THE BANKERS INVESTMENT TRUST PLC 
By ?
Page 1 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
This announcement contains regulated information
MANAGEMENT REPORT
Chairman's Statement:
· Net Asset Value total return was 9.4% over the year
· Total annual dividend for 2012 increased by 5% and forecasting a minimum increase of 4% for 2013
· 46th consecutive year of dividend increases
Performance and Markets
It is pleasing to be able to present to shareholders an increase in net asset value, share price and dividend. Our careful and diverse selection of investments continues to deliver steady growth. A further recovery in investment income has allowed us to exceed our forecast and raise the annual dividend again.
However, it is dissapointing to repeat the same problems that have overhung markets in recent years being high levels of government debt and little evidence of a lasting resolution in Europe. It appeared that a degree of progress was being made in the US during the first half of our year and this lifted expectations. The summer months witnessed a return to uncertainty which held back consumer spending and corporate investment, delaying orders and causing company earnings to stall. The second half of the year produced little progress in share prices and a return to more volatile market conditions. Despite all of this the Company achieved a net asset value total return of 9.4% over the year, which compared to a total return of 9.8% for the composite benchmark index, with the majority of our investment returns being made in the first half. Our performance has closely matched the index returns for much of the year with our, Portfolio Manager making gainings by successful stock selection in most markets, but which were eroded by the overall regional asset allocation. Asset allocation is always challenging as it involves so many variable global factors, but we expect to add value in this area, in addition to gains from stock selection. Greater resources are being engaged by our Manager to assist in optimising returns from geographic allocations and this should further improve results over time.
As I reported to you last year, stock selection has in general exceeded the returns from local indices but this useful work has been negated by an underweight position in US stocks, which delivered the greatest returns, in sterling terms, for a second year. The UK, European, Japanese and Pacific regional portfolios all beat their local index returns, reflecting our Portfolio Managers' careful selection of stocks that pay good dividends and have strong franchises. The results in the Pacific region were particularly welcome, delivering a 15.7% total return and justifying our overweight stance in this area of the world. The two regions that underperformed their respective indices were the US and Emerging Markets. The strategy of focusing on medium sized companies in the US resulted in under performance relative to the largest capitalised stocks, which increased in value more, possibly benefiting from their additional overseas earnings and a flight to safety by investors. The shortfall in the emerging markets portfolio was due to the decline in the value of commodities which impacted the holdings of both Impala Platinum and Petroleo Brasileiros. In recent months our position in Petroleo Brasileiros has been reduced significantly while we expect a recovery in the platinum price will improve the prospects for Impala.
Page 2 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
Revenue and Dividends
There has been a substantial recovery in our investment income over the year, with gross revenue up 13.4% compared to last year. While a portion of the growth in income has been as a result of a number of special dividends, the underlying investment income increased by 11.9%, year on year. There is typically a time lag between the recovery of earnings and dividends as companies wait for confidence to return to their businesses before they increase dividends. It is encouraging that we are
now seeing the benefits of the recovery in corporate profits. It is interesting to note that our overseas investment income has exceeded that of our UK based investments for the second year running. This reflects both the increased asset allocation overseas in recent years, and most especially the fact that in the US market companies like Apple are paying dividends for the first time. The rate of growth in income will moderate in the coming year but our forecasts still show further progress in revenue even excluding any uplift from further special dividends.
We are recommending a final dividend of 3.43p, making a total of 13.33p for the year, an increase of 5%. This reflects a better outturn than we predicted last year and extends our long term record of increasing dividends to shareholders every year since 1966. The great strength of the size of our revenue reserve is the ability to protect shareholders from the volatility of earnings and smooth the dividends we pay out. Looking to 2013, we are able to forecast a dividend per share of not less than 13.86p, which represents an increase of 4%.
Annual General Meeting
The Annual General Meeting this year will be held at Stationers' Hall, Ave Maria Lane, London EC4M 7DD on 26 February 2013 at 12 noon.
Governance and Board changes
Investment Trust Boards are proud of being able to demonstrate levels of governance that open-ended investment products do not have. Your Board is independent and takes its responsibilities most seriously. We review the Manager's performance throughout the year and hold a major review of all aspects of the service provided by your Manager at the end of the financial year. Our priority is to ensure that the management agreement serves the best interests of shareholders as a whole. It is our opinion that the current relationship with Henderson Global Investors achieves this. Good governance is dependent on having a Board of Directors with the right blend of skills, experience and character. In this respect I am pleased to bring you up to date with developments.
On 1 November 2012 we strengthened your Board by the appointment of Susan Inglis. Sue is the first woman to join the Board in our long history and she is a most welcome addition bringing with her a legal and investment company corporate finance background.
