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Fins Growth Inc Tst (FGT)

  Print      Mail a friend       Annual reports

Thursday 17 December, 2009

Fins Growth Inc Tst

Preliminary Announcement


                                                                   NEWS RELEASE

                                       For immediate release - 17 December 2009


Finsbury Growth & Income Trust PLC

             Audited Results for the Year Ended 30 September 2009              


Finsbury Growth & Income Trust PLC today announces its preliminary results for
the year ended 30 September 2009.


                                                   30         30           
                                                September  September       
                                                  2009                    %
                                                             2008    Change
Share price                                      231.0p     202.0p   +14.4 
Net asset value per share (including income)     249.0p     215.5p   +15.5 
Net asset value per share (excluding income)     243.9p     215.5p   +13.2 
Dividends per share                               9.5p       9.5p      -   
Discount of share price to net asset value per                             
share (excluding income)                                                   
                                                  5.3%       6.3%          
Gearing (borrowings as a percentage of                                     
shareholders' funds)                                                       
                                                  10.6%      11.8%         
Share price total return*                        +22.9%     -33.1%         
Net asset value per share total return*          +24.0%     -31.4%         
FTSE All-Share Index (total return) (company                               
                                                 +10.8%     -22.3%         
Total expense ratio (excluding the recovery of                             
                                                  0.9%       1.0%          


5 Year Performance Summary                   30/9/  30/9/  30/9/  30/9/  30/9/ 
                                             2005   2006   2007   2008   2009  
Share Price                                  260.3p 300.3p 307.5p 202.0p 231.0p
Share price total return*                    +37.2% +19.6% +5.3%  -33.1% +22.9%
Net asset value per share (including income)                                   
                                             257.8p 302.6p 315.4p 215.5p 249.0p
Net asset value per share (excluding income)                                   
                                             253.8p 298.4p 310.6p 215.5p 243.9p
Net asset value per share total return*                                        
                                             +31.5% +21.2% +6.9%  -31.4% +24.0%
FTSE All-Share Index (total return)                                            
                                             +24.9% +14.7% +12.2% -22.3% +10.8%
Premium/(discount) of share price to net                                       
asset value per share (excluding income)                                       
                                              2.6%   0.6%  (1.0)% (6.3)% (5.3)%
Gearing (borrowings as a percentage of                                         
shareholders' funds)                                                           
                                             15.6%  13.4%  15.0%  11.8%  10.6% 
Ordinary dividends per share                  8.0p   8.4p   9.0p   9.5p   9.5p 
Special dividends per share                    -     2.3p    -      -      -   


*Source: Morningstar. Includes the 2008 second interim dividend which had an
ex-dividend date of 1 October 2008.

+TER is calculated based on the average net asset value during the year ended
30 September.








This Announcement is not the Company's annual report. It is an abridged version
of the Company's full annual report for the year ended 30 September 2009, which
has been approved by the Board. The full annual report will be sent to
shareholders on 23 December 2009. The full annual report, together with a copy
of this announcement, will also be available on the Company's website:



The following are attached:

Chairman's Statement

Investment Manager's Review

Income Statement

Reconciliation of Movements in Shareholders' Funds

Balance Sheet

Cash Flow Statement



For further information please contact:

Mark Pope, Frostrow Capital LLP    020 3 008 4913
Anthony Townsend, Chairman         020 3 008 4910
Nick Train, Lindsell Train Limited 020 7 227 8200


Chairman's Statement



After a challenging first half of the year to 31 March 2009, markets rallied
strongly in the second half and I am delighted to be able to report that
overall the Company's net asset value total return for the year was 24%. The
share price total return was slightly less at 22.9%. These results compare to
the total return from our benchmark index, the FTSE All-Share index, of 10.8%.
Overall the more buoyant market conditions have provided a welcome contrast to
those experienced in 2008.


The Company's strong outperformance when compared to the benchmark index is
particularly pleasing and was derived principally from good returns from our
major holdings in A.G. Barr, Cadbury, Fidessa, Unilever and Pearson.


