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Murray Intnl Trust (MYI)

  Print          Annual reports

Wednesday 21 August, 2013

Murray Intnl Trust

Half Yearly Results

RNS Number : 1388M
Murray International Trust PLC
21 August 2013
 



MURRAY INTERNATIONAL TRUST PLC

 

HALF YEARLY REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2013

 

The Directors of Murray International Trust PLC report the unaudited results of the Company for the six months ended 30 June 2013.

 

INTERIM BOARD REPORT

 

Background

An abrupt realisation by financial markets that the United States cannot continue printing money in perpetuity resulted in a distinctly sobering conclusion to the period under review. Up until then, global equity markets had experienced material consecutive monthly gains based on hopes for global economic recovery and ample liquidity from central banks eager to inflate confidence and asset prices.  Anaemic growth prospects and weak fundamentals were largely overlooked by investors.  Equity market valuations expanded rapidly as stock prices moved sharply ahead of profit and dividend growth.  The optimism eventually succumbed to reality when the first hint that stimulative monetary policy might end prompted a rapid unwinding of excessive leveraged positions across all financial asset classes.  The resulting decline in prices, however, reversed only a portion of the positive returns secured earlier in the year.

 

Performance

The net asset value total return, with net income reinvested for the six months to 30 June 2013 was 9.3% compared with a total return of 12.4% on the Trust's benchmark (40% the FTSE World UK and 60% FTSE World ex UK).  Over the six month period the share price rose by 9.0% (total return), reflecting a very small reduction in the premium to net asset value on which the shares traded.

 

Absolute and relative performance was attributable to a mix of asset allocation and individual stock contributions.  By far the largest contributing factors to relative benchmark underperformance were the respective allocations to Latin America and North America.  Exposure to Brazil proved negative from both an asset allocation and currency stand-point, although strong stock selection in the Latin American region did partially offset this weakness.  The significant underweight position in North America proved very negative on an asset allocation basis, as this benchmark heavyweight returned over 20% in Sterling terms over the period.  The underweight position in Japanese equities also detracted from performance. Strong stock selection in Asia more than offset the negative impact of being overweight in the region, with solid absolute returns being secured. Having relatively low exposure to the UK was positive on an asset allocation basis as the UK market significantly underperformed the composite index over the period. Despite preserving capital in the residual fixed income allocation, this exposure also proved a drag on overall relative performance.

 

On 11 April 2013, the Directors announced a first interim dividend of 9.5p per Ordinary share for the current year compared with 9.0p per share last year.  Since the end of June a second interim dividend, also of 9.5p, has been announced and will be paid to shareholders on 15 November 2013.

 

Issue of New Shares

During the period under review the Company issued 3.8 million new Ordinary shares at a premium to the prevailing net asset value per Ordinary share at the time of each issue. Since the start of the issuance programme, over £330 million of new funds has been raised through the issue of new shares and, by issuing these shares at a premium, the Company is able to enhance slightly the net asset value per share whilst also improving the liquidity of its shares.  As previously stated, such issuance is also important for Share Plan Participants and other regular purchasers of the Company's shares because it ensures that the premium is managed. At the AGM of the Company held in April 2013, shareholders authorised the Company to issue new Ordinary shares for cash representing up to 10% of the issued share capital. The Board will continue to consider the merits of issuing new shares, at a premium, when there is unfulfilled demand in the market and it is in shareholders' interests to do so, subject to the overriding Listing Rule requirement not to issue more than 10% of the outstanding equity in any rolling 12 month period.

 

In the short term such issuance can have a dilutive impact upon the Company's earnings.  In practice this means that the dividend paid on newly issued shares may not have been earned in full. We mitigate the impact of this by paying quarterly dividends, investing the proceeds promptly and by not issuing shares during the period before a dividend is paid.  The objective is to ensure that the premium received on new shares more than covers the revenue accrued to those shares.

 

 

 

AIFMD

The Alternative Investment Fund Managers Directive ("the Directive") came into force on 22 July 2013 with a transitional period prior to full implementation in July 2014.  The Directive has significant consequences for the Company (and all similar investment companies) and will increase compliance and regulatory costs. The Board is in discussions with the Manager and other service providers concerning the implementation of the Directive, and will notify shareholders when exact details have been finalised.

 

Gearing

On 4 June 2013 the Company announced that the Royal Bank of Scotland plc had agreed to make available to the Company a new aggregate £120 million sterling loan ("the Loan"). The purpose of the Loan was to refinance the existing JPY ¥8.2bn loan with Barclays Bank plc and to increase the overall facilities available to the Company in light of the Company's increase in size. The new Loan was drawn down in two £60 million tranches repayable in four and five years' time which incur interest at all-in rates of 2.21% and 2.575% per annum respectively.  At the period end the Company had net gearing of 12.2%.