It is eight years since I became Chairman and it is time to pass on the baton to a younger person. I am pleased to tell you that Richard Killingbeck has agreed to take on the Chairmanship from this summer. Richard has served your Company most diligently for nine years and especially as senior independent director over the last two years. He has very considerable experience in financial services and fund management in particular and I am confident that he will maintain the values and standards that are the hallmark of Bankers' long term success.
Page 3 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
Retail Distribution Review
From 1 January 2013, the market place for selling retail investment products in the UK has changed radically, as commissions paid to advisers by funds have been banned. This should provide a more level playing field for investment companies such as Bankers when competing for investors with open-ended products and we hope more advisers will recommend investment companies to their clients.
In view of the above comments we have decided to simplify the management fee arrangements and drop the performance fee paid to our Manager and return to a simple fixed percentage fee of 0.4% per annum of net assets (following regulatory approval). On 1 November 2013 this is expected to move to 0.45%, subject to review (more details can be found in the Annual Report and Financial Statements). This fee remains one of the lowest in the Global Growth sector, and indeed amongst all investment trusts. We believe that the key characteristics of Bankers, offering consistent growth in income and capital from a broadly diversified portfolio of global companies, is very attractive and your Board is working with our Manager to spread this message to a wider audience of new investors.
We are also making changes to how we present figures to allow a better comparison with the wider spectrum of investment funds. We have adopted the standardised definitions of gearing and expenses (now called "ongoing charges") recently recommended by the AIC.
Outlook
The Company will be 125 years old in April and, at times over those years, my predecessors had to contend with an outlook that must have been truly bleak. However, the Company has endured and remained true to its long term commitment of growing shareholders' capital and income. There remain some notable barriers to returning the world to a steady state of economic growth but it is likely that the events that currently trouble investors such as the slowing Chinese economy or balancing the US defeat will in due course be resolved. The high level of debt in the world may mean that economies will grow at a slower pace than in previous periods of expansion but well managed companies should succeed in growing at a greater pace. The quality of corporate balance sheets and earnings has significantly improved since the downturn which gives us comfort that their dividends and in turn their attraction to investors should continue to increase. Good quality companies can provide both attractive yields and a degree of protection from rising inflation that bonds do not.
A global equity fund such as Bankers is therefore well placed to offer an attractive investment for people saving for their future. £1,000 invested 30 years ago with all dividends re-invested would today have a value of £38,951. This compares with the return from cash invested in a bank deposit account with interest over that same period of £4,145. These are difficult times for savers, as cash deposits carry negative real interest rates; whereas there are real merits of investing in a savings product offering such as Bankers. It has a superior track record of long-term capital growth and increasing dividends in real terms. The above figures showing the comparison of returns over 30 years speak for themselves.
Page 4 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
Principal Risks and Uncertainties
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 are as follows:
? Portfolio and market
Although the Company invests almost entirely in securities that are quoted on recognised markets, share prices may move sharply. The companies in which investments are made may operate unsuccessfully, or fail entirely. A fall in the market value of the Company's portfolio would have an adverse effect on the shareholders' funds. The Board reviews the portfolio each month and mitigates this risk through diversification of investments in the portfolio.
? Investment activity and performance
An inappropriate investment strategy (for example, in terms of asset allocation or the level of gearing) may result in underperformance against the Company's benchmark index and the companies in its peer group. The Board monitors investment performance at each Board meeting and regularly reviews the extent of its borrowings.
? Tax and regulatory risks
A breach of Section 1158 of the Corporation Taxes Act 2011 could lead to a loss of investment trust status, resulting in capital gains realised within the portfolio being subject to corporation tax. A breach of the UKLA Listing Rules could result in suspension of the Company's shares, while a breach of the Companies Act 2006 could lead to criminal proceedings, or financial or reputational damage. The Company must also ensure compliance with the listing rules of the New Zealand Stock Exchange. The Manager has contracted to provide investment, company secretarial, administration and accounting services through qualified professionals. The Board receives internal control reports produced by the Manager on a quarterly basis, which confirmed regulatory compliance during the year.
? Financial
By its nature as an investment trust, the Company's business activities are exposed to market risk (including market price risk, currency risk and interest rate risk), liquidity risk, and credit and counterparty risk. Details of these risks and how they are managed are contained in the notes in the Annual Report and Financial Statements.
? Operational
Disruption to, or failure of, the Manager's accounting, dealing or payment systems or the Custodian's records could prevent the accurate reporting and monitoring of the Company's financial position. The Company is also exposed to the operational risk that one or more of its suppliers may not provide the required level of service. Details of how the Board monitors the services provided by the Manager and its other suppliers, and the key elements designed to provide effective internal control, are explained further in the internal controls section in the Annual Report and Financial Statements.
