Financial Express (Holdings) Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).


For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 2nd Floor, Golden House, 30 Great Pulteney Street, London, W1F 9NN. Our nominated representative for the purpose of this Act is Kirsty Witter.


We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.


In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.


We store and use information you provide as follows:

  • to present content effectively;
  • to provide you with information, products or services that you request from us or which may interest you, tailored to your specific interests, where you have consented to be contacted for such purposes;
  • to carry out our obligations arising from any contracts between you and us;
  • to enable you to participate in interactive features of our service, when you choose to do so;
  • to notify you about changes to our service;
  • to improve our content by tracking group information that describes the habits, usage, patterns and demographics of our customers.

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.


We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.


The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.


Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.


Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.


If you want more information or have any questions or comments relating to our privacy policy please email in the first instance.

 Information  X 
Enter a valid email address

Independent Inv Tst (IIT)

  Print      Mail a friend

Thursday 24 January, 2008

Independent Inv Tst

Final Results

Independent Investment Trust PLC
24 January 2008


                    Results for the year to 30 November 2007

                                23 January 2008

                            Chairman's Statement

Up until now we have been able to report consistently good results and have
permitted ourselves a little levity in doing so. The figures for the year to 30
November 2007, however, are no laughing matter, but rather justify the warning
that has been prominently displayed in all our reports, that the Company has
been designed to allow an unusually high degree of freedom to exploit the
directors' judgement, and that to the extent that that judgement is flawed
results may be unusually poor.

The 19.6% fall in our net asset value over the year (from 282.6p to 227.1p) was
the more painful for having occurred during a period when the FTSE All Share
Index actually rose by 5.2%.  The NAV total return figures for the year can be
found in the managing director's report. The decline in the NAV was amplified in
the share price by a move over the year from a premium of 3.3% to a discount of

Some element of our difficulties can be ascribed to a natural reaction in
sectors, such as housebuilding, that had performed well over a number of years.
The scale of this reaction was, however, greatly exacerbated by the problems
confronting the banking industry in general, and Northern Rock in particular.
Our failure to foresee these problems left us more exposed to such sectors than
we should have been and meant that the necessary process of retrenchment that
ensued was carried out on relatively unfavourable terms.  In addition to these
problems, we made a number of mistakes in the stocks we chose and had no
exposure to the mining industry, the strong performance of which was an
important contributor to the robust performance of the overall market.

Despite our poor results in the year under review, our longer term performance
remains satisfactory.  Between 18 October 2000 and 30 November 2007, we produced
a NAV total return of 159%, equivalent to a rate of roughly 15% per annum, of
which 2.9% per annum can be offset by RPI inflation.  By comparison, the
notional return available from the FTSE All Share Index over the period amounted
to 39%, or roughly 5% per annum.  It is our view that the best returns from
equity investment are obtained by concentrating on a relatively long time
horizon and being willing to accept disappointing returns over shorter periods -
a familiar refrain from fund managers reporting on disappointing results.

Throughout the first half of our year, it was possible to consider the
performance of the UK economy in isolation and to infer that, while the overall
level of demand was uncomfortably high, a period of judicious monetary
tightening should be capable of engineering a soft landing.  By July, however,
it had become apparent that the problems of the US financial system arising from
imprudent lending decisions had severely affected liquidity in sterling and euro
money markets.  As a direct result of this, Northern Rock found itself having to
draw upon the Bank of England as a lender of last resort, an event that
precipitated a major and general tightening in credit standards.  The immediate
effect of this has already been seen in the downward movement of residential and
commercial property prices and it is widely expected that a further consequence
will be a period of pronounced weakness for consumer expenditure. This
background has been profoundly unhelpful to our portfolio with its heavy
concentration on banks, housebuilders and retailers. We have persisted with our
determination to hold good companies through periods of cyclical weakness, but
we reduced our overall exposure to these obviously vulnerable sectors to reflect
a high level of uncertainty about their immediate prospects.

We have again had an active year. There have been two important consequences of
this activity: a significant increase in our exposure to energy investments and
a move from net borrowings amounting to 15% of shareholders' funds at 30
November 2006 to net cash amounting to 13% of shareholders' funds at 30 November
2007.  There have been no new areas of enthusiasm for us, but we have retained
our loyalty to many of our former favourites, albeit in most cases with lower
absolute levels of exposure. The only foreign currency borrowings at 30 November
2007 were in euros and were matched by a forward contract to purchase euros.  We
have thus eliminated all our foreign currency hedging.

