Half Yearly Report

RNS Number : 4082M

Witan Investment Trust PLC

16 August 2011

 



WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

HIGHLIGHTS

·    During the first half of 2011, the Company's Net Asset Value total return was +3.6% compared with a benchmark return of +3.0% for the same period - a relative outperformance of 0.6%.

·    Eight out of the twelve external managers in place at the end of 2010 outperformed their respective benchmarks during the period.

·    An interim dividend of 5.45p (2010: 4.4p) per ordinary share is declared, being 50% of the total payment (10.9p) made in respect of 2010. This represents a rebalancing between the first and second interim dividend payments, which has the effect of putting more of the dividend in shareholders' hands earlier, so the rise should not be extrapolated to the full year dividend.

·    Gearing was increased from 5.4% at the year end to 9.3% at 30 June 2011, as opportunities presented themselves.

Page 2 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

FINANCIAL HIGHLIGHTS

Corporate Key Performance Indicators
	(Unaudited) 30 June  2011	Change since 31 December 2010	(Unaudited) 30 June 2010	(Audited) 31 December 2010
Share price	522.0p	1.1%	419.5p	516.5p
Net asset value per ordinary share (debt at par    value)	598.9p	2.5%	487.3p	584.4p
Net asset value per ordinary share (debt at fair    value)	592.5p	2.5%	480.7p	578.1p
Dividends per ordinary share	5.45p		4.4p	10.9p
Discount (debt at par value)	12.8%		13.9%	11.6%
Discount (debt at fair value)	11.9%		12.7%	10.7%
Share buy-backs (A)	1.2%		3.0%	4.0%
Total expense ratio including performance    fees(B)	0.45%		0.52%	1.07%
Total expense ratio excluding performance    fees (B)	0.36%		0.42%	0.81%
Number of private investors (C)	35,077		38,389	36,595

(A)	The percentage of the ordinary share capital in issue at the previous year end that was bought back during the period.
(B)	The total of the management fees and other administrative expenses (excluding the expenses of the subsidiary company) as a percentage of the average of shareholders' funds at the beginning and end of the period.
(C)	The sum of the number of accounts on the Company's register of members and the number of accounts in Witan Wisdom and Jump.

Performance
Total Returns to 30 June 2011	6 months return	1 year return	3 years return	5 years return
Total shareholder return (D)	2.4%	27.3%	34.9%	41.5%
Net asset value total return (E)	3.6%	25.8%	34.0%	41.2%
Benchmark (F)	3.0%	23.5%	27.1%	32.6%
FTSE All-Share Index	3.0%	25.6%	21.0%	24.6%
FTSE World (ex UK) Index	2.6%	22.1%	31.2%	39.3%

(D)	The movement in the ordinary share price adjusted to include the notional reinvestment of dividends.
(E)	The movement in the net asset value per share adjusted to include the notional reinvestment of dividends.
(F)	Since 1 October 2007 the benchmark has been a composite of four indices:  the FTSE All-Share Index 40%, the FTSE All-World North America Index 20%, the FTSE All-World Europe (ex UK) Index 20% and the FTSE All-World Asia Pacific Index 20%.  From 1 September 2004 to 30 September 2007 the benchmark comprised the FTSE All-Share Index 50% and the FTSE World (ex UK) Index 50%.
Source:  Datastream and Lipper (except the net asset value total return over 6 months and 1 year).

Page 3 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

OTHER FINANCIAL HIGHLIGHTS
	(Unaudited) 30 June 2011	Change since 31 December 2010	(Unaudited) 30 June 2010	(Audited) 31 December 2010
Net assets	£1,156m	1.2%	£962m	£1,142m
Number of ordinary shares in issue	193,101,000	(1.2)%	197,385,220	195,375,220
Revenue return per ordinary share	7.68p		6.32p	9.45p
Gearing*	9.3%		6.7%	5.4%

* The total market value of the investments less shareholders' funds as a percentage of shareholders' funds. 