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THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
Related Party Transactions
Other than the relationship between the Company and its directors, the provison of services by Henderson is the only related party arrangement currently in place. Other than the fees payable by the Company in the ordinary course of business, there have been no material transactions with this related party which has affected the financial position or performance of the Company in the financial year.
Statement of Directors' Responsibilities under DTR 4.1.12
Each of the directors confirms that, to the best of his or her knowledge:
? the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and
? the Report of the Directors includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that it faces.
For and on behalf of the Board of Directors
Richard Brewster
Chairman
For further information contact:
Alex Crooke Fund Manager The Bankers Investment Trust PLC Telephone: 020 7818 4447 | Richard Brewster Chairman The Bankers Investment Trust PLC Telephone: 020 7818 4233 |
James de Sausmarez Director of Investment Trusts Henderson Global Investors Telephone: 020 7818 3349 | Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Global Investors Telephone: 020 7818 3198 |
Page 6 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
SUMMARY OF THE YEAR
31 October 2012 | 31 October 2011 | Change % | ||
Consolidated Assets | ||||
Total assets less current liabilities (£'000) | 551,214 | 521,331 | +5.7 | |
Net asset value per ordinary share | 474.5p | 446.9p | +6.2 | |
Ordinary share mid-market price | 433.1p | 385.0p | +12.5 | |
Discount (Share Price to Net Asset Value) | 8.7% | 13.9% | ||
Consolidated Revenue | ||||
Gross revenue (£'000) | 18,593 | 16,389 | +13.4 | |
Revenue earnings per ordinary share | 13.84p | 11.98p | +15.5 | |
Dividends per ordinary share in respect of the year | 13.33p | 12.70p | +5.0 | |
Total Return | ||||
Total return per ordinary share | 40.42p | 7.51p | ||
Indices(capital return) | ||||
FTSE All-Share Index | 3,024.40 | 2,860.86 | +5.7 | |
S&P 500 Composite Index | 1,412.66 | 1,253.30 | +12.9 | # |
FTSE All-World Developed Europe (ex UK) Index (£) | 134.44 | 126.52 | +6.3 | |
TOPIX (Tokyo First Section Index) | 742.33 | 764.06 | -5.0 | # |
FTSE World (ex UK) Index (£) | 347.98 | 325.93 | +6.8 | |
Composite Index(capital return) | ||||
50/50 FTSE All-Share Index/ FTSE World (ex UK) Index (£) | 212.6 | 200.0* | +6.3 | |
Ongoing Charges** | 0.42% | 0.40% | ||
Retail Prices Index | 245.6 | 238.0 | +3.2 | |
# £ adjusted
* rebased as at 31 October 2012
** excluding borrowing costs
Page 7 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 October 2012
Year ended 31 October 2012 | Year ended 31 October 2011 | ||||||
Notes | Revenue Return £'000 | Capital Return £'000 | Total £'000 | Revenue Return £'000 | Capital Return £'000 | Total £'000 | |
Gains/(losses) on investments held at fair value through profit or loss | - | 31,623 | 31,623 | - | (2,786) | (2,786) | |
Investment income | 2 | 18,349 | - | 18,349 | 15,988 | - | 15,988 |
Other operating income | 3 | 244 | - | 244 | 401 | - | 401 |
--------- | --------- | --------- | --------- | --------- | --------- | ||
Total income/(loss) | 18,593 | 31,623 | 50,216 | 16,389 | (2,786) | 13,603 | |
--------- | --------- | --------- | --------- | --------- | --------- | ||
Expenses | |||||||
Management fees | 4 | (1,026) | (552) | (1,578) | (979) | (528) | (1,507) |
Other expenses | (725) | - | (725) | (696) | - | (696) | |
--------- | --------- | --------- | --------- | ------------ | --------- | ||
Profit/(loss) before finance costs and taxation | 16,842 | 31,071 | 47,913 | 14,714 | (3,314) | 11,400 | |
Finance costs | (678) | (1,582) | (2,260) | (706) | (1,647) | (2,353) | |
--------- | --------- | --------- | --------- | ------------ | --------- | ||
Profit/(loss) before taxation | 16,164 | 29,489 | 45,653 | 14,008 | (4,961) | 9,047 | |
Taxation | 5 | (805) | - | (805) | (701) | - | (701) |
--------- | --------- | --------- | --------- | ------------ | --------- | ||
Profit/(loss) for the year and total comprehensive income | 15,359 | 29,489 | 44,848 | 13,307 | (4,961) | 8,346 | |
===== | ======= | ====== | ===== | ======= | ====== | ||
Earnings/(loss) per ordinary share | 6 | 13.84p | 26.58p | 40.42p | 11.98p | (4.47p) | 7.51p |
The total column of this statement represents the Consolidated Statement of Comprehensive Income, prepared in accordance with IFRS 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.