The banking industry and those industries, such as housebuilding and retailing,
that depend upon a ready supply of reasonably priced credit to their customers
for their prosperity are the obvious victims of the evaporation of liquidity in
wholesale money markets, but the scale of the market's devaluation of these
sectors has taken us by surprise. Similarly poor performances were recorded by
our recruitment holdings and our European property holdings, none of which has
yet experienced any significant deterioration in trading.  Indeed, the only area
of our portfolio that has performed with any credit during the year under review
has been energy, and within our energy holdings it has been the offshore
drillers that have stood out as higher than expected oil prices have bolstered
investors' confidence in the durability of the current drilling boom.  Further
comments on performance can be found in the managing director's report.

Earnings per share for the year were 5.36p (4.78p).We are proposing a final
dividend of 3p (2.5p) to make a total for the year of 5p (4.5p), an increase of
11.1%. This is a better outcome than we had expected at the time of the interim
results and reflects the benefits to the income account of a switch from net
borrowings to net cash.

A combination of modestly rising expenses and a steep decline in the value of
our net assets has produced an unwelcome rise in our Total Expense Ratio - from
0.26% of year end shareholders' funds to 0.33%. Despite this, we remain one of
the most economically run companies in the investment trust sector.

We stated last year that we should like to buy in shares should the opportunity
arise to do so at a discount to net asset value. Given that our shares have
recently been selling at a discount, it may surprise you that we have not bought
any in. The main reason for this is a belief that the level of discount at which
one may prudently buy in stock is a function of the liquidity of the stocks in
the underlying portfolio. One of the consequences of the recent market
volatility has been a drying up of liquidity in many small and medium sized
stocks, which has led to our taking a more cautious view than we had originally
hoped of the level of discount at which we would act.

I have to admit that we entered the credit crisis in September on the wrong
foot.  Though our holdings, leaving aside the special case of the banks, had
strong balance sheets, many of their customers were dependent on credit. Where
do we go from here?

One of the consequences of the upheavals in the world banking system seems
likely to be a sharp slowdown in growth in western economies. That this should
be happening at a time when there are still significant inflationary pressures
makes the job of the central banks a difficult one. The Bank of England appears
to recognise the need for lower interest rates, but it remains to be seen
whether the pace of decline will be sufficient to head off the gathering
recessionary forces. The operating environment for many of our companies will be
more difficult than they have experienced for many years and their performance
in this environment will be a function of management quality and balance sheet

In the days immediately following the Northern Rock collapse, we changed course
to the extent of moving from gearing of 18% to net liquidity of 10%.  With
hindsight, we did not go nearly far enough, but the consequences of not having
acted hardly bear thinking about.

Our major position, the 25%+ of funds which we have invested in the energy
sector, is based not on a view of short term movements in the oil price, where
our guess is no better than anybody else's, but on the argument that the chances
of a flattening out and indeed decline in the supply of oil are being
under-estimated, while demand, led by the developing worlds, is likely to
continue to grow. This view is backed by investment in service companies, which
would benefit from an increasingly desperate search for oil in difficult
locations, rather than in oil companies, which will be squeezed by declining
production and rising costs. That is our big positive position at the moment.

For the rest of the portfolio, which the managing director and I chew over
incessantly in an attempt to keep our spirits up, we think that we are invested,
on the whole, in well run companies with good long term prospects, the share
prices of which have in many cases halved or worse to levels which are extremely
low in relation to recent results. They will undoubtedly suffer in the short
term, but should they survive, as we expect they will, they will prove to have
been cheap at current levels.  This is the tune which we whistle in these
difficult days, and we are naive enough to believe it.

Once again, we should like to encourage you to come to the AGM, which is to be
held in the Baillie Gifford offices at Calton Square at 11.00am on 27 March
2008.  It will help our planning if we know how many shareholders are likely to
attend, and I shall be grateful if you will mark the proxy form accordingly and
return it to us.  I look forward to seeing as many of you as possible there.

