Annual Financial Report

RNS Number : 4976L

Scottish Mortgage Inv Tst PLC

07 May 2010

 



 SCOTTISH MORTGAGE INVESTMENT TRUST PLC

Scottish Mortgage annual results for the year to 31 March 2010 show a strong increase in net asset value per share and considerable outperformance of its benchmark index.

Scottish Mortgage is a low cost investment trust that aims to maximise total return over the long term from a focused and actively managed portfolio. It invests globally, looking for strong businesses with above-average returns.

§ Scottish Mortgage's net asset value per share appreciated by 81% compared to a 45% increase in its benchmark index, the FTSE All World Index in sterling terms. The share price increased by 73% and closed at a new year-end high.

§ In keeping with the long term approach, the five year record is more relevant than one year's individual figures. Over five years Scottish Mortgage's share price total return (including dividends) was 104% (15.3% on an annualised basis) compared to a 58% return from the FTSE All World Index (9.6% annualised).

§ A final dividend of 5.8p has been proposed to give a total of 11.3p. This is the 28^th successive year that Scottish Mortgage has increased its dividend at a faster rate than inflation.

§ It is evident that economic and political influence is shifting away from Europe and the United States towards rapidly growing powers, particularly in Asia, at a considerable pace. The recent crisis produced winners as well as losers at a corporate level and many companies which successfully weathered the crisis have emerged in stronger and often dominant positions compared to their weakened competitors.

§ Overall, the Managers conclude that there is no current shortage of companies with exciting growth prospects. These are often, but not exclusively, those companies exposed to domestic growth in countries where wealth is increasing and being spread rapidly. There is strong evidence of a resumption in dividend growth and the earnings outlook is good.

§ Experience suggests that Scottish Mortgage shares will be volatile in absolute and relative terms, sometimes considerably so in the short term. Scottish Mortgage does not engage in slavish attempts to track any index but instead strives to deliver long term absolute and relative returns that are well above average. 

6 May 2010

For further information please contact:

 

James Budden, Baillie Gifford & Co       07780 704404 or 0131 275 2816

Roland Cross, Broadgate                       07831 401309 or 0207 726 6111

Scottish Mortgage is managed by Baillie Gifford & Co, the Edinburgh based fund management group with over £60 billion under management and advice as at 6 May 2010.

Past performance is not a guide to future performance. The value of an investment and any income from it is not guaranteed and may go down as well as up and investors may not get back the amount invested. You can find up to date performance information about Scottish Mortgage on the Baillie Gifford website at www.scottishmortgageit.com.

Investment Trusts are UK public limited companies and are not authorised or regulated by the Financial Services Authority.

- ends -

SCOTTISH MORTGAGE INVESTMENT TRUST PLC

 

Chairman's Statement

Results

The end of our last financial year coincided with a welcome turning point for equities, which recovered strongly after many months of retreat. So I am pleased to be able to report that, in the 12 months to
31 March 2010, not only did stock markets stage a remarkable rally from the lows of Spring 2009, Scottish Mortgage also delivered an exceptional performance and more than made up the ground that was lost in the previous year. By all measures we were considerably ahead of our benchmark: over the year to 31 March 2010, net asset value per share appreciated by 81%, while the increase in the FTSE All World Index (in sterling) was 45%. The share price started the year at 353p and was 609p at its close, representing a 73% increase - a new year-end high for Scottish Mortgage.

Investment Philosophy and Five Year Record

After the extreme disruption endured in 2008/09, the past twelve months demonstrate the considerable value of a soundly based investment philosophy and the benefits of sticking to fundamental beliefs.  Scottish Mortgage's style is first of all determined by a long term perspective. An approach is then taken where the assessment of the prospects and progress of individual companies is kept to the fore. This "bottom-up" approach is in contrast to attempts to anticipate shorter term trends and market direction.

