Half-yearly report
(Thomson Reuters ONE) - Middlefield Canadian Income Trusts - GBP PC, a cell of Middlefield Canadian Income Trusts Investment Company PCC Preliminary Announcement of Results For the period from 1 January 2009 to 30 June 2009At a meeting of the Board of Directors held on 20 August 2009, thehalf yearly report and condensed financial statements (unaudited) forthe Fund for the period from 1 January 2009 to 30 June 2009 wereapproved, details of which, are attached.The financial information set out in the announcement does notconstitute the Fund's statutory accounts for the period from 1January 2009 to 30 June 2009, but is derived from those accounts.The financial statements have been prepared in accordance withInternational Financial Reporting Standards (IFRSs). Whilst thefinancial information included in this preliminary announcement hasbeen computed in accordance with IFRSs, this announcement does notitself contain sufficient information to comply with IFRSs. Thisannouncement has been prepared using accounting policies consistentwith those set out in the Fund's last annual report and financialstatements for the year ended 31 December 2008.The full unedited report and financial statements will be availableat the end of August 2009 at www.middlefield.co.uk.Company SecretaryKleinwort Benson (Channel Islands) Corporate Services LimitedTelephone number: 01481 727111Fax number: 01481 72831721 August 2009PO Box 76Wests CentreSt. HelierJerseyJE4 8PQInterim Management Report - Six months to 30 June 2009 (unaudited)On the invitation of the Directors of the Company, this interimmanagement statement is provided by Middlefield InternationalLimited, which acts as the investment adviser to the Fund.This statement has been prepared to provide additional information toshareholders as a body to meet the relevant requirements of the UKListing Authority's Disclosure and Transparency Rules. It should notbe relied upon by any party for any purpose other than as statedabove.Middlefield Canadian Income Trusts Investment Company PCC is aclosed-ended investment company incorporated in Jersey on 24 May2006. The Company has initially established one closed-ended Cellknown as Middlefield Canadian Income Trusts - GBP PC (referred to asthe "Fund" which term includes, where the context permits, theCompany acting in respect of Middlefield Canadian Income Trusts - GBPPC). Admission to the official list of the UK Listing Authority anddealing in redeemable participating preference shares commenced on 6July 2006.Investment ObjectiveThe Fund's investment objective is to produce a high income returnwhilst also seeking to preserve shareholder capital.To achieve its objectives, the Fund (i) entered into a Swap with aCanadian chartered bank in order to achieve efficient currency hedgedeconomic exposure to the Canadian income trust market through itsreference asset, CIT Trust, an actively managed portfolio of Canadianincome trusts and (ii) invests its assets in a Money Market and BondPortfolio.Performance SummaryThe net asset value as at 30 June 2009 was £43.1 million or 53.72pence per share. The increase in the net asset value since 31December 2008 resulted in a positive return of 23.5% for the Fund forthe year to date period ended 30 June 2009. The key driver of Fundperformance is the mark-to-market value of the Swap which, in turn,is affected by a combination of the performance of its referenceasset, CIT Trust, and the mark-to-market value of the CCMD Value.CIT Trust posted a total return of 14.1% for the period ended 30 June2009 which was in line with the gain on the S&P/TSX Income TrustIndex. Due to the improved global economic outlook and thequantitative easing in the credit markets, Middlefield CapitalCorporation ("MCC"), the investment adviser to CIT Trust, increasedpositions in issuers deemed to be undervalued and significantlyreduced the portfolio's cash position. Strong demand and productioncuts by OPEC nations drove crude oil prices to US$69.89 per barrel asat June 30, 2009 from the year-end level of US$44.60 per barrel. Asa result of these developments, CIT Trust's exposure to the energysector increased significantly from 31 December 2008.Notwithstanding continuing relatively high levels of unemployment inNorth America and limited access to credit, we believe the challengesfacing economic growth are moderating and this should result inimproving equity and debt capital markets in 2009 and beyond. Weremain very positive on the oil and gas sector and continue to holdthe view that global oil production is peaking. Groppe, Long andLittell, an adviser to Middlefield, believes that the OPEC countrieshave cut production to a level which is causing a significantdemand/supply imbalance, thereby driving oil prices higher in 2009.With respect to natural gas, depressed prices