TIDMMNL
MANCHESTER AND LONDON INVESTMENT TRUST PLC
(the "Company")
ANNUAL FINANCIAL REPORT FOR THE YEARED 31 JULY 2020
The full Annual Report and Financial Statements for the year ended 31 July 2020
can be found on the Company's website at www.mlcapman.com/
manchester-london-investment-trust-plc.
STRATEGIC REPORT
Financial Summary
Total Return Year to Year to Percentage
31 July 31 July increase
2020 2019
Total return (GBP'000) 24,037 15,900 51.18%
Return per Share 74.74p 58.75p 27.22%
Total revenue return per Share (5.47p) (3.17p) 72.56%
Dividend per Share 14.00p 14.00p 0.00%
Capital As at As at Percentage
31 31 increase
July July
2020 2019
Net assets attributable to equity 225,933 166,981 35.30%
Shareholders(i) (GBP'000)
Net asset value ("NAV") per Share 625.23p 568.66p 9.95%
NAV total return(ii)? 12.84% 9.80%
Benchmark performance - total return basis (19.60%) 0.98%
(iii)
Share price 630.00p 538.00p 17.10%
Share price premium/(discount) to NAV? 0.76% (5.39%)
(i) NAV as at 31 July 2020 includes a net GBP39,894,000 increase in respect of
new Shares issued in the year (2019: GBP24,604,000 increase).
(ii) Total return including dividends reinvested, as sourced from Bloomberg.
(iii) The Company's benchmark is the MSCI UK Investable Market Index ("MXGBIM
or the "benchmark"), as sourced from Bloomberg.
Ongoing Charges Year to Year to
31 July 31 July
2020 2019
Ongoing charges as a percentage of
average net assets*? 0.77% 0.83%
* Based on total expenses, excluding finance costs and certain non-recurring
items for the year and average monthly NAV.
** Ongoing charges is based on a base fee of GBP940,000 and a Risk & Valuation
fee of GBP59,000 and excludes the variable fees of GBP470,000 (2019: GBP352,000) in
accordance with AIC guidelines.
? See Glossary below.
CHAIRMAN'S STATEMENT
Results for the year ended 31 July 2020
The portfolio remains focused on larger capitalisation, intellectual property
rich companies listed in developed markets which are investing for growth.
Manchester and London Investment Trust plc (the "Company")'s portfolio
performance for the financial year under review has led to a NAV total return
per Share of 12.8%* (2019: 9.8%*). The outperformance of the Company against
our benchmark for the three years to 31 July 2020 on a total return basis now
stands at 68.5%* (2019: 50.2%*).
At the year end, the Shares traded at 0.8% premium to their NAV per Share,
compared to a discount of 5.4% in 2019.
Dividend
The Directors are proposing a final ordinary dividend of 7.0 pence per Share
for the financial year 2020. Accordingly, on a per Share basis, the dividends
proposed or paid out in respect of the 2020 financial year total 14.0 pence,
including the 7.0 pence interim dividend paid in May 2020. These dividends
represent a yield of 2.2% on the Share price as at the year-end (2019: 2.6%).
Board appointment and Annual General Meeting
The Board is delighted with the appointment of Sir James Waterlow as a Director
of the Company on 17 August 2020. Our forty-eighth Annual General Meeting
("AGM") will be held on Monday, 2 November 2020 at 12.00 noon at 12a Princes
Gate Mews, London, SW7 2PS. Please do read further details on restrictions on
attendance at this year's AGM, which are contained within the AGM notice.
David Harris
Chairman
29 September 2020
* Source: Bloomberg, See Glossary below.
MANAGER'S REVIEW
Portfolio management
The portfolio delivered a 32.4%* outperformance against the benchmark driven by
our sector positioning. This was despite a 7.6% increase in the value of
Sterling against the US Dollar which acts as a headwind against performance.
The Total Return of the portfolio broken down by sector holdings in local
currency (separating costs and foreign exchange) is shown below:
Total return of underlying sector holdings in local
currency 2020
(excluding costs and foreign exchange)
Information Technology 7.2%
Communication Services 5.0%
Consumer Discretionary 7.6%
Other investments (including funds, ETFs and beta 2.5%
hedges)
Foreign exchange, cost & carry (9.6%)
Total NAV per Share return 12.8%
Total return of underlying sector holdings in local
currency 2019
(excluding costs and foreign exchange)
Technology investments 6.4%
Consumer investments 0.7%
Healthcare investments (0.4%)
Other (including cost, carry and foreign exchange) 3.1%
Total NAV per Share return 9.8%
Source: Bloomberg.
Information Technology
The Information Technology sector delivered 56.3% of the NAV total return per
Share.
Microsoft Corporation accounted for over half of this sector's return. Other
material positive performers included Adobe Inc, Salesforce.com Inc, Nvidia
Corp, Mastercard Inc and Visa Inc.
Paypal Holdings Inc was the only material negative contributor (due to the
timing of the disposal).
The portfolio's weighting to this sector at the year end was 38.1% of the net
assets (2019: 49.6%).
Communication Services
The Communication Services sector delivered roughly 39.3% of the NAV total
return per share.
Material positive contributors included Alphabet Inc, Facebook Inc and Tencent
Holdings Ltd.
The Walt Disney Co was the only material negative contributor (we sold this in
March due to perceived greater COVID-19 risks).
The portfolio's weighting to this sector at year end was 33.4% of the net
assets (2019: 37.0%).
Consumer Discretionary
The Consumer discretionary sector delivered 59.4% of the NAV total return per
share.
The material positive contributors in this sector were Alibaba Group Holding
Ltd and Amazon.com Inc.
The only material negative contributor was Expedia Group Inc.
The portfolio's weighting to this sector at year end was 29.8% of the net
assets (2019: 33.1%).
Other (including funds, ETFs and beta hedges)
Other holdings delivered 19.6% of the NAV total return per Share.
We employed various sector and thematic index hedges during the year in an
attempt to combat market volatility. Most of these market hedges were removed
(at a profit) during the Q1 market fall.
Of the long fund and ETF holdings in this segment, the material positive
contributors were the Morgan Stanley US SAAS Basket and Polar Capital
Technology Trust Plc.
The portfolio's weighting to this sector at year end was 5.9% of the net assets
(2019: -8.2%).
Professional negligence liability risks
M & L Capital Management Limited ("MLCM"), the Manager of the Company,
allocates additional own funds against professional liability risks and hence
it no longer requires professional liability insurance.
M&L Capital Management Limited
Manager
29 September 2020
*Source: Bloomberg. See Glossary below.
Equity exposures and portfolio sector analysis
Equity exposures (longs)
As at 31 July 2020
Company Sector * Valuation % of net
GBP'000 assets
Amazon.com Inc. Consumer 45,031 19.93
Discretionary
Microsoft Corporation** Information 34,028 15.06
Technology
Alibaba Group Holding Ltd** Information 30,356 13.44
Technology
Alphabet Inc.** Communication 29,797 13.19
services
Facebook Inc.** Communication 21,912 9.70
services
Tencent Holdings Ltd** Information 17,573 7.78
Technology
salesforce.com,inc.** Information 16,972 7.51
Technology
Adobe inc.** Information 13,200 5.84
Technology
Visa Inc. Information 12,241 5.42
Technology
Mastercard Incorporated Information 10,305 4.56
Technology
Netflix** Communication 8,193 3.63
services
Polar Capital Technology Trust Fund 5,558 2.46
plc
SAP SE** Information 4,198 1.86
Technology
Dassault Systèmes SA** Information 4,166 1.84
Technology
NetEase, Inc. Communication 4,120 1.82
services
China Software Basket** CFD Basket 4,118 1.82
Invesco QQQ (Nasdaq 100) ETF Index 1,923 0.85
US SaaS Basket** CFD Basket 1,591 0.70
Hang Seng TECH index** Index 1,003 0.44
Total long positions 266,285 117.85
Short positions > 1%
US Restaurants Basket** CFD Basket (911) (0.40)
Total short position > 1% (911) (0.40)
Cash and other net assets and (39,441) (17.45)
liabilities
Net assets 225,933 100.00
* GICS - Global Industry Classification Standard.
** Including equity swap exposures as detailed in note 13.
Portfolio sector analysis
As at 31 July 2020
% of net
Sector assets
Information Technology 63.3
Communication services 28.3
Consumer Discretionary 19.9
Fund 2.5
Index 1.3
CFD Basket 2.1
Cash and other net assets and liabilities (17.4)
Net assets 100.0
PRINCIPAL PORTFOLIO HOLDINGS
Amazon.com Inc. ("Amazon")
Amazon is the world's largest e-commerce platform and remains a disruptive
force in the retail market. Amazon also provides other large scale content and
services platforms to consumers and businesses such as Amazon Prime, Amazon Web
Services and Amazon Logistics.
Alphabet Inc. ("Alphabet")
Alphabet is a global technology company with products and platforms across a
wide range of tech verticals, including online advertising, cloud-based
technology, autonomous vehicles, artificial intelligence and smart phones.
Microsoft Corporation ("Microsoft")
Microsoft is another global tech company and a leader in cloud-based
technology, business software, operating systems and gaming.
Alibaba Group Holding Ltd ("Alibaba")
Alibaba is China's largest technology company with leading platforms in
e-commerce, payments, media, entertainment and cloud computing.
