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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 : 1616N
Bankers Investment Trust PLC
15 January 2019
LEGAL ENTITY IDENTIFIER: 213800B9YWXL3X1VMZ69
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2018
This announcement contains regulated information
Hot Features
Premium
Performance Highlights 31 October 2018 31 October 2017
---------------------------- ------------------ ------------------
NAV per share at year end 865.8p 878.9p
Share price at year end(1) 835.0p 852.0p
Dividend for year(2) 19.72p 18.60p
31 October 2018 31 October 2017
------------------ ------------------
Dividend yield(3) 2.4% 2.2%
Dividend growth 6.0% 9.4%
Ongoing charge for year 0.50% 0.44%
Net gearing at year end(4) 2.4% 2.3%
Discount at year end 3.6% 3.1%
(1) Share price is the midmarket 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 with the gearing definition in the glossary in the
Annual Report
Sources: Morningstar for the AIC, Janus Henderson, Datastream.
CHAIRMAN'S STATEMENT
-- Net asset value total return increase of 0.8%
-- Dividend increase of 6% to 19.72p per share
-- Forecast increase in 2019 dividend of 6%
Performance
The past year has been disappointing from a net asset value ('NAV') total return basis, with an increase of just 0.8% leading to a flat share price total return over this period. The caution that I expressed in the outlook paragraph of the Strategic Report last year was for the early part of the year misplaced. Yet by our year-end the effects of rising US interest rates, stretched valuations of growth stocks, trade wars and UK politics had all played their part in turning global market sentiment negative.
Volatility has been in evidence across global markets since early summer as the momentum behind the tightening US interest rate cycle has begun to influence market sentiment and, in particular, highly-rated growth stocks such as those in the technology sector. In addition, the growing number of macro concerns (trade wars, UK politics, emerging market debt levels) have risen to prominence as the year progressed. Against this backdrop, companies issuing profit warnings have been harshly treated by the markets thus compounding the rising nervousness amongst investors.
During the year the asset allocation structure of the portfolio has continued the trend of the past three years, namely a reduction in the UK equity element of the portfolio, a gradual increase in the US and a maintaining of our allocation to Japanese and Continental European equities. Towards our end of the period we allocated some more monies to our China exposure, following a near 20% decline in the market, thus maintaining an overall stable allocation to the Asian region.
With the exception of North America and Japan, all global markets experienced negative returns during the year. On a positive note our regional managers performed well with four (Europe, North America, Asia Pacific and China) significantly outperforming their local benchmarks whilst the UK, Japan and Emerging Market portfolios underperformed their local benchmarks. From a sectorial perspective, our overweight position in consumer stocks, in particular in the UK, has negatively impacted performance, whilst our technology exposure in the US has driven our outperformance in this market. Towards our year-end some profits were realised from these elements of the portfolio.
Revenue and Dividends
Bankers has delivered a further solid increase in the revenue account, reflecting positive currency movements, robust dividend growth and further special dividends. This performance has enabled the Board to recommend a final quarterly dividend of 5p per share. If approved by shareholders, this will result in a total dividend payment for the year of 19.72p, (2017: 18.60p), an increase of 6.0%. Delivering on my forecast for the year. Our revenue earnings per share over the same period rose to 20.78p (2017: 20.49p), an increase of 1.4%.
The outlook for the year ahead from a revenue account perspective remains positive. The recommended final 2018 dividend payment, if approved, will still accommodate a healthy transfer to our revenue reserve which, at the year-end, represented 1.2 times the cost of the 2018 annual dividend. This reserve gives the Board confidence in its discussions regarding likely future dividend growth. The main concern when forecasting growth for the current year remains the level of sterling. Sterling's weakness has helped our revenue account significantly during the past three years. A sudden increase in the value of sterling, albeit not our expectation, will lead to pressure on the revenue account. However such is our level of revenue reserves that I am pleased to be able to report, on behalf of the Board, a forecast of dividend growth of approximately 6% for 2019.