In keeping with the long term approach, the five year record is much more relevant than one year's individual figures - however good the past 12 months' numbers may be. I am happy to report that over five years the share price total return (both capital and dividends) has been 104% (or 15.3% on an annualised basis) and the net asset value return was 86% (13.2% per annum). These can be compared to 58% returned on the same basis by the FTSE All World Index (9.6% per annum).

Investment and International Environment

The past year saw a resumption (or, in the case of China, an acceleration) of growth, across most economies. The financial and banking system is once again functioning, although in many developed economies a legacy of the crisis has been the transfer of debt from the private to the public sector and reluctance on the part of the banks to lend, due partly to regulatory, capital and liquidity constraints, to those businesses most in need of funding. While the move away from some of the extraordinary excesses seen in financial markets is to be welcomed, the paucity of bank lending is undoubtedly hindering the nascent economic recovery in Britain and other developed economies; low base rates are of little use to companies who cannot access funds.

Within the developed world, governments and regulators are still grappling with the problem of finding acceptable ways to ensure that banking crises can be averted in future, while at the same time trying to maintain confidence in some of the worst-hit economies, of which Greece is so far the most prominent example. While Western governments' attentions are occupied with such issues, it is already evident that economic and political influence is shifting inexorably away from Europe and the United States towards rapidly growing powers, particularly in Asia, at a considerable pace. It is also apparent that the recent crisis has, at a corporate level, produced winners as well as losers; many companies which successfully weathered the crisis have emerged in stronger and often dominant positions compared to their weakened competitors.

Borrowings

Borrowings have been maintained at roughly the same level in absolute terms throughout the year and being geared into rising markets has benefited performance. The relative level of the borrowings, or gearing ratio, has fallen as the value of the assets has risen. Gearing is reviewed at all Board meetings and, provided the Company's risk profile remains commensurate with that which the Board has agreed with the Manager, borrowings may be increased should the expected returns from investment opportunities be deemed to outweigh the costs. At the financial year end, total assets were £2.2bn and borrowings were £315m.

Past performance is not a guide to future performance.

SCOTTISH MORTGAGE INVESTMENT TRUST PLC

Chairman's Statement (Ctd)

Earnings and Dividend

Earnings per share this year were 11.2p compared to 12.7p in the previous year, when the total included a non-recurring element of 1.5p derived from the substantial recovery of VAT from HMRC. Thus, underlying earnings were maintained year-on-year. In an environment where many companies have cut or even suspended their dividends, we regard this as a very satisfactory outcome for Scottish Mortgage's portfolio.

A final dividend of 5.8p per share is proposed which will give a total of 11.3p for the year. Last year's total dividend payment was 12.3p per share, or 10.8p if the non-recurring VAT element of 1.5p is excluded, so this represents an increase of 4.6% in the underlying rate and represents a small real increase as RPI rose by 4.4% in the period. This is the 28^th successive year that Scottish Mortgage has increased its dividend at a faster rate than inflation.

Forecasting future earnings is not a precise science as the portfolio changes throughout the year but at this stage the Managers expect to see an increase in earnings in 2010/11. Earnings are now derived predominantly from overseas holdings so currency fluctuations will have an impact. Your Board recognises that a growing dividend return is important to shareholders and intends, as far as possible, to build on its long record in this regard. Distributable revenue reserves currently stand at 22p per share and your Board is prepared to use these if the need arises.

Discount and share buybacks

While performance was strong this year, it is disappointing to report that the discount has widened, admittedly in line with many other large trusts and the sector as a whole. In an effort to contain the discount, we have tried to address the apparent imbalance between demand and supply for our shares.  In total, 12.6m shares (4.6%) were bought back during the course of the year, compared to 1.9m shares in the previous year. One attraction of buying back shares at a discount is that net asset value per share for the continuing shareholders is enhanced, the effect of this uplift in 2009/10 being 8.7p per share. While the Board understands the attractions of buying back shares, a significant feature of Scottish Mortgage is its low running cost for shareholders. To maintain this advantage, it is important that the scale of the Company is maintained with costs spread across a large asset base; our total expense ratio of 0.52% is among the lowest in the industry and an important part of the overall investment proposition.  To this end, seeking and sustaining demand for Scottish Mortgage shares is a priority for the Managers and great efforts are made to find new buyers to replace those who decide to exit.

