GIR Gart.Irish

 
TIDMGIR 
 
GARTMORE IRISH GROWTH FUND PLC 
 
INTERIM MANAGEMENT STATEMENT (UNAUDITED) 
 
This interim management statement covers the period from 1 October 2010 to 31 
December 2010. 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 or are 
listed on the ISEQ Index. 
 
Manager's Comments 
 
The Company's NAV increased by 3.6% over the three-month period to 31 December 
2010. This compares with a 6.6% gain for the ISEQ Index in sterling terms. As 
announced on 21 December, the Manager started to create greater liquidity in 
the portfolio to finance buybacks and in the expectation that shareholders 
approve the dissolution of the Company (see Material Events and Transactions 
below). 
 
Over the period the largest sector contributor to performance was our 
significant underweight to banks which proved very beneficial. The sector 
slumped by over 40% as Ireland's banks were bailed-out. In particular, not 
owning Bank of Ireland and Allied Irish Banks as their stock prices collapsed 
helped considerably. Allied Irish was the largest beneficiary of the bail-out 
as it received a EUR3.7 billion injection from the government, effectively 
placing it under state control. 
 
One of our larger positions, Origin Enterprises, was also an important 
contributor. The company posted a positive trading update for the first quarter 
of its new financial year with group revenue increasing by 5%. Its joint 
venture in marine proteins and oils is producing results and stronger 
performance is expected from agri-services in the new year. We believe the 
company is strongly positioned in a fragmented market, and the discount to 
peers and the market in general seems unjustified. 
 
Our lack of exposure to Ryanair, a heavyweight in the ISEQ, also helped as the 
share price retreated when fuel prices rallied. 
 
The largest detractor from returns versus the ISEQ was an underweight to 
construction materials, most notably the lack of exposure to building materials 
group CRH. The largest weighting in the ISEQ returned over 27% in the past 
three months, by far the largest contributor to index returns. A company 
statement announced acquisition and investments spending aimed to expand its 
operations in Switzerland, the US and Germany. However we see limited upside 
potential for the share price from here and the stock is trading at a 
considerable premium to its average historical multiples. Pharmaceutical 
companies Merrion Pharmaceuticals and United Drug also underperformed, as did 
financial spreads trader Worldspreads. 
 
Fund activity was predominantly focused on raising cash, especially towards the 
end of the quarter. Among the profitable disposals were Paddy Power, Dragon 
Oil, Bank of Ireland and Minco. We also realised gains from selling down Andor 
Technology and Glanbia. 
 
Investment Outlook 
 
All eyes are on Ireland given its fiscal, economic and political troubles and 
its close relationship with the Eurozone. The government has been under 
increasing pressure since last year's EUR85 billion rescue. A general election 
will now take place on 25 February 2011. Navigation of Ireland's recovery will 
prove a challenge for the leadership irrespective of who is elected. 
Nonetheless, we remain confident that the fundamentals that have worked for 
Ireland's economy in the past, such as its well-educated population and low 
corporate tax rate, still hold good on a long-term view. Our investment 
emphasis has been on international businesses that pay high and sustainable 
dividends and on healthy robust companies which are not related to the banking 
or financial sector. Kerry, DCC and Paddy Power are examples of companies that 
have a good chance of prospering in the current background. Good quality 
companies are often overlooked or avoided solely on the basis of their Irish 
incorporation without due regard to the business reality and it is this 
tendency which we seek to benefit from. 
 
Material Events and Transactions 
 
On 21 December 2010, the Company announced that, following discussions with a 
number of shareholders who have expressed reservations about continued exposure 
to the Irish market, the Board had determined that shareholders should be 
offered the opportunity to realise their investments in the Company for cash, 
if they wish to do so. Accordingly, the Directors have decided that the Company 
should embark on an orderly dissolution and the intention is that cash will be 
returned to investors, commencing at the end of the first quarter of 2011, from 
the realisation of the portfolio. 
 
