Half-year Report

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

LEI: 549300D32517C2M3A561

Half-Yearly Financial Report (unaudited) for the six months ended 31 December 2021

This announcement contains regulated information

Financial Highlights

Source: Artemis/Datastream.

† Alternative Performance Measure

\* The interim dividend for the six months to 31 December 2021 will be paid on 13 April 2022 to shareholders on the register at the close of business on 25 March 2022.

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 2021 the Company's share price rose 11.9%, 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 7.7%.

The Company's net asset value ('NAV') per share rose 10.5% on a total-return basis. Since Artemis' appointment, as Investment Manager on 1 May 2014, the net asset value per share has increased by 230.8%, on a total-return basis, against the benchmark's increase of 162.6%.

As at 31 December 2021 the share price stood at a 3.6% premium to net asset value. The Company's policy, within normal market conditions, is to issue and repurchase shares where necessary to maintain the share price within a 2% band relative to the net asset value. This is not a perfect science and in periods where markets are volatile the share price may lie outside this range for short periods. However, the Investment Manager does actively manage this and the average premium to NAV during the first half was 1.6%.

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 2021 was a gain of 77.64 pence per share, comprising a revenue gain of 3.78 pence per share and a capital gain of 73.86 pence per share. The Board is proposing an interim dividend of 3.50 pence per share which will be paid on 13 April 2022 to those shareholders on the register at the close of business on 25 March 2022. This represents an increase of 12% on last year's interim dividend of 3.10 pence. It continues to be the aim of the Board to grow the dividend but this will not be done at the expense of capital nor if market conditions dictate otherwise.

The Investment Manager has made some major changes to the portfolio over the reporting period with a greater weighting in companies with a higher dividend yield. As a result of these changes, the Company's revenue returns have risen materially. The 12% rise in the Company's interim dividend reflects this higher level of portfolio income. Your Board is keen to provide the maximum flexibility for the Investment Manager to fulfil the Company's purpose to increase the real wealth and prosperity of shareholders. The Company will continue to pursue a progressive dividend policy but the 12% increase in the interim dividend should not be seen as indicative of a level of dividend growth that is likely to be sustained.

Share capital

Demand for the Company's shares has continued to be strong. The shares have been issued at an average premium to net asset value of 2.0% over the period.

The Board is pleased to report that for the period from 1 July 2021 to 31 December 2021, 2,668,000 new ordinary shares have been issued in the market, raising £22.0 million net of costs. This represents an increase of 4.4% of the share capital at the start of the period. Following the period end, a further 1,260,000 new ordinary shares have been issued as at 10 March 2022.

Borrowings

As at 31 December 2021 the Company had drawn funds of EUR10 million and US$14 million; equating to £18.7 million.

The amount of drawn funds brings the Company to a net gearing position of 0.4% at the period end compared with a net cash position as at the year ended 30 June 2021 of 1.5%. This gearing percentage reflects the ratio of loans taken out to bank balance held. Further details can be found in the Glossary in the Half-Yearly Financial Report.

The increase in drawn funds has given the Investment Manager the ability to take advantage of the opportunities presented as market conditions evolved.

Board succession

As I noted in the 2021 Annual Report, Harry Morgan has indicated he will be stepping down from the Board at the Annual General Meeting in November 2022. The Nomination Committee has begun the recruitment process with the appointment of an independent consultancy firm specialising in investment trust board recruitment. An update on progress will be given in the 2022 Annual Report.

Outlook

It is now widely expected that inflation will not be 'transitory' as some, especially central bankers, had declared it to be. This change in expectations has produced a sea-change in financial markets due to the likely impact on corporate earnings and also on interest rates. A key element in assessing the appropriate price for any investment is the level of interest rates. Future corporate cash flows are discounted, by an appropriate rate of interest, to assess their net present value. All other things being equal, a rise in interest rates leads to a fall in the net present value of corporate cash flows which, financial theory suggests, should lead to a reduction in share prices.

As investors increasingly believe that a rise in interest rates will be necessary to combat inflation, there is now a headwind for share prices which has been absent for many years. Not all share prices will be impacted equally by rising interest rates. In particular, companies whose earnings are expected to be made far in the future, such as newer start-up companies, will see an outsized impact on the net present value of those earnings when interest rates rise. There are also direct impacts upon corporate earnings, negative and positive, from both higher interest rates and higher inflation. The move to higher inflation and somewhat higher interest rates can thus result in great shifts of capital within the equity market as investors seek to anticipate the impact from these changing factors. Our Investment Manager has already made some key changes to the portfolio in response to the changing outlook for both inflation and interest rates.