Board Changes
As has previously been announced, I shall be retiring from the Board at the forthcoming Annual General Meeting ('AGM'). Sue Inglis will succeed as Chairman from the conclusion of the AGM. Sue joined the Board in November 2012 and became Senior Independent director in February 2015. Sue is highly experienced and knowledgeable within the Investment Trust sector and has for many years advised other companies in her role as a lawyer and subsequently a corporate financier. Sue has a number of other non-executive roles in the sector having stepped down as Managing Director - Corporate Finance at Cantor Fitzgerald Europe last summer. I know that Sue will continue the ethos that has served shareholders in Bankers so well over the longer term. Julian Chillingworth will succeed Sue as Senior Independent Director at the same time.
I am also pleased to report that Richard Huntingford joined the Board on 26 September 2018, subject to shareholder approval at the AGM. Richard has been involved in the media and marketing sectors for more than 30 years and has held a number of executive and non-executive roles in listed and private businesses. Further details of his experience can be found in the Annual Report. I look forward to introducing Richard to shareholders at the AGM.
Annual General Meeting ('AGM')
This year's AGM will again be held at Trinity House, London, EC3N 4DH on 27 February 2019 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. 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
In my view it is too early to become contrarian in regard to market sentiment but it is very tempting to begin to look at markets more positively. The global economy, led by North America, remains solid, and inflationary pressures, whilst higher than a year ago, are stabilising. The recent oil price decline has yet to feed through into inflation numbers and, whilst wage inflation remains a concern, overall inflation could fall in 2019. If such a scenario were to be in evidence then the current momentum in interest rate rises in the US could ease giving markets a welcome boost. Valuations in certain sectors will continue to be a limiting factor, equally investors will need a resolution of the current trade tariff dispute to commit substantial new money to the market. The recent low levels of volatility in markets are a phenomenon that are now likely to be confined to history and a product of quantitative easing used to stabilise markets through the financial crises. Therefore, going forward investors will need to readjust to more historically normal high levels of volatility.
The uncertainty in the UK will remain and will be dominated by Brexit issues well beyond the end of March 2019. Consumer and business sentiment remain as critical indicators in the year ahead for the country and for confidence to return to the UK from international investors in particular. The UK market therefore will likely have another dull year. Yet the valuation argument is becoming more compelling especially for some companies in more traditional defensive sectors with strong balance sheets and well covered dividends. Currency markets may surprise in 2019 and, as highlighted earlier, a stronger sterling would impact our revenue account and also have a negative translational impact on the NAV from the international holdings.
Thus I fear caution remains the key watch word for global equity markets, at least for the first half of 2019. The direction of US interest rates, the outcome of Brexit with its range of economic implications and the wider inflationary picture should all be clearer by this time. If corporate earnings growth remains positive then valuations may become compelling, despite the late stage in the cycle in which we find ourselves.
R W Killingbeck
Chairman
15 January 2019
FUND MANAGER'S REVIEW
This past year has been one of the most challenging in my career, as factors beyond the financial world have collided and created a very difficult environment for investors and companies alike. I have to look back to the 1960s to find a period when politics dominated financial markets as much as they have in 2018. The fear of the unknown swamped equity markets in 2018 and created an environment where share prices outside the US fell sharply towards the end of our financial year under review.
The year started in bright form, as against my own scepticism, tax reform in the US was enacted, leading to investors' exuberance about the future. Markets rallied to set new highs in January, with one of the strongest rises in share prices of growth stocks on record. There were plenty of signs that the optimism would fade and we did reduce the gearing into the rally selling some of the best performing stocks in the portfolio. The US Federal Reserve clearly indicated at the start of 2018 that it would raise interest rates throughout the year and the European Central Bank ('ECB') announced that it's quantitative easing bond purchases would reduce monthly and cease by the end of the year. These actions would progressively drain liquidity in markets and reduce money supply. In previous tightening cycles, we have seen market volatility increase and equity prices decline. I had expected a difficult summer but the sell-off didn't start until October.
