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Murray Inc Trust PLC (MUT)

  Print      Mail a friend       Annual reports

Friday 08 September, 2006

Murray Inc Trust PLC

Preliminary Results

Murray Income Trust PLC
8 September 2006



The Directors of Murray Income Trust PLC announce the unaudited preliminary
results for the year ended 30 June 2006.

Key Facts

•         Net Asset Value total return for the year ended 30 June 2006 of 19.5%

•         Proposed final dividend of 7.5p per Ordinary share for the year ended
          30 June 2006, an increase of 32.7% on the previous year, making a 
          total for the year of 21.6p, an overall increase of 12.8%

•         Proposed interim dividends of 5p per Ordinary share for the year
          ending 30 June 2007, an increase of 6.4%.


It was another good year for the UK stock market as the global economy continued
to grow strongly on the back of rapid economic development in China, India and
other emerging regions of the world. Corporate profitability was therefore
robust, particularly for mining and industrial companies, and generally low
interest rates and inflation helped support equity valuations.

The UK economic environment remained broadly stable. Interest rates were cut
from 4.75% to 4.5% in August 2005 and remained at that level for the period
under review. This has helped to inject some life back in to the housing market,
with house price inflation now running at around 8 -10% for the year to 30 June.

A continuing theme in the market over the past two years has been merger and
acquisition activity. The period under review saw a number of household names
taken over, including BAA, Abbey National and Pilkington. Similarly to last
year, corporate activity and take-over speculation helped mid-cap stocks
outperform their FTSE 100 counterparts.


Performance in the year to 30 June 2006 was almost in line with the FTSE-All
Share Index, producing a Net Asset Value total return of 19.5% compared with the
return from the Index of 19.7%. As a result, Murray Income's Net Asset Value
total return ranked 7 out of 24 within the AITC UK Growth and Income sector. The
performance of both Murray Income and the investment trust sector continued to
compare well with that of similar open-ended funds. This was the third year of
substantial gains for Murray Income following returns of 23.6% and 18.7% in the
two previous years as confidence in equity markets returned to investors. Taken
together, this represents 20.6% compounded annual growth in the Company's Net
Asset Value in the past three years, assuming dividend reinvestment. Over the
same period the Company's share price compounded at 19.9% per annum. For the
five year period to 30 June 2006, Net Asset Value and share price performance
compounded at 5.8% and 7.7% respectively, a creditable performance in light of
the poor market environment during the early part of this decade.

Share Buybacks and Treasury Shares

Last year's Annual Report discussed the need for liquidity in the company's
shares and the reasons for proposing the introduction of Treasury shares and
seeking to take the power to re-issue them at a discount. The relevant
resolutions were passed at the Annual General Meeting. In addition, Shareholders
approved the renewal of the authority permitting the Company to repurchase its
Ordinary shares. Since that date, 1,213,000 shares have been bought back into
Treasury. However, the combination of a significantly narrower discount and
strong demand for the shares that would have led to re-issuance has not
occurred. The powers to buy into Treasury and to re-issue at either a discount
or a premium have to be renewed each year. Soundings with major shareholders
have revealed a shift in the weight of opinion against re-issuance at a discount
such that it is clear that renewal would be rejected and therefore such powers
will not be sought at the AGM. This is disappointing since there was
considerable protection against dilution and the Board still believes that this
was a potentially useful way to enhance the trust's attractiveness.


Interim dividends were paid on 18 January 2006, 13 April 2006 and 14 July 2006
each at the rate of 4.7p per Ordinary share.

The Directors propose a final dividend payment of 7.5p, payable on 31 October
2006 to Shareholders on the register on 29 September 2006, making total
dividends for the year of 21.6p. This represents an increase of 12.8% and
reflects the very strong growth that we have seen in dividends from our
investments in the last year.

