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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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.40 | 0.35% | 114.60 | 114.60 | 115.00 | 116.00 | 114.60 | 116.00 | 1,230,858 | 16:27:36 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Unit Inv Tr, Closed-end Mgmt | 68.02M | 64.56M | 0.0492 | 23.29 | 1.5B |
From May 2019 to May 2024
TIDMBNKR
RNS Number : 9093B
Bankers Investment Trust PLC
15 January 2018
LEGAL ENTITY IDENTIFIER: 213800B9YWXL3X1VMZ69
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2017
This announcement contains regulated information
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Performance Highlights 31 October 2017 31 October 2016
----------------------------------- ------------------ ------------------
NAV per share at year end 878.9p 755.9p
Share price at year end(1) 852.0p 690.0p
Dividend for year(2) 18.6p 17.0p
31 October 2017 31 October 2016
------------------ ------------------
Dividend yield(3) 2.2% 2.5%
Retail Prices Index increase over
year 4.0% 2.0%
Ongoing charge for year 0.44% 0.52%
Net gearing at year end(4) 2.3% 2.6%
Discount at year end 3.1% 8.7%
(1) Share price is the mid market closing price.
(2) This represents the four ordinary dividends recommended or paid for the year.
(3) Based on the share price at the year end.
(4) Net gearing is calculated in accordance wih the gearing definition in the Alternative Performacne Measures in the
Annual Report
Sources: Morningstar for the AIC, Janus Henderson, Datastream.
CHAIRMAN'S STATEMENT
-- Net asset value increase of 16.3%
-- Dividend increase of 9.4%
-- Forecast increase in 2018 dividend of at least 6.0%
Performance
I am very pleased to report another excellent year for our shareholders, with a net asset value ('NAV') increase of 16.3%. Also, the share price performance was enhanced as the discount to NAV narrowed, with the share price recording a 23.5% increase.
Whilst UK market sentiment was influenced by Brexit negotiations, international markets continued to perform strongly as evidence of strengthening economic activity and improving consumer confidence was recorded in virtually every region. Currency movements were less pronounced than last year albeit sterling weakened again against the Euro and US dollar. So, for the second year running our capital value was helped by both strong markets in the UK and overseas and a weaker level of sterling. This 'double' impact was particularly evident in our North American portfolio where a sterling total return of 24.3% was recorded and in our Continental European portfolio with a total return of 21.5%. Total returns from Japan and Emerging Markets were lower at 9.8% and 5.8% respectively whilst the UK portfolio had a total return of 12.7%. Indeed, every international portfolio outperformed its local benchmark. Special mention must be made of our mainland China equity exposure where we recorded a total return of 55.3% against a local benchmark of 15.1%. On behalf of the Board, I would like to thank all of our fund managers for this exceptional performance.
I have reported on several occasions that strategic asset allocation decisions have led to a considerable shift in our equity exposure away from the UK and into other major markets, primarily North America during the past five years. North America is now our single largest country exposure at approximately 28%, followed by the UK at approximately 26%. Many market commentators have, over the years, tried to call the top of the North American market based on stretched valuation levels. But, despite a backdrop of increasing interest rates, multiples have continued to rise and in certain sectors appear to be significantly beyond any normal valuation levels. With this in mind we are unlikely to increase our US asset allocation in the short to medium term.
Elsewhere, primarily in Continental Europe and Japan, the economic growth story is gaining momentum and has yet to be fully reflected in corporate earnings growth. Whilst many challenges remain in these two geographic areas, they are likely to be the beneficiaries of any further asset allocation shifts away from the UK which we may instigate in the year ahead.
Revenue and Dividends
Bankers has delivered a further solid increase in the revenue account, reflecting positive currency movements, robust dividend growth and further substantial special dividends. This performance has enabled the Board to recommend an increase in the final quarterly dividend to 4.80p per share. If approved by shareholders this will result in a total dividend payment for the year of 18.6p (2016: 17.0p), an increase of 9.4%. This increase compares with my forecast of at least 6%. Our revenue earnings per share over the same period rose to 20.49p (2016: 17.53p), an increase of 16.9%.
