Monthly Update October 2003
Lindsell Train Investment Trust PLC
17 November 2003
The Lindsell Train Investment Trust PLC
As at 31st October 2003
Fund Objective
To maximise long-term total returns subject to the avoidance of loss of absolute value and with a minimum
objective to maintain the real purchasing power of Sterling capital, as measured by the annual average yield
on the 2.5% Consolidated Loan Stock.
Share Price GBP 90.50
Net Asset Value GBP 94.63
Premium (Discount) (4.4%)
Market Capitalisation GBP 18.1mn
Source: Bloomberg; NAV - LTL
Performance (based in GBP) Oct YTD Since Launch
NAV -0.5% +1.4% -5.4%
Share Price +2.3% -4.7% -9.5%
Monthly Benchmark (Benchmark Ann +0.5%
Yield +5.4%)
Source: Bloomberg. Based in GBP.
Top 10 Holdings % NAV Industry Breakdown % NAV
US Gov Treasury 6.25% 20.5 Bonds 35.5
Lindsell Train Japan (Dist) 11.4 Preference Shares 14.4
Lindsell Train Global Media (Dist) 10.8 Equity - Media 10.2
HBOS 9.25% Non Cum 9.4 Equity - Banks & Investment Co. 4.9
21/2% Consolidated Loan Stock 8.4 Equity - Leisure & Entertainment 9.3
Barr AG 8.0 Equity - Food & Beverage 22.7
Glenmorangie plc A&B 6.8 Investment Fund 22.3
UK Treasury 2.5% 6.6 Cash & Equivalent (19.3)
Cadbury Schweppes 5.9 Total 100.0
Wolverhampton & Dudley Breweries 5.1
Geographical Breakdown % NAV Currency Exposure % NAV
Bonds 35.5 USD 50.9
UK 15.0 JPY 0.5
US 20.5 EUR 0.2
Preference 14.4 GBP 48.4
Shares 47.1 Total 100.0
Equities UK 35.2
US 5.6
Japan 4.2
Europe 2.1
22.3
Funds LT Japan 11.4
LT Global Media 10.8
(19.3)
Cash &
Equivalent
Total 100.0
Fund Manager's Comments
The NAV fell by 0.5% over the month and remains in the £90-98 range, where it has traded all year. What we
made in stocks we lost in bonds. This month it was the turn of the Sterling irredeemable bonds to fall as the
market anticipated higher short-term rates. Our most market sensitive stocks were up the most, Reuters and
Dow Jones reflecting a good month for the performance of equities. The US dollar fell 2% versus Sterling,
which contributed to the fall in the NAV.
The markets this month had to come to terms with a forthcoming rise in short term interest rates in the UK,
justified in part to quell fast rising household indebtedness, which itself continues to fuel robust
consumption and housing. This is a delicate balancing act for the Bank of England, because once consumers do
retrench it is likely to be very difficult to get them to spend again. Meanwhile as these GNP components are
three quarters of the economy their future is vital to its heath. This is why we remain as committed to our
long bond positions and at the same time to financing our borrowings with short-term debt. We expect big
falls in long and short-term interest rates when consumer spending and housing activity abates.
We didn't deal this month. Instead a number of our company's reported results or made worthwhile
announcements about the progress of their businesses. Aside from the positive news from AG Barr, Dow Jones
and Reuters all of which we mentioned last month, Cadbury announced a rationalisation of its confectionary
business following the absorption of Adams, the US chewing gum business it bought last year. Plants will be
consolidated and jobs will be cut. This is good. Even steady growth businesses will find it difficult to grow
revenues in low inflationary times without a continual reassessment of how they deploy capital and resources.
Wolters Kluwer swallowed its pride, admitted it had become dependant on acquisitions in recent years,
nonetheless recommitted to its dividend that investors feared would be cut and which offers a yield of 4.9%
and set revised margin targets and targets for the percentage of their publications they aim to distribute
electronically that, if met, would significantly enhance the value of the company, in our view. Nintendo cut
the price of its Gamecube consol by 30% to $100 in the US, its major market. The console has always been
cheaper than its rivals but the gap has now widened, as the competitors have not as yet responded. This move
is clearly designed to boost the all-important year-end sales, together with the release of some new hit
software. Early indications suggest that Nintendo's market share has risen to near 40% of console sales (not
including hand-held) from less than 20% earlier. When you add the sales of the hand held platform, Game Boy
SP, to this Nintendo has for this year had the largest market share of any hardware manufacturer, commanding
a share of 50% of the entire market. Software sales data is not so readily available but we have every reason
to believe that Nintendo is thriving here as well with some prospect of even better sales, if this seasons
new releases capture the imagination of the public. The shares are 5% away from their recent low and remain,
we think, outrageously cheap trading on a 8-15% free cash flow yield depending on how much balance sheet cash
one thinks is required to protect the company from future business threats.
In general these reports make pleasing reading for us and in particular give us encouragement that should
equities in general continue to do well we retain some assets with significant latent potential for
appreciation.
Fund Manager Launch Date Denominated Currency
Nick Train 22 January 2001 GBP
Year End Dividend Benchmark
31st March Ex-date: June The annual average yield
Payment: August on the 21/2% Consolidated
Loan Stock.
The Board Management Fees Registered Address
Rhoddy Swire Standard Fee: 0.65% p.a. Lindsell Train Investment
Michael Mackenzie Performance Fee: 10% of annual Trust
Donald Adamson increase in the share price, plus 77A High Street
Michael Lindsell dividend, Brentwood
above the gross annual yield of ESSEX DM14 4RR
the 21/2% Consolidated Loan Stock.
Sedol No Bloomberg
3197794 LTI LN
Disclaimer
The contents in this document is solely for information purposes only. The information contained herein does
not constitute an offer or invitation to buy or subscribe any securities or funds in any jurisdiction in
which such distribution is not authorised. Nothing in this document constitutes investment, legal, tax or
other advice and cannot be relied upon in making any investment decision. Applications to invest in some of
the funds must only be made on the basis of offer documents which may only be available for private
circulation. The information contained in this document is published in good faith and neither Lindsell Train
Limited nor any other person so connected assumes any responsibility for the accuracy or completeness of such
information as provided. No representation is made or assurance given that any statements made, views,
projections or forecasts are correct or that objectives will be achieved. Lindsell Train and/or persons
connected with it may have an interest in the Fund. The value of investments and the income from them may go
down as well as up and are not guaranteed. Past performance is no guarantee of future performance. You may
not get back the amount you invested. Foreign exchange rates may cause the value of investments to go up or
down. Investments may be subject to higher volatility in certain funds and the investment value may fall
suddenly and substantially.
Lindsell Train Limited
35 Thurloe Street, London SW7 2LQ
Tel. +44 20 7225 6400 Fax. +44 20 7225 6499
info@lindselltrain.com www.lindselltrain.com
Lindsell Train Limited is authorised and regulated by the Financial Services Authority.
-------------------------------------------------------------------------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 10 hours ago Oxford Nanopore Technologies
- 11 hours ago AVI Global Trust
- 11 hours ago LSL Property Services
- 11 hours ago Bluebird Merchant Ventures (DI)
- 11 hours ago Power Probe PLC