Mid Wynd International Investment Trust PLC (the 'Company')

LEI: 549300D32517C2M3A561

Half-Yearly Financial Report (unaudited) for the six months ended 31 December 2019

This announcement contains regulated information

Financial Highlights

Source: Artemis/Datastream.

† Alternative Performance Measure

*The interim dividend for the six months to 31 December 2019 will be paid on 31 March 2020 to shareholders on the register at the close of business on 13 March 2020.

Source: Artemis/Datastream/Morningstar.

**The date when Artemis was appointed as Investment Manager.

† Alternative Performance Measure

Chairman's statement

Performance

For the six months ended 31 December 2019 the Company's share price rose by 6.7% on a total return basis with dividends assumed to be re-invested. This compares to a total return from the MSCI All Country World Index (GBP) of 4.6%.

The Company's net asset value per share rose 5.0%, in capital only terms, and by 5.8% on a total return basis. Since Artemis' appointment as Investment Manager on 1 May 2014 the net asset value per share has increased by 127.1%, on a total return basis, against the comparative index increase of 94.8%.

As at 31 December 2019 the shares stood at a 3.6% premium to net asset value.

Further details of the performance of the Company during the period are included in the Investment Manager's review.

Earnings and Dividend

The net return for the six months to 31 December 2019 was a gain of 31.13 pence per share, comprising a revenue gain of 3.49 pence per share and a capital gain of 27.64 pence per share. The Board is proposing an interim dividend of 3.00 pence per share which, will be paid on 31 March 2020 to those shareholders on the register at the close of business on 13 March 2020. This represents an increase of 51.5% on last year's interim dividend of 1.98 pence. The rate of increase in the interim dividend should not be understood as indicative of the size of the final dividend. The Board considers, in light of the level of share issuance, that the interim dividend should so far as possible be rebalanced towards parity with the final dividend. It continues to be the aim of the Board to grow the dividend but this will not be done at the expense of capital or if market conditions dictate otherwise.

Share capital

Over the six month period, demand for the Company's shares has continued to be strong and they have traded at a premium to net asset value each day.

The Board is pleased to report that for the period from 1 July 2019 to 31 December 2019, 4,270,000 new ordinary shares have been issued in the market, raising £24.5 million, net of issue costs. This represents an increase of 10.4% on the share capital at the start of the year. As at 27 February 2020 a further 1,710,000 new ordinary shares have been issued.

Borrowings

The Company has in place a three year, US$30 million multi-currency facility with Scotiabank. This is due to expire on 19 February 2021. An additional amount of US$2.0m was drawn down in November 2019 bringing the total borrowing to US$5m and EUR3m as at the period end, equating to £6.3m. This facility continues to provide flexibility for the Investment Manager to take advantage of attractive markets.

Board Composition

As reported in my statement within the Annual Financial Report for the year ended 30 June 2019, the Board has begun a period of change. As the first step in this process, it is a great pleasure to welcome Mrs Diana Dyer Bartlett to the Board following her appointment as a non-executive Director on 1 February 2020. She is a qualified chartered accountant and has extensive listed company and finance experience. Diana will stand for election at the Annual General Meeting to be held in November 2020 (the 'AGM').

Auditor

As communicated to shareholders, Scott-Moncrieff resigned as independent auditor to the Company on 23 January 2020. The Audit Committee recently undertook an audit tender process and arrangements are being finalised for the appointment of the new external auditor.

A full outline of the audit tender process will be provided in the Annual Financial Report for the year ending 30 June 2020 and a resolution to appoint the new independent auditor and authorise the Directors to fix its remuneration will be proposed at the AGM.

Outlook

The six months to 31 December 2019, and in particular the last quarter, brought some renewed positivity to the global stage. The expectation of forthcoming clarity over Brexit, however distant, and the increased likelihood of better US-China trade relations, produced a calmer start to 2020. That being said, the recent outbreak of the Coronavirus in China has created some market uncertainty, explored further in the Investment Manager's review. The Investment Manager continues to ensure the portfolio is both balanced and diverse so that the Company is in a good position to react to market conditions by taking opportunities or defending as situations require.

Contact us

Shareholders can keep up to date with developments between formal reports by visiting midwynd.com where you will find information on the Company and a factsheet which is updated monthly. In addition, the Board is always keen to hear from shareholders.