Share Capital

The Company has continued to be active in issuing shares from treasury at a
discount of less than 5% and 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 1,009,000 shares were repurchased for treasury during the year in accordance
with the Company's stated policy and 1,330,000 shares were reissued during the
year 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 year end a
further 680,000 shares have been issued from treasury and 1,069,360 shares have
been repurchased to be held in treasury leaving a balance of 1,915,110 shares
held in treasury at the date of this report.


The Board attaches considerable importance to its discount control mechanism
which is actively used. The average month end discount of share price to the
ex-income net asset value per share during the year was 4%.



Return and Dividend

The Income Statement shows a total return per share of 43.1p consisting of a
revenue return per share of 9.1p and a capital return per share of 34.0p.


Your Board has declared two interim dividends for the year totalling 9.5p per
share (year ended 30 September 2008: 9.5p). The total cost of the two dividends
attributable to the year was £4.826m which compares to a net revenue available
for distribution for the year of £4.639m and therefore £187,000 of brought
forward reserves have been applied in paying the total dividend for the year.
Following payment of the second interim dividend on 6 November 2009 the Company
has £2.164m of retained distributable reserves which is equivalent to
approximately 4.2p per share.


The Board is very conscious of the importance of income to our shareholders,
but also considers it vital not to compromise the investment strategy of the
Company. The EU has barred Lloyds Banking Group from paying preference share
dividends before 2012, a ruling that will have an impact on the Company's
income. The result will be an income shortfall from the current rate of
dividend payment which may exceed the availability of the Company's
distributable reserves. However, the extent and duration of the shortfall is
not possible to ascertain today. The Board will review the position at the time
of the interim dividend declaration in March 2010.



Subsequent to the year end the Company arranged a new secured fixed term
committed multicurrency revolving credit facility of £15m with Scotiabank
Europe PLC which is subject to an interest rate linked to the London Inter-Bank
Offered Rate. A total of £14.45m is currently drawn down from this new


Proposed Change to Investment Policy

The Company's current investment policy is to invest principally in the
securities of UK quoted securities.  However, outside the control of our
Investment Manager we already have two investments, namely Thomson Reuters and
Dr Pepper Snapple, equating to approximately 5% of the portfolio, that do not
fulfil this criteria. Under the Listing Rules the Company is required to seek
the approval of shareholders for any material change in its investment policy
and I set out below further information about the proposed change. An ordinary
resolution to approve the change will be proposed at the Company's Annual
General Meeting to be held at 12 noon on Wednesday, 27 January 2010 at The City
of London Club, 19 Old Broad Street, London EC2N 1DS.

Our Investment Manager believes that it would be beneficial to shareholders if
the restriction of investing principally in the UK were amended such that up to
a maximum of 20% of the Company's portfolio can be invested in quoted companies
worldwide. This would enable the Company to retain its membership of the UK
Growth & Income Sector as administered by the Association of Investment

The Board strongly supports the investment philosophy and approach of our
Investment Manager Lindsell Train Limited and is of the view that, particularly
in the current difficult market conditions, the Company is more likely to be
able to achieve capital and income growth and to provide shareholders with a
total return in excess of that of the FTSE All-Share Index if this proposed
amendment to the Company's investment policy were made.






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. All past VAT payments due for reclaim by the
Company have now been received.


Alternative Investment Fund Manager ('AIFM') Directive

The AIFM Directive is draft legislation currently being considered in Europe
which will regulate 'alternative investment funds'. As currently drafted it
will adversely affect all investment trusts, including this Company. The Board
therefore actively supports the initiatives being taken by the Association of
Investment Companies to ensure that the Directive is tailored to accommodate
the investment company structure. The Board will keep shareholders informed of
developments concerning the Directive as they arise.




Whilst the recovery in markets generally during 2009 has been welcome, the
outlook remains difficult to gauge, both from a capital and an income return
perspective. The UK economy continues to have an uncertain feel about it and
unemployment is expected to continue to rise in the short term. An increase in
inflation in the short term has also been predicted by the Bank of England. The
current financial year will see a general election in the UK, however it is
difficult to see that whoever wins will be able to make meaningful changes in
the short term and the prospect of significant public spending cuts and tax
rises is virtually certain.


