Final Results
Temple Bar Investment Trust PLC
Final Results Announcement for the year ended 31 December 2014
Chairman's Statement
Performance
Following a strong performance in the previous year, 2014 was much more
difficult for our shareholders in terms both of absolute and relative returns.
The total return on the net assets of Temple Bar in 2014 was
-1.7%, which compares with a total return for the FTSE-All Share Index of 1.2%.
However, Temple Bar continues significantly to outperform its benchmark over
both 5 and 10 year periods.
There were both positive and negative constituents of performance during the
year but the performance lag was due mainly to individual stock selections that
were unsuccessful over the period, in contrast to the influence of larger
themes. As I have highlighted previously, the contrarian value approach adopted
by the Manager and his team focuses on the purchase of out of favour stocks;
these stocks can often move more out of favour after purchase, for both good
and bad reasons, in the near term. This highlights that this style of investing
requires participation over longer time periods for the proven benefits to
emerge.
As in 2013, the Manager was reluctant to chase yield at a time when it appeared
to be unattractively priced. Additionally, the large number of new shares
issued towards the end of the year, and thus qualifying for the final dividend,
while being accretive to net asset value, further impacted negatively the
revenue earned per share. Offsetting these factors was the receipt of a
substantial special dividend from Direct Line which ultimately led to the
proposed dividend for the current year being fully covered by revenue generated
from portfolio investments. It remains a significant benefit of investment
trusts that revenue reserves can be used to smooth dividend payments if there
is a revenue shortfall in a particular year.
The Board is, therefore, recommending a final dividend of 23.33p, to produce a
total dividend for the year of 38.88p, an increase of 3.0%. The dividend will
be payable on 31 March 2015 to shareholders on the register at 13 March 2015.
This is the 31st consecutive year in which the dividend has been increased.
Quarterly Dividends
In accordance with previous notifications to shareholders, with effect from the
financial year which started on 1 January 2015 the Company will pay dividends
on a quarterly basis. A final dividend for the 2014 financial year will be paid
on 31 March 2015, following which there will be three interim dividends payable
in respect of the current year on 30 June, 30 September and 30 December before
a final dividend is paid in late March 2016. The Board is conscious of the
income requirements of many of its shareholders and intends, on current
expectations, that shareholders will receive payments amounting to at least
those received under the previous arrangements and that the progressive annual
dividend growth of the last 31 years will be maintained.
Gearing
I mentioned in my Statement last year that the Company had taken out in 2013 an
additional £50 million private placement loan, repayable in 2028, in order to
secure attractive long term fixed rate funding at an opportune time. This loan
forms part of the Board's overall approach to debt management, mindful that one
of the Company's two debentures matures in 2017. Given the long term nature of
the loan, the Board does not feel an immediate necessity to invest the
proceeds, but will seek to deploy these funds as appropriate opportunities
arise. At the year end the Company's gearing was immunised by its holdings of
cash and related liquid assets.
New Share Issues
The Company's shares have generally been trading at a premium to net asset
value for a substantial period. The Board believes that it is important to
manage proactively any premium or discount and, accordingly, it favours regular
small issues of shares to maintain any premium at a reasonable level. During
the year a total of 3,549,517 ordinary shares were issued raising proceeds of £
42.9 million. There were no share repurchases during the year. The Board
considers that its policy towards share issuance and its preparedness to carry
out share repurchases, if required, has helped to constrain premium/discount
volatility in the past and therefore recommends that the existing authorities
to issue new ordinary shares for cash and to repurchase shares in the market
for cancellation or to hold in Treasury be continued. Accordingly, it is
seeking approval from shareholders to renew the share issue and repurchase
authorities at the forthcoming Annual General Meeting.
Alternative Investment Fund Manager Directive (`AIFMD')
In accordance with AIFMD the Company appointed Investec Fund Managers Limited
(`IFM') as its Alternative Investment Fund Manager on 21 July 2014 under a new
investment management agreement. Portfolio management has been delegated by IFM
to Investec Asset Management Limited (`IAM'), thus retaining previous portfolio
management arrangements. In addition, as required under the AIFMD, the Company
appointed HSBC Bank to act as its depositary and custodian. IAM continues to
act as Company Secretary to the Company.