While it would be comforting to conclude that inflation is an accident of the pandemic, it would also be dangerous. The world's debt-to-GDP ratio, which includes the public and private sectors, remains at levels that have almost certainly never been seen before - even during two world wars. These record high debt levels have created a very fragile financial system and on two relatively recent occasions, a recession has shown every prospect of turning into a depression. Only aggressive policy responses by central bankers and governments have prevented a similar debt deflation to that which changed the world in the 1930s. The lesson for governments from both the 2007-2009 episode and our more recent recession is that debt-to-GDP levels will have to be reduced to create a more robust financial system. The most acceptable policy to achieve this structural change will be to allow inflation to run at higher levels. The consequence is higher levels of nominal GDP growth. If debt growth can be constrained to levels below nominal GDP growth then debt-to-GDP declines and the ability to service debt improves. So much for the theory.

War has now returned to Europe. The human cost of the war is already apparent. War also usually heralds higher inflation and an increasing reluctance by governments to allow market-determined pricing. The war thus accelerates the structural shift, already evident, in which bond markets are not allowed to fully reflect inflation expectations. War also provides political legitimacy to non-market approaches to contain consumer prices such as price controls. We live in an age of emergencies: a health emergency, an inequality emergency, a national security emergency and a climate emergency. These emergencies legitimise greater government intervention in the setting of prices. Although we hold no investments in Russian or Ukrainian companies and the revenue exposures of our investee companies to these regions is minimal, the threats posed by the invasion of Ukraine have rippled throughout global markets. In this environment it becomes more difficult to select those equities that can preserve the purchasing power of the wealth of investors.

Inflation is today a chosen policy option and not a 'transitory' accident resulting from supply side disruptions associated with the pandemic. It is a policy aimed at moving wealth from savers to debtors. It is not a policy that can be publicly avowed as it is in effect a form of taxation, particularly on savers, that is being enforced without legislation. The job of your Board and Investment Manager is to attempt to ensure that your savings are managed to preserve and grow the purchasing power of your capital over the long-term. This is now a greater challenge than it has been given the need for governments to engineer this major wealth transfer. That well-chosen equities can provide protection from this threat seems likely. The best corporate managements are always adjusting to change. Our Investment Manager is also always anticipating and adjusting to change. Our global mandate provides great flexibility for our Company to adapt to change. Armed with such flexibility, your Company is well-placed, even in these difficult times, to pursue our purpose which is the increase in the real wealth and prosperity of our shareholders.

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; along with quarterly briefings and Manager presentations. In addition, the Board is always keen to hear from shareholders.

Should you wish to, you can e-mail me at [email protected].

Russell Napier

Chairman

11 March 2022

Investment Manager's review

Review of period

Global equity markets rose strongly in the last half of 2021, but saw some profit taking in the final month of the year. Economies recovered around the world as vaccines were rolled out - and most companies continued to grow their profits despite the challenging conditions. Gains were especially strong among our US-listed holdings, particularly our technology stocks, but we felt that valuations were becoming stretched and so took profits in some of them.

Performance

The Trust's shares rose by just over 11% in the period compared to the index rising just under 8% in sterling.

Five largest stock contributors

Five largest stock detractors

† Alternative Performance Measure

Artemis investment process

We seek 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 can equally fall less than the market 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

Over the last six months our most successful themes were Healthcare Costs, Online Services and Building the Future.

Healthcare Costs - our investment in Pfizer performed very well as mRNA vaccines proved very effective against new Covid variants. Moderna also performed well initially before falling back - we had taken some profits at the highs. Novovax struggled to produce its vaccine to scale and so we sold this holding at a loss.

Online Services - US technology companies continued their remarkable growth record, though a few such as Snapchat and Paypal disappointed. We noted that our Digital Finance theme and our Online Services holdings were highly correlated and we felt valuations had risen too far. So we sold Paypal, Adobe and Elastic, locking in profits. The Trust is now rather less exposed to technology shares, especially those whose cash profitability lies some years into the future.

Over the last six months we have reviewed three themes. Our High Quality Assets holdings have been split between a Building the Future theme and an Energy Transition Materials theme currently comprising of investments in copper mines. Automated warehouses dominate the Building the Future theme and these have again performed well.

We also reviewed our Digital Finance and Fintech themes. This review concluded that many Fintech shares were over-valued. We therefore disposed of a number of these positions and reinvested the proceeds in some leading banks which are benefitting from recovering economies and rising interest rates. These bank holdings were the worst performing part of the portfolio during this reporting period, but have given it better balance particularly as the market focuses on persistent inflation and a rising interest-rate environment.

We have also shifted the focus of our consumer theme away from emerging markets, where the rate of growth of middle-class consumption is slowing, towards a focus on sustainable consumption, which appeals to younger cohorts. Lastly, we have reduced the weight of the Low Carbon World theme as valuations, especially for wind farm companies, seemed too high.

Thematic attribution

Regional attribution

† Alternative Performance Measure

Outlook

Over the last six months, markets have enjoyed a strong recovery as lockdowns eased and as it seemed increasingly likely that Covid would become another flu that repeated vaccinations will allow us to live with. The recovery exposed a range of supply-chain problems, from shortages of semiconductors and natural gas through to a lack of truck drivers. Some of these issues will lessen over the next year, but it seems likely there will be higher inflation levels for some time. Furthermore, central banks have now recognised this and are ending quantitative easing - buying bonds in the open market - and planning rises in interest rates.

