Interim Results
Murray International Trust PLC
1 August 2002
MURRAY INTERNATIONAL TRUST PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2002
The Directors of Murray International Trust PLC report the unaudited results of
the company for the six months ended 30 June 2002.
Key Points
• Net Asset Value Total Return of -7.9% compared with a total return of -
11.4% from the benchmark index.
• Asset Allocation & Stock Selection positive.
• Forecast a maintained dividend for the year ended 31 December 2002.
Background
Since the start of the year, apart from a brief rally in March, global
stockmarkets led by the USA, have been in a steady decline which accelerated in
May and June as the effects of numerous profits warnings were compounded by a
loss of confidence in the quality of reported profits in the US in particular.
Other factors acting to depress market sentiment include the situation in the
Middle East and more recently some question marks over the pace of growth in the
US economy which has been widely expected to lead the global economy back onto a
growth path. Market returns accordingly were negative and were quite
significantly impacted by movements in major currencies as the dollar
deteriorated but both the yen and the Euro appreciated against the pound. In
sterling terms the North American markets returned -17.4%, the UK -9.2%, Europe
-7.1% and Japan recorded a positive return of +3.3%. On a sectoral basis the
technology, media and telecommunications sectors continued to suffer whilst both
the pharmaceutical and insurance sectors also fared relatively badly. At the
other end of the spectrum positive returns were seen in basic industries and
resources (substantially dominated by the oil and gas sector) as well as the
cyclical consumer areas of automobile and household goods.
Performance
Performance was favourable during the period.
The Net Asset Value Total Return, with net income re-invested, for the six
months to 30 June 2002 was -7.9% compared with a return of -11.4% on the
composite benchmark (40% of the FTSE World-UK and 60% of the FTSE World-ex UK
indices).
Asset allocation was very favourable for the portfolio with a substantially
underweight position in the US stock market and overweight positions in the
Japanese, European and Pacific - ex Japan markets - with the only blemish being
an overweight position in the Latin American markets of Brazil and Mexico. Stock
selection overall was also favourable with a strong relative performance from
the European portfolio whilst both the Japanese and Asian portfolio's also
outperformed their benchmark indices. In general, stock selection benefited from
an overweighting of the more defensive areas, and especially oil and gas, and
from an underweighting of the technology and media oriented sectors.
During the half year the Company bought back 1,407,000 Ordinary Shares and
79,947 B Ordinary Shares respectively for cancellation at an average price of
398.48p and this contributed 0.24% to Net Asset Value as at 30 June 2002.
Activity
In terms of asset allocation the main portfolio change was to reduce the fund's
substantial overweighting of the Japanese market after a period of significant
strength relative to world markets but the portfolio still retains a weighting
of 10% in Japan versus a benchmark weight of 5.6%. Elsewhere activity was
concentrated on ensuring wherever possible stocks held conformed to strict
solvency ratio criteria.
Dividends
For the current year the Board has already declared that three interim dividends
of 3.45p per share be paid on 16 August and 15 November 2002 and 17 February
2003. The Board believes that, given the conservative nature of the equity
portfolio and the high quality characteristics of the fixed interest portfolio,
the revenue stream of your company is relatively strong. The outlook for next
year, is clouded by the current trend of dividend reductions particularly in the
financial and insurance sectors. However, the Board intends to recommend a
maintained final dividend of 5.95p in respect of the year ended 31 December
2002, payable in May 2003.
Outlook
The recent sharp fall in equity markets has been somewhat at odds with published
economic data and the outlook indicated by most leading measures of consumer and
business confidence, with the clear implication that either one or the other is
substantially misaligned. With global economic forecasts so reliant on a lead
from the US economy, it will be crucial to monitor the path of final demand,
particularly of the consumer, in the USA. With evidence still of overcapacity
and a likely ongoing need to reduce debt, both at the corporate and the
household level, there is a risk of some disappointment.
