TIDMGIR
GARTMORE IRISH GROWTH FUND PLC
INTERIM REPORT FOR THE SIX MONTHS TO 30 SEPTEMBER 2010
INVESTMENT OBJECTIVE
The Company seeks to provide shareholders with long-term capital growth through
investment in quoted companies which are either incorporated in the Republic of
Ireland or Northern Ireland or, if elsewhere, derive the majority of their
turnover or profits from the Republic of Ireland or Northern Ireland or are
listed on the ISEQ Index.
It is considered that the Company, through the securities in which it invests,
offers an attractive and relatively direct means of investing in Ireland,
thereby giving exposure to:
? its attractive demographics;
? low corporation tax;
? an attractive English-speaking base for international investors, particularly
from the USA, to service the EU market;
? an attractive base from which Irish companies can develop international
business; and
? a pro-business Government and culture.
INVESTMENT POLICY
Asset Allocation:
The Company invests in quoted companies which are either incorporated in the
Republic of Ireland or Northern Ireland or, if elsewhere, derive the majority
of their turnover or profits from the Republic of Ireland or Northern Ireland
or are listed on the ISEQ Index. The majority of investments will be in
equities, although other forms of equity-related securities, including warrants
and convertibles, may be held. Cash and derivative instruments (such as futures
and options) may be used for efficient portfolio management and as part of
investment strategy, subject to the prior consent of the Board.
The Company's investments are not limited by reference to market
capitalisation, sector or weightings within the Republic of Ireland or
elsewhere. However, a sizeable part of the portfolio is usually held in stocks
of companies incorporated in the Republic of Ireland, since they represent a
majority of the Company's eligible investment universe.
Risk Diversification:
Portfolio risk is managed by investing in a diversified spread of investments.
There are generally up to 40 holdings at any one time, and no single holding
will represent more than 15% of the net assets of the Company or more than 15%
of the investee company's issued share capital at the time of acquisition.
The Company will not invest more than 15% of its gross assets in other listed
investment companies (including investment trusts).
Gearing:
The Manager is authorised to gear the portfolio to make additional investments.
Gearing can fluctuate between zero and 25% of shareholders' funds, with timing
determined on the basis of market circumstances and investment opportunities.
The level of gearing is regularly monitored by the Board. Alternatively, cash
is held when the Manager has negative views on share prices.
Previously, gearing has been achieved through the use of flexible borrowing
facilities. In the recent turbulence in banking markets in Ireland and in other
countries, the Company did not renew its borrowing facilities because the terms
offered were unacceptable. The Board has authorised the Manager to use
contracts for difference ("CFDs") for gearing purposes. The use of CFDs is
subject to the limits which applied when bank loan facilities were used, and
total gearing remains subject to a maximum of 25% of shareholders' funds.
Performance
Performance is compared with the ISEQ Index, the Hoare Govett Smaller Companies
(ex Investment Companies) Index, the FTSE All-Share Index and the FTSE Europe
ex UK Index.
Directors
H P Sheridan (Chairman)
R A M Baillie
G R Caldwell
W R Cotter
P K Cunneen
R A Milliken
Advisers
Investment Manager:
Gartmore Investment Limited
Gartmore House
8 Fenchurch Place
London EC3M 4PB
Telephone: 020 7782 2000
Secretary and Registered Office
Capita Sinclair Henderson Limited
(trading as Capita Financial Group - Specialist Fund Services)
Beaufort House
51 New North Road
Exeter EX4 4EP
Telephone: 01392 412122
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: 0870 707 1025
www.investorcentre.co.uk
Registered No. 3031629
England and Wales
Gartmore Irish Growth Fund PLC is managed by Gartmore Investment Limited
("GIL") which is authorised and regulated by the Financial Services Authority.
OVERVIEW FOR THE SIX MONTHS TO 30 SEPTEMBER 2010
? Net asset value per Ordinary share fell by 3.99% compared with a fall in
sterling terms of 18.21% in the ISEQ Index.
? Revenue return of 3.74p per share compared with 2.80p per share in the six
months to 30 September 2009.
