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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bankers Investment Trust Plc | LSE:BNKR | London | Ordinary Share | GB00BN4NDR39 | ORD 2.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -2.20 | -1.96% | 109.80 | 109.60 | 110.00 | 111.00 | 109.60 | 110.40 | 1,100,280 | 16:35:12 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Unit Inv Tr, Closed-end Mgmt | 68.02M | 64.56M | 0.0492 | 22.36 | 1.44B |
From Apr 2019 to Apr 2024
TIDMBNKR
RNS Number : 5398U
Bankers Investment Trust PLC
18 January 2017
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2016
This announcement contains regulated information
The Company aims to provide investors with an attractive total return, focused on growing both capital and income for shareholders.
OBJECTIVES
Capital - To achieve long term asset growth through active stock selection.
Income - To achieve regular dividend growth greater than inflation.
INVESTMENT POLICY
To achieve both these objectives by investing in a broadly diversified international portfolio of shares.
CHAIRMAN'S STATEMENT
-- Net asset value increase of 19.9%
-- Dividend increase of 7.6%
-- 50th consecutive year of dividend increase
-- Forecast increase in 2017 dividend of at least 6.0%
Performance
I am pleased to be able to report another excellent year of performance for our shareholders. A net asset value return of 19.9% and a dividend increase of 7.6% are significant achievements during what has proven to be a volatile year in financial markets. That these strong returns should be generated against such difficult markets is testament to our fund management team. However, despite our efforts to buy-back shares in the market, the degree of volatility and uncertainty led to a widening of our discount and thus the share price rise during the period was restricted to 12%. Looking forward the Board is now able to recommend a further significant increase in the dividend representing the 50th consecutive year of dividend increases and, importantly, an improvement in the growth rate in dividend payments relative to the last ten years. This record is a notable achievement by any standards and reinforces the benefits of taking a long term view of equity investing.
I was too cautious last year in my outlook for returns from world equity markets albeit, on closer inspection, a substantial element of these returns were generated in the second half of the year and were driven by exchange rate movements. The catalyst for this shift in sentiment away from sterling was the European Referendum which not only surprised the political elite but also the markets. The reaction was quickest on the currency markets where sterling fell significantly against every major currency, followed by rapid stock and sector rotation in the UK equity market towards the larger, international companies and away from the mid-sized, domestically focused companies. The majority of the market returns in sterling for the year were generated in the month after the Brexit vote.
The impact of currency on our portfolio of investments is demonstrated by the comparison of global market returns in sterling. The total return from the FTSE All-Share Index for the twelve month period ended 31 October 2016 was 12.2%, compared with a total return for a sterling investor from North America of 32.3%, from Europe of 19.7% and from Japan of 31.4%. Even emerging market currencies proved to be stronger than sterling during the summer and, when combined with better local markets, the sterling return from the FTSE All-World Emerging Market Index was in excess of 49.1% for a sterling investor. These returns are truly exceptional and demonstrate the benefit of having a broad diversified portfolio of unhedged international equities.
As reported in my statement last year, over the last ten years we have continued to reduce our exposure to sterling assets. Whilst not expecting the currency fluctuations mentioned above it does clearly focus the attention in regard to our regional asset allocation. Approximately ten years ago the sterling exposure of the total portfolio was as high as 55%. Today it is less than 30% and, given the growth in international stock markets, I would expect this declining exposure to the UK to continue.
Revenue and Dividends
Total revenue generated by the portfolio rose helped by solid underlying dividend growth across our equity holdings. Special dividends have again been a significant contributor to our total revenue line, albeit below the levels of the previous year. The exchange rate changes also helped the revenue account when dividends were translated into sterling. It is against this strong backdrop that the Board is again able to recommend an increase in the final quarterly dividend to 4.60p per share. If approved by shareholders this will result in a total dividend payment for the year of 17.0p (2015: 15.8p), an increase of 7.6%. This compares with my forecast of an increase of at least 4% in my statement last year. Our revenue earnings per share over the same period rose to 17.5p, an increase of 1.8%.
The outlook for the year ahead, from a revenue account perspective, is positive. If the sterling exchange rate remains at around the current levels against the US dollar, euro and yen and the trend of dividend increases continues, especially from our overseas investments, a further increase can be expected in the dividend for the year ahead. The confidence behind this projection is enhanced by the strong level of revenue reserves which we continue to maintain and which, if appropriate, the Board will access to maintain the progressive dividend policy of the last 50 years. As such I am able, on behalf of the Board, to forecast dividend growth of no less than 6% for 2017, representing a minimum total dividend for the year of approximately 18.0p per share.
Henderson/Janus Merger
Towards our year end an announcement was made by our Manager that, subject to shareholder approval, Henderson had agreed to merge with Janus Capital, a large US institutional fund manager. Whilst completion will not be until June and a lot of the detail is still to be decided, the Board of Bankers believes that the increased global investment breadth that this merger should bring to our Manager can only be positive for the ongoing investment expertise available to our Fund Manager and his team for the performance of the Company's portfolio.