Our line up of fund managers has not changed this year but sadly Tim Stevenson, our European fund manager, has decided to retire in early 2019 after a long career with Janus Henderson and nearly 20 years helping Bankers. His replacement will be James Ross, who joined Janus Henderson in 2007 and has worked closely with Tim in recent years.
Asset Allocation
In hindsight asset allocation was a simple decision of owning American equities and the US dollar to the exclusion of all other global markets. Every other region declined with only Japan holding flat; Chinese equities fell over 20%, in a bear market. US investors clearly repatriated assets, with investment flows moving from international markets back into US dollars. Despite the expensive valuations we increased the investment in the US, resisting the temptation to lock in gains. The portfolio's underperformance relative to the FTSE World Index is partly explained by the smaller exposure to the US relative to the benchmark, 31.6% as compared to 60.6%. I believe that purchasing expensively valued companies will ultimately hurt returns over time. The US is now a highly valued market that has outperformed other global markets for seven years during the last decade and therefore an element of caution is warranted in terms of increasing exposure. Our stock selection has offset the underweight, with the North American team producing a very impressive performance by focusing on long-term secular trends such as paperless payment, disruption and health care. The European and Pacific portfolios also delivered strong relative returns, with a focus on quality companies with dominant market positions in their industries. It was not a year to bet against market trends reversing, momentum remained strong for market leaders and value and income stocks underperformed.
The UK remained mired in Brexit uncertainty which has made the UK stock market almost un-investable in many international investors' eyes. Sterling steadily declined against the US dollar, although it has held its own against the Euro. The UK economy has seen little impact from Brexit, benefitting from the lower exchange rate. However the strains have latterly become apparent with reduced inward investment flows and tighter labour markets as immigration falls. The portfolio's exposure to the UK was reduced further this year, ending at 25.2%. The majority of the underperformance against the benchmark can be explained by the UK exposure and the underperformance of the UK stocks we held. A narrow number of the largest stocks performed well in the UK but the mid-cap stocks, which are more domestically exposed, did not perform for us.
Outlook
As I look forward I suspect that the future will not turn out as bad as many predict. The world does not appear on the verge of a sharp recession but clearly growth is slowing and share prices have begun to price this in. There is an incentive on all sides to get trade discussions concluded and I expect a better picture to emerge as the year develops. By the summer many of the uncertainties will have resolved themselves in one form or another and we should have a clearer outlook. Valuations have fallen significantly in recent months and we have an opportunity to invest cash at very favourable dividend yields. An element of caution still seems sensible and we are looking to purchase only quality companies with strong balance sheets, rather than recovery situations that require a higher level of economic growth. It looks like a year of two halves lies ahead of us.