Should you wish to, you can e-mail the Chairman at midwyndchairman@artemisfunds.com.

Malcolm Scott

Chairman

2 March 2020

Investment Manager's review

Review of period

Global equity markets went from fearing recession in September to levels of enthusiasm in December following a US-China phase 1 trade deal and progress in UK politics. Companies were neither very gloomy in September, nor that much more positive at year end. Global equity indices rose 8% in dollar terms, but this translated to only 4.5% in sterling terms as the pound bounced vigorously on the election result.

Performance

The Company's net asset value per share rose 5.8% over the first half of the year compared with an index return of 4.6%, continuing the healthy returns for global equity investors.

Although some investors have been discussing so-called 'value' opportunities, your portfolio performed best in 'growth' areas: our online services theme (including financial technology companies such as Fiserv) and our automation theme. However, some of our more 'value' oriented investments, such as Vodafone, also contributed. Indeed, the diversification in the Company worked well with returns coming from many different themes, sectors and lesser-known stocks.

Relative to the index, the worst thing we did was to hold no Apple, which has come back into favour since its poor numbers at the start of the year. The very high weight of Apple in the index makes this exception a large negative to relative performance.

Five largest stock contributors

Five largest stock detractors

Artemis' investment process

Our aim is to identify areas of commercial growth around the world and invest in companies that trade on attractive valuations and give the Company exposure to this growth. We select high quality companies, with proven profitability and high levels of cash generation, preferring businesses with strong balance sheets and those that have established strong barriers to entry. Such companies sometimes lag equity markets when they recover, but they protect capital well when economic conditions become more testing. Over time, we have found this investment approach gives a solid framework to deliver consistent returns to investors.

Current investment themes

Automation (16% of investments) - We have been slowly increasing investments in this long-term theme as automation investment has been delayed due to the US-China trade disputes. The agreement reached at the end of the year is principally designed to decrease the balance of trade between those countries, concentrating on commodities. An agreement covering trade in intellectual property will be much harder to reach. All the same, at year end there were signs that robot demand in China may have reached a bottom and that the large back-log in automation orders will come through soon. The valuations of some stocks in this area already discount some recovery, so we will monitor progress and valuations in the year ahead.

Online Services (20% of investments) - A range of different investments performed well in this broad theme. We have increased our investments in financial technology companies, buying Fiserv which merged with First Data Corporation and investing in FIS which acquired Worldpay. The future of financial services is increasingly about software and online service provision and established suppliers often take very large shares of the market. Despite some investors saying this was a time to sell all the old growth stocks and to buy value, many of the old growth stocks carried on growing perfectly well - Microsoft's share price, for instance, rising 18% over the six months and Mastercard only slightly less.

Healthcare Costs (12% of investments) - Despite Senators Warren and Sanders continuing to fare reasonably well in the Democratic Primaries, talk of an American NHS seems to be fading - with some politicians describing this as 'banning Americans from spending their own money on their own health'. Such talk had hung over our investments in American health insurance companies, but these have started to recover. Meanwhile our investments in pharmaceutical companies at the cutting edge in cancer immunology continue to show strong growth as their products are more widely adopted.

Scientific Equipment (6% of investments) - Our investments in scientific equipment have continued to produce consistent growth. We took profits in Hitachi Hi-Tec which has been a very good investment for us. The parent company may be prepared to sell this controlled subsidiary - a sign of the times that, in Japan these days, takeover prospects can drive share prices.

Emerging Market Consumer (14% of investments) - It is something of a puzzle that, with an improving US economy and a weaker US dollar, prospects for emerging markets seem lacklustre. Indeed, between riots in Hong Kong and Chile and significant GDP slowdowns in South Africa and India, we remain wary, especially as valuations of the best locally listed stocks are rather high. Our developed market holdings selling into emerging markets generally had a reasonable period, Louis Vuitton again with the best performance.

Low Carbon World (10% of investments) - This theme performed slightly less well during this half year, despite the rising enthusiasm for progress towards environmental goals. As can happen in capital markets, the leading wind farm company - our largest investment Orsted - noted that returns from new projects were falling due to less experienced, but well financed companies bidding very aggressively for contracts. We have taken a few profits and await developments.

Screen Time (7% of investments) - Over the last six months many of the investments we have made in this theme have performed well, especially as it included some modestly valued companies such as Vodafone and Nippon Telecom. However, as the valuations rose sharply, we have taken some profits. Our largest investment is now Walt Disney whose new streaming service seems to be attracting large numbers of subscribers in the USA.