CHAIRMAN'S STATEMENT FOR THE SIX MONTHS TO 30 SEPTEMBER 2010
In the context of a difficult six months for the Irish stock market, your
Company has recorded a relatively strong performance.
In sterling terms, the net asset value ("NAV") at 30 September 2010 amounted to
755.62p, a decrease of 4% over the six months to 30 September 2010, and follows
an increase in NAV of 77% in the year to 31 March 2010. The 4% decrease
compares with a decrease in sterling terms of 18.2% in the ISEQ Index. The
negative returns posted by the Irish market were more pronounced than in the UK
main market, with the FTSE All-Share Index falling 1.4%, and the Hoare Govett
Smaller Companies (excluding Investment Companies) Index increasing by 4.9% due
to a rally in UK mid-cap stocks.
The revenue return for the six months was 3.74p per share, representing an
increase of 34% on the revenue return of 2.80p for the six months to 30
September 2009. This improvement reflects strong dividend income on the
underlying investment portfolio.
As at 30 September 2010, the share price was 670p, representing a discount to
NAV of 11% compared to a discount of 13% at 31 March 2010. During the six-month
period, the Company repurchased 614,486 shares and, since 30 September 2010, a
further 189,213 shares have been repurchased. All shares repurchased were
cancelled. Shares are bought back with the objective of reducing the share
price discount to NAV whilst enhancing the NAV per share, and the Company
intends to make further purchases when stock becomes available at attractive
prices.
The Board continues to monitor closely the investment management arrangements
for the Company which were affected when Gervais Williams, who had managed the
portfolio since the Company's launch in 1995, left Gartmore in September 2010.
Since then the Company's portfolio has been managed by Adam McConkey and Moni
Sternbach, both of whom worked closely with Gervais Williams. Further
departures from Gartmore, although not directly associated with the Company,
have required the Board to examine the arrangements with Gartmore as Investment
Manager. The Board has agreed a significantly reduced notice period, from one
year to a rolling three months, under the Company's investment management
agreement, to recognise the impact of these developments on Gartmore Irish.
The current management of the portfolio and other options for the Company will
continue to be evaluated and a further announcement will be made within two
months.
In the meantime, the Board will continue to keep the level of discount under
careful review and will apply the Company's share buyback policy, as
appropriate. If necessary, the Board will seek shareholders' authority to renew
the Company's buyback powers should the existing powers be exhausted.
We remain cautiously optimistic about the prospects for selected Irish
equities, which continue to benefit from a strong export performance and their
international activities. There are still many opportunities at a stock
specific level to invest in strong, growing businesses that have an ability to
generate profits and dividends. Despite the clear challenges, the fundamentals
that have worked for the economy in the past, such as an attractive demographic
profile, a favourable tax regime and a supportive business environment, still
persist today.
Harry Sheridan
Chairman
29 November 2010
MANAGER'S REVIEW FOR THE SIX MONTHS TO 30 SEPTEMBER 2010
The past six months have seen the Irish equity market significantly
underperform the rest of Europe, driven by the fear that the rising costs of
recapitalising its banking sector could drive the Irish government to default
on their sovereign debt obligations. These concerns are reflected in the
widening of Irish government bond spreads versus German Bunds to historic
levels.
Recent economic data is also providing a mixed picture. Though GDP unexpectedly
declined during the second quarter, exports continued to expand and there are
signs that unemployment may be stabilising.
Our lack of exposure to the Irish banking sector was a positive contributor to
performance over the period. The sector suffered a sharp decline as the true
costs of bailing out the sector exceeded initial estimates.
At the stock level, our greatest positive contribution compared to the ISEQ
Index was our underweight exposure to materials producer CRH, which posted its
largest monthly decline on record during August after it issued a trading
statement. The substantial drop in earnings was exacerbated by concerns
surrounding the strength of the US economy and the continued decline in home
sales.
Our holding in Andor Technology, which sells specialist, high-performance
digital cameras to research departments in universities and scientific
institutions, was a particularly strong performer. Andor's strong newsflow over
the year to date culminated in its interim management statement at the end of
September, in which management stated that they are confident full-year results
will exceed market expectations. Post the period end we have substantially cut
the position taking profits, although at the time of writing it remains one of
our larger holdings.