Corporate Event /Management Fee
During the year the Board has delivered some significant and positive outcomes. Firstly, the Board agreed that Bankers act as a 'global growth' rollover option in the transaction to liquidate Henderson Global Trust plc. This resulted in the issue of over 9 million new Bankers shares, priced at a premium to net asset value and increased the Company's size by around GBP60 million. Also, at the year-end, the Company repaid its GBP10 million 10.5% 2016 debenture at par, using part of the proceeds from our previously announced GBP50 million, 20 year, 3.68% loan note issue.
We have agreed with our Manager a simplified tiered fee structure of 0.45% p.a. on the first GBP750 million and 0.40% p.a. on the excess over GBP750 million of the value of the net assets on the last day of each quarter. The new fee structure, which took effect on 1 July 2016, is subject to a transition period until 31 December 2017, during which period the fee is capped at GBP843,750 per quarter. This new fee structure should assist in a reduction in the ongoing charge as a percentage of net assets as the Company grows over time.
Annual General Meeting ('AGM')
This year's AGM will again be held at Trinity House, London, EC3N 4DH on 22 February 2017 at 12 noon. Full details of the business to be conducted at the meeting are set out in the Notice of Meeting which has been sent to shareholders with the Annual Report. Directions and a map showing the location of the AGM can also be found in the Notice of Meeting. The Board looks forward to seeing many of you at this meeting at which Alex Crooke and his investment team will present their investment views and how these are reflected in the portfolio. Following the formal business of the meeting light refreshments will be served.
Outlook
Politics will remain to the fore during the year ahead and the key for financial markets will be whether there are any further surprises, especially from Europe. I suspect there may be. The extent of these potential surprises could keep markets in a state of uncertainty for most of the year which will make it even harder for the fund managers to position the regional portfolios correctly.
Putting politics aside, the economic tailwind looks positive. President Trump has inherited a strong economy where growth is accelerating. The strong US economy, despite the protectionist rhetoric, is good for the global economic outlook. In the UK we are bound to see a significant jump in inflation as a result of the weaker level of sterling. One of the key debates this year will be whether the move to higher inflation is a temporary or permanent shift. At the moment the likelihood is that this will be a temporary situation. However, if we see pressure mounting on wage inflation the Bank of England might move more quickly to raise interest rates. Depending upon the resilience of the UK economy in 2017 this could have a negative impact on a number of sectors although it could well be seen as a positive for the financial sector.
Thus challenges remain to the fore but the resilience of our portfolio has been tested over time and the confidence which has been expressed by myself and the rest of the Board is based on this knowledge.
Richard Killingbeck
Chairman
PRINCIPAL RISKS AND UNCERTAINTIES
The Board, with the assistance of Henderson, has carried out a robust assessment of the principal risks facing the Company including those that would threaten its business model, future performance, solvency or liquidity. In carrying out this assessment, the Board has considered the market uncertainty arising from the result of the UK referendum to leave the European Union.The Board has drawn up a matrix of risks facing the Company and has put in place a schedule of investment limits and restrictions, appropriate to the Company's investment objective and policy, in order to mitigate these risks as far as practicable. The principal risks which have been identified, and the steps taken by the Board to mitigate these as far as practicable, and whether the Board considers the impact of such risks has changed over the past year, are as follows:
Hot Features
Premium
Risk Controls and Mitigation
------------------------------------------- ----------------------------------------
Investment Activity and Performance
Risks The Board monitors investment
An inappropriate investment strategy performance at each Board meeting
(for example, in terms of asset and regularly reviews the extent
allocation or the level of gearing) of the Company's borrowings.
may result in underperformance
against the Company's various indices
and the companies in its peer group.
------------------------------------------- ----------------------------------------
Portfolio and Market Risks
Although the Company invests almost The Fund Manager seeks to maintain
entirely in securities that are a diversified portfolio to mitigate
listed on recognised markets, share against this risk. The Board
prices may move rapidly.The companies regularly reviews the portfolio,
in which investments are made may investment activity and performance.
operate unsuccessfully, or fail
entirely. A fall in the market
value of the Company's portfolio
would have an adverse effect on
shareholders' funds.
------------------------------------------- ----------------------------------------
Tax, Legal and Regulatory Risks
A breach of Section 1158 could Henderson has been contracted
lead to a loss of investment trust to provide investment, company
status, resulting in capital gains secretarial, administration and
realised within the portfolio being accounting services through qualified
subject to corporation tax. A breach professionals. The Board receives
of the UK Listing Authority's Rules internal control reports produced
could result in suspension of the by Henderson on a quarterly basis,
Company's shares, while a breach which confirm tax, legal and
of the Companies Act could lead regulatory compliance both in
to criminal proceedings. All breaches the UK and New Zealand.
could result in financial or reputational
damage. The Company must also ensure
compliance with the Listing Rules
of the New Zealand Stock Exchange.