The outlook for the year ahead from a revenue perspective remains positive. The recommended final 2017 dividend payment, if approved, will still accommodate a healthy transfer to revenue reserve which, at the year-end, represented 1.8 times the cost of the 2017 annual dividend. These reserves give the Board confidence in its discussions over future dividend growth. So, I am pleased to be able to report, on behalf of the Board, a forecast of dividend growth of at least 6.0% for 2018.
Change to Investment Objectives and Policy Wording
You will note in the annual report that the Board has reviewed the wording of the investment objectives and policy. This has been driven by the FCA's thematic review on meeting customer expectations and ensuring that investment objectives and policies are clear, accurate and not ambiguous. Shareholders should rest assured that the existing twin key objectives of capital growth and dividend growth remain core to the investment objectives of the Company. We have taken the opportunity to consider introducing a global benchmark to judge capital growth over the long term. After consultation with our Manager and Corporate Broker we have decided to adopt the FTSE World Index, an index of global companies. We intend to review performance over a suitable medium to long term period, representing at least three years, as we do not wish our fund managers to generate excessive trading to move the portfolio into line with the index in seeking to generate short term relative performance.
Janus Henderson
We have followed the course of the merger between Henderson and Janus and the additional resources and expertise that has been available to Alex Crooke, our Fund Manager. We continue to be optimistic that Janus Henderson will be able to provide Alex with the support he will need to build on the performance of Bankers. We are also delighted to record Alex's promotion to Co-Head of Equities at Janus Henderson whilst continuing to be lead Fund Manager of Bankers.
Board Changes
Both Matthew Thorne and David Wild will be retiring from the Board at the forthcoming Annual General Meeting ('AGM'). On behalf of all shareholders I thank both of them for their significant contribution to the continuing success of the Company.
Matthew joined the Board in November 2008 and became Audit Committee Chairman in 2010. During this period Matthew has been a strong independent non-executive director who has demonstrated on many occasions his responsibilities to shareholders. Having served a full nine year term Matthew will retire at the AGM.
David joined the Board in February 2014 and is not seeking re-appointment at the AGM. David's executive role at Domino's Pizza has expanded as that company has developed and, as such, David felt unable to commit to the continuing time demands placed upon the non-executive directors of your Company.
I am pleased to report that Isobel Sharp joined the Board on 1 November 2017, and will stand for appointment by shareholders at the forthcoming AGM. Isobel has had a distinguished career in the accountancy profession, most recently as the senior technical partner at Deloitte LLP. Further details of her experience can be found in the Annual Report. Isobel will take on the Audit Committee Chair upon Matthew's retirement. I look forward to introducing Isobel to shareholders at the AGM.
Annual General Meeting ('AGM')
This year's AGM will again be held at Trinity House, London, EC3N 4DH on 21 February 2018 at 12 noon. Full details of the business to be conducted at the meeting are set out in the Notice of Meeting which will be 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. At the AGM, 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. The Board looks forward to seeing many of you at the AGM.
Outlook
Rising inflation and the reaction of central banks is likely to be one of the bigger macro issues affecting global markets in the year ahead. Increasing globalisation of the world economy has manifested itself in many ways with one key aspect being the downward pressure on labour costs across major economies. The recent increase in broader inflation measures has not yet resulted in a significant increase in labour costs but the time may be getting closer when labour cost pressures will be more evident. Central banks in the US and UK are beginning to withdraw the monetary support to their economies by raising interest rates. How aggressive this removal of monetary support will be, especially with most markets at all-time highs, will be one of the key determinants of market direction in 2018.
On a more positive note, global economic growth remains positive and corporate earnings growth in most major markets is accelerating. Whether this growth is already reflected in market valuations is another critical aspect in trying to forecast returns for next year. One thing about which I am certain, however, is to be cautious in extrapolating the returns of the past two years into next year. Global stock markets and currencies may not be as positively aligned in our favour as they have been during the past two years.
