FINSBURY GROWTH & INCOME TRUST PLC - Half-yearly Report

FINSBURY GROWTH & INCOME TRUST PLC - Half-yearly Report

PR Newswire

For immediate release

                                                                    11 May 2015

                               To: City Editors

                      Finsbury Growth & Income Trust PLC

        Announces Half Year Results for the six months to 31 March 2015

Financial Summary and Key Data

Financial Highlights

                                   As at      As at

                                31 March         30        %
                                          September

                                    2015       2014   Change

Share price                       590.0p     509.0p    +15.9

Net asset value per share         584.6p     507.7p    +15.1

Premium of share price to           0.9%       0.3%        -
net asset value per share

Gearing*                            3.7%       4.0%        -

Shareholders' funds              £629.0m    £494.9m    +27.1

Number of shares in issue    107,590,212 97,480,212    +10.4

                             Six months One year to
                                     to

                               31 March          30
                                          September

                                   2015        2014

Share price (total return)#      +17.4%       +8.6%

Net asset value per share        +17.3%       +8.9%
(total return)#

FTSE All-Share Index (total       +5.3%       +6.1%
return)
(Company benchmark)#†

                            Year ending  Year ended

                                     30          30
                              September   September

                                   2015        2014

First interim dividend             5.5p        5.1p

Second interim dividend       Yet to be        6.2p
                               declared

# Source - Morningstar

† Source - FTSE International Limited ("FTSE") © FTSE 2015*

* See glossary

Chairman's Statement

Performance

I have pleasure in reporting that the Company's share price total return of
+17.4% and net asset value per share total return of +17.3% have again both
substantially outperformed the Company's benchmark, the FTSE All-Share Index,
which delivered a total return of +5.3%.

The principal contributors to the Company's net asset value performance were
London Stock Exchange, Schroders and Sage Group. Further information on the
Company's portfolio can be found in our Portfolio Manager's Review.

During the period, the Company's shares have consistently traded close to net
asset value, beginning the period at a 0.3% premium to the Company's net asset
value per share and ending on a 0.9% premium.

Share Capital

As I reported at the year-end, due to the constant demand for your Company's
shares, we took the following action:

A new block listing authority was obtained from the UK Listing Authority in
January 2015 to enable shares to be issued as cost effectively as possible;

a Prospectus was also published in December 2014 in order that the Company can
continue to issue shares in accordance with the Prospectus Directive; and

shareholder authority to issue further shares equal to 10% of the Company's
issued share capital on a non-pre-emptive basis was renewed at the Company's
Annual General Meeting held in February 2015.

As at 31 March 2015 the Company had 107,590,212 shares of 25p each in issue (31
March 2014: 91,310,212). During the six months under review 10,110,000 new
shares were issued raising £54.3 million net of expenses. Since the end of the
half-year, to the date of this report, a further 2,340,000 new shares have been
issued raising £13.9 million. As at 11 May 2015, the Company had 109,930,212
shares in issue.

The Directors believe that the issuance of those new shares continues to yield
the following principal benefits:

Improvement of liquidity in the market for the Company's shares;

Maintenance of the Company's ability to issue shares tactically, so as to
manage the premium to net asset value per share at which the shares trade;

Increase in the size of the Company, thereby spreading operating costs over a
larger capital base with a consequent reduction in the ongoing charges ratio;
and

Enhancement of the net asset value per share of existing shares through new
share issuance at a premium to the cum income net asset value per share;

Dividend

The Board has declared a first interim dividend of 5.5p per share, compared to
last year's first interim dividend of 5.1p per share, an increase of 7.8%. The
dividend was paid on Wednesday, 6 May 2015 to shareholders who were on the
register on Tuesday, 7 April 2015. The associated ex dividend date was
Thursday, 2 April 2015.

