(3,232)	(5,522)
		(102,995)	(161,691)	(177,330)
Net assets		1,087,591	1,011,192	999,252
Capital and reserves
Called-up share capital		29,384	26,815	28,000
Share premium account		236,816	144,647	185,712
Capital redemption reserve		8,230	8,230	8,230
Capital reserve	6	748,067	771,138	714,424
Revenue reserve		65,094	60,362	62,886
Equity shareholders' funds		1,087,591	1,011,192	999,252
Net asset value per Ordinary and B Ordinary share (pence)	7	925.3	942.7	892.2

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

Six months ended 30 June 2012 (unaudited)
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2011	28,000	185,712	8,230	714,424	62,886	999,252
Return on ordinary activities after taxation	-	-	-	33,648	25,916	59,564
Dividends paid (see note 4)	-	-	-	-	(23,708)	(23,708)
Issue of new shares	1,384	51,104	-	(5)	-	52,483
Balance at 30 June 2012	29,384	236,816	8,230	748,067	65,094	1,087,591
Six months ended 30 June 2011 (unaudited)
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2010	25,999	115,472	8,230	763,031	54,944	967,676
Return on ordinary activities after taxation	-	-	-	8,112	27,196	35,308
Dividends paid (see note 4)	-	-	-	-	(21,778)	(21,778)
Issue of new shares	816	29,175	-	(5)	-	29,986
Balance at 30 June 2011	26,815	144,647	8,230	771,138	60,362	1,011,192
Year ended 31 December 2011 (audited)
		Share	Capital
	Share	premium	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 December 2010	25,999	115,472	8,230	763,031	54,944	967,676
Return on ordinary activities after taxation	-	-	-	(48,598)	46,800	(1,798)
Dividends paid (see note 4)	-	-	-	-	(38,858)	(38,858)
Issue of new shares	2,001	70,240	-	(9)	-	72,232
Balance at 31 December 2011	28,000	185,712	8,230	714,424	62,886	999,252

CASH FLOW STATEMENT

	Six months ended	Six months ended	Year ended
	30 June 2012	30 June 2011	31 December 2011
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Net return before finance costs and taxation	63,361	39,417	5,217
Adjustments for:
(Gains)/losses on investments	(39,044)	(11,781)	37,470
Effect of foreign exchange (gains)/losses	(44)	145	1,478
Amortisation of fixed income book cost	(204)	(429)	(835)
Decrease/(increase) in accrued income	455	(1,297)	589
(Increase)/decrease in other debtors	(865)	(2,040)	968
Increase in accruals	70	204	157
Tax on unfranked income - overseas	(2,204)	(2,639)	(3,365)
Net cash inflow from operating activities	21,525	21,580	41,679
Returns on investment and servicing of finance
Interest paid	(2,127)	(2,035)	(4,178)
Net cash outflow from servicing of finance	(2,127)	(2,035)	(4,178)
Financial investment
Purchases of investments	(111,038)	(104,298)	(196,704)
Sales of investments	43,978	85,384	138,606
Net cash outflow from financial investment	(67,060)	(18,914)	(58,098)
Equity dividends paid	(23,708)	(21,778)	(38,954)
Net cash outflow before financing	(71,370)	(21,147)	(59,551)
Financing
Share issue	52,483	29,986	72,232
Net cash inflow from financing	52,483	29,986	72,232
(Decrease)/increase in cash	(18,887)	8,839	12,681
Analysis of changes in cash during the period
Opening balance	32,600	10,765	10,765
(Decrease)/increase in cash as above	(18,887)	8,839	12,681
Currency differences	(2,858)	(1,954)	9,154
Closing balances	10,855	17,650	32,600

NOTES TO THE ACCOUNTS

1.	Accounting policies
	(a)	Basis of accounting
		The financial statements have been prepared in accordance with applicable UK Accounting Standards, with pronouncements on Half-Yearly Reporting issued by the Accounting Standards Board 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 financial statements and the net asset value per share figures have been prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP).
		The interim accounts have been prepared using the same accounting policies as the preceding annual accounts.
	(b)	Dividends payable
		Dividends are recognised in the period in which they are paid.

2.	Taxation
	The taxation expense reflected in the Income Statement 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 2012 is an effective rate of 24.5%. This is above the current corporation tax rate of 24% because prior to 1 April 2012 the prevailing corporation tax rate was 26%.

