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Fins Growth Inc Tst (FGT)

  Print      Mail a friend       Annual reports

Friday 29 May, 2009

Fins Growth Inc Tst

Half-yearly Report

                      LONDON STOCK EXCHANGE ANNOUNCEMENT                       

                      Finsbury Growth & Income Trust PLC                       

             Unaudited Half Year Results For The Six Months Ended              

                                 31 March 2009                                 

Financial Highlights:                  (Unaudited)      (Audited)     % change
                                     31 March 2009   30 September             
Share price                                 173.0p         202.0p        -14.4
Net asset value per share                   183.9p         215.5p        -14.7
Discount of share price to net asset          5.9%           6.3%          n/a
value per share                                                               
Shareholders' funds                         £92.4m        £109.8m        -15.8
Market capitalisation                       £86.9m        £102.9m        -15.5
                                     Six months to    One year to             
                                     31 March 2009   30 September             
Share price (total return)#                 -12.2%         -33.1%             
Net asset value per share (total            -12.1%         -31.4%             
FTSE All-Share Index (total return)         -18.3%         -22.3%             
Dividends                              Year ending Year ending 30             
                                      30 September September 2008             
First interim dividend                    4.4p per 4.4p per share             
Second interim dividend                  Yet to be 5.1p per share             

# Source - Fundamental Data for the AIC

Investment Objective

Finsbury Growth & Income Trust PLC invests in the shares of UK listed companies
with the objective of achieving capital and income growth and providing a total
return in excess of that of the FTSE All-Share Index.

Investment Policy

The Company invests only in the shares of UK listed companies. Where possible,
a minimum position size of 1% of the Company's gross assets is held unless the
holding concerned is being built or disposed of.

The portfolio is managed by Lindsell Train Limited and comprises approximately
thirty stocks. Unless driven by market movements, FTSE 100 companies, including
preference shares issued by such companies, represent between 50% and 100% of
the portfolio; at least 70% of the portfolio is invested in companies within
the FTSE 350. The Company does not and will not invest more than 15% of its
gross assets in other listed investment companies (including listed investment


Performance is measured against the FTSE All-Share Index (total return).

First Interim Dividend

A first interim dividend of 4.4p per share (2008: 4.4p) was paid on 6 May 2009
to shareholders registered at the close of business on 3 April 2009. The
associated ex-dividend date was 1 April 2009.

Capital Structure

At 31 March 2009 the Company had 50,254,173 shares of 25p each in issue
excluding 2,543,250 shares repurchased by the Company and held as treasury
shares (31 March 2008: 52,674,423 (treasury shares: 123,000)). Since the end of
the half-year a further 40,000 shares have been repurchased and are being held
in treasury. Also, a total of

410,000 shares have been reissued out of treasury. As at 26 May 2009, the
Company had 50,624,173 shares in issue (excluding 2,173,250 shares held in


As at 31 March 2009 the Company had a revolving credit facility of £15 million
provided by ING Bank N.V.. As at this date a total of £13 million had been
drawn down.

Chairman's Statement


The period under review has again been an extremely challenging one for stock
markets. I am disappointed to have to report that your Company has not been
immune from the general weakness in stock markets and in the six months to 31
March 2009 your Company's net asset value per share declined by 12.1%, on a
total return basis. The Company's share price total return was a similar
decline of 12.2% with the Company's benchmark, the FTSE All-Share Index,
measured on a total return basis, falling by 18.3% during the same period.

At the period end the share price discount to net asset value per share stood
at 5.9%, slightly narrower than the discount as at 30 September 2008 of 6.3%.

Share Capital

The Company has continued to be active in buying back shares for treasury where
they were offered at a discount greater than 5% to the net asset value per
share. A total of 746,500 shares were repurchased for treasury during the
half-year in accordance with the Company's stated policy; 50,000 of these were
then reissued to new shareholders in November 2008 at a price representing a
narrower discount to net asset value per share than that at which they had been
bought into treasury. Following the half-year end a further 40,000 shares have
been repurchased to be held as treasury shares and a total of 410,000 shares
have been reissued out of treasury. As at the date of this report, a total of
2,173,250 shares are held in treasury.