PORTFOLIO INFORMATION

Portfolio by geographical classification as at 30 June 2011
United Kingdom	43.5%
Continental Europe	19.2%
North America	18.8%
Pacific	10.7%
Other countries	5.8%
Japan	1.7%
Cash	0.3%
	----------
	100.0%
	======

Page 4 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

INTERIM MANAGEMENT REPORT

Market Background

Markets were faced with many unexpected events during the first half of the year, including the human and economic consequences of the Japanese earthquake, a sharp rise in the oil price and renewed concerns about the stability of the European banking sector, as a result of a spreading erosion of confidence in the ability of European governments to repay their debts.

These factors produced an unwelcome combination of weaker economic growth and higher inflation, presenting central banks with a dilemma - whether to seek the maintenance of economic growth as a priority or to combat the rise in inflation by lifting interest rates. Emerging markets, where growth remains stronger than in developed economies, pursued tighter policies to prevent their economies from overheating. Amongst the mature economies, the European Central Bank has tightened monetary policy, raising rates to confront rising inflation, despite the economic woes of some of the Euro currency zone's members.

Markets spent the first half of 2011 pulled in different directions, with these macro-economic factors contrasting with the generally positive tone of corporate earnings statements. In the end, global equity markets ended June with modest year-to-date gains.

Portfolio Changes

After the manager changes made during 2010, which were driven by the adoption of more active stock-picking approach to equity markets, there were few changes during the first half of 2011. A strategic decision was made to reduce the allocation to specialist European managers, which saw the closure of the small and specialised portfolio managed by Varenne, after a successful three years.

The portfolio of direct holdings, investing in investment companies mainly in specialist asset classes out of the equity mainstream, was increased from 6.5% of assets to 9% at the end of June. The position in Electra Private Equity was increased, through further purchases of its convertible bond, while the holding in 3i Group was doubled, after a poorly-presented/received trading statement created a value opportunity. New holdings were taken in the Edinburgh Dragon convertible bond and in Princess Private Equity, a private equity trust trading on a wide discount.

Investment Performance

It is encouraging that after all the tergiversations in the markets during the period, a positive absolute return was achieved on the Company's assets, which was also better than the return on our published benchmark. The NAV total return during the first half was +3.6%, which compares favourably with the 3.0% total return on our benchmark. The portfolio total return before costs was 3.9% in the first half of the year (0.9% ahead of the benchmark).

The majority of our managers (8 managers, responsible for 60% of assets) outperformed their individual benchmarks. Those which underperformed for the half year saw improved performance between the first and second quarters. This commentary is not intended to imply that such short periods are appropriate for judging performance but highlights the resilience of the multi-manager structure in delivering stable returns even during periods of financial turbulence, as well as the sound overall performance of the current list of managers.

Page 5 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

INTERIM MANAGEMENT REPORT, continued

Use of derivatives

There were no futures positions outstanding at the end of the period. However, investments were made in European equity futures in January and in Japan (a market to which Witan had little exposure) following the earthquake. These were sold for a moderate gain during the first half.

Gearing

The Company has structural borrowings of £110 million, amounting to 9.5% of net assets. In addition, a £50 million multi-currency facility was agreed in December 2010, to provide additional tactical flexibility in managing the Company's assets. £40 million of this facility was drawn down during the first three months of the year, for investment in market opportunities as they presented themselves. £35 million remained drawn under this facility at the end of June.

Gearing, having been reduced to 5.4% at the end of 2010, following the autumn rally in equity markets, was gradually raised during the first half of 2011, as the extended period of range-trading in markets presented a number of opportunities to increase exposure. Taking account of cash balances at the end of June, gearing was 9.3%, which represented a balance between the value we perceived in equity markets and the prevailing uncertainties over the outlook for growth, inflation and budget deficits in a number of regions in the world. The increased borrowings were principally allocated to equities outside the UK.

Expenses

Expenses declined in the first half of the year, owing to a reduction in marketing costs and in the legal and other costs associated with 2010's manager changes and savings plan administrator move. These cost reductions were offset by higher investment management fees. Base management fees rose by 13.5% year on year, less than the rise in shareholders' funds. Performance fees accrued for the period were £1 million, similar to the figure for the first half of 2010.