Richard Killingbeck
Chairman
FUND MANAGER'S REVIEW
Stock markets have continued to dance to the tune being played by central banks. Easy money and low interest rates provided a supportive back drop for assets of all types to appreciate, effectively debasing the value of cash by comparison. While certain politicians in the US and Europe have been distracting the attention of commentators and news services, their relevance to economic growth has been limited. The unexpected outturn was the US Federal Reserve increasing interest rates at a lower rate than expected maintaining the goldilocks era that has persisted for a few years. Investors were said to be exhibiting rational exuberance by market strategists, although in recent months this seems to be swinging to a less rational form of speculation in cryptocurrencies such as Bitcoin. Our strategy has changed little through the year, preferring to stay invested and concentrate on businesses that produce strong cash generation which can support a return of profits through dividends. This has resulted in another solid year of relative performance, particularly at the stock picking level with every region, bar the UK, outperforming their regional indices. The stand-out performers were the US and once again the mainland China portfolio of A shares.
The US portfolio has been the largest contributor to overall performance in recent years, rising to over 30% of the portfolio value earlier this year, at which point we decided to take some profits. Valuations in the US are at an elevated level, justifiable to some extent by better growth, but as economic activity improved in other parts of the world we felt better value could be obtained elsewhere. These reductions proved to be well timed. The proceeds from US sales were reinvested into Europe and China, and later in the year, Japan. At a stock level, we are beginning to find that better levels of growth globally and the slow normalisation of interest rates is benefitting cyclicals: those stocks that are more attuned to economic growth such as financials and industrials. We have benefitted from the share price appreciation of US technology shares but, towards the middle of the year, started to rotate these holdings into more diversified areas, reducing the potential impact should they start to underperform. Our managers have not had it all their way; smaller companies have performed far better than large and this dynamic impacted performance in the UK and to some extent Europe where we have limited exposure to small companies.
Europe and Asia, including China, have delivered the best absolute level of returns during the year. We continue to believe that these markets can make further progress but the exposure to China, through both mainland and Hong Kong, is getting towards the maximum level that we are able to tolerate. The region can be susceptible to higher levels of volatility and central government control, which means we should not be overly exposed. The deployment of gearing within the Company has been conservative all year and ended the period at 2%. We felt more comfortable retaining cash to take advantage of a market setback, as there have been troubling political and macro events that could easily have resulted in investors withdrawing from markets. In the end, no meaningful fall occurred but we continue to cautiously recycle investments from stocks we feel are expensive into those which offer better value.
We have made a change to the manager line-up with David Smith taking over the management of the UK portfolio from me. David and I have worked together for the last five years on another UK portfolio and I feel his clear focus on companies listed in the UK will deliver returns as the future ramifications of Brexit become clearer. The roster of fund managers working for Bankers features the best talent within Janus Henderson and the merger over the summer with Janus has created more resources.
The significant fall in the value of sterling following the 2016 European referendum had a greater impact in the translation of overseas dividends during this reported year than the previous year. The Company's earnings rose 17% year-on-year but, as the year progressed, sterling started to strengthen against the US dollar and next year we could see the positive effect on earnings reverse. A key focus of stock selection in all regions is dividend growth from our investments and this been most noticeable in the lower yielding regions such as the US and Japan. Dividend growth is gently accelerating in both regions and could surprise positively next year helped by tax reforms in the US and a move to higher pay outs in Japan.
There are plenty of future trends like Brexit, fading Chinese growth and shrinking liquidity that may make investors cautious. A negative outturn from any one could result in a sharp fall in stock markets. However, the seeds of a global recession or prolonged market collapse are not yet obvious and so share prices may continue to rise. Seeking out fundamental or intrinsic value has long been a sound investment strategy but, in recent years, they have been forgotten in favour of growth and momentum. It seems clear to us that inflationary pressures exist in labour markets and higher wage growth will favour a market shift towards more careful analysis of value and the price paid for growth. These trends should favour our portfolio.
