MERRILL LYNCH WORLD MINING TRUST plc
Interim Results for the six months ended 30 June 2007
Performance to 30 June 2007 Six months Five years
Net asset value per share - undiluted:
- capital only 30.0% 345.1%
- with income reinvested 31.0% 378.0%
Net asset value per share - fully diluted:
- capital only 27.2% 325.0%
- with income reinvested 28.3% 345.3%
Ordinary share price:
- capital only 28.4% 333.5%
- with income reinvested 29.6% 369.2%
HSBC Global Mining Index*:
- capital only 26.4% 218.6%
- with income reinvested 28.0% 258.1%
* Adjusted for exchange rates relative to sterling.
Dividends totalling 4.50p per share went ex-dividend on 21 February 2007.
Where performance has income included, it is reinvested on the ex-dividend
date. Undiluted total return performance includes the warrant reinvestment,
assuming the 2004 and 2006 warrants were sold and the proceeds were
reinvested on the first day of trading.
Sources: BlackRock, Datastream.
- As at 30 June 2007 the diluted net asset value per share was 640.15p (31
December 2006: diluted NAV 503.23p) and the undiluted net asset value per
share was 670.54p (31 December 2006: undiluted NAV 516.07p).
- The Company's share price reached a new high of 611.00p over the period.
Subsequent to the period end the share price has attained 626.00p.
For further information please contact the following:
Jonathan Ruck Keene 020 7743 2178
Managing Director, Investment Trust Division
BlackRock Investment Management (UK) Limited
Graham Birch 020 7743 2690
Fund Manager
BlackRock Investment Management (UK) Limited
Nigel Webb 020 7743 5938
Public Relations
BlackRock Investment Management (UK) Limited
William Clutterbuck 020 7379 5151
Maitland Consultancy
The Chairman, Anthony Lea, comments:
"The Natural Resources sector retained its momentum during the six months ended
30 June, with the Company's benchmark index increasing by 28.0%. Once again I
have the pleasure of announcing a creditable performance by the Company, with
the diluted net asset value increasing by 28.3% and the share price by 29.6%
(all percentages calculated on the basis that income is reinvested).
"Bonus Warrants
The first exercise date for the bonus warrants was 28 February 2007 and
3,844,373 warrants were exercised at the price of 439p for one new share. The
second and penultimate opportunity occurs on 29 February 2008, the exercise
price being 478p. At the period end, 29,814,855 warrants remained unexercised.
"Discount and share buy backs
The equity market downturn in May 2006 had a sustained negative impact on the
discount at which the Company's shares were traded. Having taken soundings from
shareholders, the Board determined to reactivate a share buy back programme
with the objective of reducing the discount to more acceptable levels on an
enduring basis. Since the end of February 2007, 13,476,677 million shares have
been bought back and held in Treasury and the discount has narrowed from 13.8%
to 6.4%. The continuing programme, and the views of our shareholders, will be
kept under careful review.
"VAT
The Board welcomes the European Court of Justice's judgement in the JP Morgan
Claverhouse case which endorses the AIC claim that VAT exemption for the
management of special investment funds as defined by Member States should
extend to the management of investment trust companies.
"Whilst this would be beneficial for the Company, the issue is still unresolved
as the final decision on whether investment trusts are entitled to VAT
exemption on their management fees has been referred back to the UK VAT
tribunal to decide.
"Outlook
Our optimism for the sector remains in place, albeit based to a significant
degree on sustained demand from India and China. Bouts of volatility are to be
expected but the upward trend appears set to continue."
Commenting upon the outlook for the Company, Graham Birch of BlackRock
Investment Management (UK) Limited, the Investment Manager, notes:
"Once again the mining sector seems likely to break all previous financial
records. Those investors who have thus far ignored the so called "commodity
super-cycle" are now starting to pay more attention and the result has been the
beginnings of a positive re-rating of the sector. We expect this re-rating to
continue as supply and demand fundamentals in the metals and minerals industry
remain favourable. Given the strong cash generation in this industry it would
not be surprising if the high level of corporate activity were to persist and
this is likely to provide additional support for equity valuations.
"We anticipate that gold will enjoy a better market later in 2007 and are
looking for an opportunity to invest in this area of the market.
"Investors should, however, remember that this is a volatile sector and that
sharp corrections are to be expected from time to time."
CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2007
Revenue Return �'000
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
Notes
Income from investments held
at fair value through
profit or loss 2 13,721 13,530 22,872
Other income 2 3,507 1,949 7,593
---------- ---------- ----------
Total revenue 17,228 15,479 30,465
Gains on investments held at
fair value through profit or loss - - -
Gains on foreign exchange - - -
---------- ---------- ----------
17,228 15,479 30,465
---------- ---------- ----------
Expenses
Management fees 3 (6,899) (4,907) (10,186)
Other expenses 4 (446) (439) (998)
---------- ---------- ----------
Total operating expenses (7,345) (5,346) (11,184)
---------- ---------- ----------
Net return before finance
costs and taxation 9,883 10,133 19,281
Finance costs (947) (402) (564)
---------- ---------- ----------
Profit before taxation 8,936 9,731 18,717
Taxation (2,006) (1,747) (3,935)
---------- ---------- ----------
Net profit for the period 6 6,930 7,984 14,782
---------- ---------- ----------
Return per ordinary share -
undiluted 6 4.17p 4.74p 8.78p
===== ===== =====
Return per ordinary share -
diluted 6 4.12p 4.74p 8.78p
===== ===== =====
The total column of this statement represents the Group's Income Statement,
prepared in accordance with International Financial Reporting Standards. The
supplementary revenue and capital return columns are both prepared under
guidance published by the Association of Investment Companies. All items in the
above statement derive from continuing operations. No operations were acquired
or discontinued during the period. All income is attributable to the equity
shareholders of Merrill Lynch World Mining Trust plc. There are no minority
interests. The final dividend of 2.50p per share and the special dividend of
2.00p per share in respect of the year ended 31 December 2006 were announced on
14 February 2007 and paid on 29 March 2007. These can be found in the
Consolidated Statement of Changes in Equity for the six months ended 30 June
2007.
CONSOLIDATED INCOME STATEMENT - continued
for the six months ended 30 June 2007
Capital Return �'000
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
Notes
Income from investments held
at fair value through
profit or loss 2 - - -
Other income 3 - - -
---------- ---------- ----------
Total revenue - - -
Gains on investments held at
fair value through profit or loss 253,300 110,667 189,814
Gains on foreign exchange 520 832 697
----------- ---------- ----------
253,820 111,499 190,511
----------- ---------- ----------
Expenses
Management fees 3 - - -
Other expenses 4 - - -
----------- ---------- ----------
Total operating expenses - - -
----------- ---------- ----------
Net return before finance
costs and taxation 253,820 111,499 190,511
Finance costs - - -
----------- ---------- ----------
Profit before taxation 253,820 111,499 190,511
Taxation - - -
----------- ---------- ----------
Net profit for the period 6 253,820 111,499 190,511
----------- ---------- ----------
Return per ordinary share -
undiluted 6 152.58p 66.25p 113.20p
======= ====== =======
Return per ordinary share -
diluted 6 150.86p 66.25p 113.20p
======= ====== =======
The total column of this statement represents the Group's Income Statement,
prepared in accordance with International Financial Reporting Standards. The
supplementary revenue and capital return columns are both prepared under
guidance published by the Association of Investment Companies. All items in
the above statement derive from continuing operations. No operations were
acquired or discontinued during the period. All income is attributable to the
equity shareholders of Merrill Lynch World Mining Trust plc. There are no
minority interests. The final dividend of 2.50p per share and the special
dividend of 2.00p per share in respect of the year ended 31 December 2006
were announced on 14 February 2007 and paid on 29 March 2007. These can be
found in the Consolidated Statement of Changes in Equity for the six months
ended 30 June 2007.