High Quality Assets (15% of investments) - This is the theme in which we most often hold so-called 'value' stocks - out of favour companies whose asset backing may be of greater importance than their growth prospects. Earlier in the year we were finding a number of opportunities of this type, but as some of these shares have performed, their valuation attractions fade, their low growth prospects become an issue and we move on. We have reduced our holdings in gold mines during the period and sold our disappointing investment in Unibail.

Tourism - we have decided to sell out of our Tourism theme after many years. We believe that very cheap air fares are the result of jet fuel being under-taxed and that increased environmental concerns will see this anomaly addressed, reducing tourism numbers and growth prospects.

Thematic attribution

Regional attribution

Outlook

2020 started with economies likely to grow more rapidly than the previous year, led by the USA and with inflation still subdued. These hopes were then interrupted by the outbreak of the Coronavirus in China which, at the time of writing, seems to be actively monitored. Necessary action to contain the spread of the virus has interrupted global supply chains and so first half GDP growth for the global economy may well prove less vigorous than hoped for. However, the areas of investment we choose tend to avoid more economically sensitive sectors. Over the last decade, unexpected events such as the SARS virus, the Thai floods or the Fukushima reactor breakdown have seemed likely to upset financial markets at the time, but years later are hard to notice on the longer-term stock market chart.

Furthermore, the companies that we hold generally had a good year last year and saw their cash flows steadily growing. Valuations seem modestly higher than this time last year, but that was after a very turbulent period in equity markets at the end of 2018. Much of the growth in our companies comes from opportunities in our chosen themes and research and development within the companies themselves: we expect this will again be the main source of growth in the year ahead.

Global equity investing has been fruitful now for over a decade and there is bound to be a rough period at some stage. However, our balanced portfolio of high quality and very healthy businesses, with good revenue growth and improving economic conditions, should be able to produce further gains this year and for the years to follow.

Simon Edelsten, Alex Illingworth &

Rosanna Burcheri

Fund Managers

2 March 2020

Statement of Principal Risks and Uncertainties

Pursuant to DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, the principal risks faced by the Company include general market risk, regulatory, operational, financial and gearing risks.

These risks, which have not materially changed since the Annual Financial Report for the year ended 30 June 2019, and the way in which they are managed, are described in more detail in the Annual Financial Report which is available at midwynd.com.

Responsibility statement of the Directors in respect of the Half-Yearly Financial Report

The Directors confirm that to the best of their knowledge, in respect of the Half-Yearly Financial Report for the six months ended 31 December 2019:

•         the condensed set of financial statements has been prepared in accordance with Financial Reporting Standard ('FRS') 104: 'Interim Financial Reporting';

•         having considered the expected cash flows and operational costs of the Company for the 18 months from the period end, the Directors are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the going concern basis of accounting continues to be used in the preparation of the Half-Yearly Financial Report;

•         the Chairman's statement to shareholders, Investment Manager's review and the Statement of Principal Risks and Uncertainties include a fair review of the information required by:

(a)      DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of the important events that have occurred during the first six months of the financial year and their impact on the 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 Guidance 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 entity during that period, and any changes in the related party transactions described in the last annual report that could do so.

The Half-Yearly Financial Report for the six months ended 31 December 2019 was approved by the Board and the above responsibility statement has been signed on its behalf by:

Malcolm Scott

Chairman

2 March 2020

Condensed statement of comprehensive income

The total column of this statement is the profit and loss account of the Company.

All revenue and capital items in this statement derive from continuing operations. No operations were acquired or discontinued during the period.

The net return/(loss) for the period disclosed above represents the Company's total comprehensive income.

Condensed statement of financial position

Condensed statement of changes in equity

¹   Capital reserve as at 31 December 2019 includes unrealised gains of £34,094,000 (31 December 2018: £4,690,000; 30 June 2019: £37,109,000).

²   These reserves form the distributable reserves of the Company.

Condensed statement of cash flows

Notes to the Half-Yearly Financial Report

1        Accounting policies

The financial statements have been prepared in accordance with the Company's accounting policies as set out in the Annual Financial Report for the year ended 30 June 2019 and are presented in accordance with the Companies Act 2006 (the 'Act'), FRS 104 and the requirements of the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies and Venture Capital Trusts' ('SORP') issued by the Association of Investment Companies (the 'AIC') in October 2019.