The best indicator may well be the progress of the US dollar. A controlled and
gradual decline, albeit necessitating some adjustment to current consensus GDP
forecasts, would be the optimal outcome, whilst a more precipitate fall would be
of concern.
America's very clear intention to eliminate weapons of mass destruction where
these are believed to be held by hostile or unstable regimes is likely to ensure
continued uncertainties in the Middle East. Thus, notwithstanding the sector's
significant outperformance of the global indices, the Manager intends to retain
an overweight position in the energy sector.
In the meantime the Manager believes that the balance of probabilities favours
an underweighting of the US stock market and an overweighting of the Japanese
and Asian markets. In a post-bubble environment it remains important to retain a
clear emphasis on sound balance sheets, strict solvency criteria and relative
security of earnings.
MURRAY INTERNATIONAL TRUST PLC
STATEMENT OF TOTAL RETURN (INCORPORATING THE REVENUE ACCOUNT)
for the six months ended 30 June 2002 (unaudited)
Six months to 30 June 2002
Revenue Capital Total
£'000 £'000 £'000
Losses on sales - (23,586) (23,586)
Unrealised losses - (30,032) (30,032)
Losses on investments - (53,618) (53,618)
Income
Income from investments 10,343 - 10,343
Other income 50 - 50
Management fees (540) (1,260) (1,800)
Currency gains (losses) - (4,424) (4,424)
Other expenses (574) - (574)
Net return before finance costs and taxation 9,279 (59,302) (50,023)
Finance costs of borrowing (555) (1,296) (1,851)
Return on ordinary activities before tax 8,724 (60,598) (51,874)
Tax on ordinary activities (1,377) 860 (517)
Return attributable to equity shareholders 7,347 (59,738) (52,391)
Ordinary dividends on equity shares (8,944) - (8,944)
Transfer from reserves (1,597) (59,738) (61,335)
Return per ordinary share (pence) 8.4 (68.2) (59.8)
Return per ordinary share assuming full
conversion of the B ordinary shares (pence) 8.3 (67.3) (59.0)
MURRAY INTERNATIONAL TRUST PLC
STATEMENT OF TOTAL RETURN (INCORPORATING THE REVENUE ACCOUNT)
for the six months ended 30 June 2002 (unaudited)
Six months to 30 June 2001
Revenue Capital Total
£'000 £'000 £'000
Losses on sales - (15,570) (15,570)
Unrealised losses - (40,173) (40,173)
Losses on investments - (55,743) (55,743)
Income
Income from investments 10,520 - 10,520
Other income 154 - 154
Management fees (696) (1,623) (2,319)
Currency gains (losses) - 5,588 5,588
Other expenses (722) - (722)
Net return before finance costs and taxation 9,256 (51,778) (42,522)
Finance costs of borrowing (747) (1,742) (2,489)
Return on ordinary activities before tax 8,509 (53,520) (45,011)
Tax on ordinary activities (1,125) 746 (379)
Return attributable to equity shareholders 7,384 (52,774) (45,390)
Ordinary dividends on equity shares (9,666) - (9,666)
Transfer from reserves (2,282) (52,774) (55,056)
Return per ordinary share (pence) 8.1 (58.1) (50.0)
Return per ordinary share assuming full
Conversion of the B ordinary shares (pence) 8.0 (57.3) (49.3)
MURRAY INTERNATIONAL TRUST PLC
STATEMENT OF TOTAL RETURN (INCORPORATING THE REVENUE ACCOUNT)
For the six months ended 30 June 2002 (unaudited)
Year ended 31 December 2001
Revenue Capital Total
£'000 £'000 £'000
Losses on sales - (31,838) (31,838)
Unrealised losses - (71,560) (71,560)
Losses on investments - (103,398) (103,398)
Income
Income from investments 18,027 - 18,027
Other income 274 - 274
Management fees (1,376) (3,211) (4,587)
Currency gains (losses) - 6,426 6,426
Other expenses (1,344) - (1,344)
Net return before finance costs and taxation 15,581 (100,183) (84,602)
Finance costs of borrowing (1,404) (3,276) (4,680)
Return on ordinary activities before tax 14,177 (103,459) (89,282)
Tax on ordinary activities (1,914) 1,372 (542)
Return attributable to equity shareholders 12,263 (102,087) (89,824)
Ordinary dividends on equity shares (14,839) - (14,839)
Transfer from reserves (2,576) (102,087) (104,663)
Return per ordinary share (pence) 13.6 (113.6) (100.0)
Return per ordinary share assuming full
Conversion of the B ordinary shares (pence) 13.5 (112.1) (98.6)
Notes
1. The revenue column of this statement is the profit and loss account of the
company.