The Board

My predecessor, Sir Donald MacKay, retired in December 2009. Sir Donald served as a Director from 1999 and as Chairman from 2003, overseeing considerable change notably to the way the investments are managed and in the significant increase in holdings in overseas stocks; Scottish Mortgage today offers a fundamentally different investment proposition as compared with only 10 years ago. I believe that we - Shareholders, the Managers and this Board - owe Sir Donald a considerable debt of gratitude for the effective way in which he has handled these changes.

Considerable thanks are also due to Geoff Ball who retired following the 2009 AGM having given over 25 years of valuable service to the Company, including several years as a most effective Senior Independent Director; that position is now fulfilled by Mike Gray. 2010 also saw the resignation of Lord Strathclyde who joined the Board in 2004 and who has stood down to fulfil extensive political commitments; his insights and advice will be missed.

SCOTTISH MORTGAGE INVESTMENT TRUST PLC

Chairman's Statement (Ctd)

AGM

At the AGM the Company is putting forward a resolution to change the Articles of Association to reflect the implementation of the last parts of the Companies Act 2006 which came into force on 1 October 2009. Further information on the resolution can be found in the Directors' Report and details of the main changes proposed are set out in the Appendix to the Notice of Annual General Meeting, both of which are included within the Annual Report and Financial Statements.

The AGM will be held at 4.30pm on 28 June in the Edinburgh offices of Baillie Gifford & Co. James Anderson, Chief Investment Officer of Baillie Gifford and who has responsibility for the investments, will give a presentation and answer shareholders' investment questions. The Board welcomes this opportunity to meet shareholders and refreshments will be served after the presentation.

Outlook

The shape of the world as defined by economic, corporate and also environmental considerations is shifting rapidly and the Scottish Mortgage portfolio is alive to these developments. Change of this scale can be unsettling and comes with risk and uncertainty but seismic shifts also provide rich seams of opportunity.

Overall, the Managers conclude that there is no current shortage of companies with exciting growth prospects. These are often, but not exclusively, those companies exposed to domestic growth in countries where wealth is increasing and being spread rapidly. Opportunities also lie amongst exporters of goods and services and with strong, well managed concerns in the developed world. In particular, one set of companies that the Managers seek to identify is young businesses at an early stage of possibly rapid growth. As ever there is considerable uncertainty about precisely how economies and trade patterns will develop, but your Board takes a positive long term view of the global outlook.

The experience of the past two years suggests that Scottish Mortgage shares will be volatile against the comparative index, sometimes considerably so in the short term; while the Board considers that it has an appropriate benchmark, it does not engage in slavish attempts to track any index but instead strives to deliver to shareholders long term absolute and relative returns that are well above average. I am delighted that Scottish Mortgage has done this so effectively in the past year.

John Scott

Chairman

6 May 2010

SCOTTISH MORTGAGE INVESTMENT TRUST PLC

 

The following is the unaudited preliminary statement for the year to 31 March 2010 which was approved by the Board on 6 May 2010. The Board of Scottish Mortgage Investment Trust PLC is recommending to the Annual General Meeting of the Company to be held on 28 June 2010 the payment of a final dividend of 5.80p (5.50p last year) per ordinary share making 11.30p (12.30p last year) for the year ended 31 March 2010. Both the revenue earnings and the dividend for the year ended 31 March 2009 include a non-recurring 1.50p per share from the reimbursement of previous years' VAT and associated interest thereon.