All income is attributable to the equity shareholders of The Bankers Investment Trust PLC.
As permitted by the Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income. The net profit of the Company for the year was £44,848,000 (2011: £8,346,000).
Page 8 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
AUDITED CONSOLIDATED AND PARENT COMPANY STATEMENT OF CHANGES IN EQUITY for the year ended 31 October 2012
Consolidated year ended 31 October 2012 | Called up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Other capital reserves £'000 | Revenue reserve £'000 | Total £'000 |
Total equity at 1 November 2011 | 27,763 | 452 | 12,447 | 425,185 | 30,484 | 496,331 |
Total comprehensive income: | ||||||
Profit for the year | - | - | - | 29,489 | 15,359 | 44,848 |
Transactions with owners, recorded directly to equity: | ||||||
Buy back of 145,000 ordinary shares | (36) | - | 36 | (594) | - | (594) |
Ordinary dividends paid | - | - | - | - | (14,371) | (14,371) |
---------- | ---------- | ---------- | ---------- | ---------- | ---------- | |
Total equity at 31 October 2012 | 27,727 | 452 | 12,483 | 454,080 | 31,472 | 526,214 |
====== | ====== | ====== | ====== | ====== | ====== |
Consolidated year ended 31 October 2011 | Called up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Other capital reserves £'000 | Revenue reserve £'000 | Total £'000 |
Total equity at 1 November 2010 | 27,772 | 452 | 12,438 | 430,286 | 31,007 | 501,955 |
Total comprehensive income: | ||||||
(Loss)/ profit for the year | - | - | - | (4,961) | 13,307 | 8,346 |
Transactions with owners, recorded directly to equity: | ||||||
Buy back of 34,000 ordinary shares | (9) | - | 9 | (140) | - | (140) |
Ordinary dividends paid | - | - | - | - | (13,830) | (13,830) |
---------- | ---------- | ---------- | ---------- | ---------- | ---------- | |
Total equity at 31 October 2011 | 27,763 | 452 | 12,447 | 425,185 | 30,484 | 496,331 |
====== | ====== | ====== | ====== | ====== | ====== |
Company year ended 31 October 2012 | Called up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Other capital reserves £'000 | Revenue reserve £'000 | Total £'000 |
Total equity at 1 November 2011 | 27,763 | 452 | 12,447 | 426,372 | 29,297 | 496,331 |
Total comprehensive income: | ||||||
(Loss)/profit for the year | - | - | - | 28,398 | 16,450 | 44,848 |
Transactions with owners, recorded directly to equity: | ||||||
Buy back of 145,000 ordinary shares | (36) | - | 36 | (594) | - | (594) |
Ordinary dividends paid | - | - | - | - | (14,371) | (14,371) |
---------- | ---------- | ---------- | ---------- | ---------- | ---------- | |
Total equity at 31 October 2012 | 27,727 | 452 | 12,483 | 454,176 | 31,376 | 526,214 |
====== | ====== | ====== | ====== | ====== | ====== |
Company year ended 31 October 2011 | Called up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Other capital reserves £'000 | Revenue reserve £'000 | Total £'000 |
Total equity at 1 November 2010 | 27,772 | 452 | 12,438 | 431,271 | 30,022 | 501,955 |
Total comprehensive income: | ||||||
Profit for the year | - | - | - | (4,759) | 13,105 | 8,346 |
Transactions with owners, recorded directly to equity: | ||||||
Buy back of 34,000 ordinary shares | (9) | - | 9 | (140) | - | (140) |
Ordinary dividends paid | - | - | - | - | (13,830) | (13,830) |
---------- | ---------- | ---------- | ---------- | ---------- | ---------- | |
Total equity at 31 October 2011 | 27,763 | 452 | 12,447 | 426,372 | 29,297 | 496,331 |
====== | ====== | ====== | ====== | ====== | ====== |
Page 9 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
AUDITED CONSOLIDATED AND PARENT COMPANY BALANCE SHEETS
at 31 October 2012
Consolidated 2012 £'000 | Consolidated 2011 £'000 | Company 2012 £'000 | Company 2011 £'000 | |
Non-current assets | ||||
Investments held at fair value through profit or loss | 546,819 | 512,257 | 546,915 | 513,444 |
---------- | ---------- | ---------- | ---------- | |
Current assets | ||||
Investments held at fair value through profit or loss | 1,301 | 3,650 | 1,301 | 3,650 |
Other receivables | 2,046 | 2,628 | 2,251 | 2,809 |
Cash and cash equivalents | 3,126 | 6,360 | 2,825 | 4,992 |
---------- | ---------- | ---------- | ---------- | |
6,473 | 12,638 | 6,377 | 11,451 | |