Our position in Aer Lingus also delivered a positive contribution. Towards the
end of last year we identified Aer Lingus as a company that could attract
greater investor interest, and it has since shown improvements in trading over
last year. Capacity rationalisation has meant an increased load factor, and
although revenues were down a little as expected, cost reductions resulted in
an operating loss that represented a substantial improvement in operating
earnings. Adding to the position during April benefited the portfolio as the
price rose during June, and since then the market has been recognising, and
rewarding, the progress that has been made in restructuring the business, as
well as the fact that Aer Lingus is a potential takeover candidate.
Other positives included Origin Enterprises, Glanbia, Elan and Smurfit Kappa.
The largest detractor compared to the ISEQ Index was our lack of exposure to
Ryanair. Although we were not exposed during the steep decline in April and
May, having sold in mid-April just before the Icelandic volcanic eruption
disrupted air travel across Europe, we missed the subsequent recovery in share
price. We maintain our preference for Aer Lingus over Ryanair.
Another detractor of performance was a position in Norkom Group, which suffered
a heavy decline during September when it issued a trading statement for the
first half and reported that revenues and earnings were both lower than for the
same period the previous year. We have now sold this position.
During the period under review we sold Allied Irish Bank, Bank of Ireland,
Ryanair and Norkom. We also took profits on Glanbia and cut our exposure to
Andor Technology. Purchases have included United Drug, Merrion and DCC.
The processes we use to manage the Fund remain in place following Gervais
Williams' departure at the end of September. We will continue to place an
emphasis on our extensive company meeting program, and through our own
fundamental research we believe we can take advantage of the pricing
inefficiencies that exist within this market.
We have recently reduced exposure to some of the smaller companies where the
investment thesis was driven by event risk, with examples such as Providence
Resources and Minco. We have also increased our exposure to Kerry, DCC and
Smurfit Kappa. We continue to place an emphasis on international businesses,
and businesses paying high and sustainable dividends.
Prospects
There are a number of compelling investment opportunities in Ireland whose
prospects are not correlated to the perceived health of the Irish economy.
Many Irish equities look undervalued, with a number of companies quoted in
Ireland being overlooked or disregarded by investors simply because of their
Irish incorporation. This is especially true for those businesses which are
international in nature, and therefore have prospects which are actually more
closely tied to other regions, such as well-known Irish companies Kerry Group,
Smurfit Kappa and Paddy Power, and less well-known names such as Norkom, Andor
and Glanbia.
In spite of the uncertainty we are continuing to find plenty of quality
investment opportunities in Ireland at very attractive valuations.
Gartmore Investment Limited
29 November 2010
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that, to the best of their knowledge, the condensed set
of financial statements for the six months to 30 September 2010, which has been
prepared in accordance with IAS 34 as adopted by the European Union, gives a
true and fair view of the assets, liabilities and financial position of the
Company.
Attention is drawn to the Chairman's statement above. The other principal risks
and uncertainties for the remaining six months of the financial year are
substantially unchanged since the date of the annual report for the year ended
31 March 2010 and continue to be as set out in that report.
The Directors confirm also that the Chairman's Statement, Manager's Review and
the condensed financial statements include a fair review of the information
required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of
important events that have occurred during the first six months of the
financial year and their impact on the condensed set of financial statements,
and a description of the principal risks and uncertainties for the remaining
six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related-party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the Company during the period, and any changes in the
related-party transactions described in the last annual report that could do
so.
On behalf of the Board
Harry Sheridan
Chairman
29 November 2010
FINANCIAL SUMMARY
At 30 At 31 Increase/
September 2010 March 2010 (decrease)
%
Net assets attributable to Ordinary GBP50.133m GBP57.050m (12.12)
shares
Net asset value per Ordinary share 755.62p 786.99p (3.99)
ISEQ Index * 2,318.54 2,834.64 (18.21)
FTSE All-Share Index 2,868.00 2,910.00 (1.44)
Hoare Govett Smaller Companies (ex 4,019.13 3,832.23 4.88
Investment Companies) Index
Mid-market price per Ordinary share 670.00p 685.00p (2.19)
* Sterling adjusted
RETURN PER ORDINARY SHARE
Six months to Year to Six months to
30 September 31 March 30 September
2010 2010 2009
pence pence pence
Return per Ordinary share:
Capital (45.42) 385.71 368.13
Revenue 3.74 4.21 2.80
Total (41.68) 389.92 370.93
Number of shares Number of Number of
shares shares
Ordinary shares in issue 6,634,634 7,249,120** 10,494,442
Weighted average Ordinary 6,869,085 9,236,716** 10,856,035
shares in issue
** Includes tender offer for 2,758,489 shares in October 2009.
This financial information has been prepared in accordance with International
Financial Reporting Standards ("IFRS").