Despite this unpromising outlook, your Board remains strongly supportive of our
Investment Manager's strategy of investing for the long term in durable cash
generative franchises with sustainable dividend growth rates. We continue to
believe that this strategy will deliver superior investment returns to


Further information concerning the portfolio, including dividend prospects, can
be found in our Investment Manager's report below.


Anthony Townsend


17 December 2009


Investment Manager Review


The last twelve months have, of course, been a most disagreeable white-knuckle
ride, with every chance that further nauseating loop-de-loops await.


We look back and wonder two things.  What lessons have we learned?  And,
perhaps more important, which of the investment rules or guidelines, that had
served us well for the previous seven years of our responsibility for your
Company's portfolio, stood up to the intense examination of the bear market and
remain valid?


As to lessons learned - one springs, most painfully, to mind.  We will never
again invest in the shares of any bank without paying closer attention to how
it funds its business.  I'm afraid that like the boards of several institutions
we were complacent in assuming major banks would always be able to refinance
their short term liabilities.  As this report is written our only remaining
exposure to the banking sector is via Lloyds preference shares, a position held
for many years. These have proven a poor allocation of your capital. What we
regarded as one of the least risky assets in the portfolio has turned out to be
one of the worst performers and this disappointment has been compounded by the
recent announcement of a two year suspension of their dividends, required by
the EU (we sold the Lloyds ordinary shares after the period end, on learning of
this dividend hiatus). In our judgement these preference shares are cheap
today, assuming Lloyds is a healing institution, but this situation must be
watched closely.


Turning to our guiding principles, we have growing concerns about one long term
touchstone.  We had always believed in the efficacy of investing in shares
offering above average dividend yields.  This may still be a winning strategy
in the very long term, but there is something bothersome to us about the
outlook for UK dividends.  It is not only that they are being cut at a quicker
rate, reportedly, than before the First World War; it is their unusual
distribution.  Nearly half the total dividends by value currently paid by
London-listed companies derive from just six giant companies - BHP, BP, Glaxo,
HSBC, Shell and Vodafone.  And of these six, five pay their dividends in
dollars, not sterling - Vodafone the exception.  Investing for dividend yield
today, therefore, not only requires one to concentrate on a limited number of
companies, for which you may or may not have any great enthusiasm (and we own
none of the six currently), it also involves involuntary currency risk.  As to
that risk, the fact is we agree with a comment we heard recently - that picking
developed world currencies now is like being asked to choose between horses in
a glue factory - they are all knackered.  And perhaps sterling is even more so
than any other, in which case receiving one's dividends in US dollars will be a
boon.  But nothing beats matching one's long term liabilities to the currency
that will be required to pay for them and all your Company's constituents pay
sterling dividends, with the exception of Thomson Reuters and Dr Pepper


These concerns mean that although dividends still very much matter in our
thinking, we place higher value today on the sustainability of a given
company's dividend, or even better, on the sustainability of its dividend
growth rate, than on the starting level of dividend yield.  For instance,
software company Fidessa is a key holding for your Company - not least because
of its 64% capital gain over the last year.  Fidessa has a wonderful dividend
record, having increased its annual payments from 3.4p in 1999 to 27p this
year, including a 33% hike in its recent interim coupon.  Today Fidessa's
shares offer a starting dividend yield of just 2% - some 35% less than that of
the FTSE All Share itself, although still usefully higher than the current rate
of UK retail price inflation.  Nonetheless, we think it would be a mistake to
exchange Fidessa's shares for others with a higher starting yield, but without
the same security and growth potential.  The reason can be seen here - the
current value of the investment in Fidessa is more than double the book cost -
meaning that the "dividend yield to book cost", or today's dividend as a
percentage of the average purchase price, is over 4%.  That 4%, which should go
higher, as Fidessa increases future dividends, is one measure of the success of
a "growth and income" investment.  And, more generally, we think some of the
best dividend prospects in the portfolio are found with companies more
traditionally regarded as "growth" plays, rather than "income" stocks - for
instance, London Stock Exchange, Pearson, Reed Elsevier, Sage, Schroders and
Thomson Reuters.  


