Interim Management Statement
18 Februar 2008 - 4:56PM
UK Regulatory
18 February 2008
GARTMORE IRISH GROWTH FUND PLC
INTERIM MANAGEMENT STATEMENT (UNAUDITED)
This interim management statement covers the period from 1 October 2007 to 31
December 2007. It has been produced for the sole purpose of providing
information to the Company's shareholders in accordance with the requirements
of the UK Listing Authority's Disclosure and Transparency Rules. It should not
be relied upon for any other purpose.
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.
Manager's Comments
Irish stocks followed global markets lower during the quarter, as investors
were faced with the full implications of the global credit crunch and
inflationary impact of rising energy and food prices. Fresh evidence emerged
that the Irish economy continued to cool, with consumer credit data in
particular showing a slowdown following a sustained period of growth. However,
the level of ongoing economic growth is expected to be higher than in most
other European economies in 2008.
Our long-term conviction holding in foods group, Glanbia, continued to deliver
strong performance for the Company during the quarter. Following August's
positive trading update, the Company has continued to capitalise on
improvements in the European dairy market and the sharp increases in global
food prices during 2007. The Company has also continued to identify
opportunities to offset the rising costs of raw materials such as milk, for
example recently investing in premium-priced organic cheese production capacity
in the US.
Our stake in fruit distributor, Fyffes, also worked firmly in our favour. A
leading player in the banana supply business in the UK and Ireland, Fyffes has
made progress in increasing its margins to more than offset higher
transportation costs and should also benefit from favourable currency
movements.
Elsewhere our investment in ICON, the provider of clinical research to the
pharmaceutical industry, delivered further good returns. The share price rose
on its full-year profit guidance, taking the business to a premium valuation.
However, our stake in building materials company CRH weighed to some extent on
performance on concerns that the acquisitive firm's performance could be
impacted by the US housing slowdown against the backdrop of the global credit
crunch.
Key stock-level changes to the portfolio during the quarter included the
disposal of bookmaker Paddy Power and the building of a holding in Allied Irish
Bank (AIB), whose stock we viewed as considerably oversold. We took large
profits from the disposal of Paddy Power after an exceptionally strong run had
propelled the shares to a level we deemed expensive relative to some peers.
The portfolio was relatively fully invested in October in anticipation of the
market bounce. However, Irish equities failed to recover at that time, so the
proceeds of sales were held in the portfolio in November and December. As at 31
December 2007, the portfolio held �12.7 million in cash.
We retain our confidence in the prospects for the Irish growth story. Following
a sustained period of rapid growth, we believe that some cooling was to be
expected given the near-term global economic uncertainties, and we retain our
view that the ongoing positives of favourable demographics and low corporate
taxation will help to underpin corporate earnings over the medium-term.
Our focus remains firmly on bottom-up stock selection, a process which should
enable us to continue to uncover and capitalise on stock-specific
opportunities, in turn delivering attractive returns as the market recovers
from global economic uncertainties.
Material Events and Transactions
Over the three months to 31 December 2007 the Company repurchased 345,000
Ordinary shares at prices ranging from 709p per share to 792p per share
excluding expenses (at discounts to net asset value of between 9.89% and
14.32%). On 27 November 2007 all shares previously repurchased and placed into
Treasury were cancelled. Subsequent to the period under review, the Company has
repurchased 155,500 Ordinary shares at prices ranging from 723p to 765p per
share, excluding expenses (representing discounts to net asset value of between
9.96% and 13.09%). The shares in issue now total 13,240,542, none of which are
held in Treasury. The Company will continue, as and when appropriate, to
exercise its powers to buy back shares with the objective of reducing the share
price discount to NAV whilst enhancing the NAV per share.
10 Largest Equity Holdings at 31 December 2007:
Company Market value % of net
�'000 assets
Allied Irish Banks 12,045 10.6
Glanbia 10,944 9.6
CRH 9,422 8.3
AER Lingus Group 8,323 7.3
DCC 6,445 5.6
Fyffes 6,026 5.3
IAWS Group 5,068 4.4
Total Produce 4,477 3.9
Kenmare Resources 4,176 3.7
Newcourt Group 3,519 3.1
Sectoral Spread of Investments at 31 December 2007:
% of net
assets
Non-Cyclical Consumer Goods 31.9
Cyclical Services 20.9
Financials 12.0
Basic Industries 8.3
Resources 7.9
Information Technology 5.3
General Industrials 1.6
Cyclical Consumer Goods 1.1
Non-Cyclical Services 0.6
Net current assets 10.4
100.0
Financial Position: As at 31.12 As at
.07 30.09.07
(unaudited) (unaudited)
�m �m
Investments 102.2 106.3
Cash and other net current assets 12.0 15.7
Net assets 114.2 122.0
Net assets attributable to Ordinary shares** 114.2 122.0
Maximum Exposure Limits
The maximum holding in any single investment (Company or Group) is limited to
15% of Gross Assets at the time of investment.
Gearing
No loans were drawn down as at 31 December 2007. The Manager is authorised to
borrow up to 25% of shareholders' funds, (gearing) for investment purposes and,
when necessary for liquidity purposes.
Performance*:
As at % increase/(decrease) over
31.12.07 3 months 1 year 3 years 5 years 10 years
Net asset value per 852.2 (4.0) (8.4) 58.7 281.5 351.2
Ordinary
share**
Share price - Ordinary 762.0 (4.6) (16.9) 41.2 301.1 425.5
shares
Discount 10.6%
* Source: Thomson Financial Datastream. Basis: Capital performance only, debt
at par.
** Excludes current year revenue account, which stood at - �0.2 million at 31
December 2007.
Price and Performance Information:
The Company's Ordinary shares are listed on the London and Irish Stock
Exchanges and the price is published in the Financial Times and The Daily
Telegraph under `Investment Companies'. Real-time share price information is
available on 0906 843 0000 (select menu item 2 and then enter company code
5137). Calls are charged at 60p per minute at all times.
The Company's net asset value is calculated daily and can be viewed on the
London Stock Exchange website at www.londonstockexchange.com and via a link
from the Gartmore web site at www.gartmore.co.uk.
Further information can be obtained from Gartmore as follows:
Free investor helpline: 0800 289 336
Internet address: www.gartmore.co.uk
Email address: helpline@gartmore.com
The information provided in this statement should not be considered as a
financial promotion.
By order of the Board
Capita Sinclair Henderson Limited
Corporate Company Secretary
18 February 2008
END
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