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)
to 30 September 2010
Six months to 30 September 2010
Note Revenue Capital Total
GBP'000 GBP'000 GBP'000
Losses on investments at fair value - (2,682) (2,682)
Exchange losses - (124) (124)
Dividends and other income 4 712 - 712
Total income 712 (2,806) (2,094)
Expenses
Investment management fee (253) - (253)
Cost of investment transactions - (314) (314)
Other expenses (182) - (182)
Total expenses (435) (314) (749)
Profit/(loss) before finance costs 277 (3,120) (2,843)
and taxation
Finance costs (20) - (20)
Profit/(loss) before taxation 257 (3,120) (2,863)
Taxation 2 - - -
Profit/(loss) and total 257 (3,120) (2,863)
comprehensive income for the period
Basic and diluted return per 5 3.74p (45.42)p (41.68)p
Ordinary share
The Group does not have any income or expense that is not included in profit/
(loss) for the period, and therefore the "Profit/(loss) for the period" is also
the "Total comprehensive income for the period", as defined in International
Accounting Standard 1 (revised) ("IAS 1"). All of the profit/(loss) for the
period and the total comprehensive income for the period is attributed to the
Shareholders of the Group.
The total column of this statement is the Statement of Comprehensive Income of
the Group which incorporates the trading subsidiary, Gartmore Irish Smaller
Companies Investment Limited, prepared under IFRS. The supplementary revenue
and capital return columns are presented for information purposes as
recommended by the Statement of Recommended Practice ("SORP") issued by the
Association of Investment Companies ("AIC"). All revenue and capital items in
the above statement derive from continuing operations. These accounts are
unaudited and are not the Group's statutory accounts.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Audited)
to 31 March 2010
Year to 31 March 2010
Note Revenue Capital Total
GBP'000 GBP'000 GBP'000
Gains on investments at fair value - 36,283 36,283
Exchange gains - 67 67
Dividends and other income 4 1,244 - 1,244
Total income 1,244 36,350 37,594
Expenses
Investment management fee (619) - (619)
Cost of investment transactions - (686) (686)
Other expenses (336) - (336)
Total expenses (955) (686) (1,641)
Profit before finance costs and 289 35,664 35,953
taxation
Finance costs (6) - (6)
Profit before taxation 283 35,664 35,947
Taxation credit/(charge) 2 106 (37) 69
Profit and total comprehensive 389 35,627 36,016
income for the year
Basic and diluted return per 5 4.21p 385.71p 389.92p
Ordinary share
The Group does not have any income or expense that is not included in profit
for the year, and therefore the "Profit for the year" is also the "Total
comprehensive income for the year", as defined in IAS 1. All of the profit for
the year and the total comprehensive income for the year is attributed to the
Shareholders of the Group.
The total column of this statement is the Statement of Comprehensive Income of
the Group which incorporates the trading subsidiary, Gartmore Irish Smaller
Companies Investment Limited, prepared under IFRS. The supplementary revenue
and capital return columns are presented for information purposes as
recommended by the SORP issued by the AIC. All revenue and capital items in the
above statement derive from continuing operations.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)
to 30 September 2009
Six months to 30 September 2009
Note Revenue Capital Total
GBP'000 GBP'000 GBP'000
Gains on investments at fair value - 40,551 40,551
Exchange losses - (53) (53)
Dividends and other income 4 796 - 796
Total income 796 40,498 41,294
Expenses
Investment management fee (348) - (348)
Cost of investment transactions - (504) (504)
Other expenses (178) - (178)
Total expenses (526) (504) (1,030)
Profit before finance costs and 270 39,994 40,264
taxation
Finance costs - - -
Profit before taxation 270 39,994 40,264
Taxation credit/(charge) 2 34 (30) 4
Profit and total comprehensive 304 39,964 40,268
income for the period
Basic and diluted return per 5 2.80p 368.13p 370.93p
Ordinary share
The Group does not have any income or expense that is not included in profit
for the period, and therefore the "Profit for the period" is also the "Total
comprehensive income for the period", as defined in IAS 1. All of the profit
for the period and the total comprehensive income for the period is attributed
to the Shareholders of the Group.