Facebook Inc. ("Facebook")
Facebook is the largest global social media platform with over 2.7 billion
monthly active users and has the second largest global online advertising
revenue after Google.
Salesforce.com Inc. ("Salesforce")
Salesforce is the global leader in CRM software and a major enterprise cloud
platform and software-as-a-service ("SAAS") provider.
Tencent Holdings Ltd ("Tencent")
Tencent is a Chinese internet company, with platforms in online gaming, social
media, digital payments and digital entertainment. Through WeChat, Tencent has
built one of Asia's leading SuperApps with over 1.1 billion monthly active
users.
Visa Inc. ("Visa")
Visa is a financial services company and a key facilitator of electronic funds
transfers throughout the world.
Adobe Inc. ("Adobe")
Adobe is a SAAS company that provides cloud-based creative, marketing and
analytics tools to businesses, professionals and prosumers. Adobe is perhaps
best known for Photoshop - imaging, design and photo-editing software.
Mastercard Inc. ("Mastercard")
Mastercard is a leader in global digital payments. Together, Mastercard and
Visa account for a dominant share of card transactions in the US and EU.
Percentage of portfolio by holding at the year end*:
Amazon.com Inc. 16.3%
Microsoft Corporation 13.5%
Alibaba Group Holding Ltd 13.5%
Alphabet Inc. 12.7%
Facebook Inc. 8.4%
Salesforce.com Inc. 7.2%
Tencent Holdings Ltd 6.8%
VISA Inc. 5.3%
Adobe Inc. 5.2%
Mastercard Inc. 4.4%
* Net of market value of options.
Investment record of the last ten years
Year ended Total Return per Dividend per Net NAV per
Return Share* Share assets Share*
(GBP'000) (p) (p) (GBP'000) (p)
31 July 2011 15,691 69.87 12.50 98,267 437.60
31 July 2012 (19,945) (88.81) 13.00 75,515 336.26
31 July 2013 2,522 11.23 13.75 75,050 334.19
31 July 2014 (6,295) (28.08) 13.75 64,361 293.20
31 July 2015 2,483 11.47 6.00 63,074 293.35
31 July 2016 13,424 62.50 13.36 75,546 350.81
31 July 2017 20,055 92.43 9.00 94,661 429.05
31 July 2018 26,792 115.27 12.00 130,388 532.81
31 July 2019 15,900 58.75 14.00 166,981 568.66
31 July 2020 24,037 74.74 14.00 225,933 625.23
* Basic and fully diluted.
Business model
The Company is an investment company as defined by Section 833 of the Companies
Act 2006 and operates as an investment trust in accordance with Section 1158 of
the Corporation Tax Act 2010.
The Company is also governed by the Listing Rules and Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority (the "FCA") and is listed
on the Premium Segment of the Main Market of the London Stock Exchange.
A review of investment activities for the year ended 31 July 2020 is detailed
in the Manager's Review above.
Investment objective
The investment objective of the Company is to achieve capital appreciation
together with a reasonable level of income.
Investment policy
Asset allocation
The Company's investment objective is sought to be achieved through a policy of
actively investing in a diversified portfolio, comprising UK and overseas
equities and fixed interest securities. The Company seeks to invest in
companies whose shares are admitted to trading on a regulated market. However,
it may invest in a small number of equities and fixed-interest securities of
companies whose capital is not admitted to trading on a regulated market.
Investment in overseas equities is utilised by the Company to increase the risk
diversification of the Company's portfolio and to reduce dependence on the UK
economy in addressing the growth and income elements of the Company's
investment objective.
The Company may invest in derivatives, money market instruments, currency
instruments, CFDs, futures, forwards and options for the purposes of (i)
holding investments and (ii) hedging positions against movements in, for
example, equity markets, currencies and interest rates.
There are no maximum exposure limits to any one particular classification of
equity or fixed-interest security. The Company's investments are not limited to
any one industry sector and its current investment portfolio is spread across a
range of sectors. The Company has no specific criteria regarding market
capitalisation or credit ratings in respect of investee companies.
Risk diversification
The Company intends to maintain a relatively focused portfolio, seeking capital
growth by investing in approximately 20 to 40 securities. The Company will not
invest more than 15% of the gross assets of the Company at the time of
investment in any one security. However, the Company may invest up to 50% of
the gross assets of the Company at the time of investment in an investment
company subsidiary, subject always to other restrictions set out in this
investment policy and the Listing Rules.
The Company intends to be fully invested whenever possible. However, during
periods in which changes in economic conditions or other factors so warrant,
the Manager may reduce the Company's exposure to one or more asset classes and
increase the Company's position in cash and/or money market instruments.
Gearing
The Company may borrow to gear the Company's returns when the Manager believes
it is in Shareholders' interests to do so. The Company's investment policy and
the Articles permit the Company to incur borrowing up to a sum equal to two
times the adjusted total of capital and reserves. Any change to the Company's
borrowing policy will only be made with the approval of Shareholders by special
resolution.
The effect of gearing may be achieved without borrowing by investing in a range
of different types of investments including derivatives. The Company will not
enter into any investments which have the effect of increasing the Company's
net gearing beyond the above limit.
General
In addition to the above, the Company will observe the investment restrictions
imposed from time to time by the Listing Rules which are applicable to
investment companies with shares listed on the Official List of the FCA under
Chapter 15.
In line with the Listing Rules, the Company will manage and invest its assets
in accordance with the Company's investment policy. Any material changes in the
principal investment policies and restrictions (as set out above) of the
Company will only be made with the approval of Shareholders by ordinary
resolution.
In the event of any breach of the investment restrictions applicable to the
Company, Shareholders will be informed of the remedial actions to be taken by
the Board and the Manager by an announcement issued through a regulatory
information service approved by the FCA.
Dividend policy
The Company may declare dividends as justified by funds available for
distribution. The Company will not retain in respect of any accounting period
an amount which is greater than 15% of net revenue in that period.
The dividend payments are split in order to better reflect the sources of the
Company's income. Recurring income from dividends on underlying holdings is
paid out as ordinary dividends.
Results and dividends
The results for the year are set out in the Statement of Comprehensive Income
and in the Statement of Changes in Equity below.
For the year ended 31 July 2020, the net revenue return attributable to
Shareholders was negative GBP1,759,000 (2019: negative GBP857,000) and the net
capital return attributable to Shareholders was GBP25,796,000 (2019: GBP
16,757,000). Total Shareholders' funds increased by 35% to GBP225,933,000 (2019:
GBP166,981,000).
The dividends paid/proposed by the Board for 2019 and 2020 are set out below:
Year ended 31 Year ended
July 2020 31 July 2019
(pence per (pence per
Share) Share)
Interim dividend 7.00 6.00
Proposed final dividend 7.00 8.00
14.00 14.00
Subject to the approval of Shareholders at the forthcoming AGM, the proposed
final ordinary dividend will be payable on 6 November 2020 to Shareholders on
the register at the close of business on 16 October 2020. The ex-dividend date
will be 15 October 2020.
Further details of the dividends paid in respect of the years ended 31 July
2020 and 31 July 2019 are set out in note 7 below.
Principal risks and uncertainties
The Board considers that the following are the principal risks and
uncertainties facing the Company. The actions taken to manage each of these are
set out below. If one or more of these risks materialised, it could potentially
have a significant impact upon the Company's ability to achieve its investment
objective. These risks are formalised within the risk matrix maintained by the
Company's Manager.
Risk How the risk is managed
Investment Performance Risk Investment performance is monitored and
The performance of the reviewed daily by MLCM as AIFM through:
Company may not be in line * Intra-day portfolio statistics; and
with its investment * Daily Risk, Liquidity & Volatility reports.
objectives.
The metrics and statistics within these reports
may be used (in combination with other factors)
to help inform investment decisions.
The AIFM also provides the Board with monthly
performance updates, key portfolio stats
(including performance attribution, valuation
metrics, VaR and liquidity analysis) and
performance charts of top portfolio holdings.
It should be noted that none of the above steps
guarantee that Company performance will meet
its stated objectives.
Key Man Risk and The Manager has a remuneration policy that
Reputational Risk incentivises key staff to take a long-term view
The Company may be unable to as variable rewards are spread over a five-year
fulfil its investment period. MLCM also has documented policies and
objectives following the procedures, including a business continuity
departure of key staff of plan, to ensure continuity of operations in the
the Manager. unlikely event of a departure.
MLCM has a comprehensive compliance framework
to ensure strict adherence to relevant
governance rules and requirements.
Fund Valuation Risk NAVs are produced independently by the
The Company's valuation is Administrator, based on the Company's valuation
not accurately represented policy.
to investors.
Valuation is overseen and reviewed by the
AIFM's valuation committee which reconciles and
checks NAV reports prior to publication.
It should be noted that the vast majority of
the portfolio consists of quoted equities,
whose prices are provided by independent market
sources; hence material input into the
valuation process is rarely required from the
valuation committee.
Third-Party Service All outsourced relationships are subject to an
Providers extensive dual-directional due diligence
Failure of outsourced process and to ongoing monitoring. Where
service providers in possible, the Company appoints a diversified
performing their contractual pool of outsourced providers to ensure
duties. continuity of operations should a service
provider fail.
The cyber security of third-party service
providers is a key risk that is monitored on an
ongoing basis. The safe custody of the
Company's assets may be compromised through
control failures by the Depositary or
Custodian, including cyber security incidents.