Gearing

The Company is in the second year of its three-year secured fixed term
multicurrency revolving credit facility with Scotiabank Europe PLC (the
"facility"). As reported in my statement within the Company's 2014 Annual
Report the Company had the ability to draw down a further £20 million over the
then existing £30 million facility. On 18 March 2015 the Board increased the
commitment under the Facility Agreement by an amount of £20 million to a total
of £50 million. The amount drawn under the facility, both initially and as
increased, lies comfortably within the Company' gearing limit and remains
within the constraints of the Company's investment policy.

Outlook

The FTSE All Share Index is up approximately 4.7% so far this calendar year.
Your Board continues to believe that our Portfolio Manager's strategy of
investing for the long-term in durable cash generative franchises capable of
sustained dividend growth will continue to deliver superior investment returns
to shareholders.

Anthony Townsend

Chairman

11 May 2015

Portfolio Manager's Review

Your Company has just enjoyed another half year of competitive absolute and
relative NAV performance. This caps several years of strong performance;
certainly since the bottom of the last bear market in March 2009. Meanwhile,
investors can find plenty to worry about in almost any market or geography they
care to turn their attention to. In particular, this report is written before
the UK General Election and shareholders will have their own apprehensions
about the various possible outcomes. Despite all this we remain exceptionally
bullish about the outlook for global equity markets, including the UK, and
think it worthwhile rehearsing the bull case below (and relating the arguments
to important holdings in the portfolio). Of course there's a risk that we have
become complacent, lulled into permanent optimism by a long bull market -
shareholders must decide the credibility of the case for themselves. At the
very least least we hope it is useful to understand our thinking and why we are
invested as we are.

The price of energy has recently declined almost 60%, with the decline driven
by a major, beneficial supply shock - US horizontal fracking. Wood Mackenzie
estimates that 98% of the world's leading oil fields would still generate
positive cash flow at an oil price of $40 a barrel, while the most efficient US
shale producers have marginal costs of $10-20 per barrel. This suggests the
current rally in oil, back to c$55, is temporary, because the price will have
to stay below $40 for a meaningful period if capacity really is to be
withdrawn. What this means for the rest of us is that, all around the world
corporations can look forward to even lower energy costs and consumers to
having higher disposable income in their pockets.

It is hard to conceive of companies more advantaged by this energy price drop
than the major global consumer branded goods owners. Their costs are declining,
while their billions of customers are feeling better off. It is no surprise to
us that, for instance, Heineken's shares are up 30% in 2015 to date. Brewing
and transporting beer is energy-intensive (and has just become a whole lot
cheaper, while people are no less thirsty but have more Pesos, Rupees, Dong or
Dollars in their pockets to slake their thirsts).

Falling inflation - one result of plummeting energy costs - and straitened
government balance sheets mean one thing: a continuation of extraordinarily lax
monetary policies worldwide. Fiat money will find its way quickly into
financial assets, particularly those that offer any certainty of real,
inflation-protected returns over time. Blue chip equities are an obvious
beneficiary. In January 2015, Merrill Lynch ("ML") put out a "buy" note on
Unilever pointing out that its shares offer a dividend yield of 3.5%. The
dividend is growing ahead of inflation and is, according to Merrill Lynch's
analysts, the second "safest" dividend across the whole of Europe. Meanwhile,
ML continued, there are billions of savings across Europe - Euros, Swiss
Francs, Krone - that offer negative interest rates. It actually costs you to
deposit cash with certain banks. In these circumstances why wouldn't you invest
more into Unilever (or Diageo, Heineken, Mondelez etc)? In addition, the
intermediaries between institutional and individual investors and the financial
markets are likely to benefit from increased volumes of cash flowing across
their platforms - for example London Stock Exchange or Hargreaves Lansdown - or
into their fund products - Schroders or Rathbone.

It's easy to be complacent and sometimes the worst does happen. However,
financial history teaches that financial crises are most often crises for fiat
currencies and government bonds - not for sound Equity.

