RNS Number:6799P
Fleming Mercantile Inv Trust PLC
11 September 2003
LONDON STOCK EXCHANGE ANNOUNCEMENT
THE FLEMING MERCANTILE INVESTMENT TRUST PLC
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31st JULY 2003
The directors of The Fleming Mercantile Investment Trust plc announce the
Company's unaudited results for the six months ended 31st July 2003.
It is pleasing to report a positive return for the half year after such a
painful bear market for investors which has been running since March 2000. The
return for the six months ended 31st July 2003 from our mid and small cap
benchmark index, the FTSE All-Share (excluding FTSE 100 constituents and
investment trusts) was +36.1% on a total return basis and during this period the
Company's comparable net asset value (NAV) total return was +43.3%. The share
price total return for the period was +40.4% reflecting an increase in the
discount to NAV to 8.2% from 6.0% at 31st January 2003.
In the Company's year end report the managers argued that, despite the gloomy
sentiment in the stockmarket at that time, they were optimistic that smaller and
mid size UK companies offered real value. Over the course of the half year,
actual gearing (that is, borrowings invested in the stockmarket) was accordingly
increased from 13% to 15%, which helped performance in a rising market. Gearing
contributed 3.9% to the outperformance of 7.2% over the benchmark index for the
period with 4.5% being contributed by stock selection. The largest individual
contributors to performance can be categorised in three ways: recovering
depressed former FTSE 100 stocks such as Invensys, Hays, British Airways and
Royal and Sun Alliance; recovering technology stocks such as Colt Telecom and
Gresham Computing; and stocks which received takeover bids such as Selfridges,
Debenhams and Compco. By keeping a broad spread of individual holdings we
achieved a good representation in each of these outperforming categories. The
worst relative contributors in the portfolio during the period were London Stock
Exchange, HMV and EMI.
The recovery in stockmarkets this year owes more to a recovery in sentiment in
the absence of further bad news rather than any real pick up in the economic
data; stockmarkets normally try to anticipate any normal cyclical recovery.
However, consumer spending has remained firm due to low interest rates and
capacity utilisation remains low following a period of high investment in the
late 1990s. Rather than a sharp cyclical upturn, we anticipate a steady recovery
as sentiment continues to improve and cost-cutting continues. We, therefore, aim
to keep the portfolio broadly diversified across all sectors to give a good
spread of exposure to the dynamic UK medium and smaller quoted market.
Board of Directors
It has been my pleasure to serve as Chairman of the Board of the Company since
1990. However, I have decided to hand over this role to Hamish Leslie Melville
with effect from 4th September 2003. Hamish has been a Director of the Company
since 1996 and is undoubtedly a worthy successor to the Chairmanship. I shall
continue to serve as a Director of The Fleming Mercantile Investment Trust plc.
Shareholders
The Board has noted in recent years that many private investors have been
purchasing shares in the Company. It is pleasing to report that over 50% of the
Company's shares in issue are now owned by private individuals.
Dividends
A second interim dividend of 4.25p per share has been declared by the Board,
payable on 3rd November 2003 to shareholders on the register as at the close of
business on 3rd October 2003. This brings the total dividend for the year to
date to 8.50p per share. This represents an increase of 6.3% on the dividends
paid for the comparable period last year. The Board intends, in the absence of
unforeseen circumstances, to pay a total dividend for the year to 31st January
2004 of at least 18.75p, made up of three interim dividends of 4.25p per share
and a final payment of 6.0p per share.
Simon Keswick
Chairman 11th September 2003
Please note that the above statements may differ from the final version to be
published in the interim accounts.