---------- | ---------- | ---------- | ---------- | |
Total assets | 553,292 | 524,895 | 553,292 | 524,895 |
---------- | ---------- | ---------- | ---------- | |
Current liabilities | ||||
Bank loan | (1,000) | - | (1,000) | - |
Other payables | (1,078) | (3,564) | (1,078) | (3,564) |
---------- | ---------- | ---------- | ---------- | |
(2,078) | (3,564) | (2,078) | (3,564) | |
---------- | ---------- | ---------- | ---------- | |
Total assets less current liabilities | 551,214 | 521,331 | 551,214 | 521,331 |
---------- | ---------- | ---------- | ---------- | |
Non-current liabilities | ||||
Debenture stocks | (25,000) | (25,000) | (25,000) | (25,000) |
---------- | ---------- | ---------- | ---------- | |
Net assets | 526,214 | 496,331 | 526,214 | 496,331 |
====== | ====== | ====== | ====== | |
Equity attributable to equity shareholders | ||||
Called up share capital (note 7) | 27,727 | 27,763 | 27,727 | 27,763 |
Share premium account | 452 | 452 | 452 | 452 |
Capital redemption reserve | 12,483 | 12,447 | 12,483 | 12,447 |
Retained earnings: | ||||
Other capital reserves | 454,080 | 425,185 | 454,176 | 426,372 |
Revenue reserve | 31,472 | 30,484 | 31,376 | 29,297 |
---------- | ---------- | ---------- | ---------- | |
Total equity | 526,214 | 496,331 | 526,214 | 496,331 |
====== | ====== | ====== | ====== | |
Net asset value per Ordinary share (pence) - basic and diluted (Note 8) | 474.5p | 446.9p | 474.5p | 446.9p |
====== | ====== | ====== | ====== | |
Page 10 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
AUDITED CONSOLIDATED AND PARENT COMPANY CASH FLOW STATEMENTS
for the year ended 31 October 2012
Reconciliation of operating revenue to net cash flow from operating activities | Consolidated 2012 £'000 | Company 2012 £'000 | Consolidated 2011 £'000 | Company 2011 £'000 |
Profit before taxation | 45,653 | 45,629 | 9,047 | 9,047 |
Add interest payable ("finance costs") | 2,260 | 2,260 | 2,353 | 2,353 |
(Less)/add: (gains)/losses on investments held at fair value through profit or loss | (31,623) | (30,532) | 2,786 | 2,521 |
(Increase)/decrease in accrued income | (573) | (573) | 383 | 383 |
Decrease/(Increase) in other receivables | 2 | 2 | (7) | (7) |
(Decrease)/Increase in other payables and accruals | (123) | (123) | 23 | 23 |
Purchases of investments | (131,873) | (131,873) | (114,549) | (114,549) |
Sales of investments | 128,980 | 128,980 | 121,530 | 121,530 |
Amounts received from subsidiary undertaking | - | - | - | 4,000 |
Purchases of current asset investments | (22,899) | (22,016) | (35,682) | (34,975) |
Sales of current asset investments | 25,364 | 24,365 | 39,242 | 37,625 |
Decrease in amounts due from brokers | 1,179 | 1,179 | 767 | 767 |
Decrease in amounts due to brokers | (2,363) | (2,363) | (7,285) | (6,674) |
Dealing profits | (116) | - | (261) | - |
---------- | ---------- | ---------- | ---------- | |
Net cash inflow from operating activities before interest and taxation | 13,868 | 14,935 | 18,347 | 22,044 |
Interest paid | (2,260) | (2,260) | (2,374) | (2,374) |
Taxation on investment income | (831) | (831) | (641) | (641) |
---------- | ---------- | ---------- | ---------- | |
Net cash inflow from operating activities | 10,777 | 11,844 | 15,332 | 19,029 |
Financing activities | ||||
Equity dividends paid | (14,371) | (14,371) | (13,830) | (13,830) |
Purchase of ordinary shares | (594) | (594) | (140) | (140) |
Drawdown/(repayment) of loan | 1,000 | 1,000 | (4,000) | (4,000) |
---------- | ---------- | ---------- | ---------- | |
Net cash outflow from financing activities | (13,965) | (13,965) | (17,970) | (17,970) |
---------- | ---------- | ---------- | ---------- | |
(Decrease)/increase in cash | (3,188) | (2,121) | (2,638) | 1,059 |
Cash and cash equivalents at start of the year | 6,360 | 4,992 | 8,910 | 3,845 |
Exchange movements | (46) | (46) | 88 | 88 |
---------- | ---------- | ---------- | ---------- | |
Cash and cash equivalents at end of the year | 3,126 | 2,825 | 6,360 | 4,992 |
====== | ====== | ====== | ====== |
Page 11 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
NOTES:
1. | Accounting policies |