2014 saw an explosion in global M&A activity. At c$4 trillion of announced
deals the value was up 60% on 2013 and the highest total since the previous
peak of 2007. This has continued into 2015, with the value of announced deals
up a further 17% on 2014 so far and we expect this to accelerate. The logic for
more deals is compelling. Global business requires global corporations.
Meanwhile, technology is increasing the payback on deals, allowing more costs
to be taken out and the control of more complex entities. In fact it's hard to
think of a global industry where there aren't well-founded and compelling
rumours of new business combinations. Bid chatter and the actuality of deals
will keep equity investors perky.

Hargreaves Lansdowne announced last quarter it had increased its IT headcount
by a third in order to take advantage of the opportunities offered by new
technology to improve its services to its customer base. Almost every company
we meet has a similar story to tell - that IT is changing their relationships
with their customers. Most often allowing them to offer a more valuable service
at a lower price. This theme has helped various portfolio companies report
stronger than expected business growth in 2015 key examples include Burberry,
Daily Mail, Fidessa, Pearson, Reed and Sage.

In conclusion - Technology - fracking, digital, biotech - is pushing inflation
down, while increasing opportunities for companies to grow. Exceptionally
bullish indeed.

Nick Train

Director

Lindsell Train Limited

Portfolio Manager

11 May 2015

Investment Portfolio

as at 31 March 2015

                                          Fair value        % of

Investment                   Sector            £'000 investments

Unilever                     Consumer         57,617         8.8
                             Goods

Diageo                       Consumer         50,290         7.7
                             Goods

Reed Elsevier                Consumer         50,254         7.7
                             Services

Pearson                      Consumer         46,922         7.2
                             Services

Heineken Holdings (A Shares) Consumer         42,867         6.6
*                            Goods

London Stock Exchange        Financials       40,974         6.3

Hargreaves Lansdown          Financials       38,748         5.9

Schroders                    Financials       35,520         5.5

Burberry Group               Consumer         35,457         5.4
                             Goods

Sage Group                   Technology       35,329         5.4

Top 10 investments                           433,978        66.5

Daily Mail & General Trust   Consumer         29,977         4.6
(A Shares)                   Services

A.G. Barr                    Consumer         26,483         4.0
                             Goods

Rathbone Brothers            Financials       25,261         3.9

Fidessa                      Technology       24,682         3.8

Mondelez International^      Consumer         22,725         3.5
                             Goods

Dr.Pepper Snapple^           Consumer         17,472         2.7
                             Goods

Greene King                  Consumer         15,353         2.3
                             Services

Kraft Foods^                 Consumer         13,143         2.0
                             Goods

Thomson Reuters~             Consumer         11,064         1.7
                             Services

Euromoney Institutional      Consumer         10,348         1.6
Investor                     Services

Top 20 investments                           630,486        96.6

Young & Co's Brewery         Consumer          7,538         1.2
(non-voting)                 Services

Fuller Smith & Turner        Consumer          7,077         1.1
                             Services

The Lindsell Train           Financials        4,230         0.6
Investment Trust

Celtic                       Consumer          2,128         0.3
                             Services

Frostrow Capital LLP+        Financials        1,060         0.2

Celtic 6% (cumulative        -                    69         0.0
convertible preference)**

Total investments                            652,588       100.0

All of the above investments are equities listed in the UK, unless otherwise
stated.

* Listed in the Netherlands

^ Listed in the United States

~ Listed in Canada

+ Unquoted partnership interest (includes AIFM capital of £320,000)

** Non-equity - Preference Shares

Comparison of Sector Weightings with the FTSE All-Share Index

as at 31 March 2015

                                                       Finsbury
                                                         Growth

                                  Finsbury      FTSE   & Income
                                    Growth All-Share

                                  & Income     Index   (under)/
                                                     overweight

Sector                                   %         %          %

Consumer Goods                        40.7      14.5       26.2

Consumer Services                     27.7      12.0       15.7

Financials                            22.4      25.8      (3.4)