Return and Dividend

The Income Statement shows a total loss per share of 26.66p consisting of a
revenue return per share of 2.99p and a capital loss per share of 29.65p.
Income was well down on the comparative period last year, almost entirely as a
result of the banking stocks in the portfolio. Further details are given in the
Investment Manager's Review.

Your Board has declared an unchanged first interim dividend of 4.4p per share
which was paid on 6 May 2009 to shareholders on the register at the close of
business on 3 April 2009. The associated ex-dividend date was 1 April 2009.

Following the payment of the first interim dividend of £2,211,000 on 6 May
2009, the Company has £1,657,000 of retained distributable revenue reserves
which is equivalent to approximately 3.3p per share.


Your Company has a fixed term committed revolving credit facility of £15m which
is subject to a variable rate. As at 31 March 2009 a total of £13m was drawn
down under this facility.


As shareholders will be aware from my previous statements, VAT is no longer
charged on investment management fees following the ruling by the European
Court of Justice in October 2007. Negotiations with the Company's previous and
current Investment Managers are continuing with respect to reclaiming VAT
previously paid. I am pleased to report that it has been agreed that the sum of
£31,000 will be refunded to the Company in respect of VAT paid to Lindsell
Train Limited during the three-month period ended 30 September 2007. Progress
remains slow with respect to VAT expected to be recoverable from Close
Investments Limited, the Company's previous Investment Manager, however, we
expect to have recovered the remaining VAT from Close Investments Limited by 30
September 2009. Recoverable amounts will be reflected in the accounts in
proportion to the original basis of allocation of expenses between income and
capital applicable to each year in respect of which a recovery is made.


2008, which included the bankruptcy of a major American investment bank and the
effective nationalisation of some UK banks and large US financial institutions,
was the second worst year for the UK equity market since the 1920's. The global
nature of the down-turn and the negative impact of the credit crunch on
companies' access to capital and cash-flow are expected to continue well into
2010 and consequently stock market conditions will continue to be difficult and
volatile in the short term. However, your Board remains supportive of our
Investment Manager's strategy of investing in durable cash generative
franchises which are held for the long term and continues to believe that this
strategy will deliver superior investment returns to shareholders.

The outlook for dividends generally remains uncertain and while so far this
year only one portfolio holding, Lloyds, has cut its dividend, your Board and
our Investment Manager continue to monitor this situation closely.

It is encouraging that since 31 March 2009 markets have shown a strong recovery
and since the period end the Company has issued 410,000 shares out of treasury.

Anthony Townsend


Investment Manager's Review

At the end of our half year, which is also the end of the first quarter of
2009, we find we have three more or less urgent observations about the
portfolio. These relate to three issues that we, as Investment Manager, have
been most exercised about. By extension, we judge they are the issues that you
as shareholders (as we are as well) ought to care most about too.

Lloyds Banking Group

Your Company retains a material exposure to Lloyds, with 2.2% of the Company's
net asset value in the ordinary and a further 3.7% in two preference shares. In
recent trying circumstances this exposure merits detailed analysis.

We are mortified by the (unrealised) loss of value suffered by shareholders in
these instruments. However, there are signs that the worst is past.

Lloyds' ordinary shares were trading at 70.7p at the period end. This is an
important price, because it is above 38.4p. What we mean by this is that
Lloyds' stock is nearly double the already announced price at which its
shareholders will be offered new ordinary shares, arising from the government's
conversion of its own preference shares in the bank. With such a premium it
seems highly likely that shareholders will take up their entitlement to this
further £4bn of equity. If so, Lloyds will be confirmed with a Tier 1 ratio of
14% - getting on for bomb-proof, surely - and, critically, the government's
stake in the bank will be unchanged, at 43%, still short of full control. This
escape from de facto nationalisation would likely improve the rating, we think.

Our belief is that one day Lloyds will be rated at 2.0x book value. In fact for
many "pre-HBOS" years, Lloyds traded at closer to 3.0x book. Current fully
diluted net asset value per share, adjusted for the government's asset
protection scheme, is over £1. Pre-provision profits at Lloyds are c£13bn a
year, compared to period end market capitalisation of £11.6bn. If the bank
survives then, which we acknowledge is still not certain, but more so after the
quarter's developments, its book value will grow quickly and its stock is
likely still very cheap.