Alex Crooke
Fund Manager
15 January 2019
LARGEST INVESTMENTS at 31 October 2018
Valuation Sales Appreciation/ Valuation
Ranking Ranking 2017 Purchases proceeds (depreciation) 2018
2018 2017 Company Country GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- ----------------- --------- ------------ ------------ ------------ --------------- ------------
1 # Microsoft US - 16,301 - 5,121 21,422
2 (2) Apple US 18,258 - (3,386) 6,413 21,285
3 (4) American Express US 16,404 1,718 - 2,052 20,174
4 (16) Union Pacific US 12,349 3,399 - 4,028 19,776
5 (1) BP UK 19,898 - (3,097) 2,015 18,816
Berkshire
6 (13) Hathaway US 12,624 3,462 - 2,003 18,089
Estée
7 (21) Lauder US 10,748 3,177 - 3,005 16,930
8 (60) Alphabet US 14,455 - - 1,431 15,886
9 (18) Visa US 11,471 - - 3,467 14,938
Royal Dutch
10 (9) Shell UK 14,091 - - 835 14,926
11 (5) American Tower US 15,860 - (3,135) 1,687 14,412
12 (12) Comcast US 12,972 - - 1,300 14,272
13 (11) FedEx US 13,688 - - 188 13,876
14 (25) MasterCard US 9,949 - - 3,793 13,742
15 (20) ICON US 10,952 - - 2,264 13,216
16 (14) Aptiv US 12,603 3,311 (2,173) (840) 12,901
17 # GlaxoSmithKline UK 8,694 2,739 - 1,277 12,710
18 (24) Diageo UK 9,972 1,417 - 598 11,987
British American
19 (3) Tobacco UK 17,057 - - (5,174) 11,883
Taiwan
Semiconductor
20 (15) Manufacturing Taiwan 12,524 - - (809) 11,715
Intercontinental
21 # Exchange US - 11,151 - 38 11,189
22 (10) Xylem US 13,809 - (3,129) 487 11,167
Cognizant
Technology
23 (19) Solutions US 11,466 - - (597) 10,869
The Cooper
24 # Companies US 9,679 - - 1,135 10,814
25 # Booking US 10,506 - - 203 10,709
----------- ----------- ----------- ----------- -----------
300,029 46,675 (14,920) 35,920 367,704
====== ====== ====== ====== ======
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 Purchases Sales proceeds Appreciation/ Valuation
2017 GBP'000 GBP'000 (depreciation) 2018
GBP'000 GBP'000 GBP'000
---------------
United Kingdom 291,399 51,806 (47,851) (21,821) 273,533
Europe (ex UK) 163,534 62,917 (57,390) (6,980) 162,081
North America 305,266 64,264 (70,309) 43,835 343,056
Japan 128,314 62,549 (58,416) (4,872) 127,575
Pacific (ex Japan, China) 118,822 25,405 (44,304) (4,802) 95,121
China 67,645 64,030 (57,624) (15,629) 58,422
Emerging Markets 26,836 4,483 (1,864) (2,210) 27,245
-------------- ----------- ------------ ------------ --------------
1,101,816 335,454 (337,758) (12,479) 1,087,033
======== ====== ======= ======= ========
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 UK's negotiations 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 activity
in which investments are made may and performance.
operate unsuccessfully, or fail
entirely. Macro matters (such as
trade wars, the conclusion of the
UK's negotiations to leave the European
Union and the global economic outlook)
are expected to lead to continued
volatility in the markets. This
is likely to impact share prices
of investments in the portfolio,
to the extent not already factored
into current prices. 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 lead Janus Henderson has been contracted
to a loss of investment trust status, to provide investment, company secretarial,
resulting in capital gains realised administration and accounting services
within the portfolio being subject through qualified professionals. The
to corporation tax. A breach of Board receives internal control reports
the UK Listing Authority's Rules produced by Janus Henderson on a quarterly
could result in suspension of the basis, which confirm tax, legal and
Company's shares, while a breach regulatory compliance both in the UK
of the Companies Act could lead and New Zealand.
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 the
Annual Report.
-------------------------------------------- ----------------------------------------------
Operational and Cyber Risks
Disruption to, or failure of, Janus The Board monitors the services provided
Henderson's accounting, dealing by Janus Henderson, the Depositary
or payment systems or the Depositary's and 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
and cyber risks 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 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, materialising 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.
RELATED PARTY TRANSACTIONS
The Company's transactions with related parties in the year were with its Directors and Janus Henderson. There were 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 were no transactions with the Manager affecting the financial position of the Company during the year under review. More details on transactions with the Manager, including amounts outstanding at the year end as shown in the Annual Report.