CONSOLIDATED INCOME STATEMENT - continued
for the six months ended 30 June 2007
Total �'000
Six months Six months Year ended
ended 30 June ended 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
Notes
Income from investments held
at fair value through
profit or loss 2 13,721 13,530 22,872
Other income 2 3,507 1,949 7,593
---------- ---------- ----------
Total revenue 17,228 15,479 30,465
Gains on investments held at
fair value through profit or loss 253,300 110,667 189,814
Gains on foreign exchange 520 832 697
----------- ---------- ----------
271,048 126,978 220,976
----------- ---------- ----------
Expenses
Management fees 3 (6,899) (4,907) (10,186)
Other expenses 4 (446) (439) (998)
---------- ---------- ----------
Total operating expenses (7,345) (5,346) (11,184)
---------- ---------- ----------
Net return before finance
costs and taxation 263,703 121,632 209,792
Finance costs (947) (402) (564)
----------- ---------- ----------
Profit before taxation 262,756 121,230 209,228
Taxation (2,006) (1,747) (3,935)
----------- ---------- ----------
Net profit for the period 6 260,750 119,483 205,293
----------- ---------- ----------
Return per ordinary share -
undiluted 6 156.75p 70.99p 121.98p
======= ====== =======
Return per ordinary share -
diluted 6 154.98p 70.99p 121.98p
======= ====== =======
The total column of this statement represents the Group's Income Statement,
prepared in accordance with International Financial Reporting Standards. The
supplementary revenue and capital return columns are both prepared under
guidance published by the Association of Investment Companies. All items in the
above statement derive from continuing operations. No operations were acquired
or discontinued during the period. All income is attributable to the equity
shareholders of Merrill Lynch World Mining Trust plc. There are no minority
interests. The final dividend of 2.50p per share and the special dividend of
2.00p per share in respect of the year ended 31 December 2006 were announced on
14 February 2007 and paid on 29 March 2007. These can be found in the
Consolidated Statement of Changes in Equity for the six months ended 30 June
2007.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Ordinary Share Capital Capital Capital
share premium Special redemption reserve - reserve - Revenue
capital account reserve reserve realised unrealised reserve Total
�'000 �'000 �'000 �'000 �'000 �'000 �'000 �'000
For the six months ended
30 June 2007 (unaudited)
At 31 December 2006 8,415 11,767 203,244 22,779 145,177 455,033 22,130 868,545
Profit after taxation for - - - - 68,976 184,844 6,930 260,750
the period
Share buy backs - - (71,905) - - - - (71,905)
Proceeds from the 192 16,685 - - - - - 16,877
exercise of warrants
Dividends paid - - - - - - (7,573) (7,573)
-------- --------- ---------- --------- ---------- ---------- ---------- ------------
At 30 June 2007 8,607 28,452 131,339 22,779 214,153 639,877 21,487 1,066,694
===== ====== ====== ====== ======= ======= ======= ========
For the six months ended
30 June 2006 (unaudited)
At 31 December 2005 8,415 11,767 203,244 22,779 60,267 349,670 12,060 668,202
Profit after taxation for - - - - 67,820 43,679 7,984 119,483
the period
Warrant issue costs - - - - (107) - - (107)
Dividends paid - - - - - - (4,712) (4,712)
-------- --------- ---------- --------- ---------- ---------- --------- ----------
At 30 June 2006 8,415 11,767 203,244 22,779 127,980 393,349 15,332 782,866
===== ====== ====== ====== ======= ======= ======= =======
For the year ended 31
December 2006 (audited)
At 31 December 2005 8,415 11,767 203,244 22,779 60,267 349,670 12,060 668,202
Profit after taxation for - - - - 85,148 105,363 14,782 205,293
the year
Warrant issue costs - - - - (238) - - (238)
Dividends paid - - - - - - (4,712) (4,712)
-------- --------- ---------- --------- ---------- ---------- --------- ----------
At 31 December 2006 8,415 11,767 203,244 22,779 145,177 455,033 22,130 868,545
===== ====== ====== ====== ======= ======= ======= =======
The transaction costs incurred on the acquisition and disposal of investments
are included within the capital reserve. Purchases and sales costs amounted to
�348,000 and �251,000 respectively for the six months ended 30 June 2007 (six
months ended 30 June 2006: �292,000 and �274,000; year ended 31 December 2006:
�429,000 and �301,000).