 

Outlook

Financial markets are likely to accept only grudgingly that the United States, and indeed most of the developed world, cannot continue unorthodox expansionary monetary policies indefinitely.  Having recently witnessed the destabilising effects of mere rhetoric towards withdrawing such stimulus, it is reasonable to assume that the effects on financial markets of actual implementation are likely to be similarly unpleasant.  Against a backdrop of fragile economic growth and persistent public sector over-indebtedness, policymakers will need to be skilful in exercising the difficult economic balancing act that lies before them.  Rising bond yields could quickly extinguish any nascent recovery in housing, consumption or investment spending, but failure to restore prudent monetary discipline runs the risk of eventual currency debasement and ultimate loss of credibility.  Negotiating such an uncertain economic landscape will not be easy.  Coupled with unrealistic market expectations, it is clear why emphasising capital preservation is so important.  Widespread portfolio diversification via investment in high-quality companies with robust balance sheets and solid dividend growth remains at the core of overall investment strategy, and offers the best prospect of achieving the Company's investment policy.

 

 

 

Kevin Carter

Chairman

20 August 2013



Principal Risks and Uncertainties

 

General

An investment in the shares of the Company is only suitable for investors who are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses which may arise therefrom (which may be equal to the whole amount invested). Such an investment should be seen as long term in nature and complementary to existing investments in a range of other financial assets.

 

Changes in economic conditions (including, for example, interest rates and rates of inflation), industry conditions, competition, changes in the law, political and diplomatic events and trends, tax laws and other factors can substantially and adversely affect the value of investments and therefore the Company's performance and prospects.

 

Past performance of the Company, and of investments managed by the Manager, is not necessarily indicative of future performance.

 

The Shares

The market value of, and the income derived from, the shares can fluctuate and, notwithstanding the Board's discount and premium control policy, may not always reflect the Net Asset Value per share. There can be no guarantee that any appreciation in the value of the Company's investments will occur and investors may not get back the full value of their investment. No assurance can be given that any sale of the Company's investments would realise proceeds which would be sufficient to repay any borrowings or provide funds for any capital repayment to shareholders. Shareholders will bear the rewards and risks of the success or otherwise of the Company's investments.

 

The market value of the shares, as well as being affected by their Net Asset Value, also takes into account their dividend yield and prevailing interest rates, supply and demand for the shares, market conditions and general investor sentiment.

 

Borrowings

The Company may incur borrowings for investment purposes. Whilst the use of borrowings should enhance the total return on the shares where the return on the Company's underlying assets is rising and exceeds the cost of borrowing, it will have the opposite effect where the underlying return is falling, further reducing the total return on the shares. As a result, the use of borrowings by the Company may increase the volatility of the Net Asset Value and market price per share.

 

There is no guarantee that any borrowings of the Company would be refinanced on their maturity either at all or on terms that are acceptable to the Company.

 

Dividends

The Company will only pay dividends on the Ordinary shares (and a capitalisation issue for B Ordinary shares) to the extent that it has profits (including available reserves) available for that purpose, which will largely depend on the amount of income which the Company receives on its investments and the timing of such receipt. The amount of dividends payable by the Company may fluctuate.

 

If under UK law or accounting rules and standards applicable to the Company, there were to be a change to the basis on which dividends could be paid by companies, this could have a negative effect on the Company's ability to pay dividends.

 

Investment Objective and Strategy

There is no guarantee that the Company's investment objective will be achieved.

 

The Company may from time to time invest in other listed investment companies. As a consequence of these investments, the Company may itself be indirectly exposed to gearing through the borrowings from time to time of these other investment companies. The Company has a policy of not investing more than 15% of its gross assets in other listed investment companies. The Net Asset Value, which is a factor in determining the market value of the shares, will be linked to the underlying share price performance of any such other investment companies.

 

Debt Instruments

The Company invests in fixed interest investments issued by corporate bodies and sovereign issuers. Bonds are subject to credit, liquidity and interest rate risks and in the event of a default there is a risk that the Net Asset Value may be adversely affected. Adverse changes in the financial position of an issuer of bonds or in general economic conditions may impair the ability of the issuer to make payments of principal and interest or may cause the liquidation or insolvency of an issuer. There can be no assurance as to the levels of default and/or recoveries that may be experienced with respect to bonds. Debt instruments held by the Company may be affected by changes in market sentiment or changes in interest rates that will, in turn, result in increases and decreases in the market value of those instruments. When interest rates decline, the value of the Company's investments in fixed rate debt obligations can be expected to rise and, when interest rates rise or are expected to rise, the value of those investments can be expected to decline.