over the last severalmonths have caused a precipitous reduction in drilling activitywhich, together with increasing decline rates in North Americannatural gas production, should result in a recovery in prices overthe next 12 months.Interim Management Report - Six months to 30 June 2009 (unaudited)Performance Summary (continued)Business trusts, which comprise a broad range of businesses includinghealth care services, agricultural products and manufacturing,represented 16% of CIT Trust's portfolio at the end of the first halfof 2009. According to the Scotia Capital Business Trust Index,business trusts gained 7.2% on a total return basis in the first halfof 2009 as credit markets eased and the global economy began to showsigns of recovery. MCC continues to focus on business trusts withproven management teams, low debt and stable cash flows as thesefirms will be best positioned to excel within their respectiveindustries.As a result of improving credit markets, Canadian REITs posted solidpositive returns in the first half of 2009 with the S&P/TSX CappedREIT Index producing a total return gain of 17.8%. During the firstsix months of the year, MCC reduced the weighting in this sector byapproximately nine percentage points from the end of 2008 to provideadditional exposure to the greater anticipated growth in energyequities over the next several months.The portfolio weight of power and pipeline trusts remains largelyunchanged as at 30 June 2009 compared to the end of 2008. For thefirst half of 2009, the CanaccordAdams Power Trust and Pipeline TrustIndices generated total returns of 4.2% and 13.0%, respectively.The asset class weightings for CIT Trust as at June 30, 2009 were:+------------------------------------------+| Asset Class | Portfolio Weighting ||--------------------+---------------------|| Oil and Gas | 57% ||--------------------+---------------------|| Business Trusts | 16% ||--------------------+---------------------|| Power and Pipeline | 14% ||--------------------+---------------------|| REITs | 4% ||--------------------+---------------------|| Other | 9% |+------------------------------------------+The CCMD Value is the direct result of the Fund's decision toeliminate the impact of fluctuations in the spread between Sterlingand Canadian interest rates on the Fund's revenues by locking in thespread from the outset. All else being equal, the CCMD Value willreduce to zero as the termination date of 28 June 2013 for the Swapis approached. As at 30 June 2009, the CCMD Value was -2.38 penceper share.DividendsThe Fund paid quarterly dividends of 1.75 pence per share in January2009 and 1.25 pence per share in each of April and July 2009.Related Party TransactionsRelated party transactions are disclosed in note 15 to the condensedset of financial statements.There have been no material changes in the related party transactionsfrom those described in the 2008 Annual Report.Material EventsThe Board of Middlefield Canadian Income Trusts Investment CompanyPCC is not aware of any significant event or transaction which hasoccurred between 1 January 2009 and the date of publication of thisstatement which could have a material impact on the financialposition of the Fund.Interim Management Report - Six months to 30 June 2009 (unaudited)Principal Risks and UncertaintiesThere are a number of potential risks and uncertainties which wouldhave a material impact on the Fund's performance over the remainingsix months of the year and could cause actual results to differmaterially from expected and historical results. Further informationon the principal risks and uncertainties of the Fund are included inthe 2008 Annual Report.OutlookAfter hitting a low in early March, the second quarter of 2009 markeda significant turnaround for equity markets globally. Resurgentmarkets were driven in part by an improvement in housing activity,jobless claims and manufacturing activity. We continue to believethat companies offering high levels of sustainable income willattract significant investor interest and receive premium valuationswithin an environment of relatively low interest rates and a Canadianmarket with few alternatives for investors seeking yield. We expectseveral income trusts to convert to corporations over the next fewyears and reduce their distributions as they become taxable.Notwithstanding, we believe a number of them will continue to pay outrelatively high levels of dividends on a sustainable basis due totheir ability to generate substantial cash flows.Middlefield International Limited20 August2009Past performance is not a guide to future performance.This interim management statement is available at:www.middlefield.co.uk. Condensed Balance Sheet (unaudited)As at 30 June 2009 with unaudited comparatives as at 30 June 2008 and audited comparatives as at 31 December 