The consolidated and parent company financial statements for the year ended 31 October 2012 have been prepared in accordance with the 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. IFRSs 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 International Accounting Standards Committee ("IASC") 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. The principal accounting policies are set out in the audited accounts. 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 January 2009 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. |
2012 | 2011 | ||
2. | Investment income | £'000 | £'000 |
UK dividend income - listed | 8,146 | 7,456 | |
UK dividend income - special dividends | 687 | 50 | |
Overseas dividend income - listed | 9,078 | 7,890 | |
Overseas dividend income - special dividends | 118 | 170 | |
Property income distributions | 320 | 333 | |
Income from fixed interest securities | - | 89 | |
-------- | -------- | ||
18,349 | 15,988 | ||
===== | ===== | ||
Analysis of investment income by geographical region: | |||
UK | 9,842 | 8,459 | |
Europe (ex UK) | 2,110 | 2,351 | |
North America | 2,437 | 1,433 | |
Japan | 1,102 | 971 | |
Pacific (ex Japan) | 2,608 | 2,367 | |
Emerging markets | 250 | 407 | |
-------- | --------- | ||
18,349 | 15,988 | ||
===== | ===== |
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THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
2012 | 2011 | ||
3. | Other operating income | £'000 | £'000 |
Bank interest | 20 | 15 | |
Stock lending revenue | 108 | 125 | |
Dealing profits from subsidiary | 116 | 261 | |
-------- | -------- | ||
244 | 401 | ||
===== | ===== |
At 31 October 2012 the total value of securities on loan by the Group for stock lending purposes was £19,200,000 (2011: £37,200,000). The maximum aggregate value of securities on loan at any one time during the year ended 31 October 2012 was £39,000,000 (2011: £45,800,000). The Group's agent held collateral at 31 October 2012 with a value of £20,200,000 in respect of securites on loan, the value of which is reviewed on a daily basis, comprising CREST Delivery By Value ("DBVs") and Government Bonds with a market value of 105% of the market value of any securities on loan. |
4. | Management fees | Revenue Return 2012 £'000 | Capital Return 2012 £'000 | Total 2012 £'000 | Revenue Return 2011 £'000 | Capital Return 2011 £'000 | Total 2011 £'000 |
Investment management | 237 | 552 | 789 | 226 | 528 | 754 | |
Accounting, secretarial and administration | 789 | - | 789 | 753 | - | 753 | |
------- | ------- | ------- | ------- | ------- | ------- | ||
1,026 | 552 | 1,578 | 979 | 528 | 1,507 | ||
==== | ==== | ==== | ==== | ==== | ==== |
5. | Taxation | Revenue Return 2012 £'000 | Capital Return 2012 £'000 | Total 2012 £'000 | Revenue Return 2011 £'000 | Capital Return 2011 £'000 | Total 2011 £'000 |
(a) Analysis of the charge for the year | |||||||
Overseas tax suffered | 925 | - | 925 | 874 | - | 874 | |
Overseas tax reclaimable | (120) | - | (120) | (173) | - | (173) | |
------- | ------- | ------- | ------- | ------- | ------- | ||
Taxation | 805 | - | 805 | 701 | - | 701 | |
==== | ==== | ==== | ==== | ==== | ==== | ||
Page 13 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
(b) Factors affecting the tax charge for the year The differences are explained below: |
Revenue Return 2012 £'000 | Capital Return 2012 £'000 | Total 2012 £'000 | Revenue Return 2011 £'000 | Capital Return 2011 £'000 | Total 2011 £'000 | ||
Profit before taxation | 16,164 | 29,489 | 45,653 | 14,008 | (4,961) | 9,047 | |
-------- | ----------- | ----------- | -------- | ----------- | ----------- | ||
Corporation tax at 24.83% (2011: 26.83%) | 4,014 | 7,322 | 11,336 | 3,760 | (1,332) | 2,428 | |
Non taxable UK dividends | (2,193) | - | (2,193) | (1,988) | - | (1,988) | |
Non taxable scrip dividends and other income | (2,238) | - | (2,238) | (2,119) | - | (2,119) | |
Income taxable in different years | 4 | - | 4 | - | - | - | |
Overseas withholding tax suffered | 805 | - | 805 | 701 | - | 701 | |
Excess management expenses | 413 | 530 | 943 | 347 | 584 | 931 | |
Capital losses/(gains) not subject to tax | - | (7,852) | (7,852) | - | 748 | 748 | |
-------- | ----------- | ----------- | -------- | --------- | --------- | ||
805 | - | 805 | 701 | - | 701 | ||
==== | ===== | ===== | ==== | ===== | ===== |