------------------------------------------- ----------------------------------------
Financial Risks
By its nature as an investment The Company has a diversified
trust, the Company's business activities portfolio which comprises mainly
are exposed to market risk (including investments in large and medium-sized
market price risk, currency risk companies and mitigates the Company's
and interest rate risk), liquidity exposure to liquidity risk. The
risk and credit and counterparty Company minimises the risk of
risk. a counterparty failing to deliver
securities or cash by dealing
through organisations that have
undergone rigorous due diligence
by Henderson.
------------------------------------------- ----------------------------------------
Operational Risks
Disruption to, or failure of, Henderson's The Board monitors the services
accounting, dealing or payment provided by Henderson and its
systems or the Depositary's records other suppliers and receives
could prevent the accurate reporting reports on the key elements in
and monitoring of the Company's place to provide effective internal
financial position. The Company control.
is also exposed to the operational
risk that one or more of its service
providers may not provide the required
level of service.
------------------------------------------- ----------------------------------------
The Board considers these risks to have remained unchanged throughout the year under review.
VIABILITY STATEMENT
The Directors have assessed the viability of the Company over a three year period, taking account of the Company's current position and the potential impact of the principal risks and uncertainties documented in the Strategic Report contained in the Annal Report.
The Directors conducted the assessment based on a period of three years because they consider this to be an appropriate period over which they do not expect there to be any significant change in the current principal risks and adequacy of the mitigating controls in place. Also the Directors do not envisage any change in strategy or objectives or any events that would prevent the Company from continuing to operate over that period as the Company's assets are liquid, its commitments
are limited and the Company intends to continue to operate as an investment trust.
The assessment has considered the impact of the likelihood of the principal risks and uncertainties facing the Company, in particular Investment Activity and Performance, Portfolio and Market and
Financial risks, in severe but plausible scenarios, and the effectiveness of any mitigating controls in place.
The Directors also took into account the liquidity of the portfolio, the gearing and the income stream from the portfolio in considering the viability of the Company over the next three years and its ability to meet liabilities as they fall due. This included consideration of the duration of the Company's long term borrowings, how the forecast income stream, expenditure and levels of reserves could impact on the Company's ability to pay dividends to shareholders over that period in line with its current dividend policy. Whilst detailed forecasts are only made over a shorter time frame, the nature of the Company's business as an investment trust means that such forecasts are equally valid to be considered over the longer three year period as a means of assessing whether the Company can continue in operation. This included consideration of the duration of the Company's fixed term debt and how a breach of the gearing covenants could impact on the Company's net asset value and share price.
Based on their assessment, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next three year period. Only a substantial financial crisis affecting the global economy could have an impact on this assessment.
RELATED PARTY TRANSACTIONS
The Company's transactions with related parties in the year were with its Directors and Henderson. There have been no material transactions between the Company and its Directors during the year other than the amounts paid to them in respect of Directors' remuneration for which there were no outstanding amounts payable at the year end. In relation to the provision of services by Henderson, other than fees payable by the Company in the ordinary course of business and the provision of sales and marketing services, there have been no transactions with Henderson affecting the financial position of the Company during the year under review.
STATEMENT OF DIRECTORS' RESPONSIBILITIES UNDER DISCLOSURE GUIDANCE AND TRANSPARECY RULE 4.1.12
Each of the Directors confirms that, to the best of his or her knowledge:
-- the Company's financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Company; and
-- the Strategic Report in the Annual Report and financial statements includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
For and on behalf of the Board of Directors
Richard Killingbeck
Chairman
FUND MANAGER'S REVIEW
In 2016 the populations of two of the oldest democracies in the world expressed the view that they do not approve of the way the world is going. Despite investment experts warning of turmoil markets have generally taken the news well producing handsome returns this year for investors from both bonds and equities. There was a brief wobble in February on worries of a Chinese slowdown and Deutsche Bank's solvency but this soon passed. The interesting question from the events in the UK and the US is whether this signals the end of globalisation. Often cherished as a central tenet of progress towards prosperity, globalisation essentially boils down to the international arbitrage of labour costs to the benefit of lower consumer prices. A return to more normal levels of inflation and interest rates could actually benefit equity prices if accompanied by wage and job growth.
Since July, and more profoundly since Trump's presidential election, investors' appetite has shifted towards companies and sectors that are perceived to benefit from reflationary trends. This rotation towards previously out of favour sectors such as banks, construction and mining was not unexpected but the rate of adoption could be challenged by the lack of real evidence of actual policy action or higher inflation. The portfolio is well positioned in financials and industrials for a continuation of this theme but is being held back by a sharp derating in quality defensive stocks, irrespective of their valuations. Normally during periods of higher inflation, value outperforms growth as an investment style but this is only partially occurring at present. Valuation has been a factor greatly diminished in stock and sector performance over recent years. Its re-emergence will be very helpful to us and active managers in general.