Meanwhile, after the period end both our Lloyds Bank preference shares went
"ex-dividend".They offer a net dividend yield of nearly 20% and are an
important source of income for the Company. It seems that the bank intends to
service its preferred obligations through this difficult time. If it succeeds,
these shares are also cheap.


As the 2009 results season unfolds we find that, to date, only one portfolio
constituent has cut its dividend - Lloyds, whose final has been replaced by a
measly scrip issue. There is no escaping the fact that the loss of the bulk of
the Lloyds' ordinary dividend is a blow to the Company's revenue account. We
must hope that growth across the portfolio can take up the slack. And indeed
another 83.4% of the Company's net asset value has reported dividends in
calendar 2009 with, of these, 8.5% maintaining and 74.9% increasing
distributions. Highlights were the double digit hikes from Fidessa, Reed, Shell
and Unilever.

We know there are no grounds for complacency and that dividends remain at risk
if the economy worsens. Reviewing the portfolio we recognise the dividend from
Marston's, in particular, cannot be described as "safe", given that company's
indebtedness. Nonetheless, at our recent meeting with its chairman we were left
in no doubt of the company's commitment to its payout, which costs £35m pa, a
relatively small sum, compared, say, to EBITDA (earnings before interest,
taxes, depreciation and amortisation) of £205m. Moreover, its business has
demonstrated resilience into the recession, offering good value nights-out to
Middle Britain.

There are forecasts predicting UK dividends will fall 30% in 2009/10. We hope
they are wrong. But so far, we find the Company's experience to be encouraging.
This is, of course, as it should be, given Lindsell Train's stated investment
approach, focused on cash generative and - we try to ensure - stable
businesses. Consider that over 43.7% of the Company's net asset value is
invested in just four branded goods companies - A. G. Barr, Cadbury, Diageo and
Unilever. Whatever you think about the short term prospects for price
performance from this quartet, their dividends look reassuringly secure.

Growth Companies - Technology and Media

Nearly 31% of the Company's net asset value is made up of
"Business-to-Business" media and software companies - including Euromoney,
Fidessa, Pearson, Reed, Sage and Thomson Reuters. For what it's worth this
represents something like a 10x "overweight" to these two sectors. This is a
very distinctive commitment, relative to other investors. It is also, in our
opinion, full of value and opportunity.

Non-cyclical, steady growth is an exceptionally attractive and rare corporate
characteristic today. Any company that can deliver it is likely to be
materially undervalued. We expect such growth to be found amongst companies
exposed to the two most powerful industry trends of this generation - namely
the Emerging Markets and the Internet. So, just as we believe that Cadbury, for
instance, is given little credit for the fact that 37% of its sales derive from
Developing Economies and are growing rapidly, we also think investors have not
given sufficient consideration to the beneficial impact of the Internet on
professional publishers.

The proof of this proposition, in our eyes, and the only one that really
counts, is that their shares are outperforming. Fidessa, Pearson, Sage and
Thomson Reuters are actually up so far in 2009 - because their businesses are
growing in a way that offers sanctuary from the broad economic cycle. After an
8 year bear market these shares are still cheap and unloved.