The total expense ratio ("TER") for the six months was 0.45%, down from 0.52% for the first half of 2010. Without performance fees, the TER was 0.36% for the first half of 2011, down from 0.42% for 2010.

Investment Income

There has been a significant further recovery in global dividend payouts this year, together with a return of BP to the dividend list. Our portfolio enjoyed good earnings progression, with revenue earnings per share rising 22% compared with the first half of 2010, to 7.68p. If this rate of increase is maintained for the full year, last year's gap between earnings and dividends paid out (which was funded by drawing from revenue reserves) would be closed. Although it is too soon to be sure that this will be achieved, the strength of the trend to date underscores the Board's confidence (expressed in the 2010 Annual Report) that the revenue shortfall in 2010 was exacerbated by temporary factors and likely to prove transitory.

Dividend

The Board has decided to rebalance the two dividend payments during the year, setting the value of the first interim payment (paid during September) to be 50% of the previous year's total payment. Accordingly, the first interim dividend will be 5.45p (2010: 4.4p), which is half the 10.9p total payment made in respect of 2010. Most of the increase reflects the rebalancing referred to, so the percentage rise should not be extrapolated to the full year. In the past, the first payment was close to 40% of the previous year's total so the change will have the effect of paying out a greater proportion of the year's dividends earlier.

Page 6 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

INTERIM MANAGEMENT REPORT, continued

This dividend will be paid on 16 September 2011 to holders on the register on 26 August 2011.

The second payment, which is normally announced in March, will be the difference between the total dividend declared for the year and the first payment of 5.45p.

The full year's dividend is intended to be consistent with the Company's policy to increase the total annual dividend at least in line with inflation. The Company has a 36 year record of dividend increases, including the recent downturn when market dividends were cut significantly.

Share Buy-backs

The Company has continued with its established policy of repurchasing shares at a discount, with the objective of achieving a sustainable discount of 10% or less, relative to the net asset value excluding income, taking debt at fair value. This policy is accretive to the net asset value per share and reduces the volatility in the discount as well as its level, relative to what would prevail in the absence of the policy. During the period, 1.2% of the shares were purchased for cancellation, adding 0.76p (approximately 0.13%) to the net asset value per share.  The discount widened during the first quarter but improved in the second, with the discount trading within a narrower range than in 2010. The average discount this year has been 10.9%, which is also below the average in 2009 and 2010.

Jump Savings/Witan Wisdom

The Coalition Government's decision to create a Junior ISA account as the successor to the Child Trust Fund (which it closed to new subscribers last year) is a potentially significant benefit for families wishing to make savings provision for their children. Witan intends to offer a Junior ISA through the Jump! Savings brand which is managed by our subsidiary Witan Investment Services. Investors may pre-register (at www.witan.com) to receive information about the account when details are finalised. There is no obligation implied by this, it simply means information will be sent when it is available, which people are free to respond to or ignore. For children with existing Child Trust Fund accounts, parents will be able to add to their investment (within the statutory limits).  

Outlook

In an echo of the early summer of 2010, this year has been dogged by spreading fears that some European governments would be unable to service their debts without external help. Worldwide, there was a slowdown in growth, accompanied by concerns that this might intensify into a renewed recession. Added to this, commodity prices rose, driven by strong growth in developing economies and political instability in some oil exporting countries. The potential combination of weak growth, rising inflation and higher interest rates presented an unattractive prospect for investors.

With such a list of worries it is perhaps a surprise that the equity market reaction was initially muted and less severe than the falls seen in May and June 2010. In late July, the markets' patience appeared to snap, in reaction to what was seen as another half-hearted attempt to stem the spread of sovereign solvency problems within Europe and after wrangles in the US Congress over fiscal policy had raised the spectre of a default on the US National Debt. The latter episode catalysed Standard & Poor's into reducing the US's credit rating from AAA to AA+, although other agencies are reserving judgment.