 

To the extent that the Company invests in sub-investment grade securities, the Company may realise a higher yield than the yield offered by investment grade securities, but investment in such securities involves a greater volatility of price and a greater risk of default by the issuers of such securities, with potential loss of interest payment and principal. Sub-investment grade securities will be subject, in the judgment of a ratings agency, to uncertainties in terms of their performance in adverse conditions and will be speculative with respect to an issuer's capacity to meet interest payments and repay principal in accordance with its obligations. There can be no assurance that an issuer will not default or that the Company will be able to recover its investments in defaulted fixed interest debt instruments.

 

As bond investments of the Company mature, it may be difficult for the Company to obtain replacement investments having similar financial characteristics.

 

Market Price Risk

The fair value of equity and other financial securities held in the Company's portfolio fluctuates with changes in market prices. Prices are themselves affected by movements in currencies and interest rates and by other financial issues including the market perception of future risks.

 

Foreign Currency Risks

The Company's investments are principally in overseas securities. The Company accounts for its activities and reports its results in pounds sterling. The Company currently hedges most of the foreign currency exposure in respect of the liabilities attached to its borrowings. Where the Company does not hedge its currency exposure, which is currently the case with the investment portfolio, the movement of exchange rates may have a favourable or unfavourable effect on the gains and losses experienced on investments and the income derived from investments which are made or realised in currencies other than pounds sterling.

 

Charges to Capital

The Company currently deducts part of the management charge from capital. This increases distributable income at the expense of capital growth, which will either be eroded or constrained. The maintenance of a high level of dividend may also diminish capital values.

 

Discount and Premium Control Policy

The Company operates a discount and premium control policy. The operation of the discount control element of this policy could lead to a significant reduction in the size of the Company over time, which would increase the Company's total expense ratio and prejudice the ability of the Company to pay satisfactory levels of dividend to shareholders. While the Company intends to issue new shares and to resell shares held in treasury at a small premium to the Net Asset Value per share where demand exceeds supply, this will be dependent upon the Company being able to issue new shares and to resell shares held in treasury at a premium, on market conditions generally at the relevant time, upon shareholders in general meeting conferring appropriate authorities on the Board to issue further shares and, where required under the Prospectus Rules, upon a prospectus having been approved by the Financial Conduct Authority and published. The ability of the Company to operate the discount control policy will depend on the Company being able to purchase its own shares, which will be dependent upon shareholders in general meeting conferring authority on the Board to purchase its own shares. The Directors will seek renewal of this authority from shareholders annually and at other times should this prove necessary. However, there can be no guarantee that requisite shareholder approvals will be obtained.

 

In accordance with the Listing Rules, the extent of each buy-back authority which will be sought by the Company from shareholders in general meeting will be limited to 14.99% of the Company's issued share capital as at the date on which such authority is granted. In order to continue purchasing its own shares once any such authority has been exhausted, the Company would be required to seek a renewal of such authority from shareholders in general meeting.

 

The ability of the Company to purchase its own shares will be subject to the Companies Act 2006 and all other applicable legislation, rules and regulations of any government, regulatory body or market applicable to the Directors or the Company and, in particular, will be dependent on the availability of distributable reserves.

 

Cessation of Investment Trust Status

The Company attempts to conduct its business so as to satisfy the conditions for approval as an investment trust under Part 24 Chapter 4 of the Corporation Tax Act 2010. In respect of each accounting period for which approval is granted, the Company will be exempt from United Kingdom taxation on its capital gains. Any breach of the tests that a company must meet to obtain approval as an investment trust company could lead to the Company being subject to tax on capital gains.

 

Tax and Accounting

Any change in the Company's tax status or in taxation legislation or accounting practice could affect the value of the investments held by the Company, affect the Company's ability to provide returns to shareholders or alter the post-tax returns to shareholders. Representations in this document concerning the taxation of investors are based upon current tax law and practice which are subject to change.

 

Any change in accounting standards may adversely affect the value of the Company's assets in its books of account or restrict the ability of the Company to pay dividends.

 

Regulatory

The Alternative Investment Fund Managers Directive ("the Directive") came into force on 22 July 2013 with a transitional period prior to full implementation in July 2014. The Directive has significant consequences for the Company (and all similar investment companies) and will increase compliance and regulatory costs. The Board will continue to monitor the progress and likely implications of the Directive.

 

Reliance Upon The Manager

The ability of the Company to successfully pursue its investment policy is significantly dependent upon the expertise of the Manager and the principal members of its management team. The Company does not currently have employees or own any facilities and depends on the Manager for the day to day management and operation of its business. The loss of any of the Manager's management team could reduce the Company's ability to pursue successfully its planned investment policy.