Technology                             9.2       1.6        7.6

Oil & Gas                                -      11.9     (11.9)

Industrials                              -      10.1     (10.1)

Health care                              -       8.9      (8.9)

Basic Materials                          -       6.7      (6.7)

Telecommunications                       -       4.9      (4.9)

Utilities                                -       3.6      (3.6)

Total                                100.0     100.0          -

Income Statement

For the six months ended 31 March 2015

                              (Unaudited)                 (Unaudited)                 (Audited)

                       Six months ended 31 March   Six months ended 31 March   Year ended 30 September
                                 2015                        2014                       2014

                      Revenue     Capital   Total Revenue     Capital   Total Revenue   Capital   Total

                        £'000       £'000   £'000   £'000       £'000   £'000   £'000     £'000   £'000

Gains on investments        -      83,232  83,232       -      35,256  35,256       -    26,961  26,961
designated at fair
value through profit
or loss

Exchange differences        -        (25)    (25)       -        (11)    (11)       -      (17)    (17)

Income (note 2)         5,229           -   5,229   3,809           -   3,809  13,570         -  13,570

AIFM and Portfolio      (573)     (1,163) (1,736)   (473)       (961) (1,434)   (987)   (2,005) (2,992)
Management fees (note
3)

Other expenses          (462)           -   (462)   (351)        (19)   (370)   (739)      (26)   (765)

Return on ordinary      4,194      82,044  86,238   2,985      34,265  37,250  11,844    24,913  36,757
activities before
finance charges and
taxation

Finance charges          (85)       (173)   (258)    (77)       (157)   (234)   (151)     (306)   (457)

Return on ordinary      4,109      81,871  85,980   2,908      34,108  37,016  11,693    24,607  36,300
activities before
taxation

Taxation on ordinary    (106)           -   (106)    (80)           -    (80)   (226)         -   (226)
activities

Return on ordinary      4,003      81,871  85,874   2,828      34,108  36,936  11,467    24,607  36,074
activities after
taxation

Return per share -       3.8p       77.8p   81.6p    3.2p       39.1p   42.3p   12.6p     27.0p   39.6p
basic (note 4)

The "Total" column of this statement represents the Company's profit and loss
account. The "Revenue" and "Capital" columns are supplementary to this and are
prepared under guidance published by the Association of Investment Companies
("AIC").

All items in the above statement derive from continuing operations. The Company
had no recognised gains or losses other than those declared in the Income
Statement.

There is no material difference between the net return on ordinary activities
before taxation and the net return on ordinary activities after taxation stated
above and their historical cost equivalents.

Reconciliation of Movements in Shareholders' Funds

                            Share    Capital

                    Share premium redemption Special Capital Revenue

(Unaudited)       capital account    reserve reserve reserve reserve   Total

Six months ended    £'000   £'000      £'000   £'000   £'000   £'000   £'000
31 March 2015

At 30 September    24,370 215,304      3,453  12,424 228,842  10,538 494,931
2014

Net return from         -       -          -       -  81,871   4,003  85,874
ordinary
activities

Second interim          -       -          -       -       - (6,086) (6,086)
dividend (6.2p
per share) for
the year ended 30
September 2014

Issue of shares     2,527  51,877          -       -       -       -  54,404

Cost of share           -   (108)          -       -       -       -   (108)
issuance

At 31 March 2015   26,897 267,073      3,453  12,424 310,713   8,455 629,015

(Unaudited)

Six months ended
31 March 2014

At 30 September    20,784 146,465      3,453  12,424 204,235   8,478 395,839
2013

Net return from         -       -          -       -  34,108   2,828  36,936
ordinary
activities

Second interim          -       -          -       -       - (4,748) (4,748)
dividend (5.7p
per share) for
the year ended 30
September 2014

Issue of shares     2,043  38,952          -       -       -       -  40,995

Cost of share           -   (110)          -       -       -       -   (110)
issuance