Page 7 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

INTERIM MANAGEMENT REPORT, continued

Confidence was especially rattled by concerns that political leadership on both sides of the Atlantic did not appear to be up to the demands being placed on it, resulting in markets reacting abruptly to economic factors which were largely already known. Global equity markets experienced falls of over 10% during the two weeks spanning the end of July, amidst volatile trading. In response, the European authorities have provided more support for Spain and Italy, two relatively large economies which had begun to be drawn into the vortex which had previously affected Greece, Ireland and Portugal. In the US, the Federal Reserve has further underlined its commitment to  keep interest rates at low levels for an extended period, to help foster recovery.

With neither the European sovereign debt issue nor further agreement on addressing the US's long-term budget problems amenable to rapid solutions, febrile markets will be sensitive to near-term economic indicators, in particular the evolution of economic growth following the weaker rates of activity in the second quarter. With the tightening cycle in developing economies well advanced and a waning inflationary impulse from commodities, some of the headwinds experienced during the first half of the year appear to be past their worst.

After recent market falls, residual complacency has been replaced by fear, possibly exaggerated by thin trading conditions.  The key tactical question is whether the shock to market confidence from inept European and US handling of their debt problems can be contained before it has a serious impact on the wider economy.  If this can be achieved, global equity markets appear increasingly attractive, in absolute valuation terms and relative to the low returns available on cash or government bonds, investments traditionally (though not entirely correctly) regarded as low risk.

For and on behalf of the Board

Harry Henderson

Chairman

15 August 2011

Page 8 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

REGULATORY DISCLOSURES

Related Party Transactions

During the first six months of the current financial year, no transactions with related parties have taken place which have materially affected the financial position or performance of the Company during the period. Details of related party transactions are contained in the Company's Annual Report for the year ended 31 December 2010.

Principal Risks and Uncertainties

The principal risks and uncertainties associated with the Company's business can be divided into various areas:

• a fall in equity prices

• the application of investment strategy: country, currency, industrial sector, stock selection, choice of investment manager

• the appropriateness of the corporate objective and strategy

• operational and regulatory risks.

Information on these risks is given in the Business Review and in the Notes to the Financial Statements in the Company's Annual Report for the year ended 31 December 2010.

In the view of the Board these principal risks and uncertainties are applicable to the remaining six months of the financial year as they were to the six months under review.

Directors' Responsibility Statement

The Directors confirm that, to the best of their knowledge:

(a) the condensed set of financial statements has been prepared in accordance with IAS 34;

(b) the interim management report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R (an indication of important events that have occurred during the first six months of the financial year and a description of the principal risks and uncertainties for the remaining six months of the financial year); and

(c) the interim management report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).

For and on behalf of the Board

Harry Henderson

Chairman

15 August 2011

Page 9 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

Investment Managers:  Assets under Management and Investment Performance as at 30 June 2011

Performance For the half year ended 30 June 2011 and from inception to 30 June 2011 Investment Manager	Value of funds under management £m at 30.06.11	% of Witan's funds under management at 30.06.11*	Performance in the period 01.01.11 to 30.06.11 (%)	Benchmark Performance 01.01.11 to 30.06.11 (%)	Performance in the period since inception to 30.06.11 (%) (annualised)	Benchmark Performance since inception to 30.06.11 (%) (annualised)
Artemis Investment Management (UK)	104.8	8.2	4.9	3.0	9.7(E)	3.1(E)
Lindsell Train (UK)	127.9	10.0	6.3	3.0	24.2(G)	17.8(G)
NewSmith Asset Management (UK)	118.5	9.3	0.7	3.0	14.1 (G)	17.8(G)
Henderson Global Investors (UK smaller)	27.9	2.2	7.4	5.7	13.6(A)	12.1(A)
Southeastern Asset Management (Global)	157.9	12.4	3.8	2.3	8.6(B)	9.4(B)
MFS International (Global)	119.1	9.3	5.4	2.3	11.8(B)	9.4(B)
Thomas White International (Global)	126.7	9.9	4.9	2.3	6.1(D)	4.5(D)
Veritas Asset Management (Global)	113.0	8.8	6.8	2.4	11.3(H)	8.4(H)
Marathon Asset Management (Pan-Europe)	141.3	11.0	5.4	7.0	19.0(F)	19.7(F)
Comgest (Asia Pacific excluding Japan)	78.5	6.1	-2.7	-1.2	10.4(C)	10.4(C)
Trilogy Global Advisors (Emerging Markets)	48.8	3.8	-6.0	-1.5	-2.0(I)	2.1(I)
Witan Growth Opportunities  (directly held)	115.1	9.0	2.5	3.0	4.6†	7.6†