 

Reliance Upon Third Party Service Providers

The Company has no employees and the Directors have all been appointed on a non executive basis. The Company is therefore reliant upon the performance of third party service providers for its executive function. In particular, the Manager and the Secretary will be performing services which are integral to the operation of the Company. The failure by any service provider to carry out its obligations to the Company in accordance with the terms of its appointment could have a materially detrimental impact on the operation of the Company and could affect the ability of the Company to pursue successfully its investment policy.

 

Fluctuations In Operating Results

The Company may experience fluctuations in its operating results from period to period due to a number of factors, including changes in the values of investments made by the Company, changes in the amount of distributions, dividends or interest paid in respect of investments in the portfolio, changes in the Company's operating expenses, and general economic and market conditions. Such variability may lead to volatility in the market price of the shares and cause the Company's results for a particular period not to be indicative of its performance in a future period.

 

Related Party Transactions

Aberdeen Asset Managers Limited acts as Manager and Aberdeen Asset Management PLC acts as Company Secretary to the Company; details of the service and fee arrangements can be found in the Annual Report for 2012, a copy of which is available on the Company's website.

 

Going Concern

The Company's assets consist of a diverse portfolio of listed equities and bonds which in most circumstances are realisable within a very short timescale. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.

 

Directors' Responsibility Statement

The Directors are responsible for preparing this Half-Yearly Financial Report in accordance with applicable law and regulations. The Directors confirm that to the best of their knowledge:

 

·    the condensed set of financial statements contained within the Half-Yearly Financial Report has been prepared in accordance with the Accounting Standards Board's Statement "Half-Yearly Financial Reports"; and

 

·    the Interim Board Report (constituting the interim management report) includes a fair review of the information required by rule 4.2.7R of the UK Listing Authority Disclosure and Transparency Rules (being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year) and 4.2.8R (being related party transactions that have taken place during the first six months of the financial year and that have materially affected the financial position of the Company during that period; and any changes in the related party transactions described in the last Annual Report that could so do).

 

The Half-Yearly Report for the six months to 30 June 2013 comprises the Interim Board Report and a condensed set of financial statements, and has not been audited or reviewed by the auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

 

For and on behalf of the Board of Murray International Trust PLC

 

 

 

Kevin Carter

Chairman

20 August 2013

 

 

 



HIGHLIGHTS

 

 

Financial Highlights

31 December 2012

% change

Total assets{A} (£'000)

1,343,768

+13.0

Equity shareholders' funds (£'000)

1,192,243

+10.3

Share price - Ordinary share

1048.0p

+6.9

Share price - B Ordinary share

1107.5p

+12.9

Net asset value per Ordinary and B Ordinary share

975.8p

+7.0

Premium to net asset value per Ordinary share

7.4%



{A} Represents total assets less current liabilities (before deducting prior charges).

 

 

Performance (total return)

Six months ended
30 June 2013

Year ended
31 December 2012

Net asset value total return per Ordinary and B Ordinary share with net income reinvested

+9.3%

+14.0%

Share price

+9.0%

+19.0%

Benchmark

+12.4%

+11.4%


Source: Aberdeen Asset Management, Morningstar & Russell Mellon

 

 



INCOME STATEMENT

 



Six months ended



30 June 2013



(unaudited)



Revenue

Capital

Total


Note

£'000

£'000

£'000

Gains on investments


-

76,487

76,487

Income

3

34,893

-

34,893

Investment management fees


(990)

(2,310)

(3,300)

Performance fees


-

3,899

3,899

Other expenses


(1,061)

-

(1,061)

Currency (losses)/gains


-

(248)

(248)



________

________

________

Net return before finance costs and taxation


32,842

77,828

110,670






Finance costs


(605)

(1,412)

(2,017)



________

________

________

Return on ordinary activities before tax


32,237

76,416

108,653






Tax on ordinary activities


(1,484)

222

(1,262)



________

________

________

Return attributable to equity shareholders


30,753

76,638

107,391



________

________

________






Return per Ordinary share assuming full conversion of the B Ordinary shares (pence)

5

24.7

61.6

86.3



________

________

________




The total column of the Income Statement is the profit and loss account of the Company.

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

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






Ordinary dividends on equity shares (£'000)

4

27,558

-

27,558



________

________

________






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



INCOME STATEMENT (Cont'd)

 



Six months ended



30 June 2012



(unaudited)



Revenue

Capital

Total


Note

£'000

£'000

£'000

Gains on investments


-

39,044

39,044

Income

3

30,341

-

30,341

Investment management fees


(861)

(2,009)

(2,870)

Performance fees


-

(2,211)

(2,211)

Other expenses


(987)

-

(987)

Currency (losses)/gains


-

44

44



________

________

________

Net return before finance costs and taxation


28,493

34,868

63,361






Finance costs


(631)

(1,474)

(2,105)



________

________

________

Return on ordinary activities before tax


27,862

33,394

61,256






Tax on ordinary activities


(1,946)

254

(1,692)



________

________

________

Return attributable to equity shareholders


25,916

33,648

59,564



________

________

________






Return per Ordinary share assuming full conversion of the B Ordinary shares (pence)

5

22.6

29.3

51.9



________

________

________


The total column of the Income Statement is the profit and loss account of the Company.