At 31 March 2014   22,827 185,307      3,453  12,424 238,343   6,558 468,912

(Audited)

Year ended 30
September 2014

At 30 September    20,784 146,465      3,453  12,424 204,235   8,478 395,839
2013

Net return from         -       -          -       -  24,607  11,467  36,074
ordinary
activities

Second interim          -       -          -       -       - (4,748) (4,748)
dividend (5.7p
per share) for
the year ended 30
September 2013

First interim           -       -          -       -       - (4,659) (4,659)
dividend (5.1p
per share) for
the year ended
30 September 2014

Issue of shares     3,586  68,949          -       -       -       -  72,535

Cost of share           -   (110)          -       -       -       -   (110)
issuance

Year ended 30      24,370 215,304      3,453  12,424 228,842  10,538 494,931
September 2014

Balance Sheet

as at 31 March 2015

                                 (Unaudited) (Unaudited) (Audited)

                                    31 March    31 March        30
                                                         September

                                        2015        2014      2014

                                       £'000       £'000     £'000

Fixed assets

Investments designated at fair       652,588     486,958   514,798
value through profit or loss

Current assets

Debtors                                2,693       1,215     2,339

Cash at bank                           1,660       1,972     2,029

                                       4,353       3,187     4,368

Current liabilities

Creditors                            (1,526)       (433)   (1,135)

Net current assets                     2,827       2,754     3,233

Total assets less current            655,415     489,712   518,031
liabilities

Creditors: amounts falling due
after one year

Bank loan                           (26,400)    (20,800)  (23,100)

Net assets                           629,015     468,912   494,931

Capital and reserves

Share capital                         26,897      22,827    24,370

Share premium account                267,073     185,307   215,304

Capital redemption reserve             3,453       3,453     3,453

Special reserve                       12,424      12,424    12,424

Capital reserve                      310,713     238,343   228,842

Revenue reserve                        8,455       6,558    10,538

Total shareholders' funds            629,015     468,912   494,931

Net asset value per share -           584.6p      513.5p    507.7p
basic (note 5)

Cash Flow Statement

for the six months ended 31 March 2015

                                 (Unaudited) (Unaudited) (Audited)

                                    31 March    31 March        30
                                                         September

                                        2015        2014      2014

                                       £'000       £'000     £'000

Net cash inflow from operating         2,518       1,707     9,346
activities (note 7)

Net cash outflow from servicing
of finance

Interest paid                          (258)       (328)     (551)

Financial investment

Purchase of investments             (55,021)    (42,457)  (78,662)

Sale of investments                      802          26       763

Net cash outflow from financial     (54,219)    (42,431)  (77,899)
investment

Equity dividends paid                (6,086)     (4,748)   (9,407)

Net cash outflow before             (58,045)    (45,800)  (78,511)
financing

Financing

Shares issued                         54,509      41,350    71,824

Drawdown of loans                      3,300         600     2,900

Cost of share issuance                 (108)       (110)     (110)

Net cash inflow from financing        57,701      41,840    74,614

Decrease in cash                       (344)     (3,960)   (3,897)

Reconciliation of net cash flow
to movement in net debt

Decrease in cash resulting from        (344)     (3,960)   (3,897)
cashflows

Increase in debt                     (3,300)       (600)   (2,900)

Exchange movements                      (25)        (11)      (17)

Movement in net debt                 (3,669)     (4,571)   (6,814)

Net debt at start of period         (21,071)    (14,257)  (14,257)

Net debt at end of period           (24,740)    (18,828)  (21,071)

Analysis of net debt

                                 (Unaudited) (Unaudited) (Audited)

                                    31 March    31 March        30
                                                         September

                                        2015        2014      2014

                                       £'000       £'000     £'000

Cash at bank                           1,660       1,972     2,029

Bank loan                           (26,400)    (20,800)  (23,100)

                                    (24,740)    (18,828)  (21,071)

Notes to the Financial Statements

1. Basis of preparation

The condensed financial statements have been prepared under the historical cost
convention, except for the measurement at fair value of investments, and in
accordance with UK Generally Accepted Accounting Practice (GAAP) and the
Statement of Recommended Practice (SORP) for `Financial Statements of
Investment Trust Companies and Venture Capital Trusts' issued by the
Association of Investment Companies dated January 2009 and the Companies Act
2006.