The portfolio's performance, for UK investors, has been dominated by the collapse in sterling since the Brexit vote in late June. The returns from the overseas portfolios are a factor of 4-5x those of the UK holdings, due to the higher translation values back into sterling. While not predicting a vote to leave, we did fear a close race and decided earlier in the year to significantly reduce the portfolio's exposure to UK domestically exposed stocks. The UK allocation fell from 38% to 29% by the year end and post Brexit we also increased allocations to international companies listed on the London market. Performance within the regions was generally positive with strong relative returns in the Pacific, China, Emerging Markets and Europe. Only the UK and US regions missed their benchmarks.
We welcome a new manager for the Japanese portfolio. Junichi Inoue has recently joined Henderson and will be managing the Japanese portfolio from Tokyo. His style will closely match our overall aim of focusing on quality businesses that generate attractive levels of free cash flow to fund dividends whilst careful not to overpay. I would like to take the opportunity to thank Michael Wood-Martin, our previous Japanese manager, for his skilful stock selection and dedication to Bankers over many years.
Over the past year we have gained a licence to invest directly in India and also gained further flexibility to access China via Hong Kong Connect. The Company is becoming more global in its outlook and this is most obvious when viewing the regional revenues from the portfolio holdings. The discrepancy between the percentage invested in the UK market (29% at the time of writing) and the revenues from the UK (15%) is a reminder that many stocks we own do very little business in the UK despite being listed in London.
We were cautious of markets earlier in the year and felt it was more prudent not to chase valuations higher while corporate profit expectations continued to be downgraded. We did invest cash when there were market dips in February and June, but thereafter sold holdings when markets subsequently rallied. The opportunity to act as a rollover option for Henderson Global Trust plc in April resulted in the issuance of 9.4m new shares, increasing Bankers' shares in issue by 8.3%. The majority of the assets were received in near cash instruments which were then invested to rebalance the portfolio further away from the UK. At the year end the 10.5% 2016 debenture was repaid for GBP10 million and cash levels have fallen resulting in a net gearing position of 2.6%.
The Company's income received a modest but useful boost from sterling's weakness, however, the full effects will be felt in 2017. There remained a healthy level of special dividends, particularly from the UK holdings, many of which should continue to distribute excess profits this year.
Alex Crooke
Fund Manager
For further information contact:
Alex Crooke Richard Killingbeck
Fund Manager Chairman
The Bankers Investment Trust PLC The Bankers Investment Trust PLC
Telephone: 020 7818 4447 Telephone: 020 7818 4233
James de Sausmarez Sarah Gibbons-Cook
Head and Director of Investment Investor Relations and PR Manager
Trusts Henderson Global Investors Limited
Henderson Investment Funds Limited Telephone: 020 7818 3198
Telephone: 020 7818 3349
31 October 31 October
Performance Highlights 2016 2015
---------------------------------------- ------------- -------------
Net Asset Value per share 755.9p 630.2p
Share price 690.0p 618.5p
Dividend for year(1) 17.0p 15.8p
Change since
31 October 31 October
2016 2015
------------- -------------
Dividend yield(2) 2.5% 2.6%
Retail Prices Index increase over year 2.0% 0.7%
Ongoing charge for year 0.52% 0.52%
Net gearing at year end 2.6% 2.0%
Discount at year end 8.7% 1.9%
(1) This represents the four ordinary dividends recommended or paid for the year.
(2) Based on the share price at the year end.
Sources: Morningstar for the AIC, Henderson, Datastream.
STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 October Year ended 31 October
2016 2015
Revenue Capital Revenue Capital
return return Total return return Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- ---------- ---------- ---------- ---------- ---------- ----------
Gains on investments
held at fair value
through profit or loss - 156,527 156,527 - 40,745 40,745
Investment income 2 24,661 - 24,661 22,621 - 22,621
Other operating income 3 255 - 255 146 17 163
--------- --------- --------- --------- --------- ---------
Total income 24,916 156,527 181,443 22,767 40,762 63,529
--------- --------- --------- --------- --------- ---------
Expenses
Management fees 4 (959) (2,237) (3,196) (892) (2,082) (2,974)
Other expenses (811) (3) (814) (788) (7) (795)
--------- --------- --------- --------- --------- ---------
Profit before finance
costs and taxation 23,146 154,287 177,433 21,087 38,673 59,760
--------- --------- --------- --------- --------- ---------
Finance costs (1,227) (2,863) (4,090) (925) (2,157) (3,082)
--------- --------- --------- --------- --------- ---------
Profit before taxation 21,919 151,424 173,343 20,162 36,516 56,678
Taxation 5 (1,090) - (1,090) (849) (6) (855)
--------- --------- --------- --------- --------- ---------
Profit for the year
and total comprehensive
income 20,829 151,424 172,253 19,313 36,510 55,823
===== ====== ====== ===== ====== ======
Earnings per ordinary
share - basic and diluted 6 17.53p 127.45p 144.98p 17.22p 32.54p 49.76p
The total columns of this statement represent the Statement of Comprehensive Income, prepared in accordance with IFRSs as adopted by the European Union. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.