INCOME STATEMENT

(unaudited)

	For the year ended 31 March 2010				For the year ended 31 March 2009
	Revenue £'000	Capital £'000	Total £'000		Revenue £'000	Capital £'000	Total  £'000
Gains/(losses) on investments	-	837,604	837,604		-	(691,354)	(691,354)
Currency gains/(losses)	-	1,593	1,593		-	(50,819)	(50,819)
Income (note 2)	49,174	-	49,174		57,470	-	57,470
Investment management fee	(3,027)	(3,027)	(6,054)		(2,821)	(2,821)	(5,642)
Recovered VAT (note 3)	-	-	-		3,850	1,816	5,666
Other administrative expenses	(2,289)	-	(2,289)		(1,885)	-	(1,885)
Net return before finance costs and taxation	43,858	836,170	880,028		56,614	(743,178)	(686,564)
Finance costs of borrowings	(8,414)	(8,414)	(16,828)		(10,786)	(11,548)	(22,334)
Net return on ordinary activities before taxation	35,444	827,756	863,200		45,828	(754,726)	(708,898)
Tax on ordinary activities	(5,244)	1,143	(4,101)		(11,257)	7,860	(3,397)
Net return on ordinary activities after taxation	30,200	828,899	859,099		34,571	(746,866)	(712,295)
Net return per ordinary share (note 4)	11.18p	306.88p	318.06p		12.67p	(273.74p)	(261.07p)

The total column of this statement is the profit and loss account of the Company.

All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year.

A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above statement. 

 SCOTTISH MORTGAGE INVESTMENT TRUST PLC

BALANCE SHEET

(unaudited)

	At 31 March  2010	At 31 March 2009
	£'000	£'000
FIXED ASSETS
Investments held at fair value through profit or loss	2,130,489	1,361,987
CURRENT ASSETS
Debtors	9,824	9,073
Cash and short term deposits	18,898	35,774
	28,722	44,847
CREDITORS
Amounts falling due within one year (note 6)	(167,751)	(77,631)
NET CURRENT LIABILITIES	(139,029)	(32,784)
TOTAL ASSETS LESS CURRENT LIABILITIES	1,991,460	1,329,203
CREDITORS
Amounts falling due after more than one year (note 6)	(151,552)	(248,866)
	1,839,908	1,080,337
CAPITAL AND RESERVES
Called-up share capital	71,086	71,086
Capital redemption reserve	19,094	19,094
Capital reserve	1,677,917	918,702
Revenue reserve	71,811	71,455
SHAREHOLDERS' FUNDS	1,839,908	1,080,337

NET ASSET VALUE PER ORDINARY SHARE	692.8p	383.8p
(After deducting borrowings at fair value) (note 7)
NET ASSET VALUE PER ORDINARY SHARE	711.2p	399.3p
(After deducting borrowings at par)
ORDINARY SHARES IN ISSUE (note 8)	259,519,897	272,089,897

SCOTTISH MORTGAGE INVESTMENT TRUST PLC

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

(unaudited)

For the year ended 31 March 2010

	Share capital £'000	Capital redemption reserve £'000	Capital reserve†† £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 April 2009	71,086	19,094	918,702	71,455	1,080,337
Net return on ordinary activities after taxation	-	-	828,899	30,200	859,099
Shares bought back †	-	-	(69,684)	-	(69,684)
Dividends paid during the year#	-	-	-	(29,844)	(29,844)
Shareholders' funds at 31 March 2010	71,086	19,094	1,677,917	71,811	1,839,908

For the year ended 31 March 2009

	Share capital £'000	Capital redemption reserve £'000	Capital reserve†† £'000	Revenue reserve £'000	Shareholders' funds £'000
Shareholders' funds at 1 April 2008	68,497	21,683	1,676,329	69,935	1,836,444
Adjustment to reserves*	2,589	(2,589)	-	-	-
Net return on ordinary activities after taxation	-	-	(746,866)	34,571	(712,295)
Shares bought back †	-	-	(10,761)	-	(10,761)
Dividends paid during the year#	-	-	-	(33,051)	(33,051)
Shareholders' funds at 31 March 2009	71,086	19,094	918,702	71,455	1,080,337

*    The adjustment to the share capital and capital redemption reserve is to reflect that when shares have been bought back in prior years and held in treasury they should not have been treated as cancelled.

†† The Capital Reserve balance at 31 March 2010 includes a gain of £622,630,000 relating to the revaluation of investments (31 March 2009 - loss of £170,580,000).