Dividend growth remains strong in the UK equity market and the Directors have
therefore decided to increase the rate at which interim dividends will be paid
to 5p per Ordinary share, an increase of 6.4% over the previous year. The rate
of the final dividend will be decided when the results for the year are known.
However, the Directors anticipate that total dividends for next year will not be
less than those paid for this year.


There have been three very good years for equity returns, and it is likely that
the expansion of corporate profit margins that has been the main propellant for
these market returns has largely run its course. Central banks worldwide are now
more concerned about inflation and willing to take some risks with economic
growth in order to control it. Despite these influences, the outlook for the
companies quoted on the London Stock Exchange and forming part of our benchmark
index, several of whom are domiciled overseas or operate largely overseas,
remains benign and the rating of the market is undemanding both absolutely and
compared to alternative investments. In addition, the yield of the market and
anticipated dividend growth provide support. The Board remains optimistic about
the long term return potential of the portfolio.



                                                 Year ended 30 June 2006           Year ended 30 June 2005
                                                 Revenue    Capital      Total    Revenue    Capital      Total
                                                   £'000      £'000      £'000      £'000      £'000      £'000
Realised gains on investments                          -     34,502     34,502          -     14,474     14,474
Unrealised gains on investments                        -     29,141     29,141          -     51,671     51,671
Income                                            17,237          -     17,237     16,533          -     16,533
Investment management fees                       (1,402)    (1,402)    (2,804)    (1,287)    (1,287)    (2,574)
Administrative expenses                            (804)          -      (804)      (881)          -      (881)
                                                ________    _______    _______    _______    _______    _______
Net return before finance costs and               15,031     62,241     77,272     14,365     64,858     79,223

Finance costs of borrowing                         (606)      (606)    (1,212)      (654)      (654)    (1,308)
                                                ________    _______    _______    _______    _______    _______
Return on ordinary activities before and          14,425     61,635     76,060     13,711     64,204     77,915
after taxation
                                                ________    _______    _______    _______    _______    _______
Return per Ordinary share (pence):                  21.8       93.1      114.9       20.0       93.7      113.7
                                                ________    _______    _______    _______    _______    _______

The total column of this statement represents the profit and loss of the

The financial statements for the year ended 30 June 2005 have been restated to
reflect the change to accounting policies as set out in the accompanying notes.

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

No operations were acquired or discontinued in the year.

A Statement of Total Recognised Gains and Losses has not been prepared as all
gains and losses are recognised in the Income Statement.

Ordinary dividends on equity shares              14,207          -     14,207     12,961          -     12,961
                                               ________    _______    _______    _______    _______    _______

The above dividend information does not form part of the Income Statement.


Balance Sheet

                                                                                As at             As at
                                                                         30 June 2006      30 June 2005
                                                                                £'000             £'000
Fixed assets
Investments at fair value through profit or loss                              480,711           417,552
                                                                          ___________       ___________
Current assets
Debtors and prepayments                                                         1,862             1,455
Cash and short term deposits                                                      100             2,700
                                                                          ___________       ___________
                                                                                1,962             4,155
                                                                          ___________       ___________
Creditors: Amounts falling due within one year                                  (959)           (1,106)
                                                                          ___________       ___________
Net current (liabilities)/assets                                                1,003             3,049
                                                                          ___________       ___________
Total assets less current liabilities                                         481,714           420,601

Creditors: Amounts falling due after more than one year
Bank loans                                                                   (25,000)          (16,000)
                                                                          ___________       ___________
Net assets                                                                    456,714           404,601
                                                                          ___________       ___________
Share capital and reserves
Called-up share capital                                                        16,318            16,765
Share premium account                                                           7,955             7,955
Capital redemption reserve                                                      5,283             4,836
Capital reserve - realised                                                    284,030           262,455
Capital reserve - unrealised                                                  121,862            92,721
Revenue reserve                                                                21,266            19,869
                                                                          ___________       ___________
Equity Shareholders' funds                                                    456,714           404,601
                                                                          ___________       ___________
Net asset value per Ordinary share (pence):                                     699.7             603.3
                                                                          ___________       ___________