STATEMENT OF CHANGES IN EQUITY
Called Share Capital Other
up premium redemption capital Revenue Total
Year ended share account reserve reserves reserve equity
31 October 2016 capital GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
-------------------------------- ----------- ----------- ------------ ----------- ----------- -----------
Total equity at 1 November
2015 28,271 12,722 12,489 624,099 35,052 712,633
Total comprehensive income:
Profit for the year - - - 151,424 20,829 172,253
Transactions with owners,
recorded directly to equity:
Issue of 10,863,453 ordinary
shares 2,715 65,819 - - - 68,534
Buy-back of 1,338,509
ordinary shares - - - (8,206) - (8,206)
Ordinary dividends paid - - - - (18,476) (18,476)
---------- ---------- ---------- ---------- ---------- ----------
Total equity at 31 October
2016 30,986 78,541 12,489 767,317 37,405 926,738
====== ====== ====== ====== ====== ======
Called
up Share Capital Other
share premium redemption capital Revenue Total
Year ended capital account reserve reserves reserve equity
31 October 2015 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ----------------------------- ----------- ------------ ----------- ----------- -----------
Total equity at 1
November
2014 28,027 7,053 12,483 587,744 32,889 668,196
Total comprehensive
income:
Profit for the
year - - - 36,510 19,313 55,823
Transactions with
owners,
recorded directly to
equity:
Issue of 100,000
ordinary
shares 250 5,669 - - - 5,919
Buy-back of 25,000
ordinary
shares (6) - 6 (155) - (155)
Ordinary dividends
paid - - - - (17,150) (17,150)
---------- ---------- ---------- ---------- ---------- ----------
Total equity at 31
October
2015 28,271 12,722 12,489 624,099 35,052 712,633
====== ====== ====== ====== ====== ======
STATEMENT OF FINANCIAL POSITION
At 31 October At 31 October
2016 2015
GBP'000 GBP'000
-------------------------------------------- ---------------- ----------------
Non-current assets
Investments held at fair value through
profit or loss 951,219 726,831
------------ ------------
Current assets
Investments held at fair value through
profit or loss 21,354 28,323
Other receivables 7,817 2,360
Cash and cash equivalents 23,271 31,762
----------- -----------
52,442 62,445
------------- -----------
Total assets 1,003,661 789,276
------------- -----------
Current liabilities
Other payables (12,117) (1,848)
Debenture stock - (10,000)
------------ -----------
(12,117) (11,848)
----------- -----------
Total assets less current liabilities 991,544 777,428
------------ -----------
Non-current liabilities
Debenture stock (15,000) (15,000)
Unsecured loan notes (49,806) (49,795)
------------ -----------
(64,806) (64,795)
----------- -----------
Net assets 926,738 712,633
======= =======
Equity attributable to equity shareholders
Share capital 30,986 28,271
Share premium account 78,541 12,722
Capital redemption reserve 12,489 12,489
Retained earnings:
Other capital reserves 767,317 624,099
Revenue reserve 37,405 35,052
----------- -----------
Total equity 926,738 712,633
======= =======
Net asset value per ordinary share 755.9p 630.2p
======= =======
CASH FLOW STATEMENT
At 31 October At 31 October
Reconciliation of profit before taxation to 2016 2015
net cash flow from operating activities GBP'000 GBP'000
------------------------------------------------------ --------------- --------------
Operating activities
Profit before taxation 173,343 56,678
Add back interest payable ('finance costs') 4,090 3,082
Amortisation of loan note issue costs 11 5
Less gains on investments held at fair value
through profit or loss (156,527) (40,745)
Increase in accrued income (454) (70)
Increase in other receivables (28) (46)
Increase in other payables 113 59
Purchases of investments (215,420) (185,007)
Sales of investments 199,472 184,706
Purchases of current asset investments (45,156) (61,777)
Sales of current asset investments 52,125 37,350
(Increase)/decrease in securities sold for future
settlement (4,754) 1,263
Increase/(decrease) in securities purchased
for future settlement 10,168 (1,077)
-------------- ------------
Net cash inflow /(outflow) from operating activities
before interest and taxation * 16,983 (5,579)
Interest paid (4,102) (2,291)
Taxation on investment income (1,302) (672)
-------------- ------------
Net cash inflow /(outflow) from operating activities 11,579 (8,542)
Financing activities
Equity dividends paid (net of refund of unclaimed
distributions) (18,476) (17,150)
Share issue 9,007 5,919
Buy-back of own shares (8,206) (155)
Repayment of loan - (2,947)
Repayment of debenture stock (10,000) -
Cash received from the liquidation of Henderson 7,160 -
Global Trust plc
Issue of unsecured loan note - 49,790
------------- ------------
Net cash(outflow)/inflow from financing activities (20,515) 35,457
------------- ------------
(Decrease)/increase in cash (8,936) 26,915
Cash and cash equivalents at start of the year 31,762 5,023
Exchange movements 445 (176)
----------- ------------
Cash and cash equivalents at end of the year 23,271 31,762
======= =======
* In accordance with IAS 7.31 cash inflow from dividends was GBP22,932,000 (2015: 21,466,000) and cash inflows from interest was GBP226,000 (2015: GBP87,000).