Nick Train, Lindsell Train Limited

Investment Manager


as at 31 March 2009  Sector              Fair       % of    
                                         Value £            
Company                                  '000    Investments
Diageo               Beverages            11,472        10.9
Barr (A.G.)          Beverages            10,947        10.5
Unilever             Food Producers       10,224         9.8
Pearson              Media                 8,148         7.8
Cadbury              Food Producers        7,762         7.4
Reed Elsevier        Media                 5,577         5.3
Marston's            Travel & Leisure      5,419         5.2
Fidessa              Software & Computer   5,296         5.0
Sage                 Software & Computer   5,156         4.9
Rathbone Brothers    General Financials    5,074         4.8
Top 10 Investments                        75,075        71.6
Schroders            General Financials    3,832         3.7
Lloyds Banking Group                                        
Preference Shares# * Banks                 3,438         3.3
Thomson Reuters      Media                 3,039         2.9
Dr Pepper Snapple^   Beverages             2,985         2.9
Fuller Smith &       Travel & Leisure      2,874         2.7
Young & Co's Brewery Travel & Leisure      2,798         2.7
Lloyds Banking Group Banks                 2,039         1.9
Euromoney            Media                 1,830         1.7
London Stock         General Financials    1,758         1.7
Royal Dutch Shell    Oil & Gas Producers   1,713         1.6
Top 20 Investments                       101,381        96.7
Lindsell Train       General Financials    1,380         1.3
Investment Trust                                            
Burberry Group       Personal Goods        1,367         1.3
Celtic               Travel & Leisure        576         0.6
Frostrow Capital+    General Financials      150         0.1
Celtic 6% (cum       Travel & Leisure         44           -
Total Investments                        104,898       100.0

All of the above investments are equities listed in the UK, unless otherwise

# Comprises holdings in Lloyds Banking 9.25% (non cum preference) equating to
2.7% of investments and Lloyds Banking 9.75% (non cum preference) equating to
0.6% of investments.

* Non-equity - Preference Shares

^ Listed in the United States. The holding arose following the demerger from
Cadbury Schweppes in 2008.

+ Unquoted investment


as at 31 March 2009

The following table compares the Company's portfolio against sector weightings.

                                  2009      FTSE       2009
                                       All-Share   Finsbury
                              Finsbury               Growth
                              Growth &     Index   & Income
                                Income                Trust
                                 Trust             (under)/
Sector                               %         %          %
Oil & Gas                          1.6      21.5     (19.9)
Basic Materials                      -       8.7      (8.7)
Industrials                          -       6.8      (6.8)
Consumer Goods                    42.8      12.1       30.7
Health Care                          -       9.3      (9.3)
Consumer Services                 28.9      10.4       18.5
Telecommunications                   -       6.9      (6.9)
Utilities                            -       4.3      (4.3)
Financials (excluding fixed                                
interest investments                                       
& preference shares)              13.5      18.7      (5.2)
Technology                         9.9       1.3        8.6
Total excluding Preference        96.7     100.0      (3.3)
Preference shares                  3.3         -        3.3
Total                            100.0     100.0          -

Income Statement

For the six months ended 31 March 2009

                              (Unaudited)               (Unaudited)                 (Audited)
                         Six months ended          Six months ended                Year ended
                            31 March 2009             31 March 2008         30 September 2008
                Revenue Capital     Total Revenue  Capital    Total Revenue Capital     Total
                  £'000 £'000       £'000 £'000   £'000       £'000 £'000   £'000       £'000
Losses on             - (14,571) (14,571)       - (28,432) (28,432)       - (51,522) (51,522)
held at fair                                                                                 
value through                                                                                
profit or loss                                                                               
Exchange              -        2        2       -        -        -       -        -        -
Income (note 2)   1,959        -    1,959   2,776        -  2,776     6,363        -    6,363
Investment        (107)    (217)    (324)   (162)    (330)    (492)   (300)    (609)    (909)
management and                                                                               
(note 3)                                                                                     
Other expenses    (212)        -    (212)   (233)        -    (233)   (434)        -    (434)
Return/(loss)     1,640 (14,786) (13,146)   2,381 (28,762) (26,381)   5,629 (52,131) (46,502)
on ordinary                                                                                  
before finance                                                                               
charges and                                                                                  
Finance charges   (123)    (250)    (373)   (217)    (441)    (658)   (346)    (702)  (1,048)
Return/(loss)     1,517 (15,036) (13,519)   2,164 (29,203) (27,039)   5,283 (52,833) (47,550)
on ordinary                                                                                  
before taxation                                                                              
Taxation on           -        -        -       -        -        -       -        -        -
Return/(loss)     1,517 (15,036) (13,519)   2,164 (29,203) (27,039)   5,283 (52,833) (47,550)
on ordinary                                                                                  
after taxation                                                                               
Return/(loss)     2.99p (29.65)p (26.66)p   4.11p (55.44)p (51.33)p  10.12p (101.20) (91.08)p
per share (note                                                                    p         