To mitigate this risk, the AIFM receives
monthly reports from the Depositary confirming
safe custody of the Company's assets held by
the Custodian.
Regulatory Risk The AIFM adopts a series of pre-trade and
A breach of regulatory rules post-trade controls to minimise breaches. MLCM
/ other legislation uses a fully integrated order management
resulting in the Company not system, electronic execution system, portfolio
meeting its objectives or management system and risk system developed by
investors' loss. Bloomberg. These systems include automated
compliance checks, both pre- and
post-execution, in addition to manual checks by
the investment team. The AIFM undertakes
ongoing compliance monitoring of the portfolio
through a system of daily reporting.
Furthermore, there is additional oversight from
the Depositary, which ensures that there are
three distinct layers of independent
monitoring.
Fiduciary Risk The Company has a clear documented investment
The Company may not be policy and risk profile. A strong system and
managed to the agreed monitoring culture, with an independent
guidelines. second-line function, provide oversight on a
daily basis and more formally through various
monthly governance committees.
Fraud Risk The AIFM has extensive fraud prevention
Fraudulent actions may cause controls and adopts a zero tolerance approach
harm to the Company's towards fraudulent behaviour and breaches of
investment activities and protocol surrounding fraud prevention. The
objectives. transfer of cash or securities involve the use
of dual authorisation and two-factor
authentication to ensure fraud prevention, such
that only authorised personnel are able to
access the core systems and submit transfers.
The second line of defence has access to core
systems to ensure complete oversight of all
transactions.
In addition to the above, the Board considers the following to be the principal
financial risks associated with investing in the Company: market risk, interest
rate risk, liquidity risk, currency rate risk and credit and counterparty risk.
An explanation of these risks and how they are managed along with the Company's
capital management policies are contained in note 16 of the Financial
Statements below.
The Board, through the Audit Committee, has undertaken a robust assessment and
review of all the risks stated above and in note 16 of the Financial
Statements, together with a review of any emerging or new risks which may have
arisen during the year, including those that would threaten the Company's
business model, future performance, solvency or liquidity. Whilst reviewing the
principal risks and uncertainties, the Board was cognisant of the risks posed
by the COVID-19 pandemic.
In accordance with guidance issued to directors of listed companies, the
Directors confirm that they have carried out a review of the effectiveness of
the systems of internal financial control during the year ended 31 July 2020,
as set out in the full Annual Report. There were no matters arising from this
review that required further investigation and no significant failings or
weaknesses were identified.
Year-end gearing
At the year end, gross long equity exposure represented 117.86% (2019: 125.98%)
of net assets.
Key performance indicators
The Board considers the most important key performance indicator to be the
comparison with its benchmark index. This is referred to in the Financial
Summary above.
Other key measures by which the Board judges the success of the Company are the
Share price, the NAV per Share and the ongoing charges measure.
Total net assets at 31 July 2020 amounted to GBP225,933,000 compared with GBP
166,981,000 at 31 July 2019, an increase of 35%, whilst the fully diluted NAV
per Share increased to 625.23p from 568.66p.
Net revenue return after taxation for the year was a negative GBP1,759,000 (2019:
negative GBP857,000).
The quoted Share price during the period under review has ranged from a
discount of 13.2% to a premium of 6.1%.
Ongoing charges, which are set out above, are a measure of the total expenses
(including those charged to capital) expressed as a percentage of the average
net assets over the year. The Board regularly reviews the ongoing charges
measure and monitors Company expenses.
Future development
The Board and the Manager do not currently foresee any material changes to the
business of the Company in the near future. As the majority of the Company's
equity investments are denominated in US Dollar, any currency volatility caused
by Brexit as well as the US elections may have an impact (either positive or
negative) on the Company's NAV per Share, which is denominated in Sterling.
Management arrangements
Under the terms of the management agreement, MLCM manages the Company's
portfolio in accordance with the investment policy determined by the Board. The
management agreement has a termination period of three months. In line with the
management agreement, the Manager receives a variable portfolio management fee.
Details of the revised fee arrangements and the fees paid to the Manager during
the year are disclosed in note 3 to the Financial Statements.
The Manager is authorised and regulated by the FCA.
M&M Investment Company Plc ("MMIC"), which is controlled by Mr Mark Sheppard
who forms part of the Manager's investment management team, is the controlling
Shareholder of the Company. Further details regarding this are set out in the
Directors' Report in the full Annual Report.
Alternative Investment Fund Managers Directive (the "AIFMD")
The Company permanently exceeded the sub-threshold limit under the AIFMD in
2017 and MLCM was appointed as the Company's AIFM with effect from 17 January
2018. Following their appointment as the AIFM, MLCM receives an annual risk
management and valuation fee of GBP59,000 to undertake its duties as the AIFM in
addition to the portfolio management fees set out above.
The AIFMD requires certain information to be made available to investors before
they invest and requires that material changes to this information be disclosed
in the Annual Report.
Remuneration
In the year to 31 July 2020, the total remuneration paid to the employees of
the Manager was GBP429,000 (2019: GBP402,000), payable to an average employee
number throughout the year of four (2019: three).
The management of MLCM is undertaken by Mr Mark Sheppard and Mr Richard Morgan,
to whom a combined total of GBP347,000 (2019: GBP284,000) was paid by the Manager
during the year.
The remuneration policy of the Manager is to pay fixed annual salaries, with
non-guaranteed bonuses, dependent upon performance only. These bonuses are
generally paid in the Company's Shares, released over a three-year period.
Leverage
Leverage is defined in the Glossary below.
The leverage policy has been approved by the Company and the AIFM. The policy
limits the leverage ratio that can be deployed by the Company at any one time
to 275% (gross method) and 250% (commitment method). This includes any gearing
created by its investment policy. This is a maximum figure as required by
regulation and not necessarily the amount of leverage that is actually used.
The leverage ratio as at 31 July 2020 measured by the gross method was 187.9%
and that measured by the commitment method was 100.8%.
Risk profile
The risk profile of the Company as measured through the Synthetic Risk Reward
Indicator ("SRRI") score, is currently at 6 on a scale of 1 to 7 as at 31 July
2020. This score is calculated on the Company's five-year annualised NAV
volatility. Liquidity, counterparty and currency risks are not captured on the
scale. The Manager will periodically disclose the current risk profile of the
Company to investors. The Company will make this disclosure on its website at
the same time as it makes its Annual Report and Financial Statements available
to investors or more frequently at its discretion.
Liquidity arrangements
The Company currently holds no assets that are subject to special arrangements
arising from their illiquid nature. If applicable, the Company would disclose
the percentage of its assets subject to such arrangements on its website at the
same time as it makes its Annual Report and Financial Statements available to
investors, or more frequently at its discretion.
Continuing appointment of the Manager
The Board keeps the performance of MLCM, in its capacity as the Company's
Manager, under continual review. It has noted the good long-term performance
record and commitment, quality and continuity of the team employed by the
Manager. As a result, the Board concluded that it is in the best interests of
the Shareholders as a whole that the appointment of the Manager on the agreed
terms should continue.
Human rights, employee, social and community issues
The Board consists entirely of non-executive Directors. The Company has no
employees and day-to-day management of the business is delegated to the Manager
and other service providers. As an investment trust, the Company has no direct
impact on the community or the environment, and as such has no human rights,
social or community policies. In carrying out its investment activities and in
relationships with suppliers, the Company aims to conduct itself responsibly,
ethically and fairly. Further details of the Environmental, Social and
Governance policy and of the Company's Board composition and related diversity
considerations can be found in the Statement of Corporate Governance in the
full Annual Report.
Gender diversity
At 31 July 2020 and throughout the majority of the year under review, the Board
comprised three male Directors. Following Sir James Waterlow's appointment on
17 August 2020 and to date of this report, the Board comprised four male
Directors. As stated in the Statement of Corporate Governance, the appointment
of any new Director is made on the basis of merit. The appointment process of
Sir Waterflow is explained in more detail in the Statement of Corporate
Governance in the full Annual Report.
Approval
This Strategic Report has been approved by the Board and signed on its behalf
by:
David Harris
Chairman
29 September 2020
DIRECTORS
David Harris (Chairman of the Board)
Brett Miller
Daniel Wright (Chairman of the Audit Committee and Senior Independent Director)
Sir James Waterlow
All the Directors are non-executive. Mr Harris, Sir James Waterlow and Mr
Wright are independent of the Company's Manager.
EXTRACTS FROM THE DIRECTORS' REPORT
Share capital
At 31 July 2020, the Company's issued Share capital comprised 36,135,738 Shares
of 25 pence each, of which none were held in Treasury.
At general meetings of the Company, Shareholders are entitled to one vote on a
show of hands and on a poll, to one vote for every Share held. Shares held in
Treasury do not carry voting rights.
In circumstances where Chapter 11 of the Listing Rules would require a proposed
transaction to be approved by Shareholders, the controlling Shareholder (see
the full Annual Report for further details) shall not vote its Shares on that
resolution. In addition, any Director of the Company appointed MMIC, the
controlling Shareholder, shall not vote on any matter where conflicted and the
Directors will act independently from MMIC and have due regard to their
fiduciary duties.