Annual General Meeting
The AGM will be held at Woolgate Exchange, 25 Basinghall Street, London EC2V
5HA on 30 March 2015 at 11.00 a.m. and I would encourage shareholders to
attend. In addition to the formal business of the meeting the portfolio
manager, Alastair Mundy, will make a presentation reviewing the past year and
commenting on the outlook. He will also be available to answer any questions
alongside the Directors. Shareholders who are unable to attend the AGM in
person are encouraged to use their proxy vote.
Outlook
The Manager has been concerned for some time that the regime of low interest
rates prevalent both in the UK and internationally has encouraged investors to
seek higher returns in alternative instruments and has pushed many asset prices
to levels beyond their fair value. There is potential for this `search for
yield' to end badly, exacerbated by the lack of liquidity in many markets and
the realisation by these investors that they have bought assets far more
volatile than the cash they switched from. While central bankers continue to
adopt aggressive policies, with debt worldwide having grown significantly since
the financial crisis and valuations far from cheap, the Manager expects the
turbulence of recent months to continue. It is anticipated that this will
produce some attractive investment opportunities.
John Reeve
Chairman
24 February 2015
Twenty Largest Investments
as at 31 December 2014
Company Super Sector Place of Valuation % of
listing portfolio
£'000
UK Treasury 4.75% 2015 Fixed Interest UK 100,401 11.49
HSBC Financials UK 76,443 8.75
Royal Dutch Shell Oil & Gas UK 72,071 8.25
GlaxoSmithKline Health Care UK 57,693 6.60
BP Oil & Gas UK 48,744 5.58
Grafton Group Industrials UK 38,933 4.46
British American Tobacco Consumer Goods UK 30,638 3.51
BT Group Telecommunications UK 25,696 2.94
Royal Bank of Scotland Financials UK 24,202 2.77
Direct Line Insurance Financials UK 22,326 2.56
Lloyds Banking Group Financials UK 22,031 2.52
TNT Express Industrials Netherlands 20,031 2.29
SIG Industrials UK 19,773 2.26
Qinetiq Industrials UK 19,521 2.23
Gold Bullion Securities Financials UK 18,330 2.10
ETF
Carnival Consumer Services UK 17,601 2.01
Unilever Consumer Goods UK 17,001 1.95
Citigroup Financials USA 16,744 1.92
Imperial Tobacco Consumer Goods UK 16,200 1.85
Go-Ahead Consumer Services UK 13,747 1.57
678,126 77.61
Statement of Comprehensive Income
for the year ended 31 December 2014
2014 2013
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment 30,262 - 30,262 26,064 - 26,064
income
Other operating 12 - 12 10 - 10
income
30,274 - 30,274 26,074 - 26,074
(Losses)/gains
on investments
Losses/gains on - (29,867) (29,867) - 164,732 164,732
investments
held at fair
value through
profit or loss
Total income 30,274 (29,867) 407 26,074 164,732 190,806
Expenses
Management fees (1,315) (1,938) (3,253) (1,141) (1,711) (2,852)
Other expenses (538) (1,009) (1,547) (569) (1,154) (1,723)
Profit/(loss) 28,421 (32,814) (4,393) 24,364 161,867 186,231
before finance
costs and tax
Finance costs (2,639) (3,999) (6,638) (2,090) (3,163) (5,253)
Profit/(loss) 25,782 (36,813) (11,031) 22,274 158,704 180,978
before tax
Tax - - - - - -
Profit/(loss) 25,782 (36,813) (11,031) 22,274 158,704 180,978
for the year
Earnings per 39.82p (56.86p) (17.04p) 36.17p 257.72p 293.89p
share (basic &
diluted)
The total column of this statement represents the Statement of Comprehensive
Income prepared in accordance with IFRS. The supplementary revenue return and
capital return columns are both prepared under guidance issued by the
Association of Investment Companies. All items in the above statement derive
from continuing operations. No operations were acquired or discontinued during
the year.
The Company does not have any income or expense that is not included in net
profit for the year. Accordingly, the net profit for the year is also the Total
Comprehensive Income for the Year, as defined in IAS1 (revised).
There are no minority interests.