J.P.Morgan Fleming Asset Management (UK) Limited - Secretary
For further information, please contact:
Richard Lewis
J.P. Morgan Fleming Asset Management (UK) Limited
Telephone 020 7742 3477
The Fleming Mercantile Investment Trust plc
Unaudited figures for the six months ended 31 July 2003
Statement of Total Return (Unaudited)
Six months to 31 July 2003 Six months to 31 July 2002 Year to 31 January 2003
Revenue Capital Total Revenue Capital Total Revenue Capital Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Realised gains/(losses)
on investments - 28,628 28,628 - (5,014) (5,014) - (62,116) (62,116)
Net change in
unrealised appreciation - 212,437 212,437 - (152,710) (152,710) - (214,900) (214,900)
Net currency gains/
(losses) on cash and
short term deposits
held during the period - 20 20 - (1) (1) - (49) (49)
Other capital charges - (1) (1) - (12) (12) - (17) (17)
Franked investment
income 15,489 - 15,489 16,229 - 16,229 28,143 - 28,143
UK unfranked investment
income 320 - 320 709 - 709 509 - 509
Unfranked investment
income 232 - 232 - - - 524 - 524
Scrip dividends 434 - 434 281 - 281 357 - 357
Underwriting 6 - 6 - - - 511 - 511
commissions
Deposit interest 2,240 - 2,240 2,328 - 2,328 4,540 - 4,540
_______ ________ _______ ______ _______ ________ _______ _______ _______
Gross return 18,721 241,084 259,805 19,547 (157,737) (138,190) 34,584 (277,082) (242,498)
Management fee (1,022) (1,022) (2,044) (1,304) (1,304) (2,608) (2,358) (2,358) (4,716)
Other administrative
expenses (371) - (371) (337) - (337) (635) - (635)
Interest payable (3,270) (3,270) (6,540) (3,270) (3,270) (6,540) (6,541) (6,541) (13,082)
_______ _______ _______ ______ _______ _______ _______ _______ _______
Return before taxation 14,058 236,792 250,850 14,636 (162,311) (147,675) 25,050 (285,981) (260,931)
Taxation 77 - 77 (439) 439 - (881) 881 -
______ _______ _______ ______ _______ ______ _______ _______ _______
Return after taxation 14,135 236,792 250,927 14,197 (161,872) (147,675) 24,169 (285,100) (260,931)
Dividends on ordinary
shares (11,545) - (11,545) (10,866) - (10,866) (24,449) - (24,449)
______ _______ _______ ______ _______ ______ _______ _______ _______
Transfer to/(from)
reserves 2,590 236,792 239,382 3,331 (161,872) (158,541) (280) (285,100) (285,380)
Return per ordinary
share 10.41p 174.33p 184.74p 10.45p (119.17)p (108.72)p 17.79p (209.90)p (192.11)p
Dividends per ordinary
share 8.50p - 8.50p 8.00p - 8.00p 18.00p - 18.00p
The Fleming Mercantile Investment Trust plc
Unaudited figures for the six months ended 31 July 2003
Statement of Total Return (Unaudited)
BALANCE SHEET 31 July 31 July 31 January
2003 2002 2003
#'000 #'000 #'000
Investments at valuation 955,427 802,678 667,922
Net current assets 75,533 115,647 123,611
Long term loans (201,278) (201,186) (201,233)
_______ _______ _______
Total net assets 829,682 717,139 590,300
===== ===== =====
Net asset value per share 610.8p 528.0p 434.6p
CASH FLOW STATEMENT 31 July 31 July 31 January
2003 2002 2003
#'000 #'000 #'000
Net cash inflow from operating activities 14,300 14,607 29,198
Net cash outflow on servicing of finance (6,498) (6,491) (12,996)
Total tax recovered /(paid) 90 (16) -
Net cash (outflow)/inflow from capital expenditure and
financial investment (52,021) 1,671 21,163
Total equity dividends paid (13,583) (14,262) (25,128)
_______ ______ ______
(Decrease)/increase in cash for the period (57,712) (4,491) 12,237
===== ==== ====
The above financial information does not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985. Statutory accounts for the
year ended 31 January 2002 have been delivered to the Registrar of Companies.
J.P. MORGAN FLEMING ASSET MANAGEMENT (UK) LIMITED
11th September 2003
This information is provided by RNS
The company news service from the London Stock Exchange
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