2. The results for the year to 31 December 2001 are abridged from the full
accounts for that year, which received an unqualified report from the auditors
and have been filed with the Registrar of Companies.
MURRAY INTERNATIONAL TRUST PLC
BALANCE SHEET
As at 30 June 2002 (unaudited)
30 June 30 June 31 December
2002 2001 2001
£'000 £'000 £'000
Fixed assets
Investments 478,681 597,055 533,708
Current assets
Debtors 3,555 5,919 4,823
Cash and short term deposits 19,302 10,590 1,374
22,857 16,509 6,197
Creditors
Amounts falling due within one year 22,596 11,273 14,565
Net current assets (liabilities) 261 5,236 (8,368)
Total assets less current liabilities 478,942 602,291 525,340
Creditors
Amounts falling due after more than one year 106,660 127,406 105,861
372,282 474,885 419,479
Capital and reserves
Equity shareholders interest:
Ordinary called up share capital 22,041 22,760 22,402
Share premium account 23 23 23
Capital redemption reserve 8,066 7,335 7,694
Capital reserve - realised 342,684 404,868 378,404
Capital reserve - unrealised (30,032) 8,507 (20,141)
Revenue reserve 29,500 31,392 31,097
372,282 474,885 419,479
Net asset value per ordinary and
'B' ordinary share (pence) 422.3 521.6 468.1
MURRAY INTERNATIONAL TRUST PLC
CASH FLOW STATEMENT
for the six months ended 30 June 2002
Year ended
Six months to 30 Six months to 31 December 2001
June 2002 30 June 2001
£'000 £'000 £'000
Operating activities
Investment income received 10,392 10,219 18,438
Deposit interest received 43 138 227
Underwriting commission received 10 - -
Investment management fees paid (1,267) (1,584) (4,365)
Secretarial fees paid (33) (33) (92)
Cash paid to and on behalf of directors (26) (33) (62)
Other cash payments (80) (332) (885)
Net cash inflow from operating activities 9,039 8,375 13,261
Returns on investment and servicing of finance
Interest paid (1,828) (2,608) (4,713)
Financial investment
Purchase of investments (48,996) (229,221) (331,680)
Sale of investments 81,441 297,048 415,371
Forward contracts (3,869) (6,398) -
Net cash inflow from financial investment 28,576 61,429 83,691
Equity dividends paid (8,311) (8,593) (14,750)
Net cash inflow before use of liquid resources
and financing 27,476 58,603 68,941
Financing
Loans repaid (53,000) (10,000) (146,110)
Loans received 50,000 22,000 144,110
Repurchase of ordinary shares (6,548) (71,221) (77,021)
Net cash outflow from financing (9,548) (59,221) (79,021)
Increase (decrease) in cash 17,928 (618) (10,080)
MURRAY INTERNATIONAL TRUST PLC
6 months to Year to
30 June 30 June 31 December 2001
2002 2001
Equity shareholders' interest* £372,282,000 £474,885,000 £419,479,000
Net asset value per ordinary share and 422.3p 521.6p 468.1p
'B' ordinary share
Cost of Share Buy Backs £6,004,000 £71,222,000 £77,021,000
* The reduction in Equity Shareholders interests includes the effect of the
share buybacks undertaken during the relevant periods.