Reconciliation of Movements in Shareholders' funds

For the year ended 30 June 2006
                                                   Share       Capital   Capital      Capital
                                        Share    premium    redemption   reserve      reserve   Revenue
                                      capital    account       reserve  realised   unrealised   reserve     Total
                                        £'000      £'000         £'000     £'000        £'000     £'000     £'000
Balance at 30 June 2005 as             16,765      7,955         4,836   262,455       92,729    13,072   397,812
originally reported
Restatements (see note 2)                   -          -             -         -          (8)     6,797     6,789
                                      _______    _______       _______   _______      _______   _______   _______
Balance at 30 June 2005 (restated)     16,765      7,955         4,836   262,455       92,721    19,869   404,601
Repurchase of own shares                (447)          -           447  (10,919)            -         -  (10,919)
Dividends on Ordinary shares                -          -             -         -            -  (13,028)  (13,028)
Return on ordinary activities after         -          -             -    32,494       29,141    14,425    76,060
                                      _______    _______       _______   _______      _______   _______   _______
Balance at 30 June 2006                16,318      7,955         5,283   284,030      121,862    21,266   456,714
                                      _______    _______       _______   _______      _______   _______   _______
For the year ended 30 June 2005
                                                   Share       Capital   Capital      Capital
                                        Share    premium    Redemption   Reserve      Reserve   Revenue
                                      Capital    account       reserve  Realised   Unrealised   reserve     Total
                                        £'000      £'000         £'000     £'000        £'000     £'000     £'000
Balance at 30 June 2004 as             17,391      7,955         4,210   262,238       41,055    12,289   345,138
originally reported
Restatements (see note 2)                   -          -             -         -          (5)     6,439     6,434
                                      _______    _______       _______   _______      _______   _______   _______
Balance at 30 June 2004 (restated)     17,391      7,955         4,210   262,238       41,050    18,728   351,572
Repurchase of own shares                (626)          -           626  (12,316)            -         -  (12,316)
Dividends on Ordinary shares                -          -             -         -            -  (12,570)  (12,570)
Return on ordinary activities after         -          -             -    12,533       51,671    13,711    77,915
                                      _______    _______       _______   _______      _______   _______   _______
Balance at 30 June 2005 (restated)     16,765      7,955         4,836   262,455       92,721    19,869   404,601
                                      _______    _______       _______   _______      _______   _______   _______

The revenue reserve represents the amount of the Company's reserves
distributable by way of dividend.


Cash Flow Statement
                                                                             Year ended        Year ended
                                                                           30 June 2006      30 June 2005
                                                                                  £'000             £'000
Net return before finance costs and taxation                                     77,272            79,223
Adjustments for:
Realised gains on investments                                                  (34,502)          (14,474)
Unrealised gains on investments                                                (29,141)          (51,671)
(Increase)/decrease in accrued income                                             (405)               266
Increase in prepayments                                                             (2)               (5)
Increase in accruals                                                                278                31
                                                                             __________        __________
Net cash inflow from operating  activities                                       13,500            13,370

Servicing of finance
Interest paid                                                                   (1,218)           (1,351)
                                                                             __________        __________
Net cash outflow from servicing of finance                                      (1,218)           (1,351)

Financial investment
Purchases of investments                                                       (95,275)          (93,962)
Sales of investments                                                             95,744           132,887
                                                                             __________        __________
Net cash inflow from financial investment                                           469            38,925
                                                                             __________        __________
Equity dividends paid                                                          (13,028)          (12,570)

Management of liquid resources
Cash drawn/(placed) on short term deposit                                           310             (104)
                                                                             __________        __________
Net cash inflow before financing                                                     33            38,270

Drawdown/(repayment of loans)                                                     9,000          (24,000)
Repurchase of own shares                                                       (11,323)          (11,913)
                                                                             __________        __________
Net cash outflow from financing                                                 (2,323)          (35,913)
                                                                             __________        __________
(Decrease)/increase in cash                                                     (2,290)             2,357
                                                                             __________        __________