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
15 January 2019
STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 October Year ended 31 October
2018 2017
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
------------------------ -------- ---------- ----------- ---------- ---------- ---------- ----------
(Losses)/Gains on
investments held
at fair value through
profit or loss - (12,611) (12,611) - 152,388 152,388
Investment income 2 30,321 - 30,321 29,445 - 29,445
Other operating income 3 226 - 226 189 - 189
--------- --------- --------- --------- --------- ---------
Total income 30,547 (12,611) 17,936 29,634 152,388 182,022
--------- --------- --------- --------- --------- ---------
Expenses
Management fees 4 (1,344) (3,136) (4,480) (1,012) (2,362) (3,374)
Other expenses (990) - (990) (963) - (963)
--------- --------- --------- --------- --------- ---------
Profit/(loss) before
finance costs and
taxation 28,213 (15,747) 12,466 27,659 150,026 177,685
--------- ---------- --------- --------- --------- ---------
Finance costs (917) (2,141) (3,058) (916) (2,137) (3,053)
--------- ---------- --------- --------- --------- ---------
Profit/(loss) before
taxation 27,296 (17,888) 9,408 26,743 147,889 174,632
Taxation 5 (1,823) - (1,823) (1,624) - (1,624)
--------- --------- --------- --------- --------- ---------
Profit/(loss) for
the year and total
comprehensive income 25,473 (17,888) 7,585 25,119 147,889 173,008
===== ====== ====== ===== ====== ======
Earnings per ordinary
share - basic and
diluted 6 20.78p (14.59p) 6.19p 20.49p 120.62p 141.11p
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 2018 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- ----------- ----------- ------------- ----------- ----------- --------------
Total equity at 1 November
2017 30,986 78,541 12,489 915,206 40,341 1,077,563
Total comprehensive income:
(Loss)/profit for the
year - - - (17,888) 25,473 7,585
Ordinary dividends paid - - - - (23,565) (23,565)
---------- ---------- ---------- ---------- ---------- -------------
Total equity at 31 October
2018 30,986 78,541 12,489 897,318 42,249 1,061,583
====== ====== ====== ====== ====== =======
Called Share Capital Other capital
up premium redemption reserves Revenue
Year ended share account reserve GBP'000 reserve Total
31 October 2017 capital 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
====== ====== ====== ====== ====== =======
STATEMENT OF FINANCIAL POSITION
At 31 October At 31 October
2018 2017
GBP'000 GBP'000
-------------------------------------------- ---------------- ----------------
Non-current assets
Investments held at fair value through
profit or loss 1,087,033 1,101,816
-------------- --------------
Current assets
Investments held at fair value through
profit or loss 18,005 23,252
Other receivables 4,667 2,660
Cash and cash equivalents 20,075 24,102
-------------- -------------
42,747 50,014
-------------- --------------
Total assets 1,129,780 1,151,830
-------------- --------------
Current liabilities
Other payables (3,370) (9,451)
------------ ------------
(3,370) (9,451)
------------- -----------
Total assets less current liabilities 1,126,410 1,142,379
-------------- ------------
Non-current liabilities
Debenture stock (15,000) (15,000)
Unsecured loan notes (49,827) (49,816)
-------------- ------------
(64,827) (64,816)
-------------- -----------
Net assets 1,061,583 1,077,563
======== =======
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 897,318 915,206
Revenue reserve 42,249 40,341
------------- -------------
Total equity 1,061,583 1,077,563
======= ========
Net asset value per ordinary share 865.8p 878.9p
======= =======
CASH FLOW STATEMENT
Year ended Year ended
31 October 31 October
Reconciliation of profit before taxation to 2018 2017
net cash flow from operating activities GBP'000 GBP'000
--------------------------------------------------- --------------- ---------------
Operating activities
Profit before taxation 9,408 174,632