Managing Director's Report

During the year to 30 November 2007, The Independent Investment Trust produced a
NAV total return of -18%. This is a disappointing outcome, particularly for a
period when theoretical investments in the FTSE All Share Index and The FTSE
World Index would have produced positive total returns of 8.5% and 7.9%.

We drew attention a year ago to the big increase in our energy stake on the back
of growing concerns about the future availability and price of energy.  We made
further additions to this stake in the early part of our year, taking advantage
of a period of temporary weakness in the oil price. Towards the end of the year,
however, the strong underlying performance of our tar sands companies and our
drillers, together with our doubts about the short term sustainability of an oil
price that had risen particularly sharply during the year, caused us to sell all
our tar sands holdings and to reduce our drilling stake. Overall, despite net
sales of £6.7m during the year, the value of our energy stake rose from £40.1m
at 30 November 2006 to £41.4m at 30 November 2007.

We continue to believe that there will be a strong long term demand for offshore
drilling rigs as long as oil prices are expected to remain above $50 in today's
money. We acknowledge, however, that the supply of such rigs is lumpy with the
result that there may well be periods of weakness in rates as new supply is
absorbed by the market. For this reason, we have started to broaden our oilfield
services exposure with the purchase of small holdings in two of the industry's
leading companies: Schlumberger and Halliburton. Their fortunes are related to
the number of rigs in operation rather than the rates commanded by such rigs.

Our Canadian gas companies have been a major disappointment to us, partly
because of the stubborn refusal of the gas price to mirror the strong
performance of the oil price, but also because some of our holdings have
achieved disappointing results from their exploration programmes, which has put
them under financial stress. We are in the process of rationalising our exposure
to this area, in the hope of ending up with a smaller number of holdings in the
more robust companies. Elsewhere in the energy field, we have taken a holding in
CleanEnergyBrazil, a vertically integrated producer of cane sugar and ethanol.
We think the economics of sugar-based ethanol production are attractive at oil
prices well below current levels.

Our willingness to retain a big exposure to the retail industry in the face of a
deteriorating outlook for consumer expenditure has cost us dear in the year
under review: an investment of £29.5m at 30 November 2006 had fallen in value to
£18.8m by 30 November 2007, despite net purchases of £3.1m. Part of this poor
performance is attributable to poor judgement: a short-lived investment in
Sports Direct proved very expensive and our furniture retailers have had a much
worse trading experience than we expected. Our other retail holdings, however,
have all traded at least as well as could be expected in a tough environment,
which gives us great hope for their prospects once the retail market improves,
as we expect it to over the next two to three years. In the meantime, we expect
their competitive position to improve as weaker operators succumb to financial
pressures. In a related area, the sale of our holding in Domino's Pizza on
grounds of price provides a powerful reminder of the difficulties of jobbing in
and out of the shares of inherently strong companies. Even after a steep fall in
recent weeks, the Domino's price has barely returned to the level at which we

Our longstanding enthusiasm for the banking sector has depended on an implicit
assumption that the banking system in Britain and Ireland was in good health.
That a drying up of liquidity in the wholesale market should have precipitated
the collapse of Northern Rock has exposed the naivety of this assumption and
cost us a lot of money, both through the holding we had taken in Northern Rock
itself and through the devaluation of our other holdings in the sector. When the
news broke, we decided to reverse an earlier policy of increasing our exposure
to the sector by making substantial sales. Among the stocks we sold completely
was Anglo Irish, which had been one of our most successful investments. We
continue to have great admiration for the company, but believe that its high
exposure to real estate lending will make life more difficult for it in the
immediate future and affect market sentiment towards its shares. Overall, our
bank holdings fell in value from £25.9m on 30 November 2006 to £16.1m on 30
November 2007 despite net purchases of £1.4m.

The arrival of a year of poor performance from our big housebuilding stake has
been long overdue and this has no doubt contributed to the scale of the decline
being greater than we were prepared for: a position worth £46.3m on 30 November
2006 had fallen in value to £13.4m by 30 November 2007 after net sales during
the year of £17.7m.