NOTES:
1. Accounting policies
The Bankers Investment Trust PLC is a company incorporated and
domiciled in the United Kingdom under the Companies Act 2006.
The financial statements of the Company for the year ended 31
October 2016 have been prepared in accordance with International
Financial Reporting Standards ('IFRSs') as adopted by the European
Union and with those parts of the Companies Act 2006 applicable
to companies reporting under IFRS. These comprise standards
and interpretations approved by the International Accounting
Standards Board ('IASB'), together with interpretations of the
International Accounting Standards and Standing Interpretations
Committee approved by the IFRS Interpretations Committee ('IFRS
IC') that remain in effect, to the extent that IFRS have been
adopted by the European Union.
The financial statements have been prepared on a going concern
basis and on the historical cost basis, except for the revaluation
of certain financial instruments held at fair value through
profit or loss. The principal accounting policies adopted are
set out below. These policies have been applied consistently
throughout the year. Where presentational guidance set out in
the Statement of Recommended Practice (the'SORP') for investment
trusts issued by the Association of Investment Companies (the
'AIC') in November 2014 is consistent with the requirements
of IFRS, the Directors have sought to prepare the financial
statements on a basis consistent with the recommendations of
the SORP.
The assets of the Company consist mainly entirely of securities
that are listed and readily realisable and, accordingly, the
Directors believe that the Company has adequate financial resources
to continue in operational existence for at least twelve months
from the date of approval of the financial statements. Having
assessed these factors, the principal risks and other matters
discussed in connection with the Viability Statement, the Directors
have decided that it is appropriate for the financial statements
to be prepared on a going concern basis.
2016 2015
2. Investment income GBP'000 GBP'000
---- ----------------------------------------------- ------------ ---------
UK dividend income - listed 9,696 8,370
UK dividend income - special dividends 693 2,011
Overseas dividend income - listed 13,419 11,872
Overseas dividend income - special dividends 682 188
Property income distributions 171 180
----------- --------
24,661 22,621
====== =====
Analysis of investment income by geographical
region:
UK 11,853 12,841
Europe (ex UK) 3,268 2,306
North America 2,883 2,193
Japan 2,209 1,345
China 1,171 997
Pacific (ex Japan, China) 2,599 2,510
Emerging markets 678 429
----------- --------
24,661 22,621
====== =====
2016 2015
3. Other operating income GBP'000 GBP'000
---- ------------------------ --------- -----------
Bank interest 86 39
Underwriting revenue 77 41
Stock lending revenue 83 66
Treasury bill interest 3 -
Other income 6 -
-------- ----------
255 146
===== =====
At 31 October 2016 the total value of securities on loan by
the Company for stock lending purposes was GBP30,184,000 (2015:
GBP50,889,000). The maximum aggregate value of securities on
loan at any one time during the year ended 31 October 2016 was
GBP66,536,000 (2015: GBP69,710,000). The Company's agent held
collateral at 31 October 2016 with a value of GBP32,154,000
(2015: GBP56,493,000) in respect of securities on loan. The
value of securities held on loan is reviewed on a daily basis,
comprising Corporate and Government Bonds with a minimum market
value of 105% (2015: 105%) of the market value of any securities
on loan.
Revenue Capital Revenue Capital
return return Total return return Total
2016 2016 2016 2015 2015 2015
4. Management fees GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------ ------------------------------- --------- --------- ------------ ---------- ---------- -----------
Investment management 959 2,237 3,196 892 2,082 2,974
------- ------- ------- ------- ------- -------
959 2,237 3,196 892 2,082 2,974
==== ==== ==== ==== ==== ====
A summary of the terms of the management agreement is given
in the Strategic Report in the Annual Report and financial statements.
Revenue Capital Revenue Capital
return return Total return return Total
2016 2016 2016 2015 2015 2015
5. Taxation GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------ ------------------------------- --------- --------- ------------ ---------- ---------- -----------
a) Analysis of the charge
for the year
Overseas tax suffered 1,373 - 1,373 956 6 962
Overseas tax reclaimable (283) - (283) (107) - (107)
------- ------- ------- ------- ------- -------
Total tax charge for
the year 1,090 - 1,090 849 6 855
==== ==== ==== ==== ==== ====
b) Factors affecting the tax charge for the year
The differences are explained below:
Revenue Capital Revenue Capital
return return Total return return Total
2016 2016 2016 2015 2015 2015
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------- ------------ ------------ --------- ------------ ------------
Profit before taxation 21,919 151,424 173,343 20,162 36,516 56,678
Corporation tax for
the year at 20.00%
(2015: 20.42%) 4,384 30,285 34,669 4,117 7,457 11,574
Non taxable UK dividends (2,046) - (2,046) (2,097) - (2,097)
Overseas income and
non taxable scrip
dividends (2,617) - (2,617) (2,370) - (2,370)
Income taxable in
different years - - - (4) - (4)
Overseas withholding
tax suffered 1,090 - 1,090 849 6 855
Excess management
expenses and loan
relationships 279 1,021 1,300 353 849 1,202
Disallowable expenses - - - 1 - 1
Capital gains not
subject to tax - (31,306) (31,306) - (8,306) (8,306)
-------- ----------- ----------- -------- ----------- -----------
1,090 - 1,090 849 6 855
===== ====== ===== ==== ====== =====
c) Provision for deferred taxation
No provision for deferred taxation has been made in the current
year or in the prior year. The Company has not provided for deferred
tax on capital gains or losses arising on the revaluation or disposal
of investments as it is exempt from tax on these items because
of its status as an investment trust company, which it intends
to maintain for the foreseeable future.