The Financial Statements have been prepared on a going concern basis. The
Directors believe this is appropriate as the Company's net assets consist
almost entirely of liquid securities which are quoted on recognised stock
exchanges.

The same accounting policies used for the year ended 30 September 2014 have
been applied.

2. Income

                                (Unaudited) (Unaudited) (Audited)

                                 Six months  Six months      Year
                                      ended       ended     ended

                                   31 March    31 March        30
                                       2015        2014 September
                                                             2014

                                      £'000       £'000     £'000

Income from investments

Franked investment income

- dividends                           4,216       3,274    11,617

Unfranked investment income

- overseas dividends                    707         535     1,705

- limited liability partnership         292           -       240
profit-share

- limited liability partnership          14           -         8
- priority profit-share on AIFM
Capital Contribution

Total income                          5,229       3,809    13,570

3. AIFM and Portfolio Management fees

                                (Unaudited) (Unaudited) (Audited)

                                 Six months  Six months      Year
                                      ended       ended     ended

                                   31 March    31 March        30
                                       2015        2014 September
                                                             2014

                                      £'000       £'000     £'000

AIFM fee                                460         367       770

Portfolio management fee              1,276         994     2,100

VAT on AIFM fees*                         -          73       122

Total fees                            1,736       1,434     2,992

* With effect from 22 July 2014, no VAT has been charged on the AIFM fees.

4. Return per share

The total return per share is based on the total return attributable to equity
shareholders of £85,874,000 (six months ended 31 March 2014: return of £
36,936,000; year ended 30 September 2014: return of £36,074,000) and on
105,279,252 shares (six months ended 31 March 2014: 87,264,241; year ended
30 September 2014: 91,128,356), being the weighted average number of shares in
issue during the period.

The revenue return per share is calculated by dividing the net revenue return
of £4,003,000 (six months ended 31 March 2014: return of £2,828,000; year ended
30 September 2014: return of £11,467,000) by the weighted average number of
shares in issue as above.

The capital return per share is calculated by dividing the net capital return
attributable to shareholders of £81,871,000, (six months ended 31 March 2014:
return of £34,108,000; year ended 30 September 2014: return of £24,607,000) by
the weighted average number of shares in issue as above.

5. Net asset value per share

The net asset value per share is based on net assets attributable to shares of
£629,015,000 (31 March 2014: £468,912,000 and 30 September 2014: £494,931,000)
and on 107,590,212 shares in issue (31 March 2014: 91,310,212 and 30 September
2014: 97,480,212).

6. Transaction costs

Purchase transaction costs for the six months ended 31 March 2015 were £304,000
(six months ended 31 March 2014: £251,000; year ended 30 September 2014: £
461,000).

These comprise of stamp duty costs of £224,000 (31 March 2004: £182,000; year
ended 30 September 2014: £344,000) and commission of £80,000 (31 March 2014: £
69,000; year ended 30 September 2014: £117,000).

Sales transaction costs for the six months ended 31 March 2015 were £nil (six
months ended 31 March 2014: £nil; year ended 30 September 2014: £1,000). These
comprise solely of commission.

These transaction costs are included within the gains on investments within the
Income Statement.