Add back interest payable ('finance costs') 3,047 3,043
Amortisation of loan notes issue costs 11 10
Add: losses/(gains) on investments held at fair
value through profit or loss 12,611 (152,388)
Decrease in accrued income 113 79
(Increase)/decrease in other receivables (12) 42
Increase/(decrease) in other payables 82 (66)
Purchases of investments (335,454) (305,170)
Sales of investments 337,755 306,581
Purchases of current asset investments (46,003) (52,453)
Sales of current asset investments 51,250 50,555
(Increase)/decrease in securities sold for future
settlement (1,834) 5,235
Decrease in securities purchased for future
settlement (6,163) (2,601)
-------------- --------------
Net cash inflow from operating activities before
interest and taxation(1) 24,811 27,499
Interest paid (3,058) (3,042)
Taxation on investment income (2,083) (1,832)
-------------- --------------
Net cash inflow from operating activities 19,670 22,625
Financing activities
Equity dividends paid (net of refund of unclaimed
distributions) (23,565) (22,183)
Drawdown of bank loan 2,005 -
Repayment of bank loan (2,005) -
Cash received from the liquidation of Henderson
Global Trust plc - 9
------------- -------------
Net cash outflow from financing activities (23,565) (22,174)
------------- -------------
(Decrease)/ increase in cash (3,895) 451
Cash and cash equivalents at start of the year 24,102 23,271
Exchange movements (132) 380
----------- -----------
Cash and cash equivalents at end of the year 20,075 24,102
======= =======
(1) In accordance with IAS 7.31 cash inflow from dividends was GBP30,398,000 (2017: GBP29,372,000) and cash inflow from interest was GBP62,000 (2017: GBP191,000).
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 2018 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 out 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 companies issued
by the Association of Investment Companies (the 'AIC') in November
2014 and updated in February 2018 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.
2018 2017
2. Investment income GBP'000 GBP'000
---- ----------------------------------------------- ------------ ------------
UK dividend income - listed 10,718 10,847
UK dividend income - special dividends 329 580
Overseas dividend income - listed 18,930 17,195
Overseas dividend income - special dividends 205 502
Property income distributions 139 321
----------- -----------
30,321 29,445
====== ======
Analysis of investment income by geographical
region:
UK 11,641 12,743
Europe (ex UK) 5,215 5,220
North America 3,077 2,639
Japan 2,825 2,183
China 1,413 1,454
Pacific (ex Japan, China) 5,183 4,343
Emerging Markets 967 863
----------- -----------
30,321 29,445
====== ======
2018 2017
3. Other operating income GBP'000 GBP'000
---- ------------------------------------------------- ----------------- ----------------
Bank interest 64 23
Underwriting income 24 54
Stock lending revenue 135 108
Other income 3 4
----- -----
226 189
=== ===
At 31 October 2018 the total value of securities on loan by the Company
for stock lending purposes was GBP42,093,000 (2017: GBP28,166,000).
The maximum aggregate value of securities on loan at any one time
during the year ended 31 October 2018 was GBP159,687,000 (2017: GBP64,544,000).
The Company's agent held collateral at 31 October 2018 with a value
of GBP44,402,000 (2017: GBP31,366,000) in respect of securities on
loan. The value which is reviewed on a daily basis comprises Corporate
and Government Bonds with a minimum market value of 105% (2017: 105%)
of the market value of any securities on loan.
2018 2017
------------------------------- ---------------------------------------
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 1,344 3,136 4,480 1,012 2,362 3,374
------- ------- ------- ------- ------- -------
1,344 3,136 4,480 1,012 2,362 3,374
==== ==== ==== ==== ==== ====
A summary of the terms of the management agreement is given in the
Annual Report.