Alex Crooke
Fund Manager
LARGEST INVESTMENTS at 31 October 2017
Valuation Sales Appreciation/ Valuation
Rank Rank 2016 Purchases proceeds (depreciation) 2017
2017 2016 Company GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------- ------- ------------------------- ------------ ------------ ------------ ----------------- ------------
1 (1) BP 23,603 - (4,448) 743 19,898
2 (4) Apple 13,340 - - 4,918 18,258
3 (2) British American Tobacco 16,428 - - 629 17,057
4 (17) American Express 9,290 3,478 - 3,636 16,404
5 (3) American Tower 14,081 - - 1,779 15,860
6 (7) Alphabet 12,198 - - 2,257 14,455
7 (22) Facebook 8,493 2,844 - 3,035 14,372
8 # Samsung 7,439 1,517 - 5,371 14,327
9 (6) Royal Dutch Shell 12,307 - - 1,784 14,091
10 # Xylem - 11,146 - 2,663 13,809
11 (19) FedEx 9,135 2,586 - 1,967 13,688
12 (8) Comcast 12,103 - - 869 12,972
13 # Berkshire Hathaway - 11,825 - 799 12,624
14 (5) Delphi Automotive 12,746 - (4,153) 4,010 12,603
Taiwan Semiconductor
15 (14) Manufacturing 10,008 - - 2,516 12,524
16 # Union Pacific - 11,931 - 418 12,349
Fidelity National
Information
17 (12) Services 10,275 - - 1,574 11,849
18 (16) Visa 9,363 - - 2,108 11,471
Cognizant Technology
19 # Solutions 3,034 6,403 - 2,029 11,466
20 # ICON - 11,142 (4,075) 3,885 10,952
21 # Estée Lauder - 9,274 - 1,474 10,748
22 # Priceline 7,838 1,172 - 1,496 10,506
Hangzhou Hikvision
Digital
23 # Technology 3,891 1,597 (371) 4,953 10,070
24 # Diageo 6,083 2,491 - 1,398 9,972
25 # MasterCard 7,785 - - 2,164 9,949
----------- ----------- ----------- ----------- -----------
209,440 77,406 (13,047) 58,475 332,274
====== ====== ====== ====== ======
All securities are equity investments
# Not in the top 25 last year
Convertibles and all classes of equity in any one company being treated as one investment
CHANGES IN INVESTMENTS at 31 October
Valuation Sales proceeds Valuation
2016 Purchases GBP'000 Appreciation 2017
GBP'000 GBP'000 GBP'000 GBP'000
--------------
United Kingdom 276,070 62,911 (71,704) 24,122 291,399
Europe (ex UK) 136,261 44,138 (41,672) 24,807 163,534
North America 263,721 82,009 (100,020) 59,556 305,266
Japan 108,972 59,251 (48,495) 8,586 128,314
China 40,472 36,485 (29,443) 20,131 67,645
Pacific (ex Japan,
China) 101,896 15,671 (13,030) 14,285 118,822
Emerging Markets 23,827 4,705 (2,217) 521 26,836
----------- ------------- ------------ ------------- -------------
951,219 305,170 (306,581) 152,008 1,101,816
====== ======= ======= ======= =======
PRINCIPAL RISKS AND UNCERTAINTIES
The Board, with the assistance of Janus 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 objectives 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:
Risk Controls and Mitigation
-------------------------------------------- ----------------------------------------------
Investment Activity and Performance
Risks The Board monitors investment performance
An inappropriate investment strategy at each Board meeting and regularly
(for example, in terms of asset reviews the extent of the Company's
allocation or the level of gearing) 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 regularly
prices may move rapidly. The companies reviews the portfolio, investment
in which investments are made may 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 Corporation Janus Henderson has been contracted
Tax 2010 could lead to a loss of to provide investment, company secretarial,
investment trust status, resulting administration and accounting services
in capital gains realised within through qualified professionals.
the portfolio being subject to corporation The Board receives internal control
tax. A breach of the UK Listing reports produced by Janus Henderson
Authority's Rules could result in on a quarterly basis, which confirm
suspension of the Company's shares, tax, legal and regulatory compliance
while a breach of the Companies both in the UK and New Zealand.