Issue of Shares
At the Annual General Meeting held on 14 January 2020, Shareholders approved
the Board's proposal to authorise the Company to allot Shares up to an
aggregate nominal amount of GBP2,446,994. In addition, the Directors were
authorised to issue shares up to an aggregate nominal value of GBP734,098 on a
non-pre-emptive basis. This authority is due to expire at the Company's
forthcoming AGM on 2 November 2020.
In addition to this authority, at the General Meeting held on 16 July 2020,
Shareholders approved the Board's proposal to authorise the Company to allot
further Shares up to an aggregate nominal amount of GBP2,275,000 on a
non-pre-emptive basis. This authority expired on 30 July 2020, being 10
business days from the passing of the resolution.
During the period, MMIC subscribed to Shares on six occasions. The details of
all subscriptions by and allotments to MMIC during the period are listed below.
Date of Number of Price paid per Market price Date of
subscription Shares share (pence) on date on admission to
subscription trading
(pence)
25 September 2019 807,573 535.00 530.00 1 October 2019
4 December 2019 781,985 547.10 522.00 10 December 2019
17 December 2019 1,500,000 550.10 524.00 23 December 2019
8 January 2020 157,250 580.50 550.00 14 January 2020
12 February 2020 1,250,000 609.50 587.00 18 February 2020
22 July 2020 1,747,000 646.50 654.00 28 July 2020
At the placing on 22 July 2020, a further 60,000 Shares were subscribed for by
Winterflood Securities Limited and 468,000 Shares by Singer Nominees Limited,
both for a price of 646.5 pence per Share. These Shares were admitted to
trading on the same date as the Shares allotted to MMIC, being 28 July 2020.
All Share issues detailed above were made at a price equal to the latest
reported NAV as at the day of the issue.
As at the date of this report, the total voting rights were 36,135,738.
Purchase of Shares
At the Annual General Meeting held on 14 January 2020, Shareholders approved
the Board's proposal to authorise the Company to acquire up to 14.99% of its
issued Share capital (excluding Treasury Shares) amounting to 3,769,238 Shares.
This authority is due to expire at the Company's forthcoming AGM on 2 November
2020.
The Company did not purchase any of its own Shares during the year or since the
year end.
Sale of Shares from Treasury
At the Annual General Meeting held on 14 January 2020, Shareholders approved
the Board's proposal to authorise the Company to waive pre-emption rights in
respect of Treasury Shares up to an aggregate amount of GBP734,098 and to permit
the allotment or sale of Shares from Treasury at a discount to NAV. This
authority is due to expire at the Company's forthcoming AGM on 2 November 2020.
No Shares were held in Treasury and no Shares were sold from Treasury during
the year. As at the date of this report, no Shares are held in Treasury
Going concern
The Directors consider that it is appropriate to adopt the going concern basis
in preparing the Financial Statements. After making enquiries, and considering
the nature of the Company's business and assets, the Directors consider that
the Company has adequate resources to continue in operational existence for the
foreseeable future. In arriving at this conclusion, the Directors have
considered the liquidity of the portfolio and the Company's ability to meet
obligations as they fall due for a period of at least 12 months from the date
that these Financial Statements were approved. In making this assessment, the
Directors have considered any likely impact of the current COVID-19 pandemic on
the Company, its operations and the investment portfolio.
Cashflow projections have been reviewed provide evidence that the Company has
sufficient funds to meet both its contracted expenditure and its discretionary
cash outflows in the form of the dividend policy.
Viability statement
The Directors have assessed the prospects of the Company over a five-year
period. The Directors consider five years to be a reasonable time horizon to
consider the continuing viability of the Company, however they also consider
viability for the longer-term foreseeable future.
In their assessment of the viability of the Company, the Directors have
considered each of the Company's principal risks and uncertainties as set out
in the Strategic Report above and in particular, have considered the potential
impact of a significant fall in global equity markets on the value of the
Company's investment portfolio overall. The Directors have also considered the
Company's income and expenditure projections and the fact that the Company's
investments mainly comprise readily realisable securities which could be sold
to meet funding requirements if necessary. On that basis, the Board considers
that five years is an appropriate time period to assess continuing viability of
the Company.
In forming their assessment of viability, the Directors have also considered:
* internal processes for monitoring costs;
* expected levels of investment income;
* the performance of the Manager;
* portfolio risk profile;
* liquidity risk;
* gearing limits;
* counterparty exposure; and
* financial controls and procedures operated by the Company.
The Board has reviewed the influence of the COVID-19 pandemic on its service
providers and is satisfied with the ongoing services provided to the Company.
Based upon these considerations, the Directors have concluded that there is a
reasonable expectation that the Company will be able to continue in operation
and meet its liabilities as they fall due over the five-year period.
By order of the Board
Link Company Matters Limited
Company Secretary
29 September 2020
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RELATION TO THE ANNUAL REPORT AND
FINANCIAL STATEMENTS
The Directors are responsible for preparing the Company's Annual Report and
Financial Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each
financial period. Under that law, they have elected to prepare the Financial
Statements in accordance with International Financial Reporting Standards
("IFRS"). Under Company law, the Directors must not approve the Financial
Statements unless they are satisfied that they give a true and fair view of the
state of affairs of the Company and of the profit or loss of the Company for
that period.
In preparing the Financial Statements, the Directors are required to:
* select suitable accounting policies in accordance with IAS 8 'Accounting
Policies, Changes in Accounting Estimates and Errors' and then apply them
consistently;
* present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;
* provide additional disclosure when compliance with specific requirements in
IFRS is insufficient to enable users to understand the impact of particular
transactions, other events and conditions on the Company's financial
position and financial performance;
* state that the Company has complied with IFRS, subject to any material
departures disclosed and explained in the Financial Statements;
* make judgements and estimates that are reasonable and prudent; and
* prepare Financial Statements on a going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy, at any time, the financial position of the Company and to
enable them to ensure that the Financial Statements comply with the Companies
Act 2006 and Article 4 of the IAS Regulation. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for
preparing a Strategic Report, Directors' Report, Directors' Remuneration Report
and Corporate Governance Statement that comply with that law and those
regulations, and ensuring that the Annual Report includes information required
by the Listing Rules and Disclosure Guidance and Transparency Rules of the FCA.
The Financial Statements are published on the Company's website,
www.mlcapman.com/manchester-london-investment-trust-plc, which is maintained on
behalf of the Company by the Manager. The Manager has agreed to maintain, host,
manage and operate the Company's website and to ensure that it is accurate and
up-to-date and operated in accordance with applicable law. The work carried out
by the Auditor does not involve consideration of the maintenance and integrity
of this website and accordingly, the Auditor accepts no responsibility for any
changes that have occurred to the Financial Statements since they were
initially presented on the website. Visitors to the website need to be aware
that legislation in the United Kingdom covering the preparation and
dissemination of the Financial Statements may differ from legislation in their
jurisdiction.
We confirm that to the best of our knowledge:
i. the Financial Statements, prepared in accordance with the IFRS as adopted
by the European Union, give a true and fair view of the assets, liabilities,
financial position and return of the Company; and
ii. the Annual Report includes a fair review of the development and
performance of the business and position of the Company, together with a
description of the principal risks and uncertainties that it faces.
The Directors consider that the Annual Report and Financial Statements, taken
as a whole, are fair, balanced and understandable and provide the information
necessary for Shareholders to assess the Company's position and performance,
strategy and business model and strategy.
On behalf of the Board
David Harris
Chairman
29 September 2020
NON-STATUTORY ACCOUNTS
The financial information set out below does not constitute the Company's
statutory accounts for the years ended 31 July 2020 and 31 July 2019 but is
derived from those accounts. Statutory accounts for the year ended 31 July 2019
have been delivered to the Registrar of Companies and statutory accounts for
the year ended 31 July 2020 will be delivered to the Registrar of Companies in
due course. The Auditor has reported on those accounts; their report was (i)
unqualified, (ii) did not include a reference to any matters to which the
Auditor drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under Section 498 (2) or (3) of the Companies
Act 2006. The text of the Auditor's report can be found on page 50 and further
of the Company's full Annual Report at www.mlcapman.com/
manchester-london-investment-trust-plc.
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 July 2020
2020 2019
Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Gains
Gains on investments at
fair value through 9 (285) 27,368 27,083 - 17,777 17,777
profit or loss
Investment income 2 647 - 647 749 - 749
Gross return 362 27,368 27,730 749 17,777 18,526
Expenses
Management fee 3 (1,470) - (1,470) (1,115) - (1,115)
Other operating expenses 4 (555) - (555) (406) - (406)
Total expenses (2,025) - (2,025) (1,521) - (1,521)
Return before finance
costs and tax (1,663) 27,368 25,705 (772) 17,777 17,005
Finance costs 5 (37) (1,572) (1,609) (37) (1,020) (1,057)
Return on ordinary
activities before tax (1,700) 25,796 24,096 (809) 16,757 15,948
Taxation 6 (59) - (59) (48) - (48)
Return on ordinary
activities after tax (1,759) 25,796 24,037 (857) 16,757 15,900
Return per Ordinary pence Pence Pence pence pence pence
Share
Basic and fully diluted 8 (5.47) 80.21 74.74 (3.17) 61.92 58.75
The total column of this statement is the Income Statement of the Company
prepared in accordance with IFRS, as adopted by the European Union. The
supplementary revenue and capital columns are presented in accordance with the
Statement of Recommended Practice issued by the AIC ("AIC SORP").