2018 2017
------------------------------- ---------------------------------------
Revenue Capital Total Revenue Capital Total
return return return return return return
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 2,121 - 2,121 1,986 - 1,986
Overseas tax reclaimable (295) - (295) (362) - (362)
Income tax recovered (3) - (3) - - -
------- ------- ------- ------- ------- -------
Total tax charge for
the year 1,823 - 1,823 1,624 - 1,624
==== ==== ==== ==== ==== ====
b) Factors affecting the tax charge for the year
The differences are explained below:
2018 2017
------------------------------------- -------------------------------------
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/(loss) before
taxation 27,296 (17,888) 9,408 26,743 147,889 174,362
Corporation tax for
the year at 19.00%
(2017: 19.42%) 5,186 (3,400) 1,786 5,193 28,720 33,913
Non taxable UK dividends (2,112) - (2,112) (2,229) - (2,229)
Overseas income and
non taxable scrip
dividends (3,493) - (3,493) (3,239) - (3,239)
Overseas withholding
tax suffered 1,826 - 1,826 1,624 - 1,624
Income tax recovered (3) - (3) - - -
Realised gains on
non-reporting offshore
funds - - - - 555 555
Excess management
expenses and loan
relationships 371 897 1,268 275 319 594
Interest capping
restriction 48 106 154 - - -
Capital losses/(gains)
not subject to tax - 2,397 2,397 - (29,594) (29,594)
-------- ----------- ----------- -------- ----------- -----------
1,823 - 1,823 1,624 - 1,624
===== ====== ===== ===== ====== =====
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 GBP8,263,000
(2017: GBP7,201,000) based on a prospective corporation tax rate of 17.0%
(2017: 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 GBP7,585,000 (2017: GBP173,008,000) and
on 122,606,783 ordinary shares (2017: 122,606,783), being the weighted
average number of shares in issue during the year.
The total earnings can be further analysed as follows:
2018 2017
GBP'000 GBP'000
------------------------------------- ------------------ ------------------
Revenue profit 25,473 25,119
Capital (loss)/profit (17,888) 147,889
---------------- ----------------
Profit for the year 7,585 173,008
---------------- ----------------
Weighted average number of ordinary
shares 122,606,783 122,606,783
----------------- -----------------
Revenue earnings per ordinary share 20.78p 20.49p
Capital earnings per ordinary share (14.59p) 120.62p
------------- -------------
Earnings per ordinary share 6.19p 141.11p
======= =======
The Company does not have any dilutive securities, therefore basic
and diluted earnings are the same.
Number of Total number
7. Called up share capital shares entitled of shares Nominal value
to dividend of shares
GBP'000
----------------------------- ------------------ ------------------ ----------------
Ordinary shares of 25p each
At 1 November 2017 122,606,783 123,945,292 30,986
----------------- ----------------- -----------
At 31 October 2018 122,606,783 123,945,292 30,986
----------------- ---------------- -----------
Number of Total
shares entitled number Nominal value
to dividend of shares of shares
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
----------------- ---------------- -----------
During the year, no ordinary shares were issued or purchased. In the
year ended 31 October 2017, no ordinary shares were issued or purchased.
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 GBP1,061,583,000 (2017: GBP1,077,563,000) and
on 122,606,783 ordinary shares in issue at 31 October 2018 (2017:
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:
2018 2017
GBP'000 GBP'000
----- ---------------------------------------------------- --------------- -------------
Net assets attributable to ordinary shares at
start of year 1,077,563 926,738
Total net profit on ordinary activities after
taxation 7,585 173,008
Dividends paid (23,565) (22,183)
------------- -----------
Net assets attributable to ordinary shares at
end of year 1,061,583 1,077,563
======= ======
9. Dividend
A final dividend of 5.00p per share, if approved by shareholders at
the Annual General Meeting, will be paid on 28 February 2019 to shareholders
on the register on 25 January 2019. The shares go ex-dividend on 24
January 2018. This final dividend, together with the three interim
dividends already paid brings the total dividend for the year to 19.72p.
10. 2018 Financial Information
The figures and financial information for the year ended 31 October
2018 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 2018 have been
audited but have not yet been delivered to the Registrar of Companies.
The Auditor's report on the 2018 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. 2017 Financial Information
The figures and financial information for the year ended 31 October
2017 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 2019 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 27 February 2019
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 Laura Thomas 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 news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR CKPDQBBKDBDD
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January 15, 2019 07:52 ET (12:52 GMT)
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