^†    See note 8

^#     See note 5

 SCOTTISH MORTGAGE INVESTMENT TRUST PLC

SUMMARISED CASH FLOW STATEMENT (unaudited)
	For the year ended 31 March 2010		For the year ended 31 March 2009
	£'000	£'000	£'000	£'000
Net cash inflow from operating Activities		40,740		56,685
NET CASH OUTFLOW FROM SERVICING OF FINANCE		(18,968)		(21,862)
TAXATION
Income tax paid	(13)		(20)
Overseas tax incurred	(4,080)		(3,381)
TOTAL TAX PAID		(4,093)		(3,401)
FINANCIAL INVESTMENT
Acquisitions of investments	(460,680)		(387,778)
Disposals of investments	527,163		595,292
Realised currency (loss)/profit	(1,508)		5,132
Net cash INFLOW from financial investment		64,975		212,646
EQUITY DIVIDENDS PAID (note 5)		(29,844)		(33,051)
NET CASH INFLOW BEFORE FINANCING		52,810		211,017
FINANCING
Shares bought back	(69,684)		(10,761)
Bank loans repaid	(66,874)		(227,492)
Bank loans drawn down	66,872		49,980
NET CASH OUTFLOW FROM FINANCING		(69,686)		(188,273)
(DECREASE)/INCREASE IN CASH		(16,876)		22,744
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
(Decrease)/increase in cash in the period		(16,876)		22,744
Decrease in bank loans		2		177,512
Exchange movement on bank loans		3,101		(55,951)
Other non-cash changes		153		133
MOVEMENT IN NET DEBT IN THE YEAR		(13,620)		144,438
NET DEBT AT 1 APRIL		(282,159)		(426,597)
NET DEBT AT 31 MARCH		(295,779)		(282,159)
RECONCILIATION OF NET RETURN BEFORE FINANCE COSTS AND TAXATION TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Net return on ordinary activities before finance costs and taxation		880,028		(686,564)
(Gains)/losses on investments - securities		(837,604)		691,354
Currency (gains)/losses		(1,593)		50,819
Amortisation of fixed income book cost		(79)		(103)
Decrease in accrued income		270		1,058
Decrease/(increase) in debtors		449		(491)
(Decrease)/increase in creditors		(731)		612
NET CASH INFLOW FROM OPERATING ACTIVITIES		40,740		56,685

 

SCOTTISH MORTGAGE INVESTMENT TRUST PLC

 

DISTRIBUTION OF ASSETS

 (unaudited)

 

		At 31 March 2010 %			At 31 March 2009 %
Equities:	United Kingdom	11.1			9.0
	Continental Europe	19.0			23.6
	North America	28.2			28.1
	China	8.9			5.0
	Asia Pacific	7.5			6.0
	Emerging Markets	14.7			14.4
	Japan	3.9			5.7
Total equities		93.3			91.8
Sterling denominated bonds		0.7			0.3
Euro denominated bonds		0.2			0.2
Brazilian real denominated bonds		4.7			5.1
Net liquid assets		1.1			2.6
Total assets (before deduction of loans and debentures)		100.0			100.0

