Interim Management Statement
May 10 2010 - 8:42AM
UK Regulatory
TIDMDDIT
Stakeholders' Momentum Investment Trust plc
Interim Management Statement for the period 1 January 2010 to 30 April 2010
Investment Policy
The investment policy of the Stakeholders' Momentum Investment Trust plc (the
"Company" or "SMIT") is to achieve returns for shareholders, primarily through
capital appreciation, by investing in companies listed on regulated investment
exchanges in the United Kingdom. The policy will be achieved through investment
in companies identified as having patterns of directors' dealing on the premise
that following such signals may lead to superior investment performance.
Recommended Offer for the Company
* On 28 April 2010, the Board of Directors were pleased to announce a
proposed merger of the Company and Manchester and London Investment Trust
plc ("MLIT") to be effected by a recommended offer to be made by MLIT to
acquire the entire issued and to be issued share capital of the Company.
* The consideration will comprise of new MLIT shares (the "Basic Offer"), the
number of which will be determined by reference to a formula based on the
net assets per share of both MLIT and SMIT as at the date at which the
offer becomes unconditional as to acceptances. There will be a cash
alternative 217.5p per share, which is not recommended.
* Based on the "offer illustration" as set out in the offer document dated 28
April 2010, the recommended Basic Offer values a SMIT share at
approximately 286p, representing a premium of 4.1 per cent to the closing
price of 274.5p per SMIT share on 23 April 2010 (being the last practicable
date prior to the publication of the announcement).
* All documents with regards to this transaction may be inspected at the
Document Viewing Facility of the FSA.
Other Material Events
* On 23 March 2010, SMIT received correspondence from a firm of solicitors
acting for Knox D'Arcy Asset Management Limited ("KDAM"). KDAM is the
former investment manager of SMIT. KDAM is alleging that it has not
received all management fees and warrants to which it had been entitled on
termination of their management agreement with the Company. SMIT had
terminated the management agreement with KDAM with effect from 11 December
2009 thereby crystallising KDAM's entitlement to warrants under the
management warrants deed also entered into between KDAM and the Company.
On 1 April 2010, SMIT received a claim form from KDAM seeking a mandatory
injunction arising from a breach of the Management Warrants Deed and in
particular claiming that SMIT issue 51,602 warrants to KDAM. On 28 April 2010,
SMIT received an application for summary judgment in relation to this claim.
SMIT has sought legal advice and disputes the claims made by KDAM and KDAM's
interpretation of the terms of the management agreement and the management
warrants deed.
* In addition, there are further contingent liabilities with regards to an
insurance company associated with KDAM and a VAT claim against a former
investment manager.
* For further details of these contingent liabilities refer to Notes 9 and 10
in the Interim Results for the period ended 31 December 2009, released on
26 February 2010.
Financial Position
* During the period, major investments have been made in Standard Chartered
plc, Vedanta Resources plc, Jardine Matheson, Diageo plc and Charter
International plc.
* During the period, major divestments have been made in UK Treasury Gilts,
Zetar plc, RPC Group plc, Opsec Security Group plc and Aggreko plc.
* During the period, the Legacy Portfolio has been reduced from GBP3.6m to GBP
1.3m.
* Since the appointment date of Midas as Investment Manager for the Company
on 4 December 2009, the weighted average market capitalisation of the
portfolio has increased from GBP417m to GBP8,935m.
As at 30 April 2010 As at 31 December 2009
Net Assets (GBPm) 21.1 19.7
Share Price (p) 274.00 241.00
Net Asset Value per Share 367.8 344.5
(p)
Discount (per cent) 25.5 30.0
Financial Performance
* Since the appointment of Midas, the Company's performance has exceeded that
of FTSE All-Share Index by 2.23 per cent.
3 Months 1 Year 3 Years 5 Years
NAV (per cent) 8.2 21.5 (23.1) 13.0
FTSE All-Share Index (per cent) 7.6 31.8 (14.7) 19.4
Overperformance/(underperformance) (per 0.6 (10.3) (8.4) (6.4)
cent)
Top Ten Holdings as at 30 April 2010
Stock Name Proportion of Sector
Portfolio
Standard Chartered 11.3 Banks
Vedanta Resources 7.8 Mining
Britvic 7.8 Beverages
Rank Group 7.8 Travel & Leisure
Diageo 7.3 Beverages
Jardine Matheson 6.6 Property
Charter International 6.3 Industrial
Engineering
Afren 5.6 Oil & Gas Producers
Halfords 5.5 General Retailers
Burberry 5.4 Personal Goods
Portfolio Analysis
Sector Proportion of Portfolio
Beverages 15.1
Banks 11.3
General Retailers 10.8
Mining 7.9
Travel & Leisure 7.8
Personal Goods 7.7
Real Estate Investment & Services 7.3
Property 6.6
Industrial Engineering 6.3
Oil & Gas Producers 6.2
Household Goods & Home Construction 4.9
Non-equity Investment Instruments 3.7
Equity Investment Instruments 3.3
Aerospace & Defence 0.8
Sundry 0.3
Total 100.0
This interim management statement and up to date NAV will be available on the
Company's website, www.stakeholdersmomentumit.co.uk.
For further information, please contact:
Midas Investment Management Ltd
Tel: 0161 228 1709
END
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