Act could lead to criminal proceedings.
All breaches 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 trust, The Company has a diversified portfolio
the Company's business activities which comprises mainly investments
are exposed to market risk (including in large and medium-sized companies
market price risk, currency risk and mitigates the Company's exposure
and interest rate risk), liquidity to liquidity risk. The Company minimises
risk and credit and counterparty the risk of a counterparty failing
risk. to deliver securities or cash by
dealing through organisations that
have undergone rigorous due diligence
by Janus Henderson. Further information
on the mitigation of financial risks
is included in note 16 in the Annual
Report.
-------------------------------------------- ----------------------------------------------
Operational Risks
Disruption to, or failure of, Janus The Board monitors the services
Henderson's accounting, dealing provided by Janus Henderson and
or payment systems or the Depositary's its other suppliers and receives
records could prevent the accurate reports on the key elements in place
reporting and monitoring of the to provide effective internal control.
Company's financial position. The
Company 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 Annual 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 a breach of the gearing covenants could impact on the Company's net asset value and share price and 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.
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 Janus 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 the Manager, 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 the Manager 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
Richard Killingbeck
Chairman
STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 October Year ended 31 October
2017 2016
Revenue Capital Total Revenue Capital Total
return return return return return return
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- ---------- ---------- ---------- ---------- ---------- ----------
Gains on investments
held at fair value
through profit or loss - 152,388 152,388 - 156,527 156,527
Investment income 2 29,445 - 29,445 24,661 - 24,661
Other operating income 3 189 - 189 255 - 255
--------- --------- --------- --------- --------- ---------
Total income 29,634 152,388 182,022 24,916 156,527 181,443
--------- --------- --------- --------- --------- ---------
Expenses
Management fees 4 (1,012) (2,362) (3,374) (959) (2,237) (3,196)
Other expenses (963) - (963) (811) (3) (814)
--------- --------- --------- --------- --------- ---------
Profit before finance
costs and taxation 27,659 150,026 177,685 23,146 154,287 177,433
--------- --------- --------- --------- --------- ---------
Finance costs (916) (2,137) (3,053) (1,227) (2,863) (4,090)
--------- --------- --------- --------- --------- ---------
Profit before taxation 26,743 147,889 174,632 21,919 151,424 173,343
Taxation 5 (1,624) - (1,624) (1,090) - (1,090)
--------- --------- --------- --------- --------- ---------
Profit for the year
and total comprehensive
income 25,119 147,889 173,008 20,829 151,424 172,253
===== ====== ====== ===== ====== ======
Earnings per ordinary
share - basic and diluted 6 20.49p 120.62p 141.11p 17.53p 127.45p 144.98p
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
up Share Capital Other
share premium redemption capital Revenue
Year ended capital account reserve reserves reserve Total
31 October 2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ----------- ----------- ------------- ----------- ----------- -------------
Total equity at 1 November
2016 30,986 78,541 12,489 767,317 37,405 926,738
Total comprehensive income:
Profit for the year - - - 147,889 25,119 173,008
Ordinary dividends paid - - - - (22,183) (22,183)
---------- ---------- ---------- ---------- ---------- ------------
Total equity at 31 October
2017 30,986 78,541 12,489 915,206 40,341 1,077,563
====== ====== ====== ====== ====== =======
Called Share Capital Other capital
up premium redemption reserves Revenue
Year ended share account reserve GBP'000 reserve Total