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the year.
There is no other comprehensive income, and therefore the return for the year
after tax is also the total comprehensive income.
The notes below form part of these Financial Statements.
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 July 2020
Share Share Capital Retained
capital premium reserve* earnings** Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 August 2019 7,341 68,987 73,365 17,288 166,981
Changes in equity for 2020
Total comprehensive income/(loss) - - 25,796 (1,759) 24,037
Dividends paid 7 - - - (4,979) (4,979)
Shares issued 14 1,693 38,201 - - 39,894
Balance at 31 July 2020 9,034 107,188 99,161 10,550 225,933
Balance at 1 August 2018 6,118 45,606 56,608 22,056 130,388
Changes in equity for 2019
Total comprehensive income/(loss) - - 16,757 (857) 15,900
Dividends paid 7 - - - (3,911) (3,911)
Shares issued 14 1,223 23,381 - - 24,604
Balance at 31 July 2019 7,341 68,987 73,365 17,288 166,981
* Within the balance of the capital reserve, GBP7,138,000 relates to realised
gains (2019: GBP13,335,000) and is distributable by way of a dividend. The
remaining GBP92,023,000 relates to unrealised gains and losses on financial
instruments (2019: GBP60,030,000) and is non-distributable.
** Fully distributable by way of a dividend.
STATEMENT OF FINANCIAL POSITION
As at 31 July 2020
2020 2019
Notes GBP'000 GBP'000
Non-current assets
Investments at fair value through 9 137,333 132,059
profit or loss
Current assets
Unrealised derivative assets 13 29,229 8,887
Trade and other receivables 10 18 137
Cash and cash equivalents 11 86,177 32,880
115,424 41,904
Current liabilities
Unrealised derivative liabilities 13 (24,278) (6,512)
Trade and other payables 12 (2,546) (470)
(26,824) (6,982)
Net current assets 88,600 34,922
Net assets 225,933 166,981
Capital and reserves
Share capital 14 9,034 7,341
Share premium 107,188 68,987
Capital reserve 99,161 73,365
Retained earnings 10,550 17,288
Total equity 225,933 166,981
Basic and fully diluted NAV per 15 625.23 568.66p
Share
The Financial Statements were approved by the Board of Directors and authorised
for issue on 29 September 2020 and are signed on its behalf by:
David Harris
Chairman
Manchester and London Investment Trust Public Limited Company
Company Number: 01009550
The notes below form part of these Financial Statements.
STATEMENT OF CASH FLOWS
For the year ended 31 July 2020
2020 2019
GBP'000 GBP'000
Cash flow from operating activities
Return on operating activities before tax 24,096 15,948
Interest expense 1,609 1,057
Gains on investments held at fair value through (30,119) (16,649)
profit or loss
Decrease/(increase) in receivables 32 (106)
Increase in payables 192 34
Derivative instruments cash flows (3,028) (2,334)
Tax paid (59) (48)
Net cash (used in)/generated from operating (7,277) (2,098)
activities
Cash flow from investing activities
Purchases of investments (38,134) (57,456)
Sales of investments 65,630 45,000
Net cash inflow/(outflow) from investing activities 27,496 (12,456)
Cash flow from financing activities
Equity dividends paid (4,979) (3,911)
Issue of Shares 39,894 24,604
Interest paid (1,837) (1,117)
Net cash generated in financing activities 33,078 19,576
53,297 5,022
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year 32,880 27,858
Cash and cash equivalents at end of year 86,177 32,880
The notes below form part of these Financial Statements.
NOTES FORMING PART OF THE FINANCIAL STATEMENTS
For the year ended 31 July 2020
1. General information and accounting policies
Manchester and London Investment Trust plc is a public limited company
incorporated in the UK and registered in England and Wales. The principal
activity of the Company is that of an investment trust company within the
meaning of Sections 1158/1159 of the Corporation Tax Act 2010 and its
investment approach is detailed in the Strategic Report.
The Financial Statements of the Company have been prepared in accordance with
IFRS as adopted by the European Union, which comprise standards and
interpretations approved by the International Accounting Standards Board
("IASB"), and as applied in accordance with the provisions of the Companies Act
2006. The annual Financial Statements have also been prepared in accordance
with the AIC SORP for the financial statements of investment trust companies
and venture capital trusts, except to any extent where it is not consistent
with the requirements of IFRS.
Basis of preparation
In order to better reflect the activities of an investment trust company and in
accordance with the AIC SORP, supplementary information which analyses the
Statement of Comprehensive Income between items of revenue and capital nature
has been prepared alongside the Statement of Comprehensive Income.
The Financial Statements are presented in Sterling, which is the Company's
functional currency as the UK is the primary environment in which it operates,
rounded to the nearest GBP'000s, except where otherwise indicated.
The Financial Statements have been prepared on the historical cost basis,
except for the revaluation of certain investments that are measured at revalued
amounts or fair values at the end of each reporting period, as explained in the
accounting policies below. Historical cost is generally based on the fair value
of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date, regardless of whether that price is directly observable
or estimated using another valuation technique. In estimating the fair value of
an asset or a liability, the Company takes into account the characteristics of
the asset or liability if market participants would take those characteristics
into account when pricing the asset or liability at the measurement date.
Going concern
The financial statements have been prepared on a going concern basis and on the
basis that approval as an investment trust company will continue to be met. The
Directors have made an assessment of the Company's ability to continue as a
going concern and are satisfied that the Company has the resources to continue
in business for the foreseeable future, being a period of at least 12 months
from the date these financial statements were approved. In making the
assessment, the Directors have considered the likely impacts of the current
COVID-19 pandemic on the Company, its operations and the investment portfolio.
The Directors noted that the cash balance exceeds any short term liabilities,
the Company holds a portfolio of liquid listed investments and is able to meet
the obligations of the Company as they fall due. The surplus cash enables the
Company to meet any funding requirements and finance future additional
investments. The Company is a closed end fund, where assets are not required to
be liquidated to meet day to day redemptions. The Directors have completed
stress tests assessing the impact of changes in market value and income with
associated cashflows. Whilst the economic future is uncertain, and it is
possible the Company could experience further reductions in income and/or
market value the Directors believe that this should not be to a level which
would threaten the Company's ability to continue as a going concern.
The Directors, the Manager and other service providers have put in place
contingency plans to minimise disruption. Furthermore, the Directors are not
aware of any material uncertainties that may cast significant doubt upon the
Company's ability to continue as a going concern, having taken into account the
liquidity of the Company's investment portfolio and the Company's financial
position in respect of its cash flows, borrowing facilities and investment
commitments (of which there are none of significance). Therefore, the financial
statements have been prepared on the going concern basis.
Segmental reporting
The Directors are of the opinion that the Company is engaged in a single
segment of business, being investment business. The Company primarily invests
in companies listed in the UK and other recognised international exchanges.
Accounting developments
In the current year, the Company has applied amendments to IFRS, issued by the
IASB. These include annual improvements to IFRS, legislative and regulatory
amendments, changes in disclosure and presentation requirements.
The adoption of the changes to accounting standards has had no material impact
on the current or prior years' financial statements. The Company held no leases
during the current or prior years.
There are amendments to IFRS, legislation and regulatory requirements that will
apply from 1 August 2020. These will not impact the financial statements other
than requiring changes in disclosure and presentation amendments.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of policies and the reported amounts in the financial statements.
The estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.
The areas requiring the most significant judgement and estimation in the
preparation of the Financial Statements are: valuation of derivatives;
accounting for revenue and expenses in relation to CFD; and setting the level
of dividends paid and proposed in satisfaction of both the Company's long-term
objective and its obligations to adhere to investment trust status rules under
Section 1158 of the Corporation Tax Act 2010. The policies for these are set
out in the notes to the Financial Statements.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future period if the revision affects both current and
future periods.
There were no significant accounting estimates or critical accounting
judgements in the year.
Investments
Investments are measured initially, and at subsequent reporting dates, at fair
value, and derecognised at trade date where a purchase or sale is under a
contract whose terms require delivery within the timeframe of the relevant
market. For listed investments, this is deemed to be bid market prices or
closing prices for Stock Exchange Electronic Trading Service - quotes and
crosses ("SETSqx").
Changes in fair value of investments are recognised in the Statement of
Comprehensive Income as a capital item. On disposal, realised gains and losses
are also recognised in the Statement of Comprehensive Income as capital items.
All investments for which fair value is measured or disclosed in the Financial
Statements are categorised within the fair value hierarchy in note 9.
Financial instruments
The Company may use a variety of derivative instruments, including CFD,
futures, forwards and options under master agreements with the Company's
derivative counterparties to enable the Company to gain long and short exposure
on individual securities.
The Company recognises financial assets and financial liabilities when it
becomes a party to the contractual provisions of the instrument. Listed options
and futures contracts are recognised at fair value through profit or loss
valued by reference to the underlying market value of the corresponding
security, traded prices and/or third party information.
Notional dividend income arising on long positions is recognised in the
Statement of Comprehensive Income as revenue. Interest expenses on long
positions are allocated to capital.
Unrealised changes to the value of securities in relation to derivatives are
recognised in the Statement of Comprehensive Income as capital items.