		Six months ended	Six months ended	Year ended
		30 June 2012	30 June 2011	31 December 2011
3.	Income	£'000	£'000	£'000
	Income from investments
	UK dividends	4,873	4,597	7,704
	UK unfranked investment income	585	672	1,374
	Overseas dividends	22,400	23,827	40,501
	Overseas interest	2,480	2,916	5,535
		30,338	32,012	55,114
	Interest
	Deposit interest	3	4	10
	Interest from HMRC	-	4	4
		3	8	14
	Total income	30,341	32,020	55,128

		Six months ended	Six months ended	Year ended
		30 June 2012	30 June 2011	31 December 2011
4.	Ordinary dividends on equity shares	£'000	£'000	£'000
	Third interim dividend 2011 of 8.00p (2010 - 6.80p)	8,890	7,015	7,015
	Final dividend 2011 of 13.00p (2010 - 11.60p)	14,818	12,145	12,145
	Special dividend 2010 of 2.50p	-	2,617	2,617
	First interim dividend 2011 of 8.00p	-	-	8,513
	Second interim dividend 2011 of 8.00p	-	-	8,664
	Return of unclaimed dividends from previous periods	-	-	(96)
		23,708	21,777	38,858
	A first interim dividend for 2012 of 9.00p (2011 - 8.00p) was paid on 16 August 2012 to shareholders on the register on 13 July 2012. The ex-dividend date was 11 July 2012.
	A second interim dividend for 2012 of 9.00p (2011 - 8.00p) will be paid on 15 November 2012 to shareholders on the register on 12 October 2012. The ex-dividend date is 10 October 2012.
	In accordance with the terms of the Articles of Association of the Company the Directors will resolve to make bonus issues of B Ordinary shares to B Ordinary shareholders which correspond to the first and second interim dividends.

		Six months ended	Six months ended	Year ended
		30 June 2012	30 June 2011	31 December 2011
5.	Returns per share	£'000	£'000	£'000
	Based on the following figures:
	Revenue return	25,916	27,196	46,800
	Capital return	33,648	8,112	(48,598)
	Total return	59,564	35,308	(1,798)
	Weighted average number of Ordinary shares	113,903,206	104,636,880	106,560,813
	Weighted average number of B Ordinary shares	876,271	842,019	850,690
	Weighted average number of Ordinary shares assuming conversion of B Ordinary shares	114,779,477	105,478,899	107,411,503

6.	Capital reserves
	The capital reserve reflected in the Balance Sheet at 30 June 2012 includes gains of £342,059,000 (30 June 2011 - gains of £374,616,000; 31 December 2011 - gains £314,276,000) which relate to the revaluation of investments held at the reporting date.

7.	Diluted net asset value
	The diluted 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	As at
		30 June 2012	30 June 2011	31 December 2011
	Attributable net assets (£'000)	1,087,591	1,011,192	999,252
	Number of shares in issue:
	Ordinary shares	116,653,204	106,408,326	111,131,628
	B Ordinary shares	882,825	851,743	866,687
		117,536,029	107,260,069	111,998,315

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 Income Statement. The total costs were as follows:
		Six months ended	Six months ended	Year ended
		30 June 2012	30 June 2011	31 December 2011
		£'000	£'000	£'000
	Purchases	212	249	414
	Sales	38	133	186
		250	382	600

9.

The financial information in this report comprises non-statutory accounts as defined in Sections 434-436 of the Companies Act 2006. The financial information for the year ended 31 December 2011 has been extracted from published accounts that have been delivered to the Registrar of Companies and on which the report of the auditors was unqualified under Section 498 (2), (3) and (4) of the Companies Act 2006.

10.	This Half-Yearly Report was approved by the Board on 21 August 2012.

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 www.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

21 August 2012

SUMMARY OF INVESTMENT CHANGES

	Valuation		Appreciation/		Valuation
	30 June 2012		(depreciation)	Transactions	31 December 2011
	£'000	%	£'000	£'000	£'000	%
Equities
United Kingdom	164,943	13.1	(3,748)	2,414	166,277	14.2
North America	127,230	10.1	7,230	(761)	120,761	10.3
Europe ex UK	207,056	16.5	(11,925)	43,527	175,454	14.9
Japan	55,488	4.4	353	(7,483)	62,618	5.3
Asia Pacific ex Japan	337,415	26.9	27,050	15,576	294,789	25.1
Latin America	272,118	21.7	19,027	18,527	234,564	19.8
	1,164,250	92.7	37,987	71,800	1,054,463	89.6
Fixed income
United Kingdom	19,297	1.5	(319)	(4,986)	24,602	2.1
Europe ex UK	10,316	0.8	1,310	-	9,006	0.8
Asia Pacific ex Japan	13,067	1.1	(606)	-	13,673	1.2
Latin America	40,342	3.2	1,123	-	39,219	3.3
	83,022	6.6	1,508	(4,986)	86,500	7.4
Other net assets	9,042	0.7	(26,577)	-	35,619	3.0
Total assets{A}	1,256,314	100.0	12,918	66,814	1,176,582	100.0
{A} Figure for 30 June 2012 excludes bank loan of £65,728,000 (31 December 2011 - £nil) which is shown as a current liability in the Balance Sheet.

