Interim Results

DUNEDIN INCOME GROWTH INVESTMENT TRUST PLC INTERIM RESULTS FOR THE 6 MONTHS TO 31 JULY 2002 The objective of Dunedin Income Growth Investment Trust is to achieve growth of income and capital from a portfolio invested in the United Kingdom. Highlights *Net asset value fell 16.8% compared with a fall in the FTSE All- Share Index of 17.8%. *DIGIT's equity portfolio outperformed its benchmark with a decline of 14.7%. The poorer performance of net asset value was attributable to the effect of gearing. *We believe that prudent levels of gearing will enhance returns to shareholders in the long term. *The interim dividend has been increased by 2.3% to 2.20p compared to last year's interim dividend of 2.15p. For further information, please contact:- David Binnie, Fund Manager Edinburgh Fund Managers plc 0131 313 1000 CHAIRMAN'S STATEMENT The six month period to 31 July was a disappointing one for stock market investment with the FTSE All-Share Index falling 17.8% in capital terms. DIGIT's net asset value per share fell 16.8% during the period, from 231.51p to 192.58p, but a modest reduction in the discount restricted the fall in the share price to 15.1%. Our earnings have showed an encouraging resilience in this environment and we are declaring an interim dividend of 2.20p, which represents an increase of 2.3% on last year's figure of 2.15p. Performance The UK equity market was relatively steady for several months, but in mid-May it started to fall sharply and remained very weak till the end of the period. There were several reasons for the decline. Confidence, already fragile after the events of last year, was delivered a further blow by a series of scandals concerning the accounting practices of a number of large US companies. Pension funds and insurance companies have been moving to reduce their exposure to equities for technical reasons and latterly this reduction has involved the selling of equities into an unwilling market. Finally, there have been mounting indications that economic activity has faltered recently. The worst affected parts of the market included the technology and telecommunications sectors where profit forecasts were being cut. The pharmaceutical sector was also weak as concerns mounted over the loss of patent protection. DIGIT has relatively low exposure to these areas, but has a higher exposure to insurance companies, which suffered as a result of their investments in equities. On the other hand some stable companies held up well, for example in the beverage, tobacco and water sectors. House builders and mortgage banks also outperformed. Overall, DIGIT's sector allocation and stock selection have been good and as a result the Trust's equity portfolio outperformed its benchmark, the All-Share Index, albeit with a decline of 14.7%. The poorer performance of the net asset value was attributable to the effect of our gearing. We have kept the level of gearing under constant review, but we continue to believe that prudent levels of gearing will enhance long term returns to shareholders and the Trust ended the period with net gearing of 16%. Outlook Volatile stock markets, together with the mixed picture emerging from the most recent economic data in the UK and elsewhere, make the job of predicting the immediate outlook an unusually difficult one. However, in a longer term context we think the shares of many companies now look attractively priced and we believe DIGIT's portfolio is well positioned to provide attractive returns. Max Ward Chairman STATEMENT OF TOTAL RETURN 6 months to 31 July 2002 Revenue Capital Total £000 £000 £000 Realised losses on investments - (375) (375) Unrealised losses on investments - (62,071) (62,071) TOTAL CAPITAL LOSSES ON INVESTMENTS - (62,446) (62,446) Income from investments 7,981 - 7,981 Interest receivable on short term 323 - 323 deposits Other income 8 - 8 Investment management fee (280) (654) (934) Administrative expenses (259) - (259) NET RETURN BEFORE FINANCE 7,773 (63,100) (55,327) COSTS AND TAXATION Interest payable and similar charges (1,046) (2,442) (3,488) RETURN ON ORDINARY 6,727 (65,542) (58,815) ACTIVITIES BEFORE TAXATION Taxation - - - RETURN ATTRIBUTABLE TO 6,727 (65,542) (58,815) EQUITY SHAREHOLDERS Dividends in respect of equity (3,522) - (3,522) shares (3,205) (65,542) (62,337) RETURN PER ORDINARY SHARE 4.20p (40.94p) (36.74p) INTERIM DIVIDEND PER ORDINARY SHARES 2.20p STATEMENT OF TOTAL RETURN 6 months to 31 July 2001 Revenue Capital Total £000 £000 £000 Realised losses on investments - (3,895) (3,895) Unrealised losses on investments - (32,556) (32,556) TOTAL CAPITAL LOSSES ON INVESTMENTS - (36,451) (36,451) Income from investments 8,017 - 8,017 Interest receivable on short term 