The total column of this statement is the Statement of Comprehensive Income of
the Group which incorporates the trading subsidiary, Gartmore Irish Smaller
Companies Investment Limited, prepared under IFRS. The supplementary revenue
and capital return columns are presented for information purposes as
recommended by the SORP issued by the AIC. All revenue and capital items in the
above statement derive from continuing operations. These accounts are unaudited
and are not the Group's statutory accounts.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited)
for the six months to 30 September 2010
Share Share Special Capital Capital Retained Total
capital premium reserve redemption reserve earnings
account reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Six months to
30 September
2010
31 March 2010 1,812 1,101 - 3,966 48,692 1,479 57,050
Total
comprehensive
income:
Net (loss)/ - - - - (3,120) 257 (2,863)
profit after
taxation for the
period
Transactions
with
shareholders,
recorded
directly to
equity:
Equity dividends - - - - - (102) (102)
paid
Shares purchased (154) - - 154 (3,952) - (3,952)
for cancellation
30 September 1,658 1,101 - 4,120 41,620 1,634 50,133
2010
Year to
31 March 2010
(audited)
31 March 2009 2,742 1,101 16,645 3,036 22,869 2,406 48,799
Total
comprehensive
income:
Net profit after - - - - 35,627 389 36,016
taxation for the
year
Transactions
with
shareholders,
recorded
directly to
equity:
Equity dividends - - - - - (1,316) (1,316)
paid
Shares purchased (240) - (2,852) 240 (3,180) - (6,032)
for cancellation
Tender offer (690) - (13,793) 690 (6,624) - (20,417)
31 March 2010 1,812 1,101 - 3,966 48,692 1,479 57,050
Six months to
30 September
2009
31 March 2009 2,742 1,101 16,645 3,036 22,869 2,406 48,799
Total
comprehensive
income:
Net profit after - - - - 39,964 304 40,268
taxation for the
period
Transactions
with
shareholders,
recorded
directly to
equity:
Equity dividends - - - - - (1,316) (1,316)
paid
Shares purchased (118) - (2,852) 118 - - (2,852)
for cancellation
Tender offer - - - - (23) - (23)
costs
30 September 2,624 1,101 13,793 3,154 62,810 1,394 84,876
2009
These accounts have been prepared under IFRS.
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
as at 30 September 2010
Note 30 September 31 March 30 September
2010 2010 2009
(audited)
GBP'000 GBP'000 GBP'000
Non-current assets
Investments at fair value 40,864 49,137 66,498
through profit or loss
Current assets
Stock of investments - - 46
Trade and other 712 557 2,410
receivables
Amounts receivable in 6 271 943 -
respect of contracts for
difference
Cash and cash equivalents 9,509 7,781 16,784
10,492 9,281 19,240
Total assets 51,356 58,418 85,738
Current liabilities
Trade and other payables (1,074) (1,115) (862)
Amounts payable in 6 (149) (253) -
respect of contracts for
difference
Total liabilities (1,223) (1,368) (862)
Net assets 50,133 57,050 84,876
Represented by:
Share capital 1,658 1,812 2,624
Share premium account 1,101 1,101 1,101
Special reserve - - 13,793
Capital redemption 4,120 3,966 3,154
reserve
Capital reserve 41,620 48,692 62,810
Retained earnings 1,634 1,479 1,394
Total equity 50,133 57,050 84,876
Net asset value per 755.62p 786.99p 808.77p
Ordinary share
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (Unaudited)
for the six months to 30 September 2010
Six months to Year to Six months to
30 September 31 March 30 September
2010 2010 2009
(audited)
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Consolidated (loss)/profit (2,863) 35,947 40,264
before tax
Adjustments to reconcile net (
loss)/profit before tax to net
cash flows from operating
activities:
Losses/(gains) on investments 2,996 (35,597) (40,047)
Exchange losses/(gains) 124 (67) 53
Finance costs 20 6 -
Increase in stocks - - (46)
(Decrease)/increase in trade (72) (98) 83
and other payables
Decrease in trade and other 94 161 154
receivables
Purchases of investments (10,934) (47,171) (27,327)
Sales of investments 18,515 78,194 43,546
Payments made under contracts (1,655) (168) -
for difference
Revaluation of foreign currency (115) 13 (146)
balances