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

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











Ordinary dividends on equity shares (£'000)

4

23,708

-

23,708



________

________

________






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



INCOME STATEMENT (Cont'd)

 

 



Year ended



31 December 2012




 (audited)




Revenue

Capital

Total


Note

£'000

£'000

£'000

Gains on investments


-

101,381

101,381

Income

3

55,141

-

55,141

Investment management fees


(1,763)

(4,116)

(5,879)

Performance fees


-

(3,246)

(3,246)

Other expenses


(1,944)

-

(1,944)

Currency (losses)/gains


-

692

692



________

________

________

Net return before finance costs and taxation


51,434

94,711

146,145






Finance costs


(1,246)

(2,911)

(4,157)



________

________

________

Return on ordinary activities before tax


50,188

91,800

141,988






Tax on ordinary activities


(3,532)

382

(3,150)



________

________

________

Return attributable to equity shareholders


46,656

92,182

138,838



________

________

________






Return per Ordinary share assuming full conversion of the B Ordinary shares (pence)

5

39.8

78.5

118.3



________

________

________


The total column of the Income Statement is the profit and loss account of the Company.

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

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






Ordinary dividends on equity shares (£'000)

4

44,911

-

44,911



________

________

________






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



BALANCE SHEET

 



As at

As at

As at



30 June 2013

30 June 2012

31 December 2012



(unaudited)

(unaudited)

(audited)


Notes

£'000

£'000

£'000

Non-current assets





Investments at fair value through profit or loss


1,478,227

1,247,272

1,327,532



________

________

________

Current assets





Debtors


8,435

6,681

5,169

Cash and short-term deposits


41,075

10,855

25,940



________

________

________



49,510

17,536

31,109



________

________

________

Creditors: amounts falling due within one year





Bank loans


(15,266)

(65,728)

(58,525)

Other creditors


(9,132)

(8,494)

(14,873)



________

________

________



(24,398)

(74,222)

(73,398)



________

________

________

Net current assets/(liabilities)


25,112

(56,686)

(42,289)



________

________

________

Total assets less current liabilities


1,503,339

1,190,586

1,285,243

Creditors: amounts falling due after more than one year





Bank loans and Debentures


(186,524)

(98,435)

(87,664)

Other creditors


(1,437)

(4,560)

(5,336)



________

________

________



(187,961)

(102,995)

(93,000)



________

________

________

Net assets


1,315,378

1,087,591

1,192,243



________

________

________

Capital and reserves





Called-up share capital


31,505

29,384

30,546

Share premium account


324,588

236,816

282,240

Capital redemption reserve


8,230

8,230

8,230

Capital reserve

6

883,229

748,067

806,596

Revenue reserve


67,826

65,094

64,631



________

________

________

Equity shareholders' funds


1,315,378

1,087,591

1,192,243



________

________

________






Net asset value per Ordinary and B Ordinary share (pence)

7

1043.8

925.3

975.8



________

________

________



RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

 

Six months ended 30 June 2013 (unaudited)









Share

Capital





Share

premium

redemption

Capital

Revenue



capital

account

reserve

reserve

reserve

Total


£'000

£'000

£'000

£'000

£'000

£'000

Balance at 31 December 2012

30,546

282,240

8,230

806,596

64,631

1,192,243

Return on ordinary activities after taxation

-

-

-

76,638

30,753

107,391

Dividends paid (see note 4)

-

-

-

-

(27,558)

(27,558)

Issue of new shares

959

42,348

-

(5)

-

43,302


______

______

______

______

______

______

Balance at 30 June 2013

31,505

324,588

8,230

883,229

67,826

1,315,378


______

______

______

______

______

______








Six months ended 30 June 2012 (unaudited)









Share

Capital





Share

premium

redemption

Capital

Revenue



capital

account

reserve

reserve

reserve

Total


£'000

£'000

£'000

£'000

£'000

£'000

Balance at 31 December 2011

28,000

185,712

8,230

714,424

62,886

999,252

Return on ordinary activities after taxation

-

-

-

33,648

25,916

59,564

Dividends paid (see note 4)

-

-

-

-

(23,708)

(23,708)

Issue of new shares

1,384

51,104

-

(5)

-

52,483


______

______

______

______

______

______

Balance at 30 June 2012

29,384

236,816

8,230

748,067

65,094

1,087,591


______

______

______

______

______

______








Year ended 31 December 2012 (audited)









