Report of the Chairman - March 2010

It is a pleasure to be able to say again “I have pleasure in presenting the Report and Accounts of the CAMRA Members’ Investment Club for the year ending 31st March 2010”!

The value of the fund has risen by just over £2 million over the year to £9.01 million and the Unit price has risen back over £3 at £3.08. Most of the improvement in the sector was in the first half of the year so whilst the fund value shows a reasonable increase from the half year figure of £8.48 million, the Unit Price rise is more modest.

Contributions were ca 5% below last year’s level. Withdrawals were also down and by a gratifying 24%. With Marstons and Greene King maintaining their dividends, dividend income showed an increase of 7% on last year. The net result of all these factors is that total funds available for investment fell by 3%. The Club joins dividend re-investment schemes where these are available. Although it did not impact on these figures, the recent J D Wetherspoon announcement that it was re-instating its dividend was also most welcome.

As reported in September the majority of our funds in the first half year were allocated to the large rights issues in Greene King and Marstons. Investments in the UK since the half-year report include Black Sheep, Greene King, Hop Back, J D Wetherspoon, Marstons, Mitchells & Butler, Wadworth and Whitbread. We were also delighted to be able to secure a small holding in the Cantillon Brewery in Brussels. Chris Holmes, Neil Kellett and Iain Loe visited Brussels in January to complete this purchase. Their visit was featured in What’s Brewing. You now own 2.5% of Cantillon. The Club also continues to buy small parcels of shares from CAMRA Branches at mid-market price which is to the benefit of both parties.

The Committee is continuing to investigate investment in suitable microbreweries. One specific proposal was rejected as the prospective company’s finances and business plan were insufficiently robust. We are in the midst of a second negotiation on which I hope to be able to report at the Annual General Meeting. It is already clear that agreeing the valuation of the microbrewery is going to be challenging. Whilst the Committee remains committed to the principle of microbrewery investment, we will only proceed if we believe that the investment is secure and the valuation is reasonable. Our prime interest is to protect your money.

As reported in the January Administration Report, the Annual General Meeting will be held at the Victoria Hotel in Beeston, Nottingham on Saturday 19th June. The AGM will be followed by a Members’ Lunch at which the guest speaker will be Hamish Champ of The Publican. In accordance with Rule 4, as amended at the 2005 Annual General Meeting, Ann Mace, Chris Holmes and Neil Kellett retire by rotation. They are standing for re-election with the full support of the Committee. No further nominations were received at the Club’s Administrative Office by 31st March so no election is necessary.

I would like to thank Neil Harding and his team at Brewin Dolphin, the Club’s main stockbrokers, and Derek Calrow at James Sharp, who both unearth parcels of the untraded securities in which we are interested, for their professional services throughout the year. Neil Harding attends a number of our Committee Meetings during the year and often attends the Annual General Meeting in June. Brewin Dolphin also makes its Manchester offices available to the Committee for its meetings when we are in Manchester which is much appreciated.

I recently had the pleasure to spend a day in the Howarth Associates Office to see Mark’s team in action. This visit endorsed further my admiration for the exemplary service which we receive. Committee members continue to receive monthly management accounts within a few days of the month end every month without fail and Mark’s team deal with all member questions and queries in a similar timely manner. On several occasions in the past year, including the year end, we have received these data within less than twenty four hours of the month end! It is a genuine pleasure to record my appreciation of this service on behalf of the Committee and all members. One small anecdote illustrates the commitment which we receive from the Howarth Associates team. During the January freeze which disrupted many services, signing all the documents for the Cantillon purchase by the deadline proved very challenging. Chris Holmes, Neil Kellett and I were driving up the M6 to get the ferry from Heysham for a reconnaissance trip to the Isle of Man but time did not permit a full detour to the office. George Hall met us at a bus stop close to Junction 8 of the M61 in the freezing cold to hand them over! We studied them and signed them over the weekend. Neil couriered them to Brussels just in time.

Although the sector has improved a little the economic outlook remains difficult particularly with the continuing assault on the licensed trade by above inflation increases in excise duty. The Committee continues to meet more frequently. I must thank all the members of the Committee for the additional commitment which they are, therefore, making. The attendance at Committee meeting remains very high and we are in touch via email between meetings when parcels of the less freely available shares do become available. We must remember that all Committee members give their time unselfishly, without remuneration or expenses, in the interests of Real Ale.

Finally I would like to thank you all for continuing to support your Club by making further contributions and also attending the various meetings and functions. Real cask ale continues to be the only growth sector in the licensed trade. I am sure that our activities continue to support the cause of Real Ale and contribute to that fact.

Chris Bruton — CAMRA Members' Investment Club Chairman