The financial information contained within this Half-yearly Financial Report does not constitute statutory accounts as defined in sections 434 to 436 of the Act. The financial information for the year ended 30 June 2019 has been extracted from the statutory accounts which have been filed with the Registrar of Companies. The Auditor's report on those accounts was not qualified and did not contain statements under sections 498(2) or (3) of the Act.

2        Return per share

Return per share has been calculated based on the weighted average number of ordinary shares in issue for the six months ended 31 December 2019 being 42,864,378 (31 December 2018: 38,199,568; 30 June 2019: 39,052,594).

3        Dividend

An interim dividend for the six months ended 31 December 2019 of 3.00 pence per ordinary share (31 December 2018: 1.98 pence) has been declared. This dividend will be paid on 31 March 2020 to those shareholders on the register at close of business on 13 March 2020.

4        Borrowing facilities

The Company has entered into a three year agreement with Scotiabank (Ireland) Designated Activity Company for a US$30 million multi-currency revolving credit facility on revised terms to February 2021, of which US$5.0 million (£3.8 million) was drawn down at 31 December 2019 (31 December 2018: US$3.0 million (£2.4 million); 30 June 2019: US$3.0 million (£2.4 million)) and €3.0 million (£2.5 million) was drawn down at 31 December 2019 (31 December 2018: €3.0 million (£2.7 million); 30 June 2019: €3.0 million (£2.7 million)). These amounts are recognised in amounts falling due within one year in the condensed statement of financial position.

The Company pays interest separately on each currency drawn down. Interest is charged on each currency at variable rates equivalent to 1.05% over the relevant currency LIBOR i.e. Sterling, US dollar and Japanese yen, and the Euro interbank offered rate (EURIBOR) is used for Euro. The US$ interest rate applied as at 31 December 2019 was 2.951% (31 December 2018: 3.566%; 30 June 2019: 3.595%). The € interest rate applied as at 31 December 2019 was 1.05% (31 December 2018: 1.05%; 30 June 2019: 1.05%).

5        Fair value hierarchy

All investments are designated at fair value through profit or loss on initial recognition in accordance with FRS 102. The following table provides an analysis of these investments based on the fair value hierarchy as described below which reflects the reliability and significance of the information used to measure their fair value.

The disclosure is split into the following categories:

Level 1 - Investments with unadjusted quoted prices in an active market;

Level 2 - Investments whose fair value is based on inputs other than quoted prices that are either directly or indirectly observable;

Level 3 - Investments whose fair value is based on inputs that are unobservable (i.e. for which market data is unavailable).

6        Share capital

As at 31 December 2019 there were 45,141,416 ordinary shares in issue (31 December 2018: 39,011,416; 30 June 2019: 40,871,416).

In the six months ended 31 December 2019 4,270,000 ordinary shares were allotted with total proceeds of £24,561,000 (six months ended 31 December 2018: 1,800,000 ordinary shares were allotted with total proceeds of £9,206,000; year ended 30 June 2019: 3,660,000 ordinary shares were allotted with total proceeds of £18,860,000).

There are no ordinary shares held in treasury.

7        Related party transactions

The Directors are considered to be related parties. No Director has an interest in any transactions which are, or were, unusual in their nature or significant to the nature of the Company.

The Directors receive fees for their services. During the six months to 31 December 2019, £56,000 was paid to Directors (31 December 2018: £56,000; 30 June 2019: £112,000) of which £nil was outstanding at the period end (31 December 2018: £14,000; 30 June 2019: £14,000).

8        Transactions with the Investment Manager

The investment management fee payable to Artemis Fund Managers Limited for the six months ended 31 December 2019 was £631,000 (31 December 2018: £484,000; 30 June 2019: £990,000) of which £321,000 was outstanding at the period end (31 December 2018: £233,000; 30 June 2019: £264,000).

Availability of Half Yearly Financial Report

Copies of the Half-Yearly Financial Report for the six months ended 31 December 2019 will be sent to shareholders shortly and will also be available from the registered office at 6^th Floor, Exchange Plaza, 50 Lothian Road, Edinburgh, EH3 9BY as well as on the Company's website midwynd.com.

For further information, please contact:

Artemis Fund Managers Limited

Company Secretary

Telephone number: 0131 225 7300

3 March 2020