The "Total" column of this statement represents the Income Statement of the
Company. The "Revenue" and "Capital" 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. The Company
had no recognised gains or losses other than those declared in the Income

Reconciliation of Movements in Shareholders' Funds

(Unaudited)            Called   Share Special    Capital  Capital Revenue    Total
                           up premium reserve redemption  reserve reserve         
Six months ended 31     share                                                £'000
March 2009            capital account   £'000    reserve    £'000   £'000         
                        £'000   £'000                                             
At 30 September 2008   13,199  35,914  12,424      3,453   39,845   4,949  109,784
Net (loss)/ return          -       -       -          - (15,036)   1,517 (13,519)
from ordinary                                                                     
Second interim              -       -       -          -        - (2,598)  (2,598)
dividend (5.1p per                                                                
share) for the year                                                               
ended 30 September                                                                
Repurchase of shares        -       -       -          -  (1,323)       -  (1,323)
into treasury                                                                     
Sale of shares from         -       -       -          -       87       -       87
At 31 March 2009       13,199  35,914  12,424      3,453   23,573   3,868   92,431

Six months ended 31                                                             
March 2008                                                                      
At 30 September 2007    13,162  35,482 12,424    3,453   97,023   4,511  166,055
Net (loss) return from       -       -      -        - (29,203)   2,164 (27,039)
ordinary activities                                                             
Second interim               -       -      -        -        - (2,527)  (2,527)
dividend (4.8p per                                                              
share) for the year                                                             
ended 30 September                                                              
Shares issued net of        37     432      -        -        -       -      469
issue expenses                                                                  
Repurchase of shares         -       -      -        -  (2,055)       -  (2,055)
into treasury                                                                   
Sale of shares from          -       -      -        -    1,677       -    1,677
At 31 March 2008        13,199  35,914 12,424    3,453   67,442   4,148  136,580

Year ended 30                                                                   
September 2008                                                                  
At 30 September 2007    13,162  35,482 12,424    3,453   97,023   4,511  166,055
Net (loss)/return            -       -      -        - (52,833)   5,283 (47,550)
from ordinary                                                                   
Second interim               -       -      -        -        - (2,527)  (2,527)
dividend (4.8p per                                                              
share) for the year                                                             
ended 30 September                                                              
First interim                -       -      -        -        - (2,318)  (2,318)
dividend (4.4p per                                                              
share) for the year                                                             
ended 30 September                                                              
Shares issued net of        37     432      -        -        -       -      469
issue expenses                                                                  
Repurchase of shares         -       -      -        -  (6,081)       -  (6,081)
into treasury                                                                   
Sale of shares from          -       -      -        -    1,736       -    1,736
At 30 September 2008    13,199  35,914 12,424    3,453   39,845   4,949  109,784

Balance Sheet

As at 31 March 2009

                              (Unaudited)    (Unaudited)          (Audited)
                            31 March 2009  31 March 2008  30 September 2008
                                    £'000          £'000              £'000
Investments held at fair          104,898        148,344            121,586
value through profit or                                                    
Current assets                                                             
Debtors                               623          1,691              1,159
Bank balances and short               293            741                204
term deposits                                                              
                                      916          2,432              1,363
Current liabilities                                                        
Creditors                           (383)          (196)              (165)
Bank loan                        (13,000)       (14,000)           (13,000)
                                 (13,383)       (14,196)           (13,165)
Net current liabilities          (12,467)       (11,764)           (11,802)
Total net assets                   92,431        136,580            109,784
Capital and reserves                                                       
Called up share capital            13,199         13,199             13,199
Share premium account              35,914         35,914             35,914
Special reserve                    12,424         12,424             12,424
Capital redemption                  3,453          3,453              3,453
Capital reserve                    23,573         67,442             39,845
Revenue reserve                     3,868          4,148              4,949
Equity shareholders'               92,431        136,580            109,784
Net asset value pershare           183.9p         259.3p             215.5p
(note 5)                                                                   