For much of our year, it appeared that a steady rise in interest rates would
engineer a soft landing for the British housing market, the persistent buoyancy
of which had become a source of concern to the Bank of England.  Unfortunately,
the shock to confidence provided by the Northern Rock debacle and the subsequent
tightening in mortgage lending standards have increased the probability of a
grim year for housing in 2008. The management teams of our housebuilding
holdings have considerable experience of operating in depressed markets and we
are optimistic that they can bring their companies through a period of falling
house prices in good shape. If we are right about this, there is considerable
upside potential in current share prices once the market starts to look beyond
the immediate trading outlook. In the meantime, we should point out that since
we set up in business in 2000, the sales we have made of housebuilders have
generated some £17m more than our housebuilding purchases.  In other words, it
is still the case that we have benefited hugely from our exposure to the sector.

Recruitment is another sector that has stood us in good stead over the life of
The Independent, but which has been a painful exposure for us in the year under
review: our stake in the sector fell in value from £19.4m on 30 November 2006 to
£7.5m on 30 November 2007 after net sales of £9.4m. The poor performance of the
sector, which really dates from August, can be attributed to growing concerns
about the global economic outlook, to which these companies are particularly
sensitive. The sales we made were all at prices well above those currently
prevailing and we await an opportunity to increase our stake in the sector, for
which we still consider long term prospects to be outstanding.

Our investments in continental European property, all of which are quoted in
London, have performed disappointingly as investors have assumed that the
weakness currently evident in UK property prices will flow through to
continental property prices. It remains to be seen whether this actually
happens, but in the meantime the shares look cheap. In June we took advantage of
a falling share price to buy back a small part of the hugely successful holding
in DTZ we sold out of in the previous year.  This move was premature and we have
since sold the holding at a loss

Elsewhere in the portfolio, Kiln and Herald both lost ground (although Kiln has
since risen strongly in reaction to its agreement to be taken over), while
Intermediate Capital was rewarded for having read the private equity cycle well.
We made good sales of Johnston Press and Sage, but would have done better to
have held onto United Utilities, Wogen and Prodesse.


The following is the unaudited preliminary statement for the year to 30 November
2007 which was approved by the board on 23 January 2007. The directors of The
Independent Investment Trust PLC are recommending to the Annual General Meeting
of the Company to be held on Thursday 27 March 2008 the payment of a final
dividend of 3.00p net (2.50p net last year) per ordinary share, making a total
of 5.00p net (4.50p net last year) per ordinary share for the year ended 30
November 2007.

                                INCOME STATEMENT

                                              For the year ended                     For the year ended
                                               30 November 2007                       30 November 2006
                                      Revenue    Capital      Total          Revenue    Capital       Total
                                        £'000      £'000      £'000            £'000      £'000       £'000

(Losses)/gains on investments               -    (37,900)   (37,900)               -     44,077      44,077
Currency gains                              -        636        636                -      2,840       2,840
Income (note 2)                         6,056          -      6,056            5,199          -       5,199
Administrative expenses                  (500)         -       (500)            (489)         -        (489)

Net return before finance costs
and taxation                            5,556    (37,264)    (31,708)          4,710     46,917      51,627

Finance costs of borrowings            (1,949)         -      (1,949)         (1,582)         -      (1,582)

Net return on ordinary activities
before taxation                         3,607    (37,264)    (33,657)          3,128     46,917      50,045

Tax on ordinary activities                (63)         -         (63)            (7)          -          (7)

Net return on ordinary activities
after taxation                          3,544    (37,264)    (33,720)          3,121     46,917      50,038

Net return per ordinary share :
(note 3)
Basic                                    5.36p   (56.35)p    (50.99)p           4.78p     71.87p      76.65p

Diluted (FRS22)                          5.32p   (55.98)p    (50.66)p           4.75p     71.45p      76.20p

Dividends paid and proposed per
ordinary share
(note 4)                                 5.00p                                  4.50p

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

All revenue and capital items in this statement derive from continuing

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.