Note 1
The number of 'B' ordinary shares converted into ordinary shares on 30 June 2002
was 20,107. The allotted ordinary share capital as of 30 June 2002 was:
£000
87,025,984 Ordinary shares of 25p 21,756
1,136,666 'B' Ordinary shares of 25p 284
Note 2
6 months to Year to
Dividends on ordinary shares 30 June 2002 30 June 2001 31 December
£000 £000 2001
£000
Interims of
- 3.45p payable 16.8.02 (2001 - 3.45p) 3,002 3,098 3,095
- 3.45p payable 15.11.02 (2001 - 3,002 3,098 3,063
3.45p)
- 3.45p payable 17.2.03 (2001 - 3.45p) 3,001 3,098 3,050
Final dividend (2001 - 5.95p) - - 5,261
Under (over) accrual of previous (61) 372 370
year's dividends due to share buybacks
8,944 9,666 14,839
Note 3
A summary of investment changes during the period and a schedule of the twenty
largest equity investments at 30 June 2002 are attached.
By order of the Board
ABERDEEN ASSET MANAGEMENT PLC, SECRETARY
1 August 2002
Copies of this announcement will be printed and issued to shareholders and will
be available to the public at the registered office of the Company, 123 St
Vincent Street, Glasgow.
MURRAY INTERNATIONAL TRUST PLC
SUMMARY OF INVESTMENT CHANGES
Valuation
31 December 2001 Transactions Appreciation Valuation
(depreciation) 30 June 2002
£'000 % £'000 £'000 £'000 %
Equities
United Kingdom 171,728 32.7 (1,935) (19,913) 149,880 31.3
Americas 103,640 19.7 4,227 (20,804) 87,063 18.2
Europe & Africa 74,413 14.2 (3,061) (1,338) 70,014 14.6
Japan 46,432 8.8 (10,741) 1,547 37,238 7.8
Middle East, Far East & 25,966 4.9 (2,018) 3,781 27,729 5.8
Australasia
422,179 80.3 (13,528) (36,727) 371,924 77.7
Fixed income
United Kingdom 68,091 13.0 (1,089) (1,795) 65,207 13.6
Europe & Africa 43,438 8.3 (4,837) 2,949 41,550 8.6
111,529 21.3 (5,926) 1,154 106,757 22.2
Other net assets (8,368) (1.6) 11,964 (3,335) 261 0.1
Total Assets 525,340 100.0 (7,490) (38,908) 478,942 100.0
Valuation
Summary of Net Assets 30 June 2002
£000 %
Equities 371,924 99.9
Fixed Income 106,757 28.7
Other Net Assets 261 0.1
Borrowings and prior capital (106,660) (28.7)
Equity shareholders' interest 372,282 100.0
MURRAY INTERNATIONAL TRUST PLC
TWENTY LARGEST INVESTMENTS
as at 30 June 2002
Investment Valuation % of
Investment Area £'000 Total Assets
John Menzies 8.58% Cum Red Pref UK 20,652 4.3
BP UK 18,420 3.8
GlaxoSmithKline UK 11,344 2.4
S&P Index Future September 2002 USA 10,880 2.3
Lloyds TSB Group UK 9,312 1.9
Vodafone Group UK 9,000 1.9
*Royal Bank of Scotland Group UK 8,519 1.8
Shell Transport & Trading UK 7,955 1.7
Atrium Underwriting UK 7,215 1.5
*HSBC Holdings UK 7,168 1.5
*Abbey National UK 5,711 1.2
AstraZeneca UK 5,432 1.1
Petrobras ADR Brazil 4,566 1.0
Diageo UK 3,841 0.8
Barclays UK 3,643 0.8
Citigroup USA 3,508 0.7
Kookmin Bank South Korea 3,474 0.7
AIG Sunamerica 5.375% 07/12/2009 UK 3,413 0.7
Microsoft USA 3,327 0.7
BT Group UK 3,276 0.7
150,656 31.5
NOTES
* Holding comprises equity and fixed income securities.
This information is provided by RNS
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