31 October 2016 capital 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 into treasury - - - (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
====== ====== ====== ====== ====== ======
STATEMENT OF FINANCIAL POSITION
At 31 October At 31 October
2017 2016
GBP'000 GBP'000
-------------------------------------------- ---------------- ----------------
Non-current assets
Investments held at fair value through
profit or loss 1,101,816 951,219
------------- ------------
Current assets
Investments held at fair value through
profit or loss 23,252 21,354
Other receivables 2,660 7,817
Cash and cash equivalents 24,102 23,271
------------- -------------
50,014 52,442
------------- -------------
Total assets 1,151,830 1,003,661
------------- -------------
Current liabilities
Other payables (9,451) (12,117)
------------ ------------
(9,451) (12,117)
------------- -----------
Total assets less current liabilities 1,142,379 991,544
-------------- ------------
Non-current liabilities
Debenture stock (15,000) (15,000)
Unsecured loan notes (49,816) (49,806)
-------------- ------------
(64,816) (64,806)
-------------- -----------
Net assets 1,077,563 926,738
======== =======
Equity attributable to equity shareholders
Share capital 30,986 30,986
Share premium account 78,541 78,541
Capital redemption reserve 12,489 12,489
Retained earnings:
Other capital reserves 915,206 767,317
Revenue reserve 40,341 37,405
------------- -----------
Total equity 1,077,563 926,738
======= =======
Net asset value per ordinary share 878.9p 755.9p
======= =======
CASH FLOW STATEMENT
Year ended Year ended
31 October 31 October
Reconciliation of profit before taxation to 2017 2016
net cash flow from operating activities GBP'000 GBP'000
------------------------------------------------------ --------------- ---------------
Operating activities
Profit before taxation 174,632 173,343
Add back interest payable ('finance costs') 3,043 4,090
Amortisation of loan note issue costs 10 11
Less gains on investments held at fair value
through profit or loss (152,388) (156,527)
Decrease/(increase) in accrued income 79 (454)
Decrease/(increase) in other receivables 42 (28)
(Decrease)/increase in other payables (66) 113
Purchases of investments (305,170) (215,420)
Sales of investments 306,581 199,472
Purchases of current asset investments (52,453) (45,156)
Sales of current asset investments 50,555 52,125
Decrease/(increase) in securities sold for future
settlement 5,235 (4,754)
(Decrease)/increase in securities purchased
for future settlement (2,601) 10,168
-------------- --------------
Net cash inflow from operating activities before
interest and taxation(1) 27,499 16,983
Interest paid (3,042) (4,102)
Taxation on investment income (1,832) (1,302)
-------------- --------------
Net cash inflow /(outflow) from operating activities 22,625 11,579
Financing activities
Equity dividends paid (net of refund of unclaimed
distributions) (22,183) (18,476)
Share issues - 9,007
Buy-back of own shares - (8,206)
Repayment of debenture stock - (10,000)
Cash received from the liquidation of Henderson
Global Trust plc 9 7,160
------------- -------------
Net cash outflow from financing activities (22,174) (20,515)
------------- -------------
Increase/(decrease) in cash 451 (8,936)
Cash and cash equivalents at start of the year 23,271 31,762
Exchange movements 380 445
----------- -----------
Cash and cash equivalents at end of the year 24,102 23,271
======= =======
(1) In accordance with IAS 7.31 cash inflow from dividends was GBP29,372,000 (2016: GBP22,932,000) and cash inflows from interest was GBP191,000 (2016: GBP226,000).
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 2017 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 IFRSs. 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 IFRSs 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 in
the Annual Report. 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 and updated in January 2017 with consequential
amendments is consistent with the requirements of IFRSs, 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 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.
