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Murray Inc Trust PLC (MUT)

  Print      Mail a friend       Annual reports

Tuesday 13 September, 2005

Murray Inc Trust PLC

Preliminary Results

Murray Income Trust PLC
13 September 2005



The Directors of Murray Income Trust PLC announce the unaudited results for the
year ended 30 June 2005.

Key Facts
•    Net Asset Value on a total return basis rose 23.6%, 4.9% ahead of its 
     benchmark, the FTSE All-Share which rose 18.7%

•    Proposed final dividend of 5.65p, making a total dividend of 19.15p, an 
     increase of 4.9% on the previous year, which continues the Company's 
     history of steadily increasing dividends.


The UK equity market performed well during the year to 30 June 2005.  Buoyant
economic growth in China, South East Asia and the US lent support to the broader
global economy, while domestic demand in the UK remained relatively firm on the
back of low interest rates and inflation and full employment.

Despite the impact of higher commodity costs, through a combination of
successful hedging and tight cost control, overall levels of corporate
profitability were good, with many companies electing to return excess capital
to shareholders either through share buy-backs or higher dividend payments.

Against this background of robust profitability, the market was given a further
boost by a wave of corporate activity at the turn of the year. Bid rumours were
rife and the accompanying takeover speculation helped create a fairly exuberant
market environment.  The main negative over the period was the retail sector
where sales failed to rebound in the New Year following a poor Christmas trading
season. This cast a pall over other areas of the market that are reliant on
consumer spending and served to temper some of the enthusiasm that had been in
evidence during the early weeks of January.

With a more cautious consumer and signs that the housing market has cooled
considerably, the market has now turned its attention to the prospect of lower
interest rates in the second half of 2005.


The Net Asset Value total return for the year ended 30 June 2005 was 23.6%. This
compares with the return on the FTSE All-Share Index, the Company's new
benchmark, of 18.7% and the FTSE 350 Higher Yield Index, the Company's benchmark
until 30 June 2004, of 22.9% Over the year ended 30 June 2005, Murray Income's
Net Asset Value Total Return was ranked 8 out of 16 within the AITC UK Growth
and Income sector. Attribution Analysis shows that stock and asset allocation
benefited the Company by 2.0 % and 2.8 % respectively and gearing by 0.8%. It is
pleasing to note that this AITC sector outperformed the comparable open-ended
peer group over the same period.


Your Board's aim is to provide an investment of choice in the Company's sector
of the equity market. Obviously this means the provision of high-quality
performance both in capital and income terms. Your investment managers are
working hard to provide this and last year's results are encouraging. It also
means the provision of liquidity and the limitation of discount volatility. A
buyback policy has been operated for some time which has sought to address these
issues. However, the Board believes that the reduction in capital committed to
the marketmaking function by securities houses means that it should adopt the
power to buy shares into Treasury, rather than simply for cancellation, in order
to improve liquidity. Approval is being sought from Shareholders for the power
to re-issue these shares at prices below Net Asset Value but with a limitation
on the overall level of dilution that can take place over a year. Further
details of the proposed arrangements regarding the issue of shares from Treasury
will be set out in the Circular which will be sent to Shareholders.  This does
represent a significant change in the operation of the Company which the Board
believes to be in the interests of all Shareholders.


Interim dividends were paid on 17 January 2005, 15 April 2005 and 15 July 2005
each at the rate of 4.50p per Ordinary share.

The Directors propose a final dividend payment of 5.65p, payable on 31 October
2005 to Shareholders on the register on 30 September 2005, making total
dividends for the year ended 30 June 2005 of 19.15p. This represents an increase
of 4.9% on the total dividends paid in the previous year and continues the
steady increase which has taken place for more than twenty years.

Last year's revenue account included the last dividends from Royal Bank of
Scotland's Additional Value Shares, which have since been redeemed. After
allowing for this, the underlying dividend growth in the portfolio was about 9%.
At the corporate level, it is encouraging to see stronger earnings growth
reflected in a rise in the rate of growth of dividends with many companies
recognising shareholders' desire to allocate their own capital.