2008 30.06.2009 30.06.2008 31.12.2008 £ £ £Current assetsSecurities (at fair 76,657,640 76,672,475 77,134,239value through profit orloss)Cash and cash 195,512 132,741 110,627equivalentsAccrued bond interest 181,544 1,028,166 247,337Accrued dividend income 572 748 934Interest receivable on 925,325 445,986 844,864SwapPrepayments - 29,484 12,376 77,960,593 78,309,600 78,350,377Current LiabilitiesOther payables and (85,100) (132,512) (104,886)accrualsNet current assets 77,875,493 78,177,088 78,245,491Non-current liabilitiesDerivative financialinstruments (at fair (34,726,185) (4,319,917) (41,207,684)value through profit orloss)Net assets 43,149,308 73,857,171 37,037,807Equity attributable toequity holdersShare capital - - -Stated capital account 22,628,627 22,628,627 22,628,627Other reserve 54,037,500 54,037,500 54,037,500Retained deficit (33,516,819) (2,808,956) (39,628,320)Total Shareholders' 43,149,308 73,857,171 37,037,807equityNet asset value perredeemable 53.72pparticipatingpreference share 91.96p 46.11p Condensed Income Statement (unaudited) For the period 1 January 2009 to 30 June 2009with unaudited comparatives for the period 1 January 2008 to 30 June 2008 and audited comparatives for the year ended 31 December 2008 Year ended Six months ended 30 June 31 December 2009 2008 2008 £ £ £RevenueDividend and interest 534,981 2,162,894 3,909,843incomeNet movement in the fairvalue of derivative 8,188,213 3,895,948 (31,725,466)financial instrumentsNet movement in the fairvalue of securities (at (53,399) 4,212 42,776fair value through profitor loss)Total revenue 8,669,795 6,063,054 (27,772,847)ExpenditureManagement fees 18,811 35,495 62,764Custodian fees 7,438 10,648 18,829Sponsor's fees 37,621 70,990 91,424Directors' fees and 42,404 30,875 94,489expensesInvestment advisory fees 18,811 35,495 62,764Audit fees 15,173 7,716 23,100Registrar's fees 9,968 5,839 15,612General expenses 227 38,579 41,867Total expenditure 150,453 235,637 410,849Net gain/(loss) 8,519,342 5,827,417 (28,183,696)Gain/(loss) perredeemable participating 7.26p (35.09)ppreference share- basicand diluted 10.61pCondensed Statement of Changes in Redeemable Participating Preference Shareholders' Equity (unaudited) For the period 1 January 2009 to 30 June 2009with unaudited comparatives for the period 1 January 2008 to 30 June 2008 and audited comparatives for the year ended 31 December 2008 Stated Share capital Retained capital account Other deficit Total £ £ reserve £ £ £At 1 54,037,500 70,837,578January2008 - 22,628,627 (5,828,549)Gain for -the period - - 5,827,417 5,827,417Dividends -paid - - (2,807,824) (2,807,824)At 30 June 54,037,500 73,857,1712008 - 22,628,627 (2,808,956)At 1 54,037,500 70,837,578January2008 - 22,628,627 (5,828,549)Loss for - (28,183,696)the period - - (28,183,696)Dividends - (5,616,075)paid - - (5,616,075)At 31 54,037,500December 37,037,8072008 - 22,628,627 (39,628,320)At 1 54,037,500January 37,037,8072009 - 22,628,627 (39,628,320)Gain for -the period - - 8,519,342 8,519,342Dividends - (2,407,841)paid - - (2,407,841)At 30 June 54,037,5002009 - 22,628,627 (33,516,819) 43,149,308 Condensed Cash Flow Statement (unaudited) For the period 1 January 2009 to 30 June 2009with unaudited comparatives for the period 1 January 2008 to 30 June 2008 and audited comparatives for the year ended 31 December 2008 Year Ended Six months ended 30 June 31 December 2009 2008 2008 £ £ £Cash flows fromoperating activitiesNet gain/(loss) 8,519,342 5,827,417 (28,183,696)Adjustments for:Net movement in thefair value of 53,399 (4,212) (42,776)securities (at fairvalue through profitor loss)Net movement in (6,481,499) (2,974,459) 33,913,308derivative financialinstrumentsOperating cash flowsbefore movements in 2,091,242 2,848,746 5,686,836working capital(Increase)/decrease (1,930) 5,321 404,194in trade and otherreceivables(Decrease)/increase (19,786) 5,871 (21,755)in trade and otherpayablesNet cash from 2,069,526 2,859,938 6,069,275operating activitiesCash flows from/(usedin) investingactivitiesPayment for purchases (155,872,423) (155,756,848) (397,015,150)of securitiesProceeds from sale of 156,295,623 155,356,848 396,191,950securitiesNet cash flow 423,200 (400,000) (823,200)from/(used in)investing activitiesCash flows used infinancing activitiesDividends paid (2,407,841) (2,807,824) (5,616,075)Net cash flow used in (2,407,841) (2,807,824) (5,616,075)financing activitiesNet 84,885 (347,886) (370,000)increase/(decrease)in cash and cashequivalentsCash and cash 110,627 480,627 480,627equivalents atbeginning of periodCash and cash 195,512 132,741 110,627equivalents at end ofperiodCash and cashequivalents made upof:Cash at bank 195,512 132,741 110,627---END OF MESSAGE---This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 21.08.2009 - 14:55 Uhr
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