We retain greater confidence in the following tried and tested investment
rules.  Last year's bouleversements confirmed for us the validity of one of the
most forthright and challenging propositions about investment we know - from
fabled US investor Peter Lynch.


  "No one can predict the economy, interest rates or the stock market.  Dismiss
all such forecasts."


What we find valuable here is not so much the assertion that the so-called
experts - including us - have no real idea what will happen next (sometimes
their predictions are true, sometimes untrue and only hindsight enables you to
establish which is which) and in any case contradict each other, it is the
insistence that investors take decisions or build portfolios on something more
tangible than guesses about an unknowable future.


Something more tangible, for instance, is a disciplined contrarian approach. 
Perhaps Warren Buffett puts it best, in his typically homely way.


"Whether we're talking socks or stocks, I like buying quality merchandise when
it is marked down."


Having hoarded cash for years, Buffett committed billions to the equity markets
last Autumn when others were selling in despair.  While few executed with such
aplomb, we at least held our nerve and increased your Company's borrowings and
gearing as markets approached their lows - magnifying the benefits of the
subsequent recovery for shareholders.  Today, borrowings stand at £14.45m, for
gearing of 11.4%.   In addition, we followed Buffett's quip and invested
sartorially with the one new holding we initiated for your Company last year. 
This was Burberry.  In mid-2007 Burberry shares peaked at £7.20.  We had
followed the company for years, but owned none, unable to make sense of the
valuation at those prices.  By October 2008, though, they had halved, to £
3.60.  At this point we started buying - tentatively.  One month later the
shares halved again, hitting a multi-year low of £1.60.  We carried on buying,
admittedly flinching slightly as we did so.  A year on, the shares are back at
£5.65!  Burberry - which does carry a line of natty check socks - is definitely
"quality merchandise".  And even if its share price behaves like an elevator
with a lunatic at the controls, you should always look for opportunities to
pick up quality at bargain prices.


Finally, it has been a great relief to us that our favourite investment rule,
the one rule that has never yet failed us, has held fast.  This was taught me
by a former boss and I share it willingly here.  The rule says that - "if a
company makes products that taste good, buy the shares".  Good tasting products
tend to attract loyal customers and loyal customers make for both decent and
reliable profitability and, critically, for long run inflation-proofing - rare
and valuable characteristics.


The portfolio is full of companies whose products taste good - such as A.G.
Barr, Diageo, Dr Pepper, Fullers, Marston's, Unilever and Youngs - and, by and
large, their shares held up well during recent traumas and have made rewarding
longer term investments.  Most topically, your Company has a substantial
investment in Cadbury, currently caught up in a bid tussle.  We note that
Cadbury shares had outperformed the FTSE All Share Index over 1, 3, 10 and 20
years even before Kraft's approach - a satisfactory showing, for what was
regarded as a dull, but worthy company and testament to the power of investing,
over the long term, in companies whose products "taste good".  We expect Kraft
will have to pay up to win control of this exceptional corporate asset.  We
certainly have no intention of accepting anything like its sighting shot.      


Nick Train, Lindsell Train Limited

Investment Manager

17 December 2009



Income Statement

incorporating the revenue account for the year ended 30 September 2009


                                       2009                                    2008
                  Revenue  Capital    Total Revenue        Capital   Total         
            Notes   £'000    £'000    £'000         £'000      £'000          £'000
(losses) on                                                                        
at fair                                                                            
through               -   17,942   17,942            -    (51,522)         (51,522)
profit or                                                                          
Exchange              -        2        2                                          
Income          2 5,401        -    5,401        6,363           -            6,363
performance     3 (226)    (460)    (686)        (300)       (609)            (909)
Recovery of                                                                        
VAT on                                                                             
fee             6    50      101      151            -           -                -
Other             (410)        -    (410)        (434)           -            (434)
(loss) on                                                                          
before            4,815   17,585   22,400        5,629    (52,131)         (46,502)
charges and                                                                        
Finance           (176)    (359)    (535)        (346)       (702)          (1,048)
(loss) on                                                                          
ordinary          4,639   17,226   21,865        5,283    (52,833)         (47,550)
Taxation on                                                                        
activities            -        -        -            -           -                -
(loss) on                                                                          
ordinary          4,639   17,226   21,865        5,283    (52,833)         (47,550)
Return/         4  9.1p    34.0p    43.1p        10.1p    (101.2)p          (91.1)p
(loss) per                                                                         



The "Total" column of this statement represents the Company's Income Statement.