7. Reconciliation of net total return before finance costs and taxation to net
cash inflow from operating activities

                                (Unaudited) (Unaudited) (Audited)

                                 Six months  Six months      Year
                                      ended       ended     ended

                                   31 March    31 March        30
                                       2015        2014 September
                                                             2014

                                      £'000       £'000     £'000

Total return before finance          86,238      37,250    36,757
charges and taxation

Less: capital return before        (82,044)    (34,265)  (24,913)
finance charges and taxation

Net revenue before finance            4,194       2,985    11,844
costs and taxation

Increase in accrued income and        (470)       (236)     (266)
prepayments

Increase in creditors                    52           4        39

Taxation - irrecoverable               (95)        (66)     (240)
overseas tax paid

AIFM and portfolio management       (1,163)       (961)   (2,005)
fees charged to capital

Other expenses charged to                 -        (19)      (26)
capital

Net cash inflow from operating        2,518       1,707     9,346
activities

8. 2014 accounts

The figures and financial information for the year to 30 September 2014 are
extracted from the latest published accounts of the Company and do not
constitute statutory accounts for the year.

Those accounts have been delivered to the Registrar of Companies and included
the Report of the Auditors which was unqualified and did not contain a
reference to any matters to which the auditors drew attention by way of
emphasis without qualifying the report, and did not contain a statement under
section 498 of the Companies Act 2006.

Interim Management Report

Principal Risks and Uncertainties

A review of the half year, and the outlook for the Company can be found in the
Chairman's Statement and in the Portfolio Manager's Review. The principal risks
and uncertainties faced by the Company fall into the following broad
categories: market price risk; interest rate risk; portfolio performance;
operational and regulatory risk; credit risk; liquidity risk; portfolio
management key person risk; availability of bank finance; inability to maintain
a progressive dividend policy. Information on each of these areas, with the
exception of the availability of bank finance and the Board's ability to
maintain a progressive dividend policy, is given in the Strategic Report within
the Annual Report and Accounts for the year ended 30 September 2014.


The risk associated with the availability of bank finance is that the provider
or any other lender may no longer be prepared to lend to the Company. Copies of
the monthly loan covenant compliance certificates, provided for the lender, are
circulated to the Board. Both the Board and Portfolio Manager are kept fully
informed of any likelihood of the withdrawal of the loan facility so that
repayment can be effected in an orderly fashion if necessary. Negotiations for
the renewal of the loan facility are conducted well in advance of the expiry of
the existing facility. With regard to the Company's dividend policy, the Board
regularly reviews the Company's portfolio and also income forecasts prepared by
the AIFM. Regular reports on the Company's income position are also made by the
Company's Portfolio Manager at each Board meeting. The Company also maintains a
distributable revenue reserve which can be used to help make up any shortfall
in income received by the Company.

In the view of the Board these principal risks and uncertainties are applicable
to the remaining six months of the financial year as they were to the six
months under review.

Related Party Transactions

During the first six months of the current financial year, no transactions with
related parties have taken place which have materially affected the financial
position or the performance of the Company.

Going Concern

The Directors, having made relevant enquiries, are satisfied that it is
appropriate to prepare financial statements on the going concern basis as the
net assets of the Company consist of liquid securities, all of which, with the
exception of the partnership interest in Frostrow Capital LLP, are traded on
recognised stock exchanges.

Directors' Responsibilities

The Board of Directors confirms that, to the best of its knowledge:

(i) the condensed set of financial statements contained within the Half Year
Report has been prepared in accordance with applicable accounting standards;
and

(ii) the interim management report includes a true and fair review of the
information required by the UK Listing Authority and 4.2.7R and 4.2.8R of the
Transparency Rules.


In order to provide these confirmations, and in preparing these financial
statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgments and accounting estimates that are reasonable and prudent;

• state whether applicable accounting policies have been followed, subject to
any material departures disclosed and explained in the financial statements;
and

• prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business;

and the Directors confirm that they have done so.

The Half Year Report has not been reviewed or audited by the Company's
auditors.

The Half Year Report was approved by the Board on 11 May 2015 and the above
responsibility statement was signed on its behalf by:

Anthony Townsend

Chairman

Glossary of Terms

AIC

Association of Investment Companies.