Notes:

*	The figures exclude the cash balances held centrally by Witan and the unquoted investments.
	(A) from 31.08.04	(C) from 31.07.07	(E) from 06.05.08	(G) from 01.09.10	(I) from 09.12.10
	(B) from 30.09.04	(D) from 28.09.07	(F) from 23.07.10	(H) from 11.11.10
†	The CEO Growth Opportunities Portfolio comprises holdings selected by the CEO; the first investments were made in March 2010.
Source:  The WM Company.

Page 10 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

Consolidated Statement of Comprehensive Income

	(Unaudited)   Half year ended   30 June 2011			(Unaudited)   Half year ended   30 June 2010			(Audited) Year ended 31 December 2010
	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000	Revenue return £'000	Capital return £'000	Total £'000
Investment income	19,564	-	19,564	17,458	-	17,458	28,021	-	28,021
Other income	653	-	653	729	-	729	1,365	-	1,365
Gains/(losses) on investments    held at fair value through profit    or loss (Note 2)	-	29,757	29,757	-	(28,688)	(28,688)	-	169,686	169,686
	----------	----------	----------	----------	----------	----------	----------	----------	----------
Total income/(loss)	20,217	29,757	49,974	18,187	(28,688)	(10,501)	29,386	169,686	199,072
Expenses
Management and performance    fees	(413)	(2,249)	(2,662)	(364)	(2,093)	(2,457)	(776)	(5,161)	(5,937)
Write-back of prior years' VAT	-	-	-	-	-	-	75	-	75
Other expenses	(2,720)	(315)	(3,035)	(3,004)	(148)	(3,152)	(6,195)	(387)	(6,582)
	----------	----------	----------	----------	----------	----------	----------	----------	----------
Profit/(loss) before finance costs    and taxation	17,084	27,193	44,277	14,819	(30,929)	(16,110)	22,490	164,138	186,628
Finance costs	(1,071)	(3,087)	(4,158)	(1,025)	(2,948)	(3,973)	(2,046)	(5,888)	(7,934)
	---------	---------	---------	---------	---------	---------	---------	---------	---------
Profit/(loss) before taxation	16,013	24,106	40,119	13,794	(33,877)	(20,083)	20,444	158,250	178,694
Taxation	(1,103)	-	(1,103)	(1,163)	-	(1,163)	(1,715)	-	(1,715)
	----------	----------	----------	----------	----------	----------	----------	----------	----------
Profit/(loss) for the period and total comprehensive income	14,910	24,106	39,016	12,631	(33,877)	(21,246)	18,729	158,250	176,979
	======	======	======	======	======	======	======	======	======
Earnings/(loss) per ordinary    share (Note 3)	7.68p	12.41p	20.09p	6.32p	(16.95)p	(10.63)p	9.45p	79.87p	89.32p
	======	======	======	======	======	======	======	======	======

The total columns of this statement represent the Group's Consolidated Statement of Comprehensive Income, prepared in accordance with IFRS. 

The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.  All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of Witan Investment Trust plc, the parent company.  There are no minority interests.

The Group does not have any other comprehensive income and hence the net profit/(loss) for the period as disclosed above is the same as the Group's total comprehensive income.