The "Revenue" and "Capital" columns are supplementary to this and are prepared
under guidance published by the Association of Investment Companies (AIC).


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 Statement.











Reconciliation of Movements in Shareholders' Funds

For the year ended 30 September 2009

                      Called-up   Share            Capital                          
                          share premium                                             
                      capital £ account Special redemption  Capital Revenue         
                           '000   £'000 reserve  reserve £  reserve reserve         
                                          £'000       '000    £'000   £'000  Total £
At 30 September 2008     13,199  35,914  12,424      3,453   39,845   4,949  109,784
Net return on                                                                       
ordinary activities                                                                 
                              -       -       -          -   17,226   4,639   21,865
Second interim                                                                      
dividend (5.1p per                                                                  
share) for the year                                                                 
ended 30 September                                                                  
2008                          -       -       -          -        - (2,598)  (2,598)
First interim                                                                       
dividend (4.4p per                                                                  
share) for the year                                                                 
ended 30 September                                                                  
2009                          -       -       -          -        - (2,211)  (2,211)
Repurchase of shares                                                                
into treasury                                                                       
                              -       -       -          -  (1,856)       -  (1,856)
Sale of shares from           -       -       -          -    2,675       -    2,675
Year ended 30                                                                       
September 2009                                                                      
                         13,199  35,914  12,424      3,453   57,890   4,779  127,659
At 30 September 2007   13,162   35,482  12,424    3,453     97,023   4,511  166,055 
Net (loss)/return on                                                                
ordinary activities                                                                 
                          -        -       -        -      (52,833)  5,283  (47,550)
Second interim                                                                      
dividend (4.8p per                                                                  
share) for the year                                                                 
ended 30 September                                                                  
2007                      -        -       -        -         -     (2,527) (2,527) 
First interim                                                                       
dividend (4.4p per                                                                  
share) for the year                                                                 
ended 30 September                                                                  
2008                      -        -       -        -         -     (2,318) (2,318) 
Shares issued net of                                                                
issue expenses                                                                      
                         37       432      -        -         -        -      469   
Repurchase of shares                                                                
into treasury                                                                       
                          -        -       -        -      (6,081)     -    (6,081) 
Sale of shares from       -        -       -        -       1,736      -     1,736  
Year ended 30                                                                       
September 2008                                                                      
                       13,199   35,914  12,424    3,453     39,845   4,949  109,784 

Balance Sheet

as at 30 September 2009


                                                           2009       2008
                                                          £'000      £'000
Fixed assets                                                              
Investments designated at fair value through profit     138,799    121,586
or loss                                                                   
Current assets                                                            
Debtors                                                   1,022      1,159
Cash at bank                                              1,531        204
                                                          2,553      1,363
Current Liabilities                                                       
Creditors                                                 (193)      (165)
Bank loan                                              (13,500)   (13,000)
                                                       (13,693)   (13,165)
Net current liabilities                                (11,140)   (11,802)
Total net assets                                        127,659    109,784
Capital and reserves                                                      
Called-up share capital                                  13,199     13,199
Share premium account                                    35,914     35,914
Capital redemption reserve                                3,453      3,453
Special reserve                                          12,424     12,424
Capital reserve                                          57,890     39,845
Revenue reserve                                           4,779      4,949
Equity shareholders' funds                              127,659    109,784
Net asset value per share (note 5)                       249.0p     215.5p