1.    Accounting policies

The new Financial Reporting Standards, issued as part of the programme to enable
UK GAAP to converge with International Financial Reporting Standards (IFRS),
were applicable for the accounting period ended 30 June 2006 and the financial
statements for the twelve months ended 30 June 2005 have also been restated. The
main change arising from these revisions to UK GAAP, in relation to the
Company's financial statements, is that dividends to shareholders declared after
the balance sheet date are now shown in the period of payment rather than in the
reporting period. Dividends were previously recognised in the Statement of Total
Return (now Income Statement) but these are now dealt with as an appropriation
of equity and are taken directly through equity in the Reconciliation of
Movements in Shareholders' Funds.

2.    Restatement for first time adoption of revised UK GAAP

Figures for the years ended 30 June 2004 and 2005 have been restated and the
impact of these changes are shown below.

Under FRS 26 - 'Financial Instruments: Recognition and Measurement' -
investments should be valued at their fair value which is deemed to be bid
market prices or closing prices for SETS stocks sourced from The London Stock
Exchange. Previously, listed investments (other than SETS stocks) were values at
mid market prices. The financial statements for the years ended 30 June 2004 and
2005 have been restated to show investments at their fair value.

Under FRS 21 - 'Events after the Balance Sheet Date' - dividends should only be
accrued in the accounts if they are a liability at the Balance Sheet date,
therefore they are now recognised in the period in which they are declared and
authorised, not in the period in which they are proposed. No provision has
therefore been made for the final dividend on Ordinary shares for the years
ended 30 June 2005 and 2006. The financial statements for the years ended 30
June 2004 and 2005 have been restated to remove these dividends that were
accrued at those dates. Dividends are no longer recognised through the Income
Statement but rather these are taken to the Statement of Movements in
Shareholders' Funds as an appropriation of equity.

                                                                                        As at           As at
                                                                                 30 June 2005    30 June 2004
                                                                                    (audited)       (audited)
Reconciliation of Balance Sheets                                                        £'000           £'000
Net assets as previously reported                                                     397,812         345,138
Restatement of investments at bid value                                                   (8)             (5)
Reversal of provision of third interim and final dividend                               6,797           6,439
                                                                                     ________        ________
Restated net assets                                                                   404,601         351,572
                                                                                     ________        ________

                                                                                   Year ended
                                                                                 30 June 2005
Reconciliation of the Income Statements                                                 £'000
Total transfer to reserves per original reported Statement of Total Return             64,990
Add originally reported 2005 dividends on Ordinary shares                              12,928
Change from mid to bid basis at 30 June 2004                                                5
Change from mid to bid basis at 30 June 2005                                              (8)

                                                                   As at        As at
                                                            30 June 2005 30 June 2004
Reconciliation of Net Asset Value per share                            p            p
Net asset value as previously reported                             593.2        496.2
Reversal of provision for final dividend                            10.1          9.2
                                                                 _______      _______
Restated net asset value                                           603.3        505.4
                                                                 _______      _______

3.    A summary of the investment changes during the year, summary of net assets
at 30 June 2006 and a list of the twenty largest investments at 30 June 2006 are

4.    The issued share capital at 30 June 2006 was 65,272,958 Ordinary shares of
25p each and 1,143,500 shares held in treasury of 25p each.

5     Returns per share have been based on the following weighted average number
of ordinary shares in issue during each year.