Share

Capital





Share

premium

redemption

Capital

Revenue



capital

account

reserve

reserve

reserve

Total


£'000

£'000

£'000

£'000

£'000

£'000

Balance at 31 December 2011

28,000

185,712

8,230

714,424

62,886

999,252

Return on ordinary activities after taxation

-

-

-

92,182

46,656

138,838

Dividends paid (see note 4)

-

-

-

-

(44,911)

(44,911)

Issue of new shares

2,546

96,528

-

(10)

-

99,064


______

______

______

______

______

______

Balance at 31 December 2012

30,546

282,240

8,230

806,596

64,631

1,192,243


______

______

______

______

______

______



CASH FLOW STATEMENT

 


Six months ended

Six months ended

Year
ended


30 June
2013

30 June
2012

31 December 2012


(unaudited)

(unaudited)

(audited)


£'000

£'000

£'000

Net return before finance costs and taxation

110,670

63,361

146,145

Adjustments for:




Gains on investments

(76,487)

(39,044)

(101,381)

Effect of foreign exchange losses/(gains)

248

(44)

(692)

Amortisation of fixed income book cost

(635)

(204)

(280)

(Increase)/decrease in accrued income

(1,495)

455

1,192

(Increase)/decrease in other debtors

(24)

(865)

115

(Decrease)/increase in accruals

(7,138)

70

363

Tax on unfranked income - overseas

(2,196)

(2,204)

(2,891)


________

________

________

Net cash inflow from operating activities

22,943

21,525

42,571





Returns on investment and servicing of finance




Interest paid

(1,817)

(2,127)

(4,233)


________

________

________

Net cash outflow from servicing of finance

(1,817)

(2,127)

(4,233)





Financial investment




Purchases of investments

(161,073)

(111,038)

(162,382)

Sales of investments

93,919

43,978

77,474


________

________

________

Net cash outflow from financial investment

(67,154)

(67,060)

(84,908)





Equity dividends paid

(27,558)

(23,708)

(44,911)


________

________

________

Net cash outflow before financing

(73,586)

(71,370)

(91,481)





Financing




Share issue

43,302

52,483

99,064

Loan repayment

(59,275)

-

-

Loan drawdown

120,000

-

-


________

________

________

Net cash inflow from financing

104,027

52,483

99,064


________

________

________

Increase/(decrease) in cash   

30,441

(18,887)

7,583


________

________

________





Analysis of changes in cash during the period




Opening balance

25,940

32,600

32,600

Increase/(decrease) in cash as above

30,441

(18,887)

7,583

Currency differences

(15,306)

(2,858)

(14,243)


________

________

________

Closing balances

41,075

10,855

25,940


________

________

________



NOTES TO THE ACCOUNTS

 

1.

Accounting policies


(a)

Basis of accounting



The financial statements have been prepared in accordance with applicable UK Accounting Standards, with pronouncements on Half-Yearly Reporting issued by the Accounting Standards Board and with the Statement of Recommended Practice for 'Financial Statements of Investment Trust Companies and Venture Capital Trusts'. They have also been prepared on a going concern basis and on the assumption that approval as an investment trust will continue to be granted.






The financial statements and the net asset value per share figures have been prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP).






The interim accounts have been prepared using the same accounting policies as the preceding annual accounts.





(b)

Dividends payable



Dividends are recognised in the period in which they are paid.

 

2.

Taxation


The taxation expense reflected in the Income Statement is based on the estimated annual tax rate expected for the full financial year. The estimated annual corporation tax rate used for the year to 31 December 2013 is an effective rate of 23.25%. This is above the current corporation tax rate of 23% because prior to 1 April 2013 the prevailing corporation tax rate was 24%.

 



Six months ended

Six months ended

Year
ended



30 June 2013

30 June 2012

31 December 2012

3.

Income

£'000

£'000

£'000


Income from investments





UK dividends

5,274

4,873

7,721


UK unfranked investment income

345

585

1,025


Overseas dividends

26,401

22,400

41,477


Overseas interest

2,872

2,480

4,913



________

________

________



34,892

30,338

55,136



________

________

________


Interest





Deposit interest

1

3

5



________

________

________


Total income

34,893

30,341

55,141



________

________

________

 



Six months ended

Six months ended

Year
ended



30 June 2013

30 June 2012

31 December 2012

4.

Ordinary dividends on equity shares

£'000

£'000

£'000


Third interim dividend 2012 of 9.00p (2011 - 8.00p)

10,915

8,890

8,891


Final dividend 2012 of 13.50p (2011 - 13.00p)

16,643

14,818

14,818


First interim dividend 2012 of 9.00p

-

-

10,499


Second interim dividend 2012 of 9.00p

-

-

10,703



________

________

________



27,558

23,708

44,911



________

________

________







A first interim dividend for 2013 of 9.50p (2012 - 9.00p) was paid on 16 August 2013 to shareholders on the register on 12 July 2013. The ex-dividend date was 10 July 2013.