(c) Provision for deferred taxation No provision for deferred taxation has been made in the current year or in the prior year. The Company has not provided for deferred tax on capital gains or losses arising on the revaluation or disposal of investments as it is exempt from tax on these items because of its status as an investment trust company, which it intends to maintain for the foreseeable futue. | |
(d) Factors that may affect future tax charges The Company has not recognised a deferred tax asset totalling £3,976,000 (2011: £3,373,000) arising as a result of having unutilised non trade loan relationship deficits of £2,910,000 (2011: £2,639,000), excess management expenses of £1,066,000 (2011: £734,000) and deferred tax liability of £nil (2011: Nil) on offshore funds. These expenses will only be utilised if the Group has profits chargeable to corporation tax in the future. The standard rate of corporation tax in the UK changed from 26% to 24% with effect from 1 April 2012. Accordingly, the Company's profits for this accounting period are taxed at the effective rate of tax of 24.83%. |
6. | Earnings per ordinary share |
The total earnings per ordinary share is based on the net profits attributable to the ordinary shares of £44,848,000 (2011: £8,346,000) and on 110,946,334 ordinary shares (2011: 111,072,713) being the weighted average number of shares in issue during the year. The total earnings can be further analysed as follows: |
Page 14 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
2012 | 2011 | ||
£'000 | £'000 | ||
Revenue profit | 15,359 | 13,307 | |
Capital profit/(loss) | 29,489 | (4,961) | |
---------- | ----------- | ||
Profit for the year | 44,848 | 8,346 | |
---------- | ----------- | ||
Weighted average number of ordinary shares | 110,946,334 | 111,072,713 | |
---------- | --------------- | ||
Revenue earnings per ordinary share | 13.84p | 11.98p | |
Capital earnings /(loss) per ordinary share | 26.58p | (4.47p) | |
---------- | ----------- | ||
Earnings per ordinary share | 40.42p | 7.51p | |
======= | ======= | ||
The Company does not have any dilutive securities, therefore basic and dilutive earnings are the same. | |||
7. | Called up share capital | 2012 £'000 | 2011 £'000 |
Authorised, allotted, issued and fully paid: | |||
110,906,839 (2011: 111,051,839) ordinary shares of 25p each | 27,727 | 27,763 | |
===== | ===== | ||
During the year, 145,000 (2011: 34,000) ordinary shares were bought back for cancellation at a cost of £594,000 (2011: £140,000). | |||
8. | Net asset value per ordinary share |
The net asset value per ordinary share is based on net assets attributable to ordinary shares of £526,214,000 (2011: £496,331,000) and on the 110,906,839 ordinary shares in issue at 31 October 2012 (2011: 111,051,839). The Company has no securities in issue that could dilute the net asset value per ordinary share. The movements during the year in net assets attributable to the ordinary shares were as follows: |
2012 | 2011 | ||
£'000 | £'000 | ||
Net assets attributable to ordinary shares at start of year | 496,331 | 501,955 | |
Total net profit on ordinary activities after taxation | 44,848 | 8,346 | |
Dividends paid | (14,371) | (13,830) | |
Buy back of ordinary shares | (594) | (140) | |
------------ | ------------ | ||
Net assets attributable to ordinary shares at end of year | 526,214 | 496,331 | |
======= | ======= |
Page 15 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
9. | Going Concern Statement |
The directors believe that it is appropriate to continue to adopt the going concern basis in preparing the financial statements as the assets of the Company consist mainly of securities which are readily realisable and, accordingly, it has adequate financial resources to continue in operational existence for the foreseeable future. In reviewing the position as at the date of this report, the Board has considered the "Going Concern and Liquidity Risk: Guidance for Directors of UK Companies 2010", published by the Financial Reporting Council in October 2010. | |
10. | 2012 financial information |