Net cash flows generated from 6,110 31,220 16,534
operating activities
Taxation
Taxation paid - (416) -
Cash flows from financing
activities
Equity dividends paid (102) (1,316) (1,316)
Cost of share repurchases (4,260) (26,289) (3,030)
Interest on contracts for (20) (6) -
difference and overdrafts
Net cash flows used in (4,382) (27,611) (4,346)
financing activities
Increase in cash and cash 1,728 3,193 12,188
equivalents
Net cash and cash equivalents 7,781 4,588 4,588
at start of period
Net cash and cash equivalents 9,509 7,781 16,776
at end of period
NOTES TO THE ACCOUNTS AT 30 SEPTEMBER 2010
1. Basis of Preparation and Accounting Policies
The condensed consolidated financial statements comprise the unaudited results
of the Company and its subsidiary, Gartmore Irish Smaller Companies Investment
Limited, for the six months to 30 September 2010, and do not constitute
statutory accounts under the Companies Act 2006. The financial information for
the six months ended 30 September 2010 and 30 September 2009 has not been
audited nor reviewed by the Company's Auditor. Full statutory accounts for the
year to 31 March 2010 included an unqualified audit report and did not contain
a statement required under section 498 (2) or (3) of the Companies Act 2006 and
were filed with the Registrar of Companies on 10 September 2010.
The consolidated financial statements have been prepared on a going concern
basis and on the basis of the accounting policies set out in the statutory
accounts for the year to 31 March 2010, in accordance with IFRS as adopted by
the European Union. There have been no changes to the accounting policies since
31 March 2010. The information is presented in pounds sterling, the currency of
the Group's domicile.
The Company has adequate financial resources and no significant investment
commitments and as a consequence, the Directors believe that the Company is
well placed to manage its business risks. After making appropriate enquiries,
the Directors have a reasonable expectation that the Company has adequate
available financial resources to continue in operational existence for the
foreseeable future and accordingly have concluded that it is appropriate to
continue to adopt the going concern basis in preparing the half-yearly report.
2. Taxation
30 September 2010 31 March 2010
Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
a) Analysis of charge in
period:
Corporation tax (credit)/ - - - (36) 37 1
charge
Total current tax - - - (36) 37 1
(credit)/charge for
period
Deferred tax credit - - - (70) - (70)
Total deferred tax credit - - - (70) - (70)
for period
Total tax (credit)/charge - - - (106) 37 (69)
for period (see 2b)
30 September 2009
Revenue Capital Total
GBP'000 GBP'000 GBP'000
a) Analysis of charge in
period:
Corporation tax charge 36 30 66
Total current tax charge for 36 30 66
period
Deferred tax credit (70) - (70)
Total deferred tax credit for (70) - (70)
period
Total tax (credit)/charge for (34) 30 (4)
period see (2b)
b) Factors affecting current taxation charge:
The tax assessed on the (loss)/profit of the period is lower than the rate of
corporation tax of 28% (31 March 2010: 28% and 30 September 2009: 28%). The
differences are explained below:
30 September 31 March 30 September
2010 2010 2009
GBP'000 GBP'000 GBP'000
(Loss)/profit before taxation (2,863) 35,947 40,264
Corporation tax 28% (31 March (802) 10,065 11,274
2010: 28% 30 September 2009: 28%)
Effects of:
Non-taxable UK dividends (6) (6) (6)
Non-taxable overseas dividends (192) (219) (99)
Expenses not deductible for tax - 3 -
purposes
Excess management expenses carried 126 36 -
forward
Proceeds from sale of redeemable - 37 30
shares
Marginal relief - - (5)
Prior year adjustment - 1 -
Non-taxable items in capital 874 (9,986) (11,198)
Total tax credit for the period - (69) (4)
(2a)
Due to the Company's status as an investment trust, and the intention to
continue meeting the conditions required to obtain approval to retain that
status in the foreseeable future, the Company has not provided deferred tax on
any capital gains and losses arising on the revaluation or disposal of
investments.