A second interim dividend for 2013 of 9.50p (2012 - 9.00p) will be paid on 15 November 2013 to shareholders on the register on 11 October 2013. The ex-dividend date is 9 October 2013.




In accordance with the terms of the Articles of Association of the Company the Directors will resolve to make bonus issues of B Ordinary shares to B Ordinary shareholders which correspond to the first and second interim dividends.

 



Six months ended

Six months ended

Year
ended



30 June 2013

30 June 2012

31 December 2012

5.

 Returns per share

£'000

£'000

£'000


Based on the following figures:





Revenue return

30,753

25,916

46,656


Capital return

76,638

33,648

92,182



________

________

________


Total return

107,391

59,564

138,838



________

________

________







Weighted average number of Ordinary shares

123,506,933

113,903,206

116,468,656


Weighted average number of B Ordinary shares

909,544

876,271

883,841



__________

__________

__________


Weighted average number of Ordinary shares assuming conversion of B Ordinary shares

124,416,477

114,779,477

117,352,497



__________

__________

__________

 

6.

Capital reserves


The capital reserve reflected in the Balance Sheet at 30 June 2013 includes gains of £445,721,000 (30 June 2012 - gains of £342,059,000; 31 December 2012 - gains of £403,974,000) which relate to the revaluation of investments held at the reporting date.

 

7.

Diluted net asset value


The diluted net asset value per share and the net asset value attributable to the Ordinary shares (including conversion of the B Ordinary shares) at the period end calculated in accordance with the Articles of Association were as follows:








As at

As at

As at



30 June
2013

30 June
2012

31 December 2012


Attributable net assets (£'000)

1,315,378

1,087,591

1,192,243



________

________

________


Number of shares in issue:





Ordinary shares

125,098,742

116,653,204

121,283,242


B Ordinary shares

921,545

882,825

899,997



___________

___________

___________



126,020,287

117,536,029

122,183,239



___________

___________

___________

 

8.

Transaction costs


During the period expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains on investments in the Income Statement. The total costs were as follows:








Six months
ended

Six months ended

Year
ended



30 June
2013

30 June
2012

31 December 2012



£'000

£'000

£'000


Purchases

424

 212

301


Sales

174

38

71



________

________

________



598

250

372



________

________

________

 

9.

The financial information in this Half-Yearly Financial Report comprises non-statutory accounts as defined in Sections 434-436 of the Companies Act 2006. The financial information for the six months ended 30 June 2013 and 30 June 2012 has not been audited.




The financial information for the year ended 31 December 2012 has been extracted from published accounts that have been delivered to the Registrar of Companies and on which the report of the auditors was unqualified under Section 498 (2), (3) and (4) of the Companies Act 2006.

 

10.

This Half-Yearly Financial Report was approved by the Board on 20 August 2013.

 

 

The Half Yearly Report will be printed and issued to shareholders and further copies will be available to the public at the registered office of the Company, 40 Princes Street, Edinburgh EH2 2BY and on the Company's web site www.murray-intl.co.uk*.

 

* Neither the Company's website nor the content of any website accessible from hyperlinks on it (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

 

 

By order of the Board

 

ABERDEEN ASSET MANAGEMENT PLC, SECRETARY

20 August 2013

 

 



SUMMARY OF INVESTMENT CHANGES

 


Valuation

Appreciation/


Valuation


30 June 2013

(depreciation)

Transactions

31 December 2012


£'000

%

£'000

£'000

£'000

%

Equities







United Kingdom

210,913

13.9

4,556

28,801

177,556

13.2

North America

209,558

13.8

19,213

55,391

134,954

10.0

Europe ex UK

238,709

15.7

18,530

(1,007)

221,186

16.5

Japan

53,879

3.5

4,817

(4,374)

53,436

4.0

Asia Pacific ex Japan

362,284

23.9

36,634

(25,669)

351,319

26.1

Latin America

290,806

19.1

(5,371)

(9,097)

305,274

22.7

Africa

16,170

1.1

1,181

14,989

-

-


________

_______

_______

_______

________

_______


1,382,319

91.0

79,560

59,034

1,243,725

92.5


________

_______

_______

_______

________

_______

Fixed income







United Kingdom

15,807

1.0

(354)

78

16,083

1.2

Europe ex UK

13,602

0.9

357

69

13,176

1.0

Asia Pacific ex Japan

11,938

0.8

(1,289)

9

13,218

1.0

Latin America

54,561

3.6

(1,787)

15,018

41,330

3.1


________

_______

_______

_______

________

_______


95,908

6.3

(3,073)

15,174

83,807

6.3


________

_______

_______

_______

________

_______

Other net assets

40,378

 2.7

24,142

-

16,236

1.2


________

_______

_______

_______

________

_______

Total assets{A}

1,518,605

100.0

100,629

74,208

1,343,768

100.0


________

_______

_______

_______

________

_______


{A} Figure for 30 June 2013 excludes bank loan of £15,266,000 (31 December 2012 - £58,525,000) which is shown as a current liability in the Balance Sheet.