230 - 230 deposits Other income 2 - 2 Investment management fee (315) (735) (1,050) Administrative expenses (272) - (272) NET RETURN BEFORE FINANCE 7,662 (37,186) (29,524) COSTS AND TAXATION Interest payable and similar charges (1,146) (2,673) (3,819) RETURN ON ORDINARY 6,516 (39,859) (33,343) ACTIVITIES BEFORE TAXATION Taxation - - - RETURN ATTRIBUTABLE TO 6,516 (39,859) (33,343) EQUITY SHAREHOLDERS Dividends in respect of equity (3,442) - (3,442) shares 3,074 (39,859) (36,785) RETURN PER ORDINARY SHARE 4.07p (24.90p) (20.83p) INTERIM DIVIDEND PER ORDINARY SHARES 2.15p STATEMENT OF TOTAL RETURN 12 months to 31 January 2002 Revenue Capital Total £000 £000 £000 Realised losses on investments - (8,647) (8,647) Unrealised losses on investments - (48,319) (48,319) TOTAL CAPITAL LOSSES ON INVESTMENTS - (56,966) (56,966) Income from investments 13,956 - 13,956 Interest receivable on short term 497 - 497 deposits Other income 2 - 2 Investment management fee (601) (1,402) (2,003) Administrative expenses (579) - (579) NET RETURN BEFORE FINANCE 13,275 (58,368) (45,093) COSTS AND TAXATION Interest payable and similar charges (2,276) (5,310) (7,586)) RETURN ON ORDINARY 10,999 (63,678) (52,679) ACTIVITIES BEFORE TAXATION Taxation - - - RETURN ATTRIBUTABLE TO 10,999 (63,678) (52,679) EQUITY SHAREHOLDERS Dividends in respect of equity (10,806) - (10,806) shares 193 (63,678) (63,485) RETURN PER ORDINARY SHARE 6.87p (39.77p) (32.90p) The revenue column of this statement represents the revenue account of the company All revenue and capital items in the above statement derive from continuing operations BALANCE SHEET At 31 July At 31 At 31 July 2002 January 2001 2002 £000 £000 £000 FIXED ASSETS Investments 357,800 428,890 490,504 CURRENT ASSETS Debtors 6,206 1,284 2,503 UK Treasury Bills - 4,960 - AAA Money Market Funds 13,000 13,000 - Cash and short term deposits 9,373 3,359 4,140 28,579 22,603 6,643 CREDITORS: Amounts falling due (8,060) (10,843) (29,805) within one year NET CURENT ASSETS/(LIABILITIES) 20,519 11,760 (23,162) TOTAL ASSETS LESS CURRENT 378,319 440,650 467,342 LIABILITIES CREDITORS: Amounts falling due (69,772) (69,766) (69,758) after one year 308,547 370,884 397,584 CAPITAL AND RESERVES Called up share capital - equity 40,025 40,025 40,025 Other reserves 268,522 330,859 357,559 TOTAL EQUITY SHAREHOLDERS' FUNDS 308,547 370,884 397,584 Net asset value per 25p ordinary 192.58p 231.51p 248.18p share CASHFLOW STATEMENT 6 months 6 months 12 months to 31 July to 31 July to 31 January 2002 2001 2002 £000 £000 £000 Revenue before finance costs and 7,773 7,662 13,275 taxation (Increase)/decrease in accrued income (409) 675 823 Decrease in other debtors 165 9 4 (Decrease)/increase in creditors (182) 2 5 Expenses charged to capital (654) (735) (1,402) Net cash inflow from operating 6,693 7,613 12,705 activities Net cash outflow from servicing of (3,481) (3,481) (7,572) finance Total tax paid - (411) (412) Net cash (outflow)/inflow from financial 5,207 (32,321) 12,299 investment Equity dividends paid (7,365) (7,124) (10,565) Net cash (outflow)/inflow before 1,054 (35,724) 6,455 financing Management of liquid resources 4,960 9,899 (8,061) Net cash inflow from financing - 25,000 - Increase/(Decrease) in cash 6,014 (825) (1,606) Notes: 1.The directors have declared an interim dividend of 2.20p (2001 - 2.20p) per ordinary share for the year ended 31 January 2003. The interim dividend, payable on 27 September 2002, will be paid to shareholders on the register on 13 September 2002. The ex dividend date is 11 September 2002. 2.The accounts have been prepared under the same accounting policies used for the year to 31 January 2002. 3.The financial information for the year ended 31 January 2002 has been extracted from the annual report and accounts of the company, which has been filed, with the Registrar of Companies and on which the auditors' report was unqualified. 4.The statement of total return (incorporating the revenue account), balance sheet and cashflow statement set out above do not represent full accounts in accordance with Section 240 of the Companies Act 1985. The accounts have been prepared in accordance with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies'. 5.The interim report will be posted to shareholders on 13 September 2002 and copies will be available at the head office of the Secretary - Edinburgh Fund Managers plc, Donaldson House, 97 Haymarket Terrace, Edinburgh EH12 5HD. Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise. Investors may not get back the amount they originally invested ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/08/21/20020821BIT01330/wkr0001.doc http://www.waymaker.net/bitonline/2002/08/21/20020821BIT01330/wkr0002.pdf