Cash Flow Statement

for the year ended 30 September 2009


                                                              2009       2008
                                                             £'000      £'000
Net cash inflow from operating activities                    4,573      5,548
Net cash outflow from servicing of finance                   (487)    (1,185)
Financial investment                                                         
Purchase of investments                                    (7,017)    (5,886)
Sale of investments                                          7,746     21,791
Net cash inflow from financial investment                      729     15,905
Equity dividends paid                                      (4,809)    (4,845)
Net cash inflow before financing                                 6     15,423
Shares issued net of issue expenses                              -        469
Repurchase of shares into treasury                         (1,856)    (6,081)
Sale of shares from treasury                                 2,675      1,736
Drawdown/(repayment) of loans                                  500   (11,850)
Net cash inflow/(outflow)/inflow from financing              1,319   (15,726)
Increase/(decrease) in cash                                  1,325      (303)
Reconciliation of net cash flow to movement in net debt                      
Increase/(decrease) in cash resulting from cashflows         1,325      (303)
(Increase)/decrease in debt                                  (500)     11,850
Exchange movements                                               2          -
Movement in net debt                                           827     11,547
Net debt at 1 October 2008                                (12,796)   (24,343)
Net debt at 30 September 2009                             (11,969)   (12,796)




 1. Accounting Policies


The principal accounting policies, all of which have been applied consistently
throughout the year in the preparation of these financial statements are set
out below:


Basis of preparation

The financial statements have been prepared under the historical cost
convention, except for the measurement at fair value of investments and in
accordance with UK Generally Accepted Accounting Practice (GAAP) and the
Statement of Recommended Practice (SORP) for "financial statements of
Investment Trust Companies" issued by the Association of Investment Trust
Companies dated January 2009.



Investments have been designated by the Board as held at fair value through
profit or loss and accordingly are valued at fair value. Fair value for quoted
investments is deemed to be bid market prices, or last traded price, depending
on the convention of the exchange on which they are quoted.


Unquoted investments are valued by the Directors using primary valuation
techniques in accordance with IPEVCA guidelines.


Changes in the fair value of investments held at fair value through profit or
loss, and gains and losses on disposal are recognised in the Income Statement
as "gains or losses on investments held at fair value through profit or loss".


All purchases and sales of investments are accounted for on the trade date


The Company's policy is to expense transaction costs on acquisition and the
capital column of the Income Statement. The total of such expenses, showing the
total amounts included in disposals and additions are disclosed below, as
recommended by the SORP.


Transaction costs on the acquisition and sale of investments totalled £36,000
and £13,000 respectively (2008: £50,000 and £33,000) and are included in the
gains/(losses) on investments within the Income Statement.


Dividend Payments

Dividends paid by the Company on its shares are recognised in the financial
statements in the period in which they are paid and are shown in the
Reconciliation of Movements in Shareholders' Funds.


Investment Income

Dividends receivable on equity shares are recognised on the ex-dividend date.


Fixed returns on non-equity shares are recognised on a time apportionment


Special dividends: In deciding whether a dividend should be regarded as a
capital or revenue receipt, the Company reviews all relevant information as to
the reasons for and sources of the dividend on a case by case basis.

LLP profit share is recognised in the financial statements when the entitlement
to the income is established.

Expenditure and Finance Charges

   All the expense and finance costs are accounted for on an accruals basis.
Expenses are charged through the revenue column of the Income Statement except
as follows:

Notes (continued)


expenses which are incidental to the acquisition or disposal of an investment
are treated as part of the cost or proceeds of that investment (as explained in
1(b) above);

expenses are taken to capital reserve realised via the capital column of the
Income Statement, where a connection with the maintenance or enhancement of the
value of the investments can be demonstrated. In line with the Board's expected
long term split of returns, in the form of capital gains and income, from the
Company's portfolio, 67% of the investment management fee and finance costs are
taken to the capital reserve; 

performance fees are charged 100% to capital.


The payment of taxation is deferred or accelerated because of timing
differences between the treatment of certain items for accounting and taxation
purposes.  Full provision for deferred taxation is made under the liability
method, without discounting, on all timing differences that have arisen, but
not reversed by the balance sheet date, unless such provision is not permitted
by Financial Reporting Standard 19.


Any tax relief obtained in respect of management and investment management
fees, finance costs and other capital expenses charged or allocated to the
capital column of the Income Statement is reflected in the Capital reserve -
realised and a corresponding amount is charged against the revenue column of
the Income Statement.  The tax relief is the amount by which corporation tax
payable is reduced as a result of these capital expenses.