Foreign currency
Transactions denominated in foreign currencies are converted to Sterling at the
actual exchange rate as at the date of the transaction. Monetary assets and
liabilities and non-monetary assets held at fair value denominated in foreign
currencies at the year end are translated at the Statement of Financial
Position date. Any gain or loss arising from a change in exchange rate
subsequent to the date of the transaction is included as an exchange gain or
loss in the capital reserve or the revenue account depending on whether the
gain or loss is capital or revenue in nature.
Cash and cash equivalents
Cash comprises cash in hand, overdrafts and demand deposits. Cash equivalents
are short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to insignificant risk of changes in
value.
For the purposes of the Statement of Financial Position and the Statement of
Cash Flows, cash and cash equivalents consist of cash and cash equivalents as
defined above, net of outstanding bank overdrafts when applicable.
Trade receivables, trade payables and short-term borrowings
Trade receivables, trade payables and short-term borrowings are measured at
amortised cost.
Revenue recognition
Revenue is recognised when it is probable that economic benefits associated
with a transaction will flow to the Company and the revenue can be reliably
measured.
Dividends from overseas companies are shown gross of any non-recoverable
withholding taxes which are disclosed separately in the Statement of
Comprehensive Income.
Dividends receivable on quoted equity shares are taken to revenue on an
ex-dividend basis. Dividends receivable on equity shares where no ex-dividend
date is quoted are brought into account when the Company's right to receive
payment is established.
All other income is accounted for on a time-apportioned basis and recognised in
the Statement of Comprehensive Income.
Expenses
All expenses are accounted for on an accruals basis and are charged to revenue.
All other administrative expenses are charged through the revenue column in the
Statement of Comprehensive Income.
Expenses incurred in issuing or the buyback of Shares to be held in Treasury
are charged to the share premium account.
Finance costs
Finance costs are accounted for on an accruals basis.
Financing charged by the Prime Brokers on open long positions are allocated to
capital, with other finance costs being allocated to revenue.
Taxation
The charge for taxation is based on the net revenue for the year and any
deferred tax.
Deferred tax is provided using the liability method on temporary differences
between the tax bases of assets and liabilities and their carrying amount for
financial reporting purposes at the reporting date. Deferred tax assets are
only recognised if it is considered more likely than not that there will be
suitable profits from which the future reversal of timing differences can be
deducted. In line with recommendations of the AIC SORP, the allocation method
used to calculate the tax relief on expenses charged to capital is the
"marginal" basis. Under this basis, if taxable income is capable of being
offset entirely by expenses charged through the revenue account, then no tax
relief is transferred to the capital account.
No taxation liability arises on gains from sales of fixed asset investments by
the Company by virtue of its investment trust status. However, the net revenue
(excluding investment income) accruing to the Company is liable to corporation
tax at prevailing rates.
Dividends payable to Shareholders
Dividends to Shareholders are recognised as a liability in the period in which
they are approved and are taken to the Statement of Changes in Equity.
Dividends declared and approved by the Company after the Statement of Financial
Position date have not been recognised as a liability of the Company at the
Statement of Financial Position date.
Share capital
Nominal value of total Shares issued.
Shares held in Treasury
Consideration paid for the purchase of Shares held in Treasury.
Share premium
The Share premium account represents the accumulated premium paid for Shares
issued in previous periods above their nominal value less issue expenses. This
is a reserve forming part of the non-distributable reserves. The following
items are taken to this reserve:
* costs associated with the issue of equity;
* premium on the issue of Shares; and
* premium on the sales of Shares held in Treasury over the market value.
Capital reserve
The following are taken to capital reserve:
* gains and losses on the realisation of investments;
* increases and decreases in the valuation of the investments held at the year
end;
* cost of share buy backs;
* exchange differences of a capital nature; and
* expenses, together with the related taxation effect, allocated to this
reserve in accordance with the above policies.
Retained earnings
The revenue reserve represents accumulated profits and losses and any surplus
profits. The surplus accumulated profits are distributable by way of dividends.
2. Income
2020 2019
GBP'000 GBP'000
Dividends from listed 392 383
investments
Interest 255 448
647 831
3. Management fee
2020 2019
GBP'000 GBP'000
Base fee 941 704
Variable fee 470 352
Risk management and valuation fee 59 59
1,470 1,115
The Management Fee payable to the Manager is equal to 0.5% per annum of the
Company's NAV (the "Base Fee"), calculated as at the last business day of each
calendar month (the "Calculation Date"), and is paid monthly in arrears. An
uplift of 0.25% of the NAV will be applied to the fee, should the performance
of the Company over the 36-month period to the Calculation Date be above that
of the Company's benchmark. Should the performance of the Company over the
36-month period to the Calculation Date be below that of the Company's
benchmark, the fee will be reduced to the lower adjusted amount of 0.25% of the
NAV. The Manager is also reimbursed any expenses incurred by it on behalf of
the Company. In addition, a Risk Management and Valuation fee equating to GBP
59,000 on an annualised basis is charged by the AIFM. The Manager is also
reimbursed any expenses incurred by it on behalf of the Company.
The fee is not subject to Value Added Tax ("VAT"). Transactions with the
Manager during the year are disclosed in note 17.
The management fee is chargeable to revenue.
4. Other operating expenses
2020 2019
GBP'000 GBP'000
Directors' fees 55 58
Auditors' remuneration 38 35
Registrar fees 31 26
Depositary fees 68 51
Other expenses 363 236
555 406
Fees payable to the Company's Auditor for the audit
of the Company Financial Statements 38 35
38 35
Other operating expenses include irrecoverable VAT where appropriate.
No non-audit services were provided by Deloitte LLP in the year to 31 July
2020.
5. Finance costs
2020 2019
GBP'000 GBP'000
Charged to revenue 37 37
Charged to capital 1,572 1,020
1,609 1,057
6. Taxation
2020 2019
Revenue Capital Total Revenue Capital GBP Total
GBP'000 GBP'000 GBP'000 GBP'000 '000 GBP'000
Current tax:
Overseas tax not recoverable 59 - 59 48 - 48
59 - 59 48 - 48
The charge for the year can be reconciled to the profit per the Statement of
Comprehensive Income as follows:
Profit/(loss) before tax (1,700) 25,796 24,096 (809) 16,757 15,948
Tax at the UK corporation tax
rate of 19% (2019: 19%) (323) 4,901 4,578 (154) 3,184 3,030
Tax effect of non-taxable
dividends/ unrealised profits - - - (4) - (4)
Income not subject to UK
corporation tax - - - (69) - (69)
Profits on investment
appreciation not taxable - (4,901) (4,901) - (3,378) (3,378)
Unrelieved tax losses and
other deductions arising in 323 - 323 227 194 421
the year
Overseas tax not recoverable 59 - 59 48 - 48
Total tax charge 59 - 59 48 - 48
As at 31 July 2020, the Company had unrelieved capital losses of GBP9,329,000
(2019: GBP10,349,000). There is therefore, a related unrecognised deferred tax
asset of GBP1,772,000 (2019: GBP1,759,000). These capital losses can only be
utilised to the extent that the Company does not qualify as an investment trust
in the future and, as such, the asset has not been recognised.At 31 July 2020,
there was an unrecognised deferred tax asset of GBP1,603,000 (2019: GBP807,000).
This deferred tax asset relates to surplus management expenses. It is unlikely
that the Company will generate sufficient taxable profits in the foreseeable
future to recover these amounts and therefore the asset has not been recognised
in the year, or in prior years.
7. Dividends
2020 2019
Amounts recognised as distributions to equity holders in GBP'000 GBP'000
the period:
Final ordinary dividend for the year ended 31 July 2019 2,609 2,209
of 8.0p (2018: 8.0p) per Share
Interim ordinary dividend for the year ended 31 July 2020 2,370 1,702
of 7.0p (2019: 6.0p) per Share
4,979 3,911
The Directors are proposing a final ordinary dividend of 7.0p for the financial
year 2020. These proposed dividends have been excluded as a liability in these
Financial Statements in accordance with IFRS.
We also set out below the total dividend payable in respect of the financial
year, which is the basis on which the requirements of Section 1158 of the
Corporation Tax Act 2010 are considered.
2020 2019
GBP'000 GBP'000
Interim ordinary dividend for the year ended 31 July 2020 2,370 1,702
of 7.0p
(2019: 6.0p) per Share
Proposed final ordinary dividend for the year ended 31 2,530 2,349
July 2020 of 7.0p (2019: 8.0p) per Share*
4,900 4,051
8. Return per Share
2020 2019
Net Return Weighted Total Net Weighted Total
GBP'000 Average (p) Return Average (p)
Shares GBP'000 Shares
Net revenue return (1,759) 32,160,449 (5.47) (857) 27,061,801 (3.17)
after taxation
Net capital return 25,796 32,160,449 80.21 16,757 27,061,801 61.92
after taxation
Total 24,037 32,160,449 74.74 15,900 27,061,801 58.75
Basic revenue, capital and total return per Share is based on the net revenue,
capital and total return for the period and on the weighted average number of
Shares in issue of 32,160,449 (2019: 27,061,801).