Cash Flow Statement

For the six months ended 31 March 2009

                               (Unaudited)      (Unaudited)          (Audited)
                             31 March 2009    31 March 2008  30 September 2008
                                     £'000            £'000              £'000
Net cash inflow from                 2,088            2,078              5,548
operating activities(note                                                     
Servicing of finance                                                          
Loan interest and                    (284)            (795)            (1,185)
arrangement fees paid                                                         
Financial investment                                                          
Purchase of investments            (3,035)          (1,869)            (5,886)
Sale of investments                  5,152           14,106             21,791
Net cash inflow from                 2,117           12,237             15,905
financial investment                                                          
Equity dividends paid              (2,598)          (2,527)            (4,845)
Net cash inflowbefore                1,323           10,993             15,423
Issue of new shares                      -              469                469
Repurchase of shares into          (1,323)          (2,055)            (6,081)
Sale of shares from                     87            1,677              1,736
Repayment of loans                       -         (10,850)           (11,850)
Net cash outflow from              (1,236)         (10,759)           (15,726)
Increase/(decrease) in cash             87              234              (303)
Reconciliation of net cash                                                    
flow to movement in net                                                       
Increase/(decrease) in cash             87              234              (303)
resulting from cashflows                                                      
Decrease in debt                         -           10,850             11,850
Exchange movements                       2                -                  -
Movement in debt                        89           11,084             11,547
Net debt at start of period       (12,796)         (24,343)           (24,343)
Net debt at end of period/        (12,707)         (13,259)           (12,796)

Notes to the interim accounts

1.  Basis of Preparation                                                        
    The financial statements have been prepared under the historical cost       
    convention except for the measurement of investments which are valued at    
    fair value, and in accordance with applicable accounting standards and with 
    the Statement of Recommended Practice `Financial Statements of Investment   
    Trust Companies' dated January 2009.                                        
    The same accounting policies used for the year ended 30 September 2008 have 
    been applied.                                                               
2.  Income                                                                      
                                         (Unaudited)     (Unaudited)   (Audited)
                                          Six months      Six months  Year ended 
                                               ended           ended          30         
                                       31 March 2009   31 March 2008   September  
                                               £'000           £'000       £'000
    Franked investment income                  1,884           2,697       6,237
    Limited Liability Partnership                 70               -          11
    Fixed interest income                          -              47          65
    Money market dividend                          5              28          44
    Bank interest                                  -               4           6
    Total                                      1,959           2,776       6,363
3.  Investment Management, Management and Performance Fees                      
                                          (Unaudited) (Unaudited)      (Audited)
                                           Six months  Six months     Year ended
                                                ended       ended   30 September
                                        31 March 2009    31 March           2008    
                                                £'000       £'000          £'000
    Investment management fee                     205         331            601
    Management fee                                103         137            262
    Performance fee                                 -           -              -
    VAT thereon*                                   16          24             46
    Total                                         324         492            909
    * VAT on management fee.                                                    
4.  Return/(loss) pershare                                                      
    The total return per share is based on the total loss attributable to equity
    shareholders of £13,519,000 (six months ended 31 March 2008: loss of £      
    27,039,000; year ended 30 September 2008:loss of £47,550,000) and on        
    50,709,699 shares (six months ended 31 March 2008: 52,671,134; year ended 30
    September 2008: 52,206,113), being the weighted average number of shares in 
    The revenue return per share is calculated by dividing the net revenue      
    return of £1,517,000 (six months ended 31 March 2008: return of £2,164,000; 
    year ended 30 September 2008: return of £5,283,000) by the weighted average 
    number of shares in issue as above.                                         
    The capital loss per share is calculated by dividing the net capital loss   
    attributable to shareholders of £15,036,000 (six months ended 31 March 2008:
    loss of £29,203,000; year ended 30 September 2008: loss of £52,833,000) by  
    the weighted average number of shares in issue as above.                    
5.  Net asset value per share                                                   
    The net asset value per share is based on net assets attributable to shares 
    of £92,431,000 (31 March 2008: £136,580,000 and 30 September 2008: £        
    109,784,000) and on 50,254,173 shares in issue (excluding treasury shares)  
    (31 March 2008: 52,674,423 and 30 September 2008: 50,950,673) (excluding    
    treasury shares)                                                            
6.  Transaction costs                                                           
    Purchase transaction costs for the six months ended 31 March 2009 were £    
    19,000 (six months ended 31 March 2008: £22,000; year ended 30 September    
    2008: £50,000).                                                             
    Sales transaction costs for the six months ended 31 March 2009 were £9,000  
    (six months ended 31 March 2008: £31,000; year ended 30 September 2008: £   
7.  Reconciliation of net total loss before finance costs and taxation to net cash
    inflow from operating activities                                            
                                                        (Unaudited)       (Unaudited)          (Audited)  
                                                   Six months ended  Six months ended         Year ended
                                                      31 March 2009     31 March 2008  30 September 2008
                                                              £'000             £'000              £'000
    Total loss before finance charges and taxation         (13,146)          (26,381)           (46,502)    
    Capital loss before finance charges and taxation         14,788            28,762             52,131
    Gains on exchange movements                                 (2)                 -                  -        