AIFMD

The Alternative Investment Fund Manager Directive (the "Directive") is a
European Union Directive that entered into force on 22 July 2013. The Directive
regulates EU fund managers that manage alternative investment funds (this
includes investment trusts).

AIFM Rules

AIFMD and all applicable rules and regulations implementing AIFMD in the UK,
including without prejudice to the generality of the foregoing the Alternative
Investment Fund Managers Regulations 2013 (SI2013/1773) and all relevant
provisions of the FCA Handbook.

Discount or Premium

A description of the difference between the share price and the net asset value
per share. The size of the discount or premium is calculated by subtracting the
share price from the net asset value per share and is usually expressed as a
percentage (%) of the net asset value per share. If the share price is higher
than the net asset value per share the result is a premium. If the share price
is lower than the net asset value per share, the shares are trading at a
discount.

FTSE Disclaimer

"FTSE©" is a trade mark of the London Stock Exchange Group companies and is
used by FTSE International Limited under licence. All rights in the FTSE
indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor
its licensors accept any liability for any errors or omissions in the FTSE
indices and/or FTSE ratings or underlying data. No further distributions of
FTSE Data is permitted without FTSE's express written consent.

Gearing

Gearing is calculated by dividing total assets (less cash/cash equivalents) by
shareholders' funds, expressed as a percentage (equivalent to AIC definition of
net gearing).

Leverage

The AIFM Directive (the "Directive") has introduced the obligation on the
Company and its AIFM in relation to leverage as defined by the Directive. The
Directive leverage definition is slightly different to the Association of
Investment Companies method of calculating gearing and is as follows; any
method by which the AIFM increases the exposure of an AIFM it manages whether
through borrowing of cash or securities, or leverage embedded in derivative
positions.

There are two methods for calculating leverage under the Directive - the Gross
Method and the Commitment Method. The process for calculating exposure under
each methodology is largely the same, except where certain conditions are met,
the Commitment Method enables instruments to be netted off to reflect `netting'
or `hedging' arrangements and the entity exposure is effectively reduced.

The Board has set the leverage limit for both the Gross basis and the
Committment basis at 125%. These limits are monitored by both the Board and the
AIFM.

Net Asset Value (NAV)

The value of the Company's assets, principally investments made in other
companies and cash being held, less any liabilities. The NAV is also described
as `shareholders' funds' per share. The NAV is often expressed in pence per
share after being divided by the number of shares which have been issued. The
NAV per share is unlikely to be the same as the share price which is the price
at which the Company's shares can be bought or sold by an investor. The share
price is determined by the relationship between the demand and supply of the
shares.

Net Asset Value Total Return

The total return on an investment over a specified period assuming dividends
paid to shareholders were reinvested at net asset value per share at the time
the shares were quoted ex-dividend. This is a way of measuring investment
management performance of investment trusts which is not affected by movements
in discounts or premiums.

Share Price Total Return

The change in capital value of a company's shares over a given period, plus
dividends paid to shareholders, expressed as a percentage of the opening value.
The assumption is that dividends paid to shareholders are re-invested in the
shares at the time the shares are quoted ex dividend.

Treasury Shares

Shares previously issued by a company that have been bought back from
shareholders to be held by the Company for potential sale or cancellation at a
later date. Such shares are not capable of being voted and carry no rights to
dividends.

For and on behalf of

Frostrow Capital LLP, Secretary

11 May 2015

- ENDS -

The following are attached:

* Chairman's Statement
* Portfolio Manager's Review and Investment Portfolio
* Income Statement
* Reconciliation of Movements in Shareholders' Funds
* Balance Sheet
* Cash Flow Statement
* Notes to the Interim Accounts
*Interim Management Report
*Glossary of Terms

For further information please contact:
Alastair Smith/Victoria Hale, Frostrow Capital LLP 020 3008 4911/020 3170 8732
Jo Stonier, Quill PR 020 7466 5066.
Nick Train, Lindsell Train Limited 020 7227 8200