SCOTTISH MORTGAGE INVESTMENT TRUST PLC

THIRTY LARGEST EQUITY HOLDINGS AND EQUITY PERFORMANCE at 31 March 2010  (unaudited)
Name	Business	Fair value 31 March 2010 £'000	% of total assets	Performance †		Contribution to absolute performance %	Fair value 31 March 2009 £'000
				Absolute %	Relative %
Amazon.com	Online retailer	120,009	5.6	75.4	18.2	3.6	62,512
Petrobras	Oil producer	108,260	5.0	56.2	5.3	4.7	87,056
Banco Santander	Banking	84,691	3.9	95.3	31.6	4.6	34,179
Atlas Copco	Engineering	83,831	3.9	104.5	37.8	5.7	60,044
Baidu.com	Online search engine	77,278	3.6	220.7	116.2	2.6	5,357
Nintendo	Games consoles and software	71,659	3.3	13.1	(23.8)	(0.1)	49,315
Vale (CVRD)	Iron ore and nickel mining	58,268	2.7	138.4	60.7	4.4	41,632
Google	Online search engine	47,770	2.2	54.0	3.8	2.1	44,751
PPR	Luxury goods producer and    retailer	47,517	2.2	104.9	38.1	1.9	18,132
Deere	Farm machinery	47,030	2.2	74.2	17.4	1.8	27,478
Walgreen	Pharmacy chain	43,022	2.0	36.8	(7.8)	1.1	31,826
Standard Chartered	Banking	42,768	2.0	112.7	43.3	2.3	20,617
Taiwan    Semiconductor    Manufacturing	Semi-conductor manufacturer	40,303	1.9	14.7	(22.7)	0.5	22,523
Berkshire    Hathaway	Insurance	37,503	1.7	36.2	(8.2)	0.8	27,523
Progressive Ohio	Property and casualty    insurance	37,106	1.7	35.3	(8.8)	0.8	27,640
KGHM	Copper mining	34,170	1.6	1.8*	(9.7)*	0.1*	-
New Oriental    Education &    Technology	Education and training	34,118	1.6	34.5*	16.4*	0.5*	-
Tencent Holdings	Internet service portal	30,900	1.4	155.3	72.1	1.2	7,566
ABB	Electronic and electrical equipment	30,747	1.4	51.4	2.0	0.8	18,094
Meggitt	Aerospace equipment and    systems	30,731	1.4	146.5	66.2	1.7	11,542
First Solar	Solar energy technology	30,640	1.4	(12.7)	(41.2)	(0.5)	25,693
Sandvik	Engineering	30,322	1.4	119.9	48.2	3.4	37,111
Rockwell    Automation	Industrial automation    providers	29,708	1.4	149.8	68.4	1.8	12,167
Brown-Forman	Wine and spirits producer	29,384	1.4	47.6	(0.5)	0.7	20,254
Schlumberger	Oil services	29,280	1.3	50 .0	1.1	1.3	28,276
Apple	Computer hardware    manufacturer	28,323	1.3	111.1	42.3	1.1	7,019
Australia and    New Zealand    Banking	Banking	27,916	1.3	30.4*	16.3*	0.2*	-
Telecomunikacja     Polska	Fixed and mobile telecoms	26,050	1.2	2.3*	(9.2)*	-*	-
Wal Mart Stores	General retailer	25,658	1.2	12.5*	(14.8)*	0.1*	-
Richemont	Luxury goods	25,553	1.2	136.5	59.4	1.3	10,903
		1,390,515	64.4				739,210

^† Absolute and relative performance has been calculated on a total return basis over the period 1 April 2009 to
   31 March 2010.  Absolute performance is in sterling terms; relative performance is against the benchmark: FTSE

   All World Index (in sterling terms).

* Figures relate to part-period returns where the equity has been purchased during the period.

Source: Baillie Gifford & Co/StatPro

Past performance is not a guide to future performance.