9. Investments at fair value through profit or loss
2020 2019
GBP'000 GBP'000
Investments
Listed investments 137,333 132,023
Unlisted investments - 36
137,333 132,059
2020 2019
Listed Unlisted Total Total
GBP'000 GBP'000 GBP'000 GBP'000
Analysis of investment
portfolio movements
Opening cost at 1 August 78,700 100 78,800 57,133
Opening unrealised
appreciation at 53,323 (64) 53,259 45,071
1 August
Opening fair value at 1 132,023 36 132,059 102,204
August
Movements in the year
Purchases at cost 40,238 100 40,338 57,456
Sales proceeds (65,539) (95) (65,634) (45,000)
Realised profit on sales 15,829 (105) 15,724 9,211
Increase/(decrease) in 14,782 64 14,846 8,188
unrealised appreciation
Closing fair value at 31 137,333 - 137,333 132,059
July
Closing cost at 31 July 69,228 - 69,228 78,800
Closing unrealised -
appreciation at 68,105 68,105 53,259
31 July
Closing fair value at 31 137,333 - 137,333 132,059
July
Fair value hierarchy
Financial assets of the Company are carried in the Statement of Financial
Position at fair value. The fair value is the amount at which the asset could
be sold or the liability transferred in an orderly transaction between market
participants, at the measurement date, other than a forced or liquidation sale.
The Company measures fair values using the following hierarchy that reflects
the significance of the inputs used in making the measurements.
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant assets as follows:
* Level 1 - valued using quoted prices unadjusted in an active market.
* Level 2 - valued by reference to valuation techniques using observable
inputs for the asset or liability other than quoted prices included in
Level 1.
* Level 3 - valued by reference to valuation techniques using inputs that are
not based on observable market data for the asset or liability.
The tables below set out fair value measurements of financial instruments as at
the year end, by their category in the fair value hierarchy into which the fair
value measurement is categorised.
Financial assets at fair value through profit or loss at 31 July 2020
Level 1 Level 2 Total
GBP'000 GBP'000 GBP'000
Equity investments 137,333 - 137,333
Derivatives - assets - 29,229 29,229
Total 137,333 29,229 166,562
Financial assets at fair value through profit or loss at 31 July 2019
Level 1 Level 2 Total
GBP'000 GBP'000 GBP'000
Equity investments 132,023 - 132,023
Debentures - 36 36
Derivatives - assets - 8,887 8,887
Total 132,023 8,923 140,946
There have been no transfers during the year between Level 1 and 2 fair value
measurements.
Financial liabilities at 31 July 2020
Level 2 Total
GBP'000 GBP'000
Derivatives - liabilities 24,278 24,278
Financial liabilities at 31 July 2019
Level 2 Total
GBP'000 GBP'000
Derivatives - liabilities 6,512 6,512
Transaction costs
During the year, the Company incurred transaction costs of GBP25,000 (2019: GBP
212,000) on the purchase and disposal of investments.
Analysis of capital gains and losses
2020 2019
GBP'000 GBP'000
Gains on sales investments 15,724 9,211
Investment holding gains 14,846 8,188
Realised losses on derivative instruments (20,424) (4,363)
Unrealised gains on derivative instruments 19,973 3,612
Realised (losses)/ gains on currency balances and (2,751) 1,129
trade settlements
27,368 17,777
Income cost in respect of contracts for (285) (82)
difference
27,083 17,695
10. Trade and other receivables
2020 2019
GBP'000 GBP'000
Dividends receivable 11 19
Due from brokers 4 -
Prepayments 3 118
18 137
2020 2019
GBP'000 GBP'000
Cash and cash equivalents 86,177 32,880
86,177 32,880
11. Cash and cash equivalents
Details of what comprises cash and cash equivalents can be found in note 1.
12. Trade and other payables
2020 2019
GBP'000 GBP'000
Due to Brokers 2,204 253
Accruals 342 217
2,546 470
13. Derivatives
The Company may use a variety of derivative contracts, including equity swaps,
futures, forwards and options under master agreements with the Company's
derivative counterparties to enable it to gain long and short exposure on
individual securities. Derivatives are valued by reference to the underlying
market value of the corresponding security.
The net fair value of derivatives at 31 July 2020 was a positive GBP4,951,000
(2019: positive GBP2,375,000). The corresponding gross exposure on equity swaps
as at 31 July 2020 was GBP128,951,000 (2019: GBP78,314,000). The total exposure of
negative equity swaps was GBP24,448,000 (2019: GBP21,751,000). The net marked to
market futures and options total value as at 31 July 2020 was negative GBP
23,538,000 (2019: negative GBP4,491,000).
2020 2019
GBP'000 GBP'000
Assets
Unrealised derivative assets 29,229 8,887
Current liabilities
Unrealised derivative liabilities 24,278 6,512
The above liabilities are secured against assets held with the Prime Brokers.
The levels of collateral as at 31 July 2020 were:
* Morgan Stanley & Co. International plc GBP116.9m (2019: GBP69.7m)
* JP Morgan Chase & Co. GBP111.1m (2019: GBP97.2m)
The assets listed above are covered by the terms and conditions described by
the Prime Brokerage agreements between the Company and the respective Prime
Brokers above.
14. Share capital
2020 2019
Share capital Number GBP'000 Number GBP'000
('000) ('000)
Shares of 25p each issued and fully
paid
Balance as at 1 August 29,364 7,341 24,472 6,118
Shares issued 6,772 1,693 4,892 1,223
Balance as at 31 July 36,136 9,034 29,364 7,341
During the year, the company issued 6,771,808 Shares of 25p each to the market
(2019: 4,891,945) for a net consideration (after costs) of GBP39,938,000 (2019: GBP
24,604,000), generating a Share Premium of GBP38,201,000 (2019: GBP23,381,000).
This represented 23.0% of the Shares in issue as at 31 July 2019 (2019: this
represented 20% of the Shares in issue as at 31 July 2018).
The Company did not buy or sell any of its Shares during the year.
15. NAV per Share
NAV per Share Net assets
attributable
2020 2019 2020 2019
(p) (p) GBP'000 GBP'000
Shares: basic and fully diluted 625.23 568.66 225,933 166,981
The basic NAV per Share is based on net assets at the year end and 36,135,738
(2019: 29,363,930) Shares in issue, adjusted for any Shares held in Treasury.
16. Risks - investments, financial instruments and other risks
Investment objective and policy
The Company's investment objective and policy are detailed above.
The investing activities in pursuit of its investment objective involve certain
inherent risks.
The Company's financial instruments can comprise:
* shares and debt securities held in accordance with the Company's investment
objective and policy;
* derivative instruments for trading and investment purposes;
* cash, liquid resources and short-term debtors and creditors that arise from
its operations; and
* current asset investments and trading.
Risks
The risks identified arising from the Company's financial instruments are
market risk (which comprises market price risk and interest rate risk),
liquidity risk and credit and counterparty risk. The Company may enter into
derivative contracts to manage risk. The Board reviews and agrees policies for
managing each of these risks, which are summarised below.
These policies remained unchanged since the beginning of the accounting period.
Market risk
Market risk arises mainly from uncertainty about future prices of financial
instruments used in the Company's business. It represents the potential loss
the Company might suffer through holding market positions by way of price
movements, interest rate movements and exchange rate movements. The Company
assesses the exposure to market risk when making each investment decision and
these risks are monitored by the Manager on a regular basis and the Board at
quarterly meetings with the Manager.
Details of the long equity exposures held at 31 July 2020 are shown above.
If the price of these investments and equity swaps had increased by 5% at the
reporting date with all other variables remaining constant, the capital return
in the Statement of Comprehensive Income and the net assets attributable to
equity holders of the Company would increase by GBP13,314,000.
A 5% decrease in share prices would have resulted in an equal and opposite
effect of GBP13,314,000, on the basis that all other variables remain constant.
This level of change is considered to be reasonable based on observation of
current market conditions.
At the year end, the Company's direct equity exposure to market risk was as
follows:
Company
2020 2019
GBP'000 GBP'000
Equity long exposures
Investments held in equity form 137,333 132,059
Long exposure held in equity swaps 128,952 78,314
266,285 210,373
Interest rate risk
Interest rate risk arises from uncertainty over the interest rates charged by
financial institutions. It represents the potential increased costs of
financing for the Company. The Manager actively monitors interest rates and the
Company's ability to meet its financing requirements throughout the year and
reports to the Board.
Liquidity risk
Liquidity risk reflects the risk that the Company will have insufficient funds
to meet its financial obligations as they fall due. The Directors have
minimised liquidity risk by investing in a portfolio of quoted companies that
are readily realisable.
The Company's uninvested funds are held almost entirely with the Prime Brokers
or on interest-bearing deposits with UK banking institutions.
As at 31 July 2020, the financial liabilities comprised:
Company
2020 2019
GBP'000 GBP'000
Unrealised derivative liabilities 24,278 6,512
Trade payables and accruals 2,546 470
26,824 6,982
The above liabilities are stated at amortised cost or approximate fair value.
The Company manages liquidity risk through constant monitoring of the Company's
gearing position to ensure the Company is able to satisfy any and all debts
within the agreed credit terms.
Currency rate risk
Currency risk is the risk that the fair value of future cash flows of a
financial instrument will fluctuate because of changes in foreign exchange
rates. If Sterling had strengthened by 5% against all other currencies at the
reporting date, with all other variables remaining constant, the total return
in the Statement of Comprehensive Income and the net assets attributable to
equity holders of the Company would have decreased by GBP9,219,000. If the
Sterling had weakened by 5% against all currencies, there would have been an
equal and opposite effect. This level of change is considered to be reasonable
based on observation of current market conditions.