3. Dividends Paid
During the period, a final dividend of 1.52p (2009: final dividend of 1.27p and
special dividend of 10.88p) per Ordinary share amounting to GBP101,799 (2009: GBP
1,316,000) was paid to Shareholders in respect of the year ended 31 March 2010.
4. Dividends and Other Income
Six months to Year to Six months to
30 September 31 March 30 September
2010 2010 2009
GBP'000 GBP'000 GBP'000
Revenue:
Income from listed investments:
Franked dividend income 23 23 23
Unfranked investment income 686 942 655
Dividends reinvested - 88 -
Dividends on contracts for 13 44 -
difference
Dealing (losses/gains of subsidiary (24) 124 114
698 1,221 792
Interest on deposits 9 6 4
Underwriting commission 5 17 -
712 1,244 796
5. Return per Ordinary Share
Six months to Year to 31 March Six months to
30 September 2010 2010 30 September 2009
GBP'000 per share GBP'000 per share GBP'000 per share
Capital return (3,120) (45.42)p 35,627 385.71p 39,964 368.13p
Revenue return 257 3.74p 389 4.21p 304 2.80p
Total return (2,863) (41.68)p 36,016 389.92p 40,268 370.93p
Weighted 6,869,085 9,236,716 10,856,035
average
Ordinary shares
in issue
6. Derivative Instruments
Whilst the Group and Company may use a variety of derivative contracts, the
only derivatives entered into during the period were CFDs under a master
agreement with HSBC to enable the Company to gain long exposure on individual
securities through CFDs. CFDs are synthetic equities and are valued by
reference to the investments' underlying market values.
Six months to Year to Six months to
30 September 31 March 30 September
2010 2010 2009
GBP'000 GBP'000 GBP'000
Net (losses)/gains on derivative
instruments in the period
Payments made under contracts for (1,455) (362) -
difference
Holding (losses)/gains under (569) 690 -
contracts for difference
(2,024) 328 -
At the period end the Company had exposure to the following derivative
instruments:
Six months to Year to Six months to
30 September 31 March 30 September
2010 2010 2009
GBP'000 GBP'000 GBP'000
Contracts for difference - assets 271 943 -
Contracts for difference - (149) (253) -
liabilities
122 690 -
Market exposure 5,943 9,062 -
7. Share Capital
During the six-month period to 30 September 2010, the Company repurchased and
cancelled 614,486 Ordinary shares, at a cost of GBP3,952,000. This reduced the
number of Ordinary shares in issue from 7,249,120 to 6,634,634.
Since the period end, a further 189,213 Ordinary shares have been repurchased
and cancelled at a cost of GBP1,290,000.
8. Related Party Transactions
Under the terms of an agreement dated 8 July 2002, the Company has appointed
Gartmore Investment Limited to be the Manager. The investment management fee
payable to the Manager is calculated at 1.0% per annum of the gross asset value
(less current liabilities) of the Group held at each month end. The total fees
payable under the agreement are shown in the Condensed Consolidated Income
Statement of Comprehensive Income.
At 30 September 2010 an amount of GBP42,000 (31 March 2010: GBP48,000, 30 September
2009: GBP246,000) was outstanding and due to Gartmore Investment Limited.
In addition to the fees paid under the management agreement, the Company also
pays Gartmore Investment Limited up to a maximum of GBP20,000 per annum for the
services provided in respect of Gartmore SAVEit and Gartmore ISAit. The fees
included in the accounts for the six months ended 30 September 2010 were
GBP10,000 (31 March 2010: GBP17,000, 30 September 2009: GBP10,000), of which GBP4,000
(31 March 2010: GBP2,000, 30 September 2009: GBP5,000) was outstanding.