Page 11 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

Consolidated Statement of Changes in Equity

			(Unaudited) Half year ended 30 June 2011
		Ordinary share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 December 2010		48,844	16,237	44,982	980,884	50,818	1,141,765
Total comprehensive income:   Profit for the period		-	-	-	24,106	14,910	39,016
Transactions with owners,   recorded directly to equity:   Ordinary dividend paid		-	-	-	-	(12,654)	(12,654)
Buy-backs of ordinary shares	(Note 5)	(569)	-	569	(11,647)	-	(11,647)
		----------	-----------	----------	-------------	-----------	------------
At 30 June 2011		48,275	16,237	45,551	993,343	53,074	1,156,480
		======	======	======	========	======	=======

			(Unaudited) Half year ended 30 June 2010
		Ordinary share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 December 2009		50,866	16,237	42,960	859,595	53,161	1,022,819
Total comprehensive income:  (Loss)/profit for the period		-	-	-	(33,877)	12,631	(21,246)
Transactions with owners,   recorded directly to equity:   Ordinary dividend paid		-	-	-	-	(12,385)	(12,385)
Buy-backs of ordinary shares	(Note 5)	(1,520)	-	1,520	(27,379)	-	(27,379)
		----------	-----------	----------	-------------	-----------	------------
At 30 June 2010		49,346	16,237	44,480	798,339	53,407	961,809
		======	======	======	========	======	=======

			(Audited) Year ended 31 December 2010
		Ordinary share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 31 December 2009		50,866	16,237	42,960	859,595	53,161	1,022,819
Total comprehensive income:   Profit for the year		-	-	-	158,250	18,729	176,979
Transactions with owners,   recorded directly to equity:   Ordinary dividends paid		-	-	-	-	(21,072)	(21,072)
Buy-backs of ordinary shares	(Note 5)	(2,022)	-	2,022	(36,961)	-	(36,961)
		------------	------------	------------	-------------	---------	------------
At 31 December 2010		48,844	16,237	44,982	980,884	50,818	1,141,765
		=======	======	=======	========	=====	=======

Page 12 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

Consolidated Balance Sheet

	(Unaudited) 30 June  2011 £'000	(Unaudited) 30 June 2010 £'000	(Audited) 31 December 2010 £'000
Non current assets
Investments held at fair value through profit or loss	1,263,586	1,026,577	1,203,675
	--------------	--------------	-------------
Current assets
Other receivables	6,762	7,986	4,986
Cash and cash equivalents	40,141	47,087	52,510
	--------------	--------------	-------------
	46,903	55,073	57,496
	--------------	--------------	-------------
Total assets	1,310,489	1,081,650	1,261,171
	--------------	--------------	-------------
Current liabilities
Other payables	(8,770)	(9,635)	(9,160)
Bank loan	(35,000)	-	-
	--------------	--------------	-------------
	(43,770)	(9,635)	(9,160)
	--------------	--------------	-------------
Total assets less current liabilities	1,266,719	1,072,015	1,252,011
	--------------	--------------	--------------
Non current liabilities
At amortised cost:
8½ per cent. Debenture Stock 2016	(44,581)	(44,589)	(44,589)
6.125 per cent. Secured Bonds due 2025	(63,103)	(63,062)	(63,102)
3.4 per cent. cumulative preference shares of £1	(2,055)	(2,055)	(2,055)
2.7 per cent. cumulative preference shares of £1	(500)	(500)	(500)
	--------------	--------------	--------------
	(110,239)	(110,206)	(110,246)
	--------------	--------------	--------------
Net assets	1,156,480	961,809	1,141,765
	========	========	========
Equity attributable to equity holders
Ordinary share capital	48,275	49,346	48,844
Share premium account	16,237	16,237	16,237
Capital redemption reserve	45,551	44,480	44,982
Retained earnings:
Other capital reserves	993,343	798,339	980,884
Revenue reserve	53,074	53,407	50,818
	--------------	--------------	-------------
Total equity	1,156,480	961,809	1,141,765
	========	========	========
Net asset value per ordinary share (Note 6)	598.9p	487.3p	584.4p
	========	========	========