Share Buybacks and Treasury Shares

At the Annual General Meeting held on 27 October 2004, Shareholders approved the
renewal of the authority permitting the Company to repurchase its Ordinary
shares. Consequently, during the year ended 30 June 2005, the Company
repurchased 2,505,000 Ordinary shares at an average price of 488.36p,
representing 3.64% of the share capital at 27 October 2004, the date of renewal
of the authority. These repurchases contributed marginally to an increase in the
Net Asset Value of the remaining Ordinary shares.

A Circular will be sent to Shareholders with the Annual Report setting out the
Board's proposals regarding the introduction of Treasury shares, for which
Shareholders' approval will be sought at the Annual General Meeting. To enable
the Company to purchase its own shares and hold them in Treasury for subsequent
resale or cancellation, it is also necessary to amend the Articles of
Association of the Company. Consequently, this information will be contained in
the Circular.

Management Fee

The management fee arrangements have been reviewed during the year and two main
changes agreed, namely a move from a management fee based on gross assets to one
based on net assets and also the removal of the initial fixed fee element of
£37,500 each month. Accordingly from 1 July 2005, the fee charged will be as
follows: a monthly fee at the rate of one twelfth of 0.55% on the first £400
million of net assets, 0.45% on the next £150 million of net assets and 0.25% on
the excess over £550 million. Assuming an unchanged level of net assets from
that at 30 June 2005, this would result in an overall saving to shareholders of
£46,000 per annum in the management fee. The investment management fee remains
chargeable 50% to revenue and 50% against realised capital reserves. The
secretarial fee, which is chargeable 100% to revenue, has been increased from
£50,000 to £75,000 per annum.

Your Board

Sir David Trippier has served just over nine years on the Board and in line with
best practice has decided to retire from the Board at the AGM. The Board would
like to take this opportunity to thank him for his contributions to the Board's
deliberations over this time. Consultants were again appointed to help identify
a new Director. The Board is pleased to have appointed Neil Honebon as a
Director on 4 August 2005.  He is a founder director of Fleming Family and
Partners Asset Management and is responsible for the management of investment
portfolios for the Fleming family and for other clients. He has over 25 years
experience in investment analysis and research and while at Flemings, he was
Head of Global Research and deputy chair on the asset allocation committee.


The UK economy appears to be slowing down principally because of slow growth in
real incomes and relatively high levels of consumer debt. For markets this may
lead to a conflict between a worsening profit outlook and the benign impact of
low interest rates. Given the already high levels of corporate profits and the
strong performance of equity markets a quieter period may be in prospect.
However, dividend levels in the portfolio appear to be secure and should help
considerably to underpin share prices.


Statement of Total Return (incorporating the Revenue Account*)

                                                     Year ended                       Year ended
                                                    30 June 2005                     30 June 2004
                                                    (unaudited)                       (audited)
                                               Revenue   Capital     Total     Revenue   Capital      Total
                                                 £'000     £'000     £'000       £'000     £'000      £'000

Gains on investments                                 -    66,148    66,148           -    44,507     44,507
Income from investments                         16,333         -    16,333      16,736         -     16,736
Other income                                       200         -       200          91         -         91
Investment management fees                     (1,287)   (1,287) (2,574)       (1,254)   (1,254)    (2,508)

Other expenses                                   (881)         -     (881)       (972)         -      (972)
                                              ________   _______   _______     _______   _______    _______
Net return before finance costs and             14,365    64,861    79,226      14,601    43,253     57,854

Finance costs of borrowing                       (654)     (654)   (1,308)       (858)     (858)    (1,716)
                                              ________   _______   _______     _______   _______    _______
Return attributable to equity
Shareholders                                    13,711    64,207    77,918      13,743    42,395     56,138