d) Factors that may affect future tax charges
The UK Government announced in July 2015 that the corporate tax
rate is set to be cut to 19.0% in 2017 and 18.0% in 2020. These
reductions in the standard rate of corporation tax were substantially
enacted on 26 October 2015 and became effective from 18 November
2015. The rate for 2020 was subsequently reduced to 17.0% by the
Finance Act 2016. The Company has not recognised a deferred tax
asset totalling GBP6,257,000 (2015: GBP6,561,000) based on a prospective
corporation tax rate of 17.0% (2015: 20.0%). The deferred tax asset
arises as a result of having unutilised management expenses and
unutilised non-trade loan relationship deficits. These expenses
will only be utilised, to any material extent, if the Company has
profits chargeable to corporation tax in the future because changes
are made either to the tax treatment of the capital gains made
by investment trusts or to the Company's investment profile which
require them to be used.
6. Earnings per ordinary share
The total earnings per ordinary share is based on the net profit
attributable to the ordinary shares of GBP172,253,000 (2015:
GBP55,823,000) and on 118,813,485 ordinary shares (2015: 112,178,757),
being the weighted average number of shares in issue during the
year.
The total earnings can be further analysed as follows:
2016 2015
GBP'000 GBP'000
------------------------------------- --------------------------- -----------------
Revenue profit 20,829 19,313
Capital profit 151,424 36,510
------------- ----------
Profit for the year 172,253 55,823
------------- ----------
Weighted average number of ordinary
shares 118,813,485 112,178,757
----------------- ----------------
Revenue earnings per ordinary share 17.53p 17.22p
Capital earnings per ordinary share 127.45p 32.54p
------------- ----------
Earnings per ordinary share 144.98p 49.76p
======= =======
The Company does not have any dilutive securities, therefore
basic and diluted earnings are the same.
Number of Total number Nominal
7. Called up share capital shares entitled of shares value
to dividend of shares
GBP'000
---------------------------------------- ------------------ ------------------ ------------
Ordinary shares of 25p each authorised
At 1 November 2015 113,081,839 113,081,839 28,271
New shares issued 10,863,453 10,863,453 2,715
Shares brought back in the year:
held in treasury (1,338,509) - -
----------------- ----------------- -----------
At 31 October 2016 122,606,783 123,945,292 30,986
----------------- ---------------- -----------
Number of Total Nominal
shares entitled number value
to dividend of shares of shares
GBP'000
---------------------------------------- ------------------ ------------------ ------------
Ordinary shares of 25p each authorised
At 1 November 2014 112,106,839 112,106,839 28,027
New shares issued 1,000,000 1,000,000 250
Shares brought back in the year: (25,000) (25,000) (6)
----------------- ----------------- -----------
At 31 October 2015 113,081,839 113,081,839 28,271
----------------- ----------------- -----------
During the year, 10,863,453 ordinary shares were issued for net
proceeds of GBP68,534,000 (2015: 1,000,000 issued for net proceeds
of GBP5,919,000). Also during the year, 1,338,509 ordinary shares
were purchased into treasury at a cost of GBP8,206,000 (2015:
25,000 shares purchased for cancellation at a cost of GBP155,000).
Further details can be found in the Annual Report.
Included in the issue of 10,863,453 ordinary shares during the
period were 9,413,453 shares issued following the liquidation
of Henderson Global Trust plc ('HGT') whereby investors in HGT
were given the option of receiving shares in either The Bankers
Investment Trust PLC or Henderson International Income Trust
plc. The proceeds for this issue were received as a mix of cash
and in-specie assets. Since the year end, the Company has not
issued any ordinary shares.
8. Net asset value per ordinary share
The net asset value per ordinary share is based on net assets
attributable to ordinary shares of GBP926,738,000 (2015: GBP712,633,000)
and on 122,606,783 ordinary shares in issue at
31 October 2016 (2015: 113,081,839). The Company has no securities
in issue that could dilute the net asset value per ordinary share.