The Directors of the Company may be or have been directors of companies held in
the portfolio. The Board has delegated authority for investment selection to
the Manager and the Manager has selected all investments independently in
accordance with the investment strategy set out above. The Board as a whole
reviews the investment portfolio on a regular basis and is satisfied that the
investments were selected in an objective manner and that no conflict of
interest has arisen as a result of the selection of these stocks.
ANALYSIS OF NET ASSETS BY LOCATION OF INCORPORATION
Valuation at Valuation at
30 September 2010 31 March 2010
GBP'000 % GBP'000 %
Equities
United Kingdom 5,327 10.6 5,124 9.0
Republic of 35,537 70.9 44,013 77.1
Ireland
Total 40,864 81.5 49,137 86.1
investments
Net current 9,269 18.5 7,913 13.9
assets
Net assets 50,133 100.0 57,050 100.0
PORTFOLIO (including cash and CFDs)
as at 30 September 2010
Company Sector classification Market Total Exposure
Value
GBP'000 %
1 (6) Andor Technology Electronic & Electrical 4,378 7.8 (5.1)
Equipment
2 (1) Greencore Food Producers 3,791 6.7 (7.9)
3 (7) Origin Food Producers 3,657 6.5 (5.1)
Enterprises
4 (15) Aer Lingus Travel & Leisure 3,608 6.4 (2.8)
5 (2) Irish Continental Travel & Leisure 3,572 6.3 (7.1)
6 (8) Paddy Power Travel & Leisure 2,676 4.7 (4.8)
7 (-) United Drug Food & Drug Retailers 2,557 4.5 (-)
8 (3) Total Produce Food & Drug Retailers 2,398 4.3 (6.1)
9 (-) DCC Support Services 2,398 4.3 (-)
10 (9) Smurfit Kappa General Industrials 2,223 3.9 (4.6)
11 (13) Worldspreads General Financial 2,030 3.6 (3.5)
12 (5) Glanbia Food Producers 2,002 3.6 (5.6)
13 (14) FBD Holdings Non Life Insurance 1,975 3.5 (3.5)
14 (10) Fyffes Food Producers 1,722 3.1 (3.9)
15 (-) Merrion Pharmacy Pharmaceuticals & 1,695 3.0 (-)
Biotechnology
16 (-) Kerry Food Producers 1,550 2.8 (-)
17 (18) TVC Holdings General Financial 1,114 2.0 (2.0)
18 (-) Dragon Oil Oil & Gas Producers 929 1.6 (-)
19 (17) UTV Media Media 842 1.5 (2.5)
20 (20) Datalex Software & Computer 830 1.5 (1.1)
Services
21 (-) Minco Mining 264 0.5 (-)
22 (11) Bank of Ireland Banks 251 0.4 (3.8)
23 (22) Providence Oil & Gas Producers 134 0.2 (0.9)
Resources
24 (28) Galantis Gold Mining 106 0.2 (0.1)
25 (26) Zamano Mobile Telecommunications 73 0.1 (0.5)
26 (29) Prime Active Media 32 0.1 (0.1)
Capital
27 (27) Veris Support Services - - (0.3)
28 (31) Newcourt Support Services - - (-)
29 (32) Fortfield Electronic & Electrical - - (-)
Equipment
Total equity 46,807 83.1
exposure
Cash 9,509 16.9
Total exposure & cash¹ 56,316 100.0
CFD notional cash exposure (5,821)
Other net current liabilities (362)
Net assets 50,133
¹ Percentage based on total exposure which comprises fixed asset investments of
GBP40,864,000 plus exposure to underlying securities represented by CFDs of
GBP5,943,000 and cash balances of GBP9,509,000.
Previous year end ranking and percentages in brackets.
HALF-YEARLY REPORT
The foregoing represents the full text of the Half-Yearly Report for the six
months to 30 September 2010, which will be posted to shareholders shortly. The
Report will also be available for download from the Company's website:
www.gartmoreirishgrowthfund.com or on request from the Company Secretary.
Capita Sinclair Henderson Limited
Secretary
29 November 2010
END
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