Capital Reserve


           The following are taken to this reserve:

Gains and losses on the realisation of investments;

Exchange differences of a capital nature;

Expenses, together with the related taxation effect, allocated to this reserve
in accordance with the above policies; and

            -Increase and decrease in the valuation of investments held at the
year end.

Following guidance in the revised SORP, the capital reserve realised and the
capital reserve unrealised are now presented as one reserve on the face of the
Balance Sheet.

(h) Cash at bank

Cash comprises cash in hand and demand deposits.

2.           Income


                                              2009  2008
                                             £'000 £'000
Income from investments                                 
Franked investment income                               
- dividends                                  5,326 6,237
Unfranked investment income                             
- Limited Liability Partnership profit-share    70    11
- fixed interest                                 -    65
- money market dividend                          5    44
                                             5,401 6,357
Other income                                            
Bank interest                                    -     6
Total Income                                 5,401 6,363







Notes (continued)


3.           Investment Management, Management and Performance Fees


                           Revenue Capital Total Revenue Capital Total
                              2009    2009  2009    2008    2008  2008
                             £'000   £'000 £'000   £'000   £'000 £'000
Investment management fee      144     293   437     199     402   601
Management fee                  71     145   216      86     176   262
VAT on management fee           11      22    33      15      31    46
Total fees                     226     460   686     300     609   909




4.           Return/(loss) per Share



                         Revenue Capital Total Revenue   Capital   Total
                            2009    2009  2009    2008      2008    2008
Return/(loss) per Share     9.1p   34.0p 43.1p   10.1p  (101.2)p (91.1)p



              The total return per share is based on the total loss
attributable to equity shareholders of £21,865,000 (2008: loss £47,550,000),
and on 50,737,975 (2008: 52,206,113) shares, being the weighted average number
of shares in issue during the year.


              Revenue return per share is based on the net revenue on ordinary
activities after taxation of £4,639,000 (2008: profit £5,283,000).


              Capital profit per share is based on net capital loss for the
year of £17,226,000 (2008: loss £52,833,000).


5.           Net Asset Value per Share

              Net asset value per share is based on net assets of £127,659,000
(2008:£109,784,000) and on 51,271,673 (excluding treasury shares) (2008:
50,950,673) shares in issue at the year end. As at 30 September 2009 the
Company held 1,525,750 shares in treasury (2008: 1,846,750).


6.           Contingent Asset

On 31 October 2007 the Association of Investment Companies announced that HM
Revenue and Customs had confirmed to the Investment Management Association that
investment trust management fees should no longer attract Value Added Tax
(VAT). As a result, during the period the Company's previous Manager, Close
Investments Limited (Close), submitted a claim to HM Revenue and Customs for
the repayment of £154,000, which equates to 0.3p per share. This amount is in
respect of VAT previously paid by the Company to Close. In view of the fact
that at the Company's year end, the absolute amount was still subject to
challenge by HMRC, only £120,000 of this amount was recognised during the year,
leaving a contingent asset of £34,000 as at 30 September 2009. Subsequent to
the year end the amount of £154,000 has now been received in full. Also, during
the year an amount of £31,000 in respect of VAT paid to Lindsell Train during
the three month period ended 30 September 2007 was received.



7.           Financial Information

This preliminary statement is not the Company's statutory accounts. The above
results for the year ended 30 September 2009 are an abridged version of the
Company's audited statutory accounts, which have not yet been filed with the
Registrar of Companies.


The statutory accounts for the year ended 30 September 2008 have been delivered
to the Registrar of Companies and those for 30 September 2009 will be
despatched to shareholders shortly.  The statutory accounts for the years ended
30 September 2008 and 2009 both received an audit report which was unqualified,
did not include a reference to any matters to which the auditors drew attention
by way of emphasis without qualifying the report, and did not contain
statements under Section 237 (2) and (3) of the Companies Act 1985 or Section
498 of the Companies Act 2006 as applicable.



Frostrow Capital LLP,

Company Secretary

17 December 2009


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