The movements during the year in net assets attributable to the
ordinary shares were as follows:
2016 2015
GBP'000 GBP'000
----- ------------------------------------------------- ------------- -------------
Net assets attributable to ordinary shares at
start of year 712,633 668,196
Total net profit on ordinary activities after
taxation 172,253 55,823
Dividends paid (18,476) (17,150)
Issue of ordinary shares 68,534 5,919
Purchase of ordinary shares (8,206) (155)
----------- ------------
Net assets attributable to ordinary shares at
end of year 926,738 712,633
====== ======
9. 2016 Financial Information
The figures and financial information for the year ended 31 October
2016 are extracted from the Company's annual financial statements
for that period and do not constitute statutory accounts. The
Company's annual financial statements for the year to 31 October
2016 have been audited but have not yet been delivered to the
Registrar of Companies. The Auditors' report on the 2016 annual
financial statements was unqualified, did not include a reference
to any matter to which the Auditors drew attention without qualifying
the report, and did not contain any statements under Section
498 of the Companies Act 2006.
10. 2015 Financial Information
The figures and financial information for the year ended 31 October
2015 are compiled from an extract of the published accounts for
that year and do not constitute statutory accounts. Those accounts
have been delivered to the Registrar of Companies and included
the report of the Auditors which was unqualified and did not
contain a statement under Sections 498(2) or 498(3) of the Companies
Act 2006.
11. Dividend
A final dividend of 4.60p per share, if approved by shareholders
at the AGM, will be paid on 28 February 2017 to shareholders
on the register on 27 January 2017. The shares go ex-dividend
on 26 January 2017. This final dividend, together with the three
interim dividends already paid, brings the total dividend for
the year to 17.0p.
12. Annual Report
Copies of the Annual Report will be posted to shareholders by
the end of January 2017 and will be available on the Company's
website (www.bankersinvestmenttrust.com) or in hard copy format
from the Registered Office, 201 Bishopsgate, London EC2M 3AE.
13. Annual General Meeting
The Annual General Meeting will be held on Wednesday 22 February
2017 at 12 noon at Trinity House, London, EC3N 4DH.
LARGEST INVESTMENTS at 31 October 2016
The 25 largest investments (convertibles and all classes of equity in any one company being treated as one investment) were as follows:
Valuation Sales Appreciation/ Valuation
Rank Rank 2015 Purchases proceeds (depreciation) 2016
2016 2015 Company GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ----------------------- -------------- ------------ ------------ ----------------- ------------
1 (1) BP 13,197 6,089 - 4,317 23,603
British American
2 (2) Tobacco 10,807 3,123 - 2,498 16,428
3 (9) American Tower 8,785 996 - 4,300 14,081
4 (4) Apple 10,044 900 - 2,396 13,340
5 (3) Delphi Automative 10,743 2,060 - (57) 12,746
6 (12) Royal Dutch Shell 8,534 1,411 - 2,362 12,307
7 # Alphabet 6,110 2,733 - 3,355 12,198
8 (16) Comcast 7,627 2,423 - 2,053 12,103
9 (11) CVS Health 8,621 2,325 - 664 11,610
10 (20) The Cooper Companies 6,861 785 - 3,441 11,087
11 (22) GlaxoSmithKline 6,518 2,929 (93) 1,012 10,366
Fidelity National
Information
12 (18) Services 7,252 728 - 2,295 10,275
13 (21) Accenture 6,700 798 - 2,657 10,155
Taiwan Semiconductor
14 # Manufacturing 4,694 1,069 - 4,245 10,008
15 # Amazon 5,464 595 - 3,579 9,638
16 (25) Visa 6,299 706 - 2,358 9,363
17 (24) American Express 6,390 1,839 - 1,061 9,290
18 (15) Cardinal Health 7,917 855 - 477 9,249
19 # FedEx 5,850 695 - 2,590 9,135
20 (17) Reckitt Benckiser 7,613 - - 1,163 8,776
21 # Fujitsu 2,147 3,816 - 2,811 8,774
22 # Facebook 4,360 1,035 - 3,098 8,493
23 # Mednax 5,824 1,851 - 763 8,438
24 # Applied Materials 3,468 483 - 4,456 8,407
25 # Netease 4,210 806 (3,047) 6,356 8,325
------------- ----------- ----------- ----------- -----------
176,035 41,050 (3,140) 64,250 278,195
======= ====== ====== ====== ======
All securities are equity investments
# Not in the top 25 last year.
CHANGES IN INVESTMENTS at 31 October 2016
Valuation Sales proceeds Appreciation/ Valuation
2015 PurchasesGBP'000 GBP'000 (depreciation) 2016
GBP'000 GBP'000 GBP'000
------------
United Kingdom 277,238 82,968 (85,833) 1,697 276,070
Europe 93,021 27,970 (8,503) 23,773 136,261
North America 177,721 41,780 (16,953) 61,173 263,721
Japan 84,564 23,071 (24,035) 25,372 108,972
China 23,086 30,643 (23,317) 10,060 40,472
Pacific (ex Japan, China) 58,787 52,166 (35,671) 26,614 101,896
Emerging Markets 12,414 9,180 (5,160) 7,393 23,827
----------- ----------- ------------ ----------- -----------
726,831 267,778 (199,472) 156,082 951,219
======= ====== ======= ====== ======
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.
******
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UWSNRBKAAAAR
(END) Dow Jones Newswires
January 18, 2017 11:55 ET (16:55 GMT)
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