CONSOLIDATED BALANCE SHEET
as at 30 June 2007
30 June 30 June 31 December
2007 2006 2006
�'000 �'000 �'000
Note (unaudited) (unaudited) (audited)
Non current assets
Investments held at fair value
through profit or loss 1,091,447 757,702 867,959
Current assets
Investments - 11,158 13,607
Other receivables 1,190 1,609 1,153
Amounts due from brokers 18,680 - 405
Cash and cash equivalents - 17,038 -
------------- ----------- ----------
19,870 29,805 15,165
------------- ----------- ----------
Total assets 1,111,317 787,507 883,124
Current liabilities
Other payables (5,242) (4,242) (6,282)
Amounts due to brokers (984) (199) -
Bank overdrafts (38,257) - (8,156)
------------- ----------- -----------
(44,483) (4,441) (14,438)
------------- ----------- -----------
Total assets less current 1,066,834 783,066 868,686
liabilities
Non current liabilities
Deferred tax (140) (200) (141)
------------- ----------- -----------
Net assets 1,066,694 782,866 868,545
======== ======= =======
Equity attributable to equity
holders
Ordinary share capital 8,607 8,415 8,415
Share premium account 28,452 11,767 11,767
Special reserve 131,339 203,244 203,244
Capital redemption reserve 22,779 22,779 22,779
Capital reserve - realised 214,153 127,980 145,177
Capital reserve - unrealised 639,877 393,349 455,033
Revenue reserve 21,487 15,332 22,130
------------- ----------- -----------
Total equity 1,066,694 782,866 868,545
======== ======= =======
Net asset value per ordinary
share -
undiluted 6 670.54p 465.16p 516.07p
======= ======= =======
Net asset value per ordinary
share -
diluted 6 640.15p 460.80p 503.23p
======= ======= =======
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2007
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2007 2006 2006
�'000 �'000 �'000
(unaudited) (unaudited) (audited)
Net cash inflow/(outflow) from
operating activities before financing 30,993 20,995 (3,933)
Financing activities
Buy back of ordinary shares (70,918) - -
Exercise of warrants 16,877 - -
Warrant issue costs - (107) (238)
Dividends paid (7,573) (4,712) (4,712)
---------- -------- --------
Net outflow from financing (61,614) (4,819) (4,950)
---------- -------- --------
(Decrease)/increase in cash and cash
equivalents (30,621) 16,176 (8,883)
Effect of foreign exchange rate 520 832 697
changes
---------- --------- --------
Change in cash and cash equivalents (30,101) 17,008 (8,186)
Cash and cash equivalents at start of (8,156) 30 30
period
---------- --------- --------
Cash and cash equivalents at end of (38,257) 17,038 (8,156)
period
====== ====== =====
RECONCILIATION OF NET INCOME BEFORE TAX TO NET CASH FLOW FROM OPERATING
ACTIVITIES
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2007 2006 2006
�'000 �'000 �'000
(unaudited) (unaudited) (audited)
Profit before tax 262,756 121,230 209,228
Gains on investments held at fair
value through profit or loss
including transaction costs (253,300) (110,667) (189,814)
Net sales/(purchases) of investments
by subsidiary 16,914 (7,679) (4,902)
Increase in other receivables (1,702) (685) (351)
Increase in other payables 618 208 555
(Increase)/decrease in amounts due (16,593) 92 (215)
from brokers
Decrease in amounts due to brokers - (964) (1,163)
Net purchases/(sales) of investments 29,479 22,462 (8,648)
Net gains on foreign exchange (520) (832) (697)
Net taxation paid (3,097) (83) (175)
Taxation on investment income
included within gross income (598) (726) (1,164)
Dealing profits (2,964) (1,361) (6,587)
----------- ----------- -----------
Net cash inflow/(outflow) from
operating activities 30,993 20,995 (3,933)
====== ====== ======
NOTES TO THE INTERIM RESULTS
1. Principal activity and basis of preparation
The principal activity of the Company is that of an investment trust company
within the meaning of section 842 of the Income and Corporation Taxes Act
1988.
The principal activity of the subsidiary undertaking, World Mining Investment
Company Limited, is investment dealing. The other subsidiary, Merrill Lynch
Gold Limited, is no longer trading.
The interim financial statements have been prepared on the basis of the
accounting policies set out in the Group's financial statements at 31 December
2006.
2. Income
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2007 2006 2006
�'000 �'000 �'000
(unaudited) (unaudited) (audited)
Investment income:
UK listed dividends 1,837 1,656 3,338
UK listed special dividends 498 2,252 2,252
Overseas listed dividends 11,156 7,465 14,674
Overseas listed special dividends 230 2,157 2,471
Bond interest - - 137
--------- -------- ---------
13,721 13,530 22,872
--------- -------- ---------
Other operating income:
Deposit interest 143 188 296
Dealing profits 2,964 1,361 6,587
Stock lending commission 28 - -
Underwriting commission - - 171
Option premium income 372 400 539
------- ------- --------
3,507 1,949 7,593
--------- -------- ---------
Total income 17,228 15,479 30,465
====== ===== ======
Dealing profits are presented after deducting transaction costs incurred on the
purchase and sale of investments.
3. Investment management fees
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2007 2006 2006
�'000 �'000 �'000
(unaudited) (unaudited) (audited)
Investment management fees 6,381 4,879 9,887
Irrecoverable VAT 518 28 299
------- ------- --------
6,899 4,907 10,186
===== ===== =====
The investment management fee is levied quarterly at a rate of 1.25% per annum,
based on the value of the gross assets on the last day of each quarter, and is
charged wholly to the revenue account.