Page 13 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

Consolidated Cash Flow Statement

	(Unaudited) Half Year ended 30 June 2011 £'000	(Unaudited) Half Year ended 30 June 2010 £'000	(Audited) Year ended 31 December 2010 £'000
Operating activities
Profit/ (loss) before taxation	40,119	(20,083)	178,694
Interest paid	4,082	3,866	7,909
(Gains)/losses on investments held at fair value through profit or loss	(29,757)	28,688	(169,686)
Net (purchases)/sales of investments held at fair value through profit or loss	(30,695)	19,750	33,295
(Increase)/decrease in other receivables	(1,504)	(351)	397
Increase/(decrease) in other payables	177	(117)	(76)
Net gain from futures contracts	946	758	8,984
	-----------	-----------	-----------
Net cash (outflow)/ inflow from operating     activities before interest and taxation	(16,632)	32,511	59,517
Interest paid	(4,082)	(3,866)	(7,909)
Amortisation of debt issue costs	(7)	40	80
Tax on overseas income	(1,523)	(1,325)	(1,877)
	----------	----------	------------
Net cash (outflow)/ inflow from operating activities	(22,244)	27,360	49,811
	----------	----------	------------
Financing activities
Equity dividends paid	(12,654)	(12,385)	(21,072)
Buy-backs of ordinary shares	(12,085)	(27,067)	(36,561)
Drawdown of bank loans	35,000	-	-
	-----------	-----------	------------
Net cash inflow/(outflow) from financing activities	10,261	(39,452)	(57,633)
	-----------	-----------	------------
Decrease in cash and cash equivalents	(11,983)	(12,092)	(7,822)
Cash and cash equivalents at the start of the period	52,510	58,638	58,638
Effect of foreign exchange rate changes	(386)	541	1,694
	------------	------------	------------
Cash and cash equivalents at the end of the period	40,141	47,087	52,510
	=======	=======	=======

Page 14 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

Notes to the Financial Statements

1	Basis of preparation The condensed set of financial statements for the half year ended 30 June 2011 has been prepared on the basis of the accounting policies set out in the consolidated financial statements for the year ended 31 December 2010.
2	Transaction costs The gains/(losses) on investments held at fair value through profit or loss include purchase transaction costs of £803,000 (half year ended 30 June 2010: £598,000; year ended 31 December 2010: £1,525,000) and sale transaction costs of £233,000 (half year ended 30 June 2010: £283,000; year ended 31 December 2010: £672,000).  The purchase transaction costs comprise mainly stamp duty and commissions.  The sale transaction costs comprise mainly commissions.
3	Earnings/(loss) per ordinary share The earnings per ordinary share figure is based on the net profit for the half year of £39,016,000 (half year ended 30 June 2010: loss of £21,246,000; year ended 31 December 2010: gain of £176,979,000) and on 194,165,913 ordinary shares (half year ended 30 June 2010: 199,775,901; year ended 31 December 2010: 198,139,038), being the weighted average number of ordinary shares in issue during the period. The earnings per ordinary share figure detailed above can be further analysed between revenue and capital, as below.
		(Unaudited) Half year ended 30 June 2011 £'000	(Unaudited) Half year ended 30 June 2010 £'000	(Audited) Year ended 31 December 2010 £'000
	Net revenue profit	14,910	12,631	18,729
	Net capital profit/(loss)	24,106	(33,877)	158,250
		--------------	--------------	--------------
	Net total profit/(loss)	39,016	(21,246)	176,979
		========	========	========
	Weighted average number of ordinary shares in issue during the period	194,165,913	199,775,901	198,139,038
		Pence	Pence	Pence
	Revenue earnings per ordinary share	7.68	6.32	9.45
	Capital earnings/(loss) per ordinary share	12.41	(16.95)	79.87
		--------------	--------------	--------------
	Total earnings/(loss) per ordinary share	20.09	(10.63)	89.32
		========	========	========

Page 15 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

Notes to the Financial Statements (continued)