The figures and financial information for the year ended 31 October 2012 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 2012 have been audited but have not yet been delivered to the Registrar of Companies. The auditors' report on the 2012 annual financial statements was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain any statements under section 498 of the Companies Act 2006. | |
11. | 2011 financial information |
The figures and financial information for the year ended 31 October 2011 are compiled from an extract of the published accounts for that year and do not constitute statutory accounts. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under sections 498(2) or 498(3) of the Companies Act 2006. | |
12. | Dividend |
A final dividend of 3.43p per ordinary share will be paid, if approved by shareholders at the AGM, on 28 February 2013 to shareholders on the register on 1 February 2013. The Company's shares go ex?dividend on 30 January 2013. | |
13. | Annual report and financial statements |
Copies of the Annual Report and Financial Statements will be posted to shareholders by the end of January 2013 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. | |
14. | Annual General Meeting The Annual General Meeting will be held on Tuesday 26 February 2013 at 12 noon at the Stationers' Hall, Ave Maria Lane, London EC4M 7DD. |
Page 16 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
LARGEST INVESTMENTS at 31 October 2012
The 25 largest investments (convertibles and all classes of equity in any one company being treated as one investment) were as follows:
Rank | (2011) | Valuation 2011 £'000 | Purchases £'000 | Sales proceeds £'000 | (Depreciation) /appreciation £'000 | Valuation 2012 £'000 | |
1 | (1) | BP | 15,745 | - | - | (605) | 15,140 |
2 | (3) | British American Tobacco | 11,659 | - | (752) | 872 | 11,779 |
3 | (4) | GlaxoSmithKline | 10,808 | - | - | (104) | 10,704 |
4 | (5) | Royal Dutch Shell | 10,060 | - | - | (203) | 9,857 |
5 | (2) | Vodafone | 11,735 | - | (2,558) | (250) | 8,927 |
6 | (6) | Catlin | 9,493 | - | (2,516) | 1,716 | 8,693 |
7 | (7) | HSBC | 8,646 | - | (1,279) | 771 | 8,138 |
8 | (8) | BG | 8,546 | - | - | (1,317) | 7,229 |
9 | (13) | Apple | 4,686 | - | (729) | 2,243 | 6,200 |
10 | (*) | Galliford Try | 3,623 | - | - | 2,118 | 5,741 |
11 | (*) | Sports Direct International | 1,607 | 2,072 | - | 1,932 | 5,611 |
12 | (22) | Petrofac | 4,021 | 729 | - | 547 | 5,297 |
13 | (20) | Rolls-Royce | 4,171 | - | - | 903 | 5,074 |
14 | (9) | Jardine Lloyd Thompson | 6,485 | - | (1,710) | 148 | 4,923 |
15 | (16) | Amcor | 4,268 | - | - | 412 | 4,680 |
16 | (*) | Smiths News | 2,861 | - | - | 1,797 | 4,658 |
17 | (*) | Reckitt Benckiser | 3,838 | - | - | 662 | 4,500 |
18 | (*) | General Electric | - | 3,722 | - | 723 | 4,445 |
19 | (*) | Time Warner Cable | - | 3,413 | - | 893 | 4,306 |
20 | (17) | Christian Dior | 4,243 | - | - | 33 | 4,276 |
21 | (*) | Rio Tinto | - | 3,705 | - | 437 | 4,142 |
22 | (*) | ITV | 3,050 | - | - | 1,071 | 4,121 |
23 | (23) | Microsoft | 3,966 | 327 | (612) | 401 | 4,082 |
24 | (11) | Petroleo Brasileiros | 6,024 | - | (572) | (1,373) | 4,079 |
25 | (*) | Fisher (J) & Sons | 2,872 | - | - | 1,175 | 4,047 |
---------- | ---------- | ---------- | ---------- | ---------- | |||
142,407 | 13,968 | (10,728) | 15,002 | 160,649 | |||
====== | ====== | ====== | ====== | ====== |
These investments total 29.4% of the portfolio.
(*) Not in the top 25 last year.
Page 17 of 17
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2012
CHANGES IN INVESTMENTS at 31 October 2012
Valuation 2011 | Purchases | Sales proceeds | Appreciation/ (depreciation) | Valuation 2012 | |
£'000 | £'000 | £'000 | £'000 | £'000 | |
United Kingdom | 233,189 | 30,747 | (32,973) | 17,677 | 248,640 |
Europe (ex UK) | 61,742 | 8,479 | (14,570) | 3,358 | 59,009 |
North America | 102,140 | 43,900 | (39,674) | 7,972 | 114,338 |
Japan | 48,599 | 19,102 | (18,427) | (1,473) | 47,801 |
Pacific (ex Japan) | 56,520 | 23,125 | (21,881) | 6,175 | 63,939 |
Emerging Markets | 9,969 | 6,520 | (1,410) | (2,070) | 13,009 |
Fixed Interest | 98 | - | (45) | 30 | 83 |
----------- | ----------- | ---------- | ----------- | ----------- | |
Total | 512,257 | 131,873 | (128,980) | 31,669 | 546,819 |
====== | ====== | ====== | ====== | ====== |
- ENDS -
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
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