We aim to grow our investors' real wealth over time. Inflation now threatens that wealth. We are conscious that the companies we invest in can also face challenges, both through cost pressures eating into their profit margins and through equity valuations coming under pressure as bond yields rise.

We have therefore rebalanced the portfolio so that it has a core of holdings such as railways, telephone companies and leading banks, which have historically coped well with modest levels of inflation. We funded these additions by reducing the portfolio's holdings in the most expensive part of the global equity market: younger technology companies. Inevitably, this reduces the portfolio exposure to their exciting growth prospects, but it should also help to protect the capital value of the Company if markets' worries about inflation intensify further from here.

Longer term, we continue to see our core investments prospering despite the challenges of the last few years. A few of our holdings have commented on rising costs and supply-chain issues, but we are little exposed to the worst-affected parts of the economy. The recent falls in the market have already unwound much of the excess in valuation multiples that concerned us last year. We therefore have confidence that the years to come will again show a balanced global equity fund to be an excellent way of growing real wealth.

Simon Edelsten & Alex Illingworth

Fund Managers

11 March 2022

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 strategic, market, borrowing, regulatory, reliance on third party service providers and key personnel.

The pandemic risk and its effect on third party service providers, are included in the June 2021 Annual Financial Report, and continue to be closely monitored by the Investment Manager and the Board.

These risks, which have not materially changed since the Annual Financial Report for the year ended 30 June 2021, 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 2021:

• 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 Half-Yearly Financial Report includes 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 Financial Report that could do so.

The Half-Yearly Financial Report for the six months ended 31 December 2021 was approved by the Board and the above responsibility statement has been signed on its behalf by:

Russell Napier

Chairman

11 March 2022

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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 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 2021 includes distributable gains of £207,896,000 (31 December 2020: £149,606,000; 30 June 2021: £107,092,000).

2 The Company may pay dividends from both capital and revenue reserves.

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 2021 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 April 2021.

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 2021 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.

The unaudited condensed financial statements for the six months ended 31 December 2021 have been prepared on a going concern basis.

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 2021 being 60,944,418 (31 December 2020: 53,175,261; 30 June 2021: 55,845,969).

3 Dividend

An interim dividend for the six months ended 31 December 2021 of 3.50 pence per ordinary share (31 December 2020: 3.10 pence) has been declared. This dividend will be paid on 13 April 2022 to those shareholders on the register at close of business on 25 March 2022.

4 Borrowing facilities

The Company has entered into a three year agreement with The Bank of Nova Scotia (UK Branch) for a US$60 million multi-currency revolving credit facility terminating on 19 February 2024, of which US$14.0 million (£10.3 million) was drawn down at 31 December 2021 (31 December 2020: US$4.5 million (£3.3 million); 30 June 2021: US$9.0 million (£6.5 million)) and €10.0 million (£8.4 million) was drawn down at 31 December 2021 (31 December 2020: €3.8 million (£3.4 million); 30 June 2021: €4.0 million (£3.4 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. Sterling is calculated with reference to RFR (Risk-free rate); US dollar with reference to SOFR RFR and Japanese yen with reference to TONAR RFR. Euro utilisations continue to be calculated as 1.05% over EURIBOR. The US$ interest rate applied as at 31 December 2021 was 1.5346% (31 December 2020: 1.2636%; 30 June 2021: 1.45%). The € interest rate applied as at 31 December 2021 was 1.30% (31 December 2020: 1.05%; 30 June 2021: 1.30%).

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

In the six months ended 31 December 2021, 2,668,000 ordinary shares were allotted with net proceeds of £22,022,000 (six months ended 31 December 2020: 6,076,000 ordinary shares were allotted with net proceeds of £40,525,000; year ended 30 June 2021: 9,641,000 ordinary shares were allotted with net proceeds of £66,498,000).

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 2021, £70,000 was paid to Directors (31 December 2020: £79,000; 30 June 2021: £127,000) of which £nil was outstanding at the period end (31 December 2020: outstanding £12,000; 30 June 2021: outstanding £4,000).

8 Transactions with the Investment Manager

The investment management fee payable to Artemis Fund Managers Limited for the six months ended 31 December 2021 was £1,231,000 (31 December 2020: £880,000; year to 30 June 2021: £1,920,000) of which £633,000 was outstanding at the period end (31 December 2020: £468,000; 30 June 2021 £549,000).

9. Availability of Half-Yearly Financial Report

Copies of the Half-Yearly Financial Report for the six months ended 31 December 2021 will be sent to shareholders shortly and will also be available on request from the registered office at 6th Floor, Exchange Plaza, 50 Lothian Road, Edinburgh, EH3 9BY as well as on the Company's website midwynd.com.

A copy of the Half-Yearly Financial Report will also be submitted to the FCA's National Storage Mechanism and will soon be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism

For further information, please contact:

Artemis Fund Managers Limited

Company Secretary

Telephone number: 0131 225 7300

14 March 2022