                                 BALANCE SHEET
                              at 30 November 2007

                                                                  At 30 November 2007     At 30 November 2006
                                                                   £'000       £'000       £'000       £'000


Investments held at fair value through profit or loss                        129,206                 210,697


Debtors                                                            6,698                   3,846
Cash at bank and in hand                                          24,373                  10,731

                                                                  31,071                  14,577


Amounts falling due within one year                              (10,103)                (38,404)

NET CURRENT ASSETS/(LIABILITIES)                                              20,968                 (23,827)

TOTAL ASSETS LESS CURRENT LIABILITIES                                        150,174                 186,870


Called-up share capital                                                       16,532                  16,532
Share premium                                                                 15,242                  15,242
Special distributable reserve                                                 38,663                  38,663
Capital reserve - realised                                                    76,139                  54,102
Capital reserve - unrealised                                                    (914)                 58,387
Revenue reserve                                                                4,512                   3,944

                                                                             150,174                 186,870


NET ASSET VALUE PER ORDINARY SHARE (note 5)                                    227.1p                  282.6p


                      For the year ended 30 November 2007

                            Share      Share         Special     Capital     Capital   Revenue            Total
                          capital    premium   distributable   reserve -   reserve -   reserve    shareholders'
                                                     reserve    realised  unrealised                      funds
                            £'000      £'000           £'000       £'000       £'000     £'000            £'000         
Shareholders' funds at
1 December 2006            16,532     15,242          38,663      54,102     58,387      3,944          186,870
Net return on ordinary
activities after
taxation                        -         -                -      22,037    (59,301)     3,544         (33,720)

Dividends paid during
the year                        -         -                -           -           -    (2,976)          (2,976)        
Shareholders' funds at
30 November 2007           16,532    15,242           38,663      76,139       (914)     4,512         150,174

                      For the year ended 30 November 2006

                            Share      Share         Special     Capital      Capital    Revenue           Total
                          capital    premium   distributable   reserve -    reserve -    reserve   shareholders'
                                                     reserve    realised   unrealised                      funds
                            £'000      £'000           £'000       £'000        £'000      £'000           £'000        
Shareholders' funds at
1 December 2005            16,307    13,046           38,663     21,863       43,709       3,759         137,347
Net return on ordinary
activities after
taxation                        -         -                -      32,239      14,678       3,121          50,038

Issue of shares               225     2,201                -           -            -          -           2,426

Expenses of share issue         -        (5)               -           -            -          -              (5)

Dividends paid during
the year                        -         -                -           -            -    (2,936)          (2,936)

Shareholders' funds at
30 November 2006           16,532    15,242           38,663      54,102      58,387      3,944          186,870

                                  CASH FLOW STATEMENT

                                                                For the year ended      For the year ended
                                                                 30 November 2007        30 November 2006
                                                             £'000             £'000    £'000       £'000

NET CASH INFLOW FROM OPERATING ACTIVITIES                                     5,234                      4,842


Interest Paid                                                    (1,968)                    (1,618)
Net cash outflow from servicing of finance                                   (1,968)                    (1,618)

Income tax recovered                                                   -                         8          
Total tax recovered                                                               -                         8

Acquisitions of investments                                     (63,881)                   (80,168)
Disposals of investments                                        105,070                     74,632
Realised currency (loss)/gain                                       (19)                       157

FINANCIAL INVESTMENT                                                         41,170                     (5,379)

EQUITY DIVIDENDS PAID                                                        (2,976)                    (2,936)

NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING                                   41,460                     (5,083)

Issues of shares                                                      -                      2,421
Net bank loans (repaid)/drawn down                              (27,818)                    13,381
NET CASH (OUTFLOW)/INFLOW FROM FINANCING                                    (27,818)                    15,802
INCREASE IN CASH                                                             13,642                     10,719

Increase in cash in the year                                                 13,642                     10,719
(Decrease)/increase in bank loans                                            27,818                    (13,381)
Exchange movement on bank loans                                                 467                      2,683

MOVEMENT IN NET FUNDS/(DEBT) IN THE YEAR                                     41,927                         21
NET DEBT AT 1 DECEMBER                                                      (27,548)                   (27,569)
NET FUNDS/(DEBT) AT 30 NOVEMBER                                              14,379                    (27,548)
        Net return before finance costs and taxation                        (31,708)                    51,627
        Losses/(gains) on investments                                        37,900                    (44,077)
        Currency gains                                                         (636)                    (2,840)
        (Increase)/decrease in accrued income                                  (258)                       128
        (Increase)/decrease in debtors                                           (3)                         7
        Increase in creditors                                                      2                         4
        Overseas tax                                                            (63)                        (7)

        NET CASH INFLOW FROM OPERATING ACTIVITIES                             5,234                      4,842



1.   The financial statements for the year to 30 November 2007 have been prepared on the basis of the same
     accounting policies set out in the Company's Annual Financial Statements at 30 November 2006.