Ordinary dividends on equity shares           (12,928)         -  (12,928)    (12,755)         -   (12,755)
                                              ________   _______   _______     _______   _______    _______
Transfer to reserves                               783    64,207    64,990         988    42,395     43,383
                                              ________   _______   _______     _______   _______    _______
Return per Ordinary share (pence):                20.0      93.7     113.7        19.6      60.5       80.1
                                              ________   _______   _______     _______   _______    _______

*  The revenue column of this statement represents the revenue account of the 

   All revenue and capital items in the above statement derive from continuing 

   No operations were acquired or discontinued in the year


Balance Sheet                                                                As at                 As at
                                                                           30 June               30 June
                                                                              2005                  2004
                                                                       (unaudited)             (audited)
                                                                             £'000                 £'000
Fixed assets
Investments                                                                417,560               390,004
                                                                    ______________         _____________
Current assets
Debtors                                                                      1,455                 1,716
Cash and overnight deposits                                                  2,700                   239
                                                                    ______________         _____________
                                                                             4,155                 1,955
Amounts falling due within one year                                        (7,903)               (36,821)
                                                                    ______________         _____________
Net current liabilities                                                    (3,748)              (34,866)
                                                                    ______________         _____________
Total assets less current liabilities                                      413,812               355,138

Amounts falling due after more than one year                              (16,000)              (10,000)
                                                                    ______________         _____________
Total net assets                                                           397,812               345,138
                                                                    ______________         _____________
Capital and reserves
Called-up share capital                                                     16,765                17,391
Share premium account                                                        7,955                 7,955
Capital redemption reserve                                                   4,836                 4,210
Capital reserve - realised                                                 262,455               262,238
Capital reserve - unrealised                                                92,729                41,055
Revenue reserve                                                             13,072                12,289
                                                                    ______________         _____________
Equity Shareholders' funds                                                 397,812               345,138
                                                                    ______________         _____________

Net Asset Value per Ordinary share (pence):                                 593.2p                 496.2
                                                                    ______________         _____________

Cash Flow Statement
                                                                    Year ended            Year ended
                                                                   30 June 2005           30 June 2004
                                                                   (unaudited)             (audited)
                                                                    £'000      £'000       £'000      £'000
Operating activities
Investment income received                                         16,601                 16,056
Deposit interest received                                             198                     88
Underwriting commission received                                        -                      4
Investment management fees paid                                   (2,568)                (2,498)
Secretarial fees paid                                                (50)                   (50)
Cash paid to and on behalf of Directors                              (72)                   (72)
Other cash payments                                                 (739)                  (951)
                                                                 ________    _______    ________   ________
Net cash inflow from operating  activities                                    13,370                 12,577

Servicing of finance
Bank and loan interest paid                                       (1,351)                (1,666)
                                                                 ________    _______    ________   ________
Net cash outflow from servicing of finance                                   (1,351)                (1,666)

Financial investment
Purchase of investments                                          (93,962)               (51,348)
Sale of investments                                               132,887                 46,605
                                                                 ________    _______    ________   ________
Net cash inflow/ (outflow) from financial investment                          38,925                (4,743)

Equity dividends paid                                                       (12,570)               (12,809)

Management of liquid resources
Cash (placed)/drawn on short term deposit                           (104)                  3,478
                                                                 ________    _______    ________   ________
Net cash (outflow)/inflow from management of liquid resources                  (104)                  3,478
                                                                             _______                _______
Net cash inflow/ (outflow) before financing                                   38,270                (3,163)

Repurchase of  shares                                            (11,913)                (2,772)
(Repayment)/Drawdown of loans                                    (24,000)                  5,000
                                                                 ________    _______    ________   ________
Net cash (outflow)/inflow from financing                                    (35,913)                  2,228
                                                                 ________    _______    ________   ________
Increase/(decrease) in cash                                                    2,357                  (935)
                                                                 ________    _______    ________   ________