2017 2016
2. Investment income GBP'000 GBP'000
---- ----------------------------------------------- ------------ ------------
UK dividend income - listed 10,847 9,696
UK dividend income - special dividends 580 693
Overseas dividend income - listed 17,195 13,419
Overseas dividend income - special dividends 502 682
Property income distributions 321 171
----------- -----------
29,445 24,661
====== ======
Analysis of investment income by geographical
region:
UK 12,743 11,853
Europe (ex UK) 5,220 3,268
North America 2,639 2,883
Japan 2,183 2,209
China 1,454 1,171
Pacific (ex Japan, China) 4,343 2,599
Emerging Markets 863 678
----------- -----------
29,445 24,661
====== ======
2017 2016
3. Other operating income GBP'000 GBP'000
---- ------------------------ -------- --------
Bank interest 23 86
Underwriting income 54 77
Stock lending revenue 108 83
Treasury bill interest - 3
Other income 4 6
----- -----
189 255
=== ===
At 31 October 2017 the total value of securities on loan by the
Company for stock lending purposes was GBP28,166,000 (2016: GBP30,184,000).
The maximum aggregate value of securities on loan at any one
time during the year ended 31 October 2017 was GBP64,544,000
(2016: GBP66,536,000). The Company's agent held collateral at
31 October 2017 with a value of GBP31,366,000 (2016: GBP32,154,000)
in respect of securities on loan. The value of securities held
on loan, comprising Corporate and Government Bonds with a minimum
market value of 105% (2016: 105%) of the market value of any
securities on loan is reviewed on a daily basis.
2017 2016
------------------------------- ------------------------------------------
Revenue Capital Total Revenue Capital Total
return return return return return return
4. Management fees GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------ --------------------- --------- --------- --------- --------- --------- --------------------
Investment management 1,012 2,362 3,374 959 2,237 3,196
------- ------- ------- ------- ------- -------
1,012 2,362 3,374 959 2,237 3,196
==== ==== ==== ==== ==== ====
A summary of the terms of the management agreement is given in the
Annual Report.
2017 2016
------------------------------- ------------------------------------------
Revenue Capital Total Revenue Capital Total return
return return return return return GBP'000
5. Taxation GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------ --------------------- --------- --------- --------- --------- --------- --------------------
a) Analysis of the
charge
for the year
Overseas tax suffered 1,986 - 1,986 1,373 - 1,373
Overseas tax reclaimable (362) - (362) (283) - (283)
------- ------- ------- ------- ------- -------
Total tax charge for
the year 1,624 - 1,624 1,090 - 1,090
==== ==== ==== ==== ==== ====
b) Factors affecting the tax charge for the year
The differences are explained below:
2017 2016
------------------------------------- --------------------------------------
Revenue Capital Total Revenue Capital Total return
return return return return return GBP'000
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- ------------ ------------ --------- ------------ -------------
Profit before taxation 26,743 147,889 174,632 21,919 151,424 174,343
Corporation tax for
the year at an effective
rate of 19.42% (2016:
20.00%) 5,193 28,720 33,913 4,384 30,285 34,669
Non taxable UK dividends (2,229) - (2,229) (2,046) - (2,046)
Overseas income and
non taxable scrip
dividends (3,239) - (3,239) (2,617) - (2,617)
Overseas withholding
tax suffered 1,624 - 1,624 1,090 - 1,090
Realised gains on
non-reporting offshore
funds - 555 555 - - -
Excess management
expenses and loan
relationships 275 319 594 279 1,021 1,300
Capital gains not
subject to tax - (29,594) (29,594) - (31,306) (31,306)
-------- ----------- ----------- -------- ----------- -----------
1,624 - 1,624 1,090 - 1,090
===== ====== ===== ===== ====== =====
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,
which it intends to maintain for the foreseeable future.
d) Factors that may affect future tax charges
The Company has not recognised a deferred tax asset totalling GBP7,201,000
(2016: GBP6,257,000) based on a prospective corporation tax rate of
17.0% (2016: 17.0%). 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 GBP173,008,000 (2016: GBP172,253,000)
and on 122,606,783 ordinary shares (2016: 118,813,485), being the
weighted average number of shares in issue during the year.