The Company's material foreign currency exposures are laid out below.
Sterling US Dollar Euro Chinese Hong Kong Total
Renminbi Dollar
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Equity exposure 5,558 131,775 - - - 137,333
Derivative - 16,080 162 (127) 12,523 28,638
assets
Derivative
liabilities - (21,573) (50) - (2,064) (23,687)
Cash* 36,318 52,060 655 (13) (2,843) 86,177
Other net (335) (2,193) - - - (2,528)
assets
41,541 176,149 767 (140) 7,616 225,933
* Includes balances held in margin accounts relating to equity swaps.
The Company constantly monitors currency rate risk to ensure balances, wherever
possible, are translated at rates favourable to the Company.
Credit and counterparty risk
Credit risk is the risk of financial loss to the Company if the contractual
party to a financial instrument fails to meet its contractual obligations.
The maximum exposure to credit risk as at 31 July 2020 was GBP115,424,000 (2019:
GBP41,904,000). The calculation is based on the Company's credit risk exposure as
at 31 July 2020 and this may not be representative for the whole year.
The Company's quoted investments are held on its behalf by the Prime Brokers.
Bankruptcy or insolvency of the Prime Brokers may cause the Company's rights
with respect to securities held by the Prime Brokers to be delayed. The Manager
and the Board monitor the Company's risk and exposures.
Where the Manager makes an investment in a bond, corporate or otherwise, the
credit worthiness of the issuer is taken into account so as to minimise the
risk to the Company of default. The credit standing and other associated risks
are reviewed by the Manager.
Investment transactions are carried out with a number of brokers where
creditworthiness is reviewed by the Manager.
Cash is only held at banks that have been identified by the Board as reputable
and of high credit quality. The Manager reviews these on a continual basis with
regular updates to the Board.
Capital management policies
The structure of the Company's capital is noted in the Statement of Changes in
Equity and managed in accordance with the investment objective and policy set
out in the Strategic Report.
The Company's capital management objectives are to maximise the return to
Shareholders while maintaining a capital base to allow the Company to operate
effectively and meet obligations as they fall due.
The Board, with the assistance of the Manager, monitors and reviews the capital
on an ongoing basis.
The Company is subject to externally imposed capital requirements:
* as a public company, the Company is required to have a minimum Share
capital of GBP50,000; and
* in accordance with the provisions of Sections 832 and 833 of the Companies
Act 2006, the Company, as an investment company:
+ is only able to make a dividend distribution to the extent that the
assets of the Company are equal to at least one and a half times its
liabilities after the dividend payment has been made; and
+ is required to make a dividend distribution each year such that it does
not retain more than 15% of the income that it derives from shares and
securities.
These requirements are unchanged since last year and the Company has complied
with them at all times.
A sensitivity analysis has not been prepared for interest risk, as the Company
is not materially exposed to interest rates.
17. Related party transactions
MLCM, a company controlled by Mr Mark Sheppard, is the Manager and AIFM of the
Company. Mr Sheppard is also a director of MMIC, which is the controlling
Shareholder of the Company.
The Manager receives a monthly management fee for these services which in the
year under review amounted to a total of GBP1,470,000 (2019: GBP1,115,000)
excluding VAT. The balance owing to the Manager as at 31 July 2020 was GBP148,000
(2019: GBP111,447). Also payable to the Manager during the year were expenses
incurred on behalf of the Company of GBPNil (2019: GBP8,000).
During the year, MMIC subscribed for a further 6,245,808 Shares of 25 pence
each. Total consideration for the subscriptions amounted to GBP36,676,000. A
detailed breakdown of the subscriptions can be found in the Directors' Report
above.
Details relating to the Directors' emoluments are found in the Directors'
Remuneration Report on page 42 of the full Annual Report.
18. Ultimate control
The ultimate controlling Shareholder throughout the year and the previous year
was MMIC, a company incorporated in the UK and registered in England and Wales.
This company was controlled throughout the year and the previous year by Mr
Mark Sheppard and his immediate family.
A copy of the financial statements of MMIC can be obtained from the Company's
website: www.mlcapman.com/manchester-london-investment-trust-plc.
19. Post Statement of Financial Position events
There were no significant events since the end of the reporting period.
GLOSSARY
Active share
Active share is a measure of the percentage of stock holdings in a manager's
portfolio that differ from the comparative benchmark index. It is calculated by
summing the absolute differences between benchmark and portfolio holdings'
weights, then dividing by two (to eliminate double counting). An active share
of 100 indicates no overlap with the index and an active share of zero
indicates a portfolio that tracks the index (when using leverage, maximum
active share levels can exceed 100%).
Discount/premium
If the Share price is lower than the NAV per Share it is said to be trading at
a discount. The size of the discount is calculated by subtracting the Share
price from the NAV per Share and is usually expressed as a percentage of the
NAV per Share. If the Share price is higher than the NAV per Share, this
situation is called a premium.
Gearing
Gearing refers to the level of the Company's debt to its equity capital. The
Company may borrow money to invest in additional investments for its portfolio.
If the Company's assets grow, the Shareholders' assets grow proportionately
more because the debt remains the same. But if the value of the Company's
assets falls, the situation is reversed. Gearing can therefore enhance
performance in rising markets but can adversely impact performance in falling
markets.
Gearing represents borrowings at par less cash and cash equivalents (including
any outstanding trade or foreign exchange settlements) expressed as a
percentage of Shareholders' funds.
Potential gearing is the Company's borrowings expressed as a percentage of
Shareholders' funds.
Equity gearing is the Company's borrowings adjusted for cash and bonds
expressed as a percentage of Shareholders' funds.
Leverage
For the purposes of the AIFMD, leverage is any method which increases the
Company's exposure, including the borrowing of cash and the use of derivatives.
It is expressed as a ratio between the Company's exposure and its NAV and can
be calculated on a gross and a commitment method. Under the gross method,
exposure represents the sum of the Company's positions after the deduction of
Sterling cash balances, without taking into account any hedging and netting
arrangements. Under the commitment method, exposure is calculated without the
deduction of Sterling cash balances and after certain hedging and netting
positions are offset against each other.
Net asset value ("NAV")
The NAV is Shareholders' funds expressed as an amount per individual Share.
Shareholders' funds are the total value of all the Company's assets, at a
current market value, having deducted all liabilities and prior charges at
their par value (or at their asset value). The total NAV per Share is
calculated by dividing the NAV by the number of Ordinary Shares in issue
excluding Treasury Shares.
Prime Broker
Prime brokerage is the bundling of services by investment banks enabling the
Company to borrow securities and cash in order to be able to invest on a netted
basis and achieve an absolute return. The Prime Broker provides custody and a
centralised securities clearing facility for the Company so the Company's
collateral requirements are netted across all deals handled by the Prime
Broker.
Ongoing charges ratio
As recommended by the AIC in its guidance, ongoing charges are the Company's
annualised expenses (excluding finance costs and certain non-recurring items)
of GBP1,454,000 expressed as a percentage of the average monthly net assets of
the Company during the year of 0.77%.
Total assets
Total assets include investments, cash, current assets and all other assets. An
asset is an economic resource, being anything tangible or intangible that can
be owned or controlled to produce value and to produce positive economic value.
Assets represent the value of ownership that can be converted into cash. The
total assets less all liabilities will be equivalent to total Shareholders'
funds.
Total return
Total return statistics enable the investor to make performance comparisons
between investment trusts with different dividend policies. The total return
measures the combined effect of any dividends paid, together with the rise or
fall in the Share price or NAV. This is calculated by the movement in the NAV
or Share price plus dividend income reinvested by the Company at the prevailing
NAV or Share price.
NAV Total Return Page 31 July 2020 31 July 2019
Closing NAV per Share (p) 3 625.23 568.66 a
Total dividends paid in the year ended
31 July 2020 (2019) (p) 15.00 14.00
Adjusted closing NAV (p) 640.23 582.66
Opening NAV per Share (p) 3 568.66 532.81 b
NAV total return unadjusted (c=((a-b)/ 12.58 6.73 c
b)) (%)
NAV total return adjusted (%)* 3/4 19.60 9.80
* Based on NAV price movements and dividends reinvested at the relevant cum
dividend NAV value during the period. Where the dividend is invested and the
NAV value falls this will further reduce the return or, if it rises, any
increase will be greater. The source is Bloomberg who have calculated the
return on an industry comparative basis.
ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of Manchester and London
Investment Trust plc will be held at 12a Princes Gate Mews, London, SW7 2PS on
Monday 2 November 2020 at 12.00 noon. However, due to the continuing COVID-19
pandemic and in line with Government restrictions and the Corporate Insolvency
and Governance Act 2020, shareholders will not be able to attend this year's
Annual General Meeting in person.
The notice of this meeting, containing details of these restrictions, will be
circulated to Shareholders with the full Annual Report and will also be
available at www.mlcapman.com/manchester-london-investment-trust-plc.
NATIONAL STORAGE MECHANISM
A copy of the Annual Report and Financial Statements and Notice of Annual
General Meeting will be submitted shortly to the National Storage Mechanism
("NSM") and will be available for inspection at the NSM, which is situated at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
LEI: 213800HMBZXULR2EEO10
ENDS
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on this announcement (or any other website) is
incorporated into, or forms part of, this announcement.
END
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