Progress is being made in creating liquidity in the portfolio and as at 10 
February 2011, the Company's estimated net assets include net cash and cash 
equivalents of approximately GBP32.0 million or 64.8% of estimated net assets. In 
a rising market, the increased liquidity will inevitably lead to 
underperformance versus the market. 
 
The Company expects to send a circular to Shareholders shortly to seek approval 
of the proposed dissolution. The circular is expected to include an open-ended 
rollover alternative. 
 
Over the three months to 31 December 2010 the Company repurchased 322,776 
Ordinary shares at prices ranging from 660.64p to 698.61p per share excluding 
expenses (at discounts to net asset value including current period revenue of 
between 9.72% and 13.10%). No shares have been repurchased subsequent to the 
end of the period under review. The shares in issue now total 6,311,858, none 
of which are held in Treasury. 
 
Financial Position:                              As at 31.12.         As at 
                                                           10       30.09.10 
 
                                                  (unaudited)     (unaudited) 
 
                                                           GBPm             GBPm 
 
Investments                                             29.70          40.86 
 
Cash                                                    19.41           9.51 
 
Other net current assets / (liabilities) *               0.25          (0.24) 
 
Net assets                                              49.36          50.13 
 
Net assets attributable to Ordinary shares**            49.36          50.13 
 
                                                        pence          pence 
 
Net asset value per Ordinary share**                   782.00         755.62 
 
* Includes GBP157,000 unrealised gain on CFDs 
 
** Includes current period revenue. 
 
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 Manager is authorised to use and is using contracts for difference ("CFDs") 
for gearing purposes. The level of gearing is regularly monitored by the Board. 
Alternatively, cash is held when the Manager has negative views on share 
prices. 
 
As at 31 December 2010 the Company held two CFDs with a notional value of GBP 
6,935,000, and an unrealised gain of GBP157,000. 
 
Performance*: 
 
                             As at          % increase/(decrease) over 
 
                          31.12.10  3 months  1 year  3 years  5 years 10 years 
 
Net asset value per       782.00p       3.56    8.66   (8.24)    15.11   190.09 
Ordinary share** 
 
Share price - Ordinary    720.00p       7.46   19.01   (5.51)    10.26   228.77 
shares 
 
Discount                    (7.93)% 
 
* Source: Thomson Financial Datastream. Basis: Capital performance only, debt 
at par. 
 
** With effect from 31 March 2008 NAV's include current period revenue. Prior 
period figures exclude current period revenue and are therefore not directly 
comparable. 
 
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 09058 171 690. Calls are charged at 75p per minute from a BT 
landline. 
 
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 Company's website at www.gartmoreirishgrowthfund.com. 
 
Information on the Company is available on the Gartmore internet site, 
www.gartmore.co.uk. The Company's discrete area on the site can be accessed via 
the "Fund range" menu or directly using www.gartmoreirishgrowthfund.com. This 
information includes the latest annual and interim reports and fact sheets, 
together with the latest regulatory news announcements and net asset values. 
 
Further information can be obtained from Gartmore Investment Limited, as 
follows: 
 
Free investor helpline: 0800 289 336 
 
Internet address: www.gartmore.co.uk 
 
Email address: helpline@gartmore.com 
 
Other than as stated above, the Directors are not aware of any significant 
events or transactions which have occurred between 31 December 2010 and the 
date of publication of this statement which have had a material impact on the 
financial position of the Company. For latest performance information, please 
refer to the Company's website. 
 
The information provided in this statement should not be considered as a 
financial promotion. 
 
By order of the Board 
 
Capita Sinclair Henderson Limited 
 
(trading as Capita Financial Group - Specialist Fund Services) 
 
Company Secretary 
 
16 February 2011 
 
Neither the contents of the Company's or Gartmore's website nor the contents of 
any website accessible from hyperlinks on these websites (or any other website) 
is incorporated into, or forms part of this announcement. 
 
 
 
END 
 

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