SUMMARY OF NET ASSETS

	Valuation		Valuation
	30 June 2012		30 June 2011
	£'000	%	£'000	%
Equities	1,164,250	107.1	1,040,938	102.9
Fixed income	83,022	7.6	109,687	10.9
Other net assets	9,042	0.8	22,258	2.2
Prior charges	(164,163)	(15.1)	(158,459)	(15.7)
Other long term liabilities	(4,560)	(0.4)	(3,232)	(0.3)
Equity shareholders' funds	1,087,591	100.0	1,011,192	100.0

INVESTMENT PORTFOLIO

AS AT 30 JUNE 2012

		Valuation	Total assets
Security	Country	£'000	%
British American Tobacco{A}	UK & Malaysia	56,882	4.5
Souza Cruz	Brazil	52,005	4.1
Unilever Indonesia	Indonesia	49,743	4.0
Philip Morris International	USA	37,805	3.0
Aeroportuario del Sureste ADS	Mexico	37,317	3.0
Taiwan Mobile	Taiwan	36,738	2.9
Vale{B}	Brazil & USA	32,721	2.6
Telus	Canada	30,530	2.4
Taiwan Semiconductor Manufacturing	Taiwan	30,144	2.4
Telefonica Brasil	Brazil	29,520	2.4
Top ten investments		393,405	31.3
Kimberly Clark de Mexico	Mexico	28,675	2.3
Singapore Telecommunications	Singapore	27,818	2.2
Standard Chartered	UK	27,690	2.2
Fomento Economico Mexicano	Mexico	26,730	2.1
Daito Trust Construction	Japan	25,640	2.1
PetroChina	China	25,327	2.0
Royal Dutch Shell	UK	25,143	2.0
Total	France	24,968	2.0
Tenaris ADR	Mexico	24,533	2.0
QBE Insurance Group	Australia	24,357	1.9
Top twenty investments		654,286	52.1
Roche Holdings	Switzerland	24,244	1.9
Nordea	Sweden	24,101	1.9
Wing Hang Bank	Hong Kong	23,930	1.9
Casino	France	23,539	1.9
China Mobile	China	22,988	1.9
Johnson & Johnson	USA	22,833	1.8
Pepsico	USA	22,522	1.8
Petrobras ADR	Brazil	21,987	1.8
Banco Bradesco{C}	Brazil	21,948	1.7
Zurich Financial Services	Switzerland	21,572	1.7
Top thirty investments		883,950	70.4
Novartis	Switzerland	20,648	1.6
ENI	Italy	20,328	1.6
Public Bank	Malaysia	19,339	1.5
Weir Group	UK	18,730	1.5
Hindustan Unilever	India	18,145	1.5
HSBC	UK	17,394	1.4
Canon	Japan	15,174	1.2
Vodafone Group	UK	15,057	1.2
Astellas Pharmaceutical	Japan	14,674	1.2
GDF Suez	France	14,416	1.1
Top forty investments		1,057,855	84.2
Wilson & Sons	Brazil	14,408	1.1
Kraft Foods	USA	13,539	1.1
PTT Exploration and Production	Thailand	13,490	1.1
Nestlé	Switzerland	13,321	1.1
Swire Pacific 'B'	Hong Kong	13,123	1.1
Republic of Indonesia{D}	Indonesia	13,068	1.0
Centrica	UK	12,720	1.0
AstraZeneca	UK	12,553	1.0
Belgacom	Belgium	11,534	0.9
Oversea-Chinese Bank	Singapore	11,047	0.9
Top fifty investments		1,186,658	94.5
Other investments		60,614	4.8
Total investments		1,247,272	99.3
Net current assets		9,042	0.7
Total assets		1,256,314	100.0
{A} Holding comprises equity holdings in both UK and Malaysia split £35,656,000 and £21,226,000 respectively.
{B} Holding comprises equity and fixed income securities, split £22,367,000 and £10,354,000 respectively.
{C} Holding comprises equity and fixed income securities, split £12,687,000 and £9,261,000 respectively.
{D} Holding comprises two fixed income securities, split £6,555,000 (10% 15/02/28) and £6,513,000 (9.5% 15/07/23).

 

END

 

 

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