 SCOTTISH MORTGAGE INVESTMENT TRUST PLC

NOTES

1.	The financial statements for the year to 31 March 2010 have been prepared on the basis of the accounting policies set out in the Company's Annual Financial Statements at 31 March 2009. The Directors consider the Company's functional currency to be sterling as the Company's shareholders are predominantly based in the UK and the Company is subject to the UK's regulatory environment.
								2010									2009
								£'000									£'000
2.	Income
	Income from investments and interest receivable							48,561									54,363
	Other income							613									3,107
								49,174									57,470
3.	Recovered VAT
	In 2007 the European Court of Justice ruled that investment trust management fees should be exempt from VAT. During the year to 31 March 2009, in respect of the periods 1990 to 1996 and from 2000 to 2007 the Company received a reimbursement of £5,666,000 which has been allocated to revenue and capital in the manner in which it had originally been charged, plus £1,910,000 of interest thereon.
							2010 £'000								2009 £'000
4.	Net return per ordinary share
	Revenue return						30,200								34,571
	Capital return						828,899								(746,866)
	Total return						859,099								(712,295)
	Weighted average number of ordinary shares						270,102,144								272,833,733
	Net return per ordinary share figures are based on the above totals of revenue and capital and the weighted average number of ordinary shares during each period. There are no dilutive or potentially dilutive shares.
		2010				2009				2010 £'000						2009 £'000
5.	Ordinary Dividends
	Amounts recognised as distributions in the period:
	Previous year's final (paid 1 July 2009)	5.50p				5.30p				14,955						14,521
	Interim (paid 13 November 2009)†	5.50p				6.80p				14,889						18,530
		11.00p				12.10p				29,844						33,051
	We also set out below the total dividends paid and proposed in respect of the financial year, which is the basis on which the requirements of section 842 of the Income and Corporation Taxes Act 1988 are considered.  The revenue available for distribution by way of dividend for the year is £30,200,000 (2009- £34,571,000).

SCOTTISH MORTGAGE INVESTMENT TRUST PLC

NOTES (Ctd)

		2010			2009					2010 £'000				2009 £'000
5.	Ordinary Dividends (Ctd)
	Dividends paid and proposed in the period:
	Interim dividend per ordinary share (paid 13 November 2009) †	5.50p			6.80p					14,889				18,530
	Proposed final dividend per ordinary share (payable 1 July 2010)	5.80p			5.50p					15,052				14,965
	Adjustment to the previous year's final dividend re shares bought back									(10)				-
		11.30p			12.30p					29,931				33,495
	† The interim dividend for the year ending 31 March 2009 includes a non-recurring 1.5p per share.
	The final dividend was declared after the period end date and has therefore not been included as a liability in the balance sheet. If approved the final dividend will be paid on 1 July 2010 to all shareholders on the register at the close of business on 4 June 2010.  The ex-dividend date is 2 June 2010.
6.	The bank loans falling due within one year comprise US$99 million, ¥8,500 million and CHF60.5 million (2009 - US$99 million). There were no bank loans falling due in more than one year at 31 March 2010. (2009 - ¥8,500 million and CHF60.5 million drawn down under a facility which is repayable June 2010). During the year a bank loan of US$99 million was repaid and a bank loan of US$99 million was drawn down.
7.	The fair value of borrowings at 31 March 2010 was £356,653,000 (2009 - £353,959,000). Net asset value per share (after deducting borrowings at fair value) was 692.8p (2009 - 383.8p).
								2010 Number							2009 Number
8.	Share capital: Ordinary shares of 25p each
	Allotted, called-up and fully paid					259,519,897								272,089,897
	Treasury shares					24,826,279								12,256,279
	Total					284,346,176								284,346,176
	The Company's authority permits it to hold shares bought back 'in treasury'. Such treasury shares may be subsequently either sold for cash (at, or at a premium to, net asset value per ordinary share) or cancelled.  In the year to 31 March 2010 a total of 12,570,000 (2009 - 1,900,000) ordinary shares with a nominal value of £3,142,500 (2009 - £475,000) were bought back at a total cost of £69,684,000 (2009 - £10,761,000) and held in treasury.  At 31 March 2010 the Company had authority to buy back a further 28,365,043 ordinary shares.

SCOTTISH MORTGAGE INVESTMENT TRUST PLC

NOTES (Ctd)

9.	The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 March 2010. The financial information for 2009 is derived from the statutory accounts for 2009 which have been delivered to the Registrar of Companies.  The Auditors have reported on the 2009 accounts, their report was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985.  The statutory accounts for 2010 are unaudited, however it is expected that the Auditors will issue an unqualified opinion. The statutory accounts for 2010 will be finalised on the basis of the financial information presented in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.
10.	The Report and Accounts will be available on the Managers' website www.scottishmortgageit.com on or around 25 May 2010.
	None of the views expressed in this document should be construed as advice to buy or sell a particular investment.

 

END

 

 

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