4	Interim dividend The directors have declared an interim dividend of 5.45p (2010: 4.40p) per ordinary share, payable on Friday 16 September 2011 to shareholders registered on Friday 26 August 2011.  The shares will be quoted ex-dividend on 24 August 2011.
5	Ordinary share capital At 30 June 2011 there were 193,101,000 ordinary shares in issue (30 June 2010: 197,385,220; 31 December 2010: 195,375,220). During the half year ended 30 June 2011 the Company bought 2,274,220 of its own issued ordinary shares in the market for cancellation (half year ended 30 June 2010: 6,079,060; year ended 31 December 2010: 8,089,060). The cost of the share buy-backs, including stamp duty, amounted to £11,647,000 (half year ended 30 June 2010: £27,379,000; year ended 31 December 2010: £36,961,000).
6	Net asset value per ordinary share The net asset value per ordinary share is based on the net assets attributable to the equity shareholders of £1,156,480,000 (30 June 2010: £961,809,000; 31 December 2010: £1,141,765,000) and on 193,101,000 (30 June 2010: 197,385,220; 31 December 2010: 195,375,220) ordinary shares, being the number of ordinary shares in issue at the period end.
7	Subsidiary undertaking The Company has an investment in the issued ordinary share capital of its wholly owned subsidiary undertaking, Witan Investment Services Limited, which is registered in England and Wales, operates in the United Kingdom and is regulated by the Financial Services Authority.
8	Segment Reporting As detailed in the Company's Annual Report for the year ended 31 December 2010, geographical segments are considered to be the Group's primary reporting segment and business segments the secondary reporting segment.  The Group has two business segments:  its activity as an investment trust, which is the business of the parent company, and the business of the subsidiary company, Witan Investment Services Limited, which provides management services within the United Kingdom only.  The investment trust is managed by reference to a geographical benchmark, as detailed on page 2 above; the geographical allocation of the portfolio, as at 30 June 2011, is set out on page 3 above.  The schedule on page 9 above summarises the assets under management and investment performance relating to each investment manager.  This information is updated and reviewed regularly for internal management purposes and is essential for assessing the structure of the overall portfolio and the performance of each investment manager.
		Half year ended 30 June 2011		Half year ended 30 June 2010		Year ended 31 December 2010
		Investment trust £'000	Management services £'000	Investment trust £'000	Management services £'000	Investment trust £'000	Management services £'000
	Revenue from external customers	19,769*	448	17,754*	433	28,546*	840
	Carrying amount of assets	1,155,510	970	960,796	1,013	1,140,702	1,063
	*The investment and other income of the parent company.

Page 16 of 16

WITAN INVESTMENT TRUST PLC

Financial Report for the Half Year ended 30 June 2011

Notes to the Financial Statements (continued)

9	Half year accounts The condensed set of financial statements, forming the half year accounts, has been neither audited nor reviewed by the Company's auditors.
10	Comparative information The financial information contained in this half year financial report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The financial information for the half years ended 30 June 2011 and 30 June 2010 has been neither audited nor reviewed by the auditors. The figures and financial information for the year ended 31 December 2010 are extracted from the latest published audited financial statements of the Company and do not constitute the statutory accounts for that year.  The audited financial statements for the year ended 31 December 2010 have been filed with the Registrar of Companies. The report of the independent auditors on those accounts contained no qualification or statement under section 498(2) or section 498(3) of the Companies Act 2006.
Financial report for the half year ended 30 June 2011 The financial report for the half year ended 30 June 2011 will be filed with the UK Listing Authority by 31 August 2011 and will be made available on the Company's website.  Printed copies will be sent to shareholders in September 2011 and will be available thereafter from the Secretary at the Company's registered office, 14 Queen Anne's Gate, London SW1H 9AA.

For further information please contact:

Andrew Bell

Chief Executive Officer

Witan Investment Trust plc

Telephone:  [phone]

James Frost

Marketing Director

Witan Investment Trust plc

Telephone:  [phone]

-  ENDS -

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

 

END

 

 

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