                                                                           Year ended         Year ended
                                                                         30 June 2005       30 June 2004
Ordinary dividends on equity shares                                             £'000              £'000
Over accrual in relation to 2004                                                 (33)                  -
First interim of 4.50p (2004 - 4.50p)                                           3,095              3,159
Second interim of 4.50p (2004 - 4.50p)                                          3,069              3,157
Third interim of 4.50p (2004 - 4.50p)                                           3,038              3,135
Proposed final of 5.65p (2004 - 4.75p)                                          3,759              3,304
                                                                        _____________       ____________
                                                                               12,928             12,755
                                                                        _____________       ____________

The statement of total return (incorporating the revenue account), balance sheet
and cashflow statement set out above do not represent statutory accounts in
accordance with Section 240 of the Companies Act 1985.

The results stated above for the year ended 30 June 2004 are abridged from the
full accounts for that year, which have received an unqualified report from the
Auditors and were filed with the Registrar of Companies.

The financial information for the year to 30 June 2005 contains an unqualified
audit report and will be delivered to the Registrar of Companies.

A summary of investment changes during the year and the twenty largest
investments as at 30 June 2005 are attached.

The Annual General Meeting will be held on 26 October 2005 at 12.30 p.m in the
Strathclyde Suite, Glasgow Royal Concert Hall.

By Order of the Board


13 September 2005

Copies of this announcement will be available to the public at the registered
office of the Company at 123 St Vincent Street, Glasgow.


                                     Valuation                       Appreciation        Valuation
                                   30 June 2004       Transactions  (depreciation)     30 June 2005
                                     £'000      %            £'000            £'000     £'000        %

United Kingdom
Equities                           390,004   101.3        (38,592)           66,148   417,560     100.9
                                   _______   _____      __________       __________     _____     _____
Total Investments                  390,004   101.3        (38,592)           66,148  417,560      100.9
                                   _______   _____      __________       __________     _____     _____
Other net liabilities              (4,866)   (1.3)           1,118                -   (3,748)     (0.9)

                                   _______   _____      __________       __________     _____     _____
Total Assets*                      385,138   100.0        (37,474)           66,148   413,812     100.0
                                   _______   _____      __________       __________     _____     _____

* Represents total assets less current liabilities, after excluding short-term 
  loans of £30,000,000 as at 30 June 2004.
Summary of net assets                                                                  30 June 2005
                                                                                        £'000         %
Equities                                                                              417,560     105.0
Other net liabilities                                                                 (3,748)     (1.0)
Borrowings                                                                           (16,000)     (4.0)
                                                                                       ______    ______
Equity Shareholders' interest                                                         397,812     100.0
                                                                                       ______    ______

as at 30 June 2005

                                             Sector                 Valuation  % of Total Assets

Investment                                 Description                  £'000
Royal Dutch Shell                           Oil & Gas                  32,239                7.8
BP                                          Oil & Gas                  29,660                7.2
HSBC Holdings                                 Banks                    24,252                5.9
Barclays                                      Banks                    16,709                4.0
GlaxoSmithKline                          Pharmaceuticals               16,370                4.0
Aviva                                    Life Assurance                15,115                3.6
Royal Bank of Scotland Group                  Banks                    15,073                3.6
Diageo                                      Beverages                  12,345                3.0
British American Tobacco                     Tobacco                   12,329                3.0
Great Universal Stores                  General Retailers              12,184                2.9
HBOS                                          Banks                    10,799                2.6
Slough Estates                             Real Estate                 10,378                2.5
Anglo American                               Mining                    10,093                2.4
Centrica                                 Other Utilities               10,037                2.4
BBA Group                                   Transport                   8,255                2.0
Unilever                                 Food Producers                 7,972                2.0
                                         and Processors
Lloyds TSB                                    Banks                     7,852                1.9
Standard Chartered                            Banks                     7,446                1.8
Scottish Power                             Electricity                  7,398                1.8
P & O                                       Transport                   6,995                1.7
Top twenty investments                                                273,501               66.1

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

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