                                                                       Year to 30                Year to 30
                                                                    November 2007                  November
                                                                            £'000                     £'000
2.   Income

     Income from investments and interest receivable                        6,042                     5,189
     Other income                                                              14                        10

                                                                            6,056                     5,199

                                            Year to 30 November 2007            Year to 30 November 2006
                                            Revenue  Capital     Total          Revenue    Capital    Total
                                              pence    pence     pence            pence      pence    pence
3.   Return per ordinary share
     Basic                                     5.36   (56.35)   (50.99)            4.78      71.87    76.65
     Diluted (FRS 22)                          5.32   (55.98)   (50.66)            4.75      71.45    76.20

     Revenue return per ordinary share is based on the net revenue on ordinary activities after taxation of
     £3,544,000 (2006 - £3,121,000) and on 66,128,895 (2006 - 65,280,676) ordinary shares of 25p, being the
     weighted average number of ordinary shares in issue during the year.

     Capital return per ordinary share is based on the net capital loss for the financial year of
     £37,264,000 (2006 - £46,917,000) and on 66,128,895 (2006 - 65,280,676) ordinary shares, being the
     weighted average number of ordinary shares in issue during the year.

     Dilution of revenue return is attributable to the difference between the average share price and the
     average exercise price of the outstanding options for the year. The diluted returns per share are
     based on the above returns and on 66,562,850 shares (2006 - 65,664,422), being the weighted average
     number of shares in issue during the year plus the notional number of shares that would have been
     issued for no consideration using an average share price of 295.0p (2006 - 252.0p) and an average
     exercise price for the options of 281.0p (2006 -242.0p).

4.   Dividends per share
                                                     Year to 30 November 2007             Year to 30 November 2006
                                                     Pence              £'000              Pence           £'000
     Amounts recognised as distributions in
     the year:
     Previous year's final dividend paid 10
     April 2007
                                                      2.50              1,653               2.50           1,631
     Interim dividend paid 31 August 2007             2.00              1,323               2.00           1,305

                                                      4.50              2,976               4.50           2,936

     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 £3,544,000 (2006 - £3,121,000).

     Dividends paid and proposed in respect of
     the year:

     Interim dividend paid 31 August 2007               2.00           1,323             2.00     1,305
     Proposed final dividend payable 7 April 2008       3.00           1,984             2.50     1,653

                                                        5.00           3,307             4.50     2,958

     If approved, the final dividend will be paid on 7 April 2008 to all shareholders on the register
     at the close of business on 14 March 2008. The ex dividend date is 12 March 2008.

                                                                At 30 November                   At 30 November
                                                                          2007                             2006
                                                                          £000                            £'000
5.   Net asset value per ordinary share
     Net asset value attributable to ordinary shares                   150,174                          186,870

     Net asset value per share is based on net assets (as shown above) and on 66,128,895 shares (2006 -
     66,128,895) being the number of shares in issue at the year end.

     Dilution of revenue return is attributable to the difference between the share price and the
     exercise price of the outstanding options. Because these options are exercisable at net asset
     value, no dilution to the net asset value arises from their exercise.

6.   At 30 November 2007, the Company had total borrowings of £10.0m (30 November 2006 - £38.3m),
     comprising €14.0m (30 November 2006 - US$46.8m and €21.5m).

7.   Transaction costs incurred on the purchase and sale of the investments are added to the purchase
     cost or deducted from the sale proceeds, as appropriate. During the year, transaction costs on
     purchases amounted to £237,000 (2006 - £195,000) and transaction costs on sales amounted to
     £165,000 (2006 - £136,000).

8.   The financial information set out above does not constitute the Company's statutory accounts for
     the year ended 30 November 2007.  The financial information for 2006 is derived from the statutory
     accounts for 2006 which have been delivered to the Registrar of Companies.  The Auditors have
     reported on the 2006 accounts; their report was unqualified and it did not contain a statement
     under section 237(2) or (3) of the Companies Act 1985.  The statutory accounts for 2007 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.

9.   The Report and Accounts will be available on the Company's website on or around 19 February 2008.

     None of the views expressed in this document should be construed as advice to buy or sell a
     particular investment.

                      This information is provided by RNS
            The company news service from the London Stock Exchange