Statement of Changes in Equity
for the year ended 31 December 2014
Ordinary Share
share premium Capital Retained Total
capital account reserves earnings equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 January 15,138 22,105 530,413 33,535 601,191
2013
Unclaimed dividends - - - 29 29
- 12 years
Profit for the year - - 158,704 22,274 180,978
Issue of share 693 31,897 - - 32,590
capital
Dividends paid to - - - (22,718) (22,718)
equity shareholders
Balance at 31 15,831 54,002 689,117 33,120 792,070
December 2013
Unclaimed dividends - - - 17 17
Profit for the year - - (36,813) 25,782 (11,031)
Issue of share 888 42,038 - - 42,926
capital
Dividends paid to - - - (24,538) (24,538)
equity shareholders
Balance at 31 16,719 96,040 652,304 34,381 799,444
December 2014
Statement of Financial Position
as at 31 December 2014
31 December 2014 31 December 2013
£'000 £'000 £'000 £'000
Non-current assets 873,781 889,385
Investments held at fair value
through profit or loss
889,385
Current assets
Receivables 3,256 4,087
Cash and cash equivalents 37,225 14,139
40,481 18,226
Total assets 914,262 907,611
Current liabilities
Payables (1,064) (1,836)
Total assets less current 913,198 905,775
liabilities
Non-current liabilities
Interest bearing borrowings (113,754) (113,705)
Net assets 799,444 792,070
Equity attributable to equity
holders
Ordinary share capital 16,719 15,831
Share premium 96,040 54,002
Capital reserves 652,304 689,117
Retained earnings 34,381 33,120
799,444 792,070
Total equity 799,444 792,070
Net asset value per share 1,195.47p 1,250.84p
Statement of Cash Flows
for the year ended 31 December 2014
2014 2013
£'000 £'000 £000 £'000
Cash flows from operating
activities
(Loss)/profit before tax (11,031) 180,978
Adjustments for:
Purchases of investments¹ (305,944) (351,220)
Sales of investments¹ 291,681 261,070
(14,263) (90,150)
Gains/(losses) on investments 29,867 (164,732)
Financing costs 6,638 5,253
Operating cash flows before 11,211 (68,651)
movements in working capital
Increase in accrued income (78) (332)
(Decrease)/increase in receivables 909 (929)
(Decrease)/increase in payables (460) 779
Net cash flows from operating 11,582 (69,133)
activities before and after income
tax
Cash flows from financing
activities
Proceeds from issue of new shares 42,926 32,590
4.05% Private Placement Loan - 50,000
Issue costs relating to 4.05% (313) (133)
Private Placement Loan
17 29
Unclaimed dividends
(6,588) (4,559)
Interest paid on borrowings
Equity dividends paid (24,538) (22,718)
Net cash used in financing 11,504 55,209
activities
Net Increase/(decrease) in cash and 23,086 (13,924)
cash equivalents
Cash and cash equivalents at the 14,139 28,063
start of the year
Cash and cash equivalents at the 37,225 14,139
end of the year
¹ Purchases and sales of investments are considered to be operating activities
of the Company, given its purpose, rather than investing activities.
Notes
i. The figures set out above are prepared on the same basis as set out in the
previous year's annual accounts and are derived from the audited accounts
of Temple Bar Investment Trust Plc for the years ended 31 December 2013 and
31 December 2014. The 2014 accounts will be sent to shareholders shortly.
ii. The financial information contained in this announcement does not
constitute full accounts within the meaning of Section 434 of the Companies
Act 2006. The 2014 accounts, on which the report of the auditors is
unqualified, will be filed with the Registrar of Companies in due course.
The audited accounts for the year ended 31 December 2013 on which the
report of the auditors was unqualified and did not contain a statement
under Section 498 of the Companies Act 2006, have been filed with the
Registrar of Companies.
24 February 2015
Contact: Alastair Mundy
Telephone 020 7597 2000
Investec Fund Managers Limited
Friday, 22nd November 2024
COMPANIES COVERED:
Latest directors dealings
- 1 day ago Cerillion
- 1 day ago Associated British Foods
- 1 day ago B&M European Value Retail S.A. (DI)
- 1 day ago B&M European Value Retail S.A. (DI)
- 1 day ago Haleon