    Net revenue before finance costs and taxation             1,640             2,381              5,629
    Decrease/(increase) in accrued income and prepayments       541             (182)                346
    (Increase)/decrease in debtors                              (5)               244                248
    Increase/(decrease) in creditors                            129              (35)               (66)
    Investment management, management and performance
     fees charged to capital                                  (217)             (330)              (609)
    Net cash inflow from operating activities                 2,088             2,078              5,548
8.  2008 Accounts                                                                
    The figures and financial information for the year ended 30 September 2008  
    are extracted from the latest published accounts of the Company and do not  
    constitute statutory accounts for the year.                                 
    Those accounts have been delivered to the Registrar of Companies and        
    included the Report of the Auditors which was unqualified and did not       
    contain a reference to any matters to which the auditors drew attention by  
    way of emphasis without qualifying the report, and did not contain a        
    statement under either Section 237(2) or 237(3) of the Companies Act 1985.  
    INTERIM MANAGEMENT REPORT                                                   
    Principal Risks and Uncertainties                                           
    A review of the half year, including reference to the risks and             
    uncertainties that existed during the period, and the outlook for the       
    Company can be found in the Chairman's Statement beginning on page 3 and in 
    the Investment Manager's Review beginning on page 5. The principal risks    
    faced by the Company fall into nine broad categories: market price risk;    
    interest rate risk; portfolio performance; operational and regulatory;      
    credit risk; liquidity; shareholder profile; investment management key      
    person risk; availability of bank finance. Information on each of these     
    areas, with the exception of the availability of bank finance, is given in  
    the Business Review within the Annual Report and Accounts for the year ended
    30 September 2008. The risk associated with the availability of bank finance
    is that the provider may no longer be prepared to lend to the Company.      
    Copies of the monthly loan covenant compliance certificates, provided for   
    the lender, are circulated to the Board and both the Board and the          
    Investment Manager are kept fully informed of any likelihood of the         
    withdrawal of the loan facility so that repayment can be effected in an     
    orderly fashion if necessary.                                               
    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.                                                
    Related Parties Transactions                                                
    During the first six months of the current financial year no material       
    transactions with related parties have taken place which have affected the  
    financial position or the performance of the Company during the period.     
    Directors' Responsibilities                                                 
    The Directors are responsible for preparing the Interim Report in accordance
    with applicable law and regulations. The Directors confirm that to the best 
    of their knowledge the condensed set of financial statements, within the    
    Interim Report, have been prepared in accordance with applicable accounting 
    standards, give a true and fair view of the assets, liabilities, financial  
    position and the loss for the half-year ended 31 March 2009 and that the    
    Chairman's Statement, the Investment Manager's Review and the Interim       
    Management Report include a fair review of the information required by      
    4.1.8R to 4.2.11R of the FSA's Disclosure and Transparency Rules.           
    The Interim Report has not been reviewed by the Company's auditors.         
    The Interim Report was approved by the Board on 26 May 2009 and the above   
    responsibility statement was signed on its behalf by:                       
    Anthony Townsend                                                            
    Frostrow Capital LLP                                                        
    Company Secretary                                                           
    29 May 2009                                                                 
    0203 008 4913                                                               
    Please note that up to date information on the Company, including daily NAV,
    share prices and fact sheets, can be found at            

                      Finsbury Growth & Income Trust PLC