 

 

SUMMARY OF NET ASSETS

 


Valuation

Valuation


30 June 2013

30 June 2012


£'000

%

£'000

%

Equities

1,382,319

105.1

1,164,250

107.1

Fixed income

95,908

7.3

83,022

7.6

Other net assets

40,378

3.0

9,042

0.8

Prior charges

(201,790)

(15.3)

(164,163)

(15.1)

Other long term liabilities

(1,437)

(0.1)

(4,560)

(0.4)


________

_______

_______

_______

Equity shareholders' funds

1,315,378

100.0

1,087,591

100.0


________

_______

_______

_______

 



INVESTMENT PORTFOLIO

AS AT 30 JUNE 2013

 




Valuation

Total assets

Security

Country

£'000

%

British American Tobacco {A}

UK & Malaysia

60,674

4.0

Unilever Indonesia

Indonesia

56,081

3.7

Aeroportuario del Sureste ADS

Mexico

54,894

3.6

Souza Cruz

Brazil

45,780

3.0

Taiwan Mobile

Taiwan

45,621

3.0

Taiwan Semiconductor Manufacturing

Taiwan

42,107

2.8

Philip Morris International

USA

38,808

2.6

Kimberly Clark de Mexico

Mexico

36,192

2.4

Roche Holdings

Switzerland

35,995

2.4

Standard Chartered

UK

34,248

2.2

Top ten investments


450,400

29.7

Singapore Telecommunications

Singapore

32,838

2.2

Vale do Rio Doce {B}

Brazil & USA

32,788

2.2

Nordea

Sweden

32,236

2.1

Fomento Economico Mexicano

Mexico

31,983

2.1

Casino

France

30,836

2.0

Zurich Financial Services

Switzerland

30,730

2.0

Telus

Canada

30,679

2.0

Johnson & Johnson

USA

30,003

2.0

Verizon Communications

USA

29,872

2.0

Royal Dutch Shell

UK

29,594

1.9

Top twenty investments


761,959

50.2

Tenaris ADR

Mexico

29,192

1.9

Potash Corporation of Saskatchewan

Canada

28,570

1.9

Telefonica Brasil

Brazil

28,123

1.8

Total

France

27,939

1.8

Pepsico

USA

26,963

1.8

BHP Billiton

UK

26,912

1.8

PetroChina

China

26,649

1.8

HSBC

UK

26,598

1.8

Daito Trust Construction

Japan

26,375

1.7

Weir Group

UK

26,332

1.7

Top thirty investments


1,035,612

68.2

QBE Insurance Group

Australia

25,466

1.7

ENI

Italy

25,290

1.7

Public Bank

Malaysia

24,804

1.6

Baxter International

USA

24,663

1.6

Wing Hang Bank

Hong Kong

23,090

1.5

Banco Bradesco{C}

Brazil

22,026

1.4

Coca-Cola Amatil

Australia

21,623

1.4

Petrobras ADR

Brazil

18,327

1.2

GDF Suez

France

16,247

1.1

MTN

South Africa

16,170

1.1

Top forty investments


1,253,318

82.5

Vodafone Group

UK

15,779

1.0

Nestlé

Switzerland

15,109

1.0

Novartis

Switzerland

14,951

1.0

Astellas Pharmaceutical

Japan

14,641

1.0

Centrica

UK

14,408

0.9

Swire Pacific B

Hong Kong

13,954

0.9

Petroleos Mexicanos 5.5% 27/06/44

USA

13,648

0.9

Portugal Telecom 4.5% 16/06/25

Portugal

13,602

0.9

PTT Exploration and Production

Thailand

13,435

0.9

Oversea-Chinese Bank

Singapore

12,983

0.9

Top fifty investments


1,395,828

91.9

Other investments


82,399

5.4

Total investments


1,478,227

97.3

Net current assets excluding bank loans


40,378

2.7

Total assets


1,518,605

100.0


{A}      Holding comprises equity holdings in both UK and Malaysia, split £37,043,000 and £23,631,000 respectively.

{B}      Holding comprises equity and fixed income securities, split £22,775,000 and £10,013,000 respectively.

{C}      Holding comprises equity and fixed income securities, split £12,634,000 and £9,392,000 respectively.

 


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