The total earnings can be further analysed as follows:
2017 2016
GBP'000 GBP'000
------------------------------------- --------------------------- ---------------------------
Revenue profit 25,119 20,829
Capital profit 147,889 151,424
---------------- ----------------
Profit for the year 173,008 172,253
---------------- ----------------
Weighted average number of ordinary
shares 122,606,783 118,813,485
----------------- -----------------
Revenue earnings per ordinary share 20.49p 17.53p
Capital earnings per ordinary share 120.62p 127.45p
------------- -------------
Earnings per ordinary share 141.11p 144.98p
======= =======
The Company does not have any dilutive securities, therefore basic
and diluted earnings are the same.
Number of Total number Nominal value
7. Called up share capital shares entitled of shares of shares
to dividend GBP'000
-------------------------------- ------------------ ------------------ ---------------
Ordinary shares of 25p each
At 1 November 2016 122,606,783 123,945,292 30,986
----------------- ----------------- -----------
At 31 October 2017 122,606,783 123,945,292 30,986
----------------- ---------------- -----------
Number of Total Nominal value
shares entitled number of shares
to dividend of shares GBP'000
-------------------------------- ------------------ ------------------ ---------------
Ordinary shares of 25p each
At 1 November 2015 113,081,839 113,081,839 28,271
New shares issued 10,863,453 10,863,453 2,715
Shares bought back in the year (1,338,509) - -
----------------- ----------------- -----------
At 31 October 2016 122,606,783 123,945,292 30,986
----------------- ---------------- -----------
During the year, no ordinary shares were issued or purchased. In
the year ended 31 October 2016, 10,863,453 shares were issued for
net proceeds of GBP68,534,000 and 1,338,509 shares were purchased
for holding in treasury at a cost of GBP8,206,000.
Since the year end, the Company has not issued any ordinary shares
or purchased shares for cancellation or to be held in treasury.
8. Net asset value per ordinary share
The net asset value per ordinary share is based on net assets attributable
to ordinary shares of GBP1,077,563,000 (2016: GBP926,738,000) and
on 122,606,783 ordinary shares in issue at 31 October 2017 (2016:
122,606,783). 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:
2017 2016
GBP'000 GBP'000
---- ------------------------------------------------- --------------- ------------
Net assets attributable to ordinary shares at
start of year 926,738 712,633
Total net profit on ordinary activities after
taxation 173,008 172,253
Dividends paid (22,183) (18,476)
Issue of ordinary shares - 68,534
Purchase of ordinary shares - (8,206)
------------- -----------
Net assets attributable to ordinary shares at
end of year 1,077,563 926,738
======= ======
9. Dividend
A final dividend of 4.80p per share, if approved by shareholders
at the Annaul General Meeting, will be paid on 28 February 2018
to shareholders on the register on 26 January 2018. The shares go
ex-dividend on 25 January 2018. This final dividend, together with
the three interim dividends already paid, brings the total dividend
for the year to 18.6p.
10. 2017 Financial Information
The figures and financial information for the year ended 31 October
2017 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 2017 have
been audited but have not yet been delivered to the Registrar of
Companies. The Auditor's report on the 2017 annual financial statements
was unqualified, did not include a reference to any matter to which
the Auditor drew attention without qualifying the report, and did
not contain any statements under Section 498 of the Companies Act
2006.
11. 2016 Financial Information
The figures and financial information for the year ended 31 October
2016 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 Auditor which was unqualified and did not contain
a statement under Sections 498(2) or 498(3) of the Companies Act
2006.
12. Annual Report
Copies of the Annual Report will be posted to shareholders by the
end of January 2018 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 21 February
2018 at 12 noon at Trinity House, London, EC3N 4DH.
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 Director and Head of Investment Investor Relations and PR Manager Trusts Janus Henderson Investors Janus Henderson Investors Telephone: 020 7818 3198 Telephone: 020 7818 3349
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 UVOORWBAAAAR
(END) Dow Jones Newswires
January 15, 2018 08:39 ET (13:39 GMT)
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