4. Other expenses
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2007 2006 2006
�'000 �'000 �'000
(unaudited) (unaudited) (audited)
Custody fee 99 100 202
Administration fee 282 231 467
Registrar's fees and other
administrative costs 24 60 244
Directors' emoluments 41 48 85
------ ------ ------
446 439 998
==== ==== ====
5. Dividend
The Board has not declared an interim dividend, as dividends are considered and
paid annually in respect of each accounting period. The final dividend of 2.50p
per share and the special dividend of 2.00p per share in respect of the year
ended 31 December 2006 were paid on 29 March 2007.
6. Net asset value and return per ordinary share
Six months Six months Year
ended ended ended
30 June 2007 30 June 2006 31 December 2006
(unaudited) (unaudited) (audited)
Net revenue return attributable to
ordinary shareholders (�'000) 6,930 7,984 14,782
Net capital return attributable to
ordinary shareholders (�'000) 253,820 111,499 190,511
----------- ----------- ------------
Total return attributable to
ordinary shareholders (�'000) 260,750 119,483 205,293
====== ====== =======
Equity shareholders' funds (�'000) 1,066,694 782,866 868,545
The weighted average number of
ordinary shares in issue during
each period, on which the return
per ordinary share was calculated,
was: 166,348,592 168,298,906 168,298,906
The weighted average number of
ordinary shares in issue during
each period, on which the diluted
return per ordinary share was
calculated, was: 168,246,697 168,298,906 168,298,906
The actual number of ordinary
shares in issue at the end of
each period, on which
the net asset value was 159,079,858 168,298,906 168,298,906
calculated, was:
Warrants in issue 29,814,855 33,659,228 33,659,228
The actual number of shares in
issue for fully diluted net
asset value 188,894,713 201,958,134 201,958,134
Undiluted:
Revenue return per share 4.17p 4.74p 8.78p
Capital return per share 152.58p 66.25p 113.20p
--------- --------- ----------
Total return per share 156.75p 70.99p 121.98p
====== ====== ======
Diluted:
Revenue return per share 4.12p 4.74p 8.78p
Capital return per share 150.86p 66.25p 113.20p
--------- --------- ----------
Total return per share 154.98p 70.99p 121.98p
====== ====== ======
Net asset value per share - 670.54p 465.16p 516.07p
undiluted*
Net asset value per share - 640.15p 460.80p 503.23p
diluted*
Share price 570.00p 406.00p 444.00p
Warrant price 114.00p 42.00p 48.75p
* Excludes 13,063,421 ordinary shares bought back and held in treasury.
6. Net asset value and return per ordinary share (continued)
The fully diluted net asset value per share at 30 June 2007 of 640.15p is
calculated by adjusting equity shareholders' funds for consideration receivable
on the exercise of all warrants, assuming an exercise price of 478p, and
dividing by the total number of shares that would have been in issue at 30 June
2007 had all the warrants been exercised. Warrants are exercisable on 29
February 2008 or 27 February 2009 at exercise prices of 478p and 565p
respectively.
The fully diluted revenue and capital returns per ordinary share are calculated
in accordance with International Accounting Standard 33. For the purposes of
calculating diluted revenue and capital returns per ordinary share, the number
of ordinary shares is the weighted average used in the basic calculation plus
the number of ordinary shares deemed to be issued (for no consideration) on
exercise of all warrants by reference to the average price of the ordinary
shares during the period.
7. Ordinary share capital
Number of Number of
ordinary treasury Nominal
shares shares value
in issue in issue Total �'000
At 1 January 2007 168,298,906 - 168,298,906 8,415
Share issues pursuant to
warrant conversion 3,844,373 - 3,844,373 192
Share buy backs
transferred to treasury (13,063,421) 13,063,421 - -
--------------- -------------- --------------- -------
At 30 June 2007 159,079,858 13,063,421 172,143,279 8,607
=========== ========== =========== =====
On 28 February 2007, 3,844,373 warrants were exercised for a total
consideration of �16,877,000.
During the period 13,063,421 ordinary shares were bought back and held as
treasury shares for a total consideration of �71,905,000, which includes stamp
duty of �356,000.
8. Publication of non-statutory accounts
The financial information for the six months ended 30 June 2007 and 2006 has
not been audited.
The information for the year ended 31 December 2006 has been extracted from the
latest published audited financial statements which have been filed with the
Registrar of Companies.
The report of the auditors on those accounts contained no qualification or
statement under section 237(2) or (3) of the Companies Act 1985.
9. Annual results
The Board expects to announce the annual results for the year ended 31 December
2007 in mid February 2008.
Copies of the preliminary announcement can be obtained from the Secretary on
020 7743 3000. The annual report should be available by the end of February,
with the Annual General Meeting being held in March 2008.
2 August 2007
33 King William Street
London EC4R 9AS
END
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