       Weighted average number of Ordinary shares                 66,222,372

6. Ordinary dividends on equity shares
                                                                           Year ended         Year ended
                                                                         30 June 2006       30 June 2005
                                                                                £'000              £'000

First interim of 4.70p (2005 - 4.50p)                                           3,121              3,095
Second interim of 4.70p (2005 - 4.50p)                                          3,110              3,069
Third interim of 4.70p (2005 - 4.50p)                                           3,080              3,038
Final 2006 of 7.5p (2005 - 5.65p)                                               4,896              3,759
                                                                           __________         __________
                                                                               14,207             12.961
                                                                           __________         __________

7.    If approved, the proposed final dividend of 7.50p per share will be paid
on 31 October 2006 to holders of Ordinary shares on the register at the close of
business on 29 September 2006 In respect of the year ending 30 June 2007, three
interim dividends of 5.0p per share will be paid on 19 January 2007, 15 April
2007, and 13 July 2007 to holders of Ordinary shares on the register at the
close of business on 15 December 2006, 16 March 2007, and 15 June 2007

8.    The Income Statement, Balance Sheet, Reconciliation of Shareholders
Movements and Cashflow statement set out above does not constitute the company's
statutory financial statements as defined in Section 240 of the Companies Act
1985.  The statutory financial statements for the year ended 30 June 2005 have
been delivered to the Registrar of Companies and contained an audit report which
was unqualified and did not constitute statements under Sections 237(2) or (3)
of the Companies Act 1985.

       The annual results will be circulated to shareholders in the form of an
Annual Report, copies of which will be available at the Company's registered
office, 123 St Vincent Street, Glasgow and which will be filed with the
Registrar of Companies.

9.    The Annual General Meeting will be held on 30 October 2006 at the
Strathclyde Suite, Glasgow Royal Concert Hall, 2 Sauchiehall Street, Glasgow, G2

By Order of the Board



8 September 2006

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



                                     30 June 2005                                              Valuation
                                      (restated)           Transactions     Appreciation      30 June 2006
                                      £'000          %            £'000            £'000       £'000         %
United Kingdom
Equities                            417,552       99.3          (8,589)           64,811     473,774       98.4
Fixed interest                            -          -            4,500              (3)       4,497        0.9
FTSE options                              -          -            3,605          (1,165)       2,440        0.5
                                    _______    _______          _______          _______     _______    _______
Total investments                   417,552       99.3            (484)           63,643     480,711       99.8

Other net assets                      3,049        0.7          (2,046)                -       1,033        0.2
                                    _______    _______          _______          _______     _______    _______
Total assets                        420,601      100.0          (2,530)           63,643     481,714      100.0
                                    _______    _______          _______          _______     _______    _______


                                                   30 June 2006
                                                   £'000             %
Equities                                         473,774         103.7
Fixed interest                                     4,497           1.0
FTSE options                                       2,440           0.5
Other net assets                                   1,003           0.2
Borrowings                                      (25,000)         (5.4)
                                                 _______       _______
Equity Shareholders' interest                    456,714         100.0
                                                 _______       _______


Twenty Largest Investments
As at 30 June 2006
                                                                    Valuation        assets
Investment                                                              £'000             %
 1  Royal Dutch Shell                                                  32,275           6.7
 2  BP                                                                 29,791           6.2
 3  HSBC Holdings                                                      25,928           5.4
 4  Barclays                                                           20,358           4.2
 5  Royal Bank of Scotland Group                                       19,629           4.1
 6  GlaxoSmithKline                                                    18,308           3.8
 7  Aviva                                                              15,808           3.3
 8  British American Tobacco                                           15,606           3.2
 9  Diageo*                                                            13,475           2.8
10  Lloyds TSB                                                         13,447           2.8
11  Slough Estates                                                     12,169           2.5
12  BT Group                                                           12,077           2.5
13  Centrica                                                           12,023           2.5
14  Anglo American                                                     11,624           2.4
15  Rio Tinto                                                          10,292           2.1
16  Vodafone Group                                                      9,912           2.1
17  Weir Group                                                          8,403           1.7
18  Land Securities Group                                               8,120           1.7
19  Unilever                                                            8,100           1.7
20  Resolution                                                          8,054           1.7
Top twenty investments                                                305,399          63.4

* Consolidated holding

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

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