Final Results

Temple Bar Investment Trust PLC

Final Results Announcement for the year ended 31 December 2015

Chairman’s Statement

Performance

The year under review has seen a continuation of volatile markets together with conditions generally unfavourable for Temple Bar’s value oriented investment approach. The total return on net assets of Temple Bar in 2015 was -1.0% which compares with a total return for the FTSE All Share Index of 1.0%. It is always disappointing when the Trust endures periods of underperformance but this is a natural consequence of our chosen investment style which very much favours a longer term standpoint. Temple Bar continues to outperform its benchmark over both five and ten year periods.

The Company’s portfolio is constructed to deliver both capital and income growth. The portfolio manager remains fully focussed on identifying good quality companies with attractive yields and run by strong management teams. Sometimes such companies are under-appreciated by the market for various reasons and accordingly offer value to a long term, patient investor. The benefits of this approach are reflected in Temple Bar’s returns over longer time periods.

Dividend

This is the first year in which the Company has paid dividends on a quarterly basis, a change implemented on our understanding of shareholder preference. There have already been three interim dividend payments of 7.93p per share and the directors are now recommending a final dividend of 15.87p per share to be paid on 31 March 2016 to those shareholders on the register as at 11 March 2016. The ex-dividend date for this payment is 10 March 2016. If approved, this would give a total dividend of 39.66p, an increase for the year as a whole of 2% and the 32nd consecutive year in which the Company has increased its annual dividend payment.

Gearing

The Company was only moderately geared at the year end, its long term borrowings largely matched by the relatively high cash and near cash position on the portfolio. At the year end, gearing (calculated net of cash and related liquid assets including our investment in a UK short dated gilt) was 3.8%. The Manager is only prepared to invest the available funds when he considers that suitable opportunities are available. This has generally not been the case in the recent past.

Share Capital Management

For large parts of 2013-14 the Company’s shares were trading at a premium to net asset value and it was therefore able to issue new shares to market participants. Throughout the majority of 2015 the Company’s shares have traded at a modest discount to their net asset value; consequently it has not been possible to issue new shares. While there were also no share repurchases during the year, the Board is prepared to undertake such action, subject to market conditions, if the discount widens both in absolute terms and relative to the Company’s peer group, as part of a proactive approach to discount/premium management. The Board recommends that the existing authorities to issue new ordinary shares 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.

The Board

As mentioned in the half year report, we were pleased to welcome to the Board during the year Lesley Sherratt, who is already making a positive contribution to Board discussion. We were also sorry to lose the services of Martin Riley, for health reasons, after 10 years of excellent service on the Board. In common with best practice, all directors are subject to annual re-election by shareholders. Every year the Board undertakes a formal and rigorous evaluation of each director including myself as Chairman.

Annual General Meeting

The AGM will be held at Woolgate Exchange, 25 Basinghall Street, London EC2V 5HA on 30 March 2016 at 11am. In addition to the formal business of the meeting the portfolio manager, Alastair Mundy, will, as usual, make a presentation reviewing the past year and commenting on the outlook. He will also be available to answer questions alongside the directors. Shareholders who are unable to attend the meeting are encouraged to use their proxy votes.

Outlook

There is no getting away from the fact that the last few years have been an uncomfortable time for committed adherents of the value investing approach. While in relative terms our portfolio has suffered as a consequence, investment is a long term matter and I am reassured that many of our shareholders appear to understand this. They appreciate that the value investment style is inherently cyclical but that, if one is patient and adheres to this approach, eventually some great opportunities will arise. Clearly we hope that this occurs sooner rather than later but if needs be we will remain patient before investing any of the surplus cash currently held on the portfolio.

John Reeve
Chairman
23 February 2016



Twenty Largest Investments
as at 31 December 2015

Company Industry Place of listing Valuation
£’m
% of portfolio
UK Treasury 4.00% 2016 Fixed Interest UK 73.171 8.6
HSBC Holdings Financials UK 71.808 8.4
GlaxoSmithKline Health Care UK 57.567 6.7
BP Oil & Gas UK 55.995 6.5
Royal Dutch Shell Oil & Gas UK 42.842 5.0
Grafton Group Industrials  UK 40.995 4.8
Lloyds Banking Group Financials UK 40.665 4.8
British American Tobacco Consumer Goods UK 33.011 3.9
Royal Bank of Scotland Financials UK 32.467 3.8
Direct Line Insurance Financials UK 28.597 3.3
BT Group Telecommunications UK 24.903 2.9
Gold Bullion Securities ETF Financials UK 19.297 2.3
Wm Morrison Supermarkets Consumer Services UK 18.294 2.1
Centrica Utilities UK 18.235 2.1
Tesco Consumer Services UK 17.995 2.1
SIG Industrials UK 17.603 2.1
CitiGroup Financials USA 16.938 2.0
Drax Utilities UK 16.404 1.9
CRH Industrials UK 16.033 1.9
Imperial Brands Consumer Goods UK 15.362 1.8
658.182 77.0



Statement of Comprehensive Income
for the year ended 31 December 2015

2015 2014
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Investment income 31,243 - 31,243 30,262 - 30,262
Other operating income 10 - 10 12 - 12
31,253 - 31,253 30,724 - 30,274
Losses on investments
Losses on investments held at fair value through profit or loss - (31,615) (31,615) - (29,867) (29,867)
Total income 31,253 (31,615) (362) 30,274 (29,867) 407
Expenses
Management fees (1,374) (1,980) (3,354) (1,315) (1,938) (3,253)
Other expenses (581) (1,282) (1,863) (538) (1,009) (1,547)
Profit/(loss) before finance costs and tax 29,298 (34,877) (5,579) 28,421 (32,814) (4,393)
Finance costs (2,635) (4,000) (6,635) (2,639) (3,999) (6,638)
Profit/(loss) before tax 26,663 (38,877) (12,214) 25,782 (36,813) (11,031)
Tax - - - - - -
Profit/(loss) for the year
26,663

(38,877)

(12,214)

25,782

(36,813)

(11,031)

Earnings per share (basic & diluted)

 


39.87p


(58.14p)


(18.27p)


39.82p


(56.86p)


(17.04p)

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).



Statement of Changes in Equity
for the year ended 31 December 2015

Ordinary Share
share premium Capital Retained Total
capital account reserves earnings equity
£’000 £’000 £’000 £’000 £’000
Balance at
1 January 2014
15,831 54,002 689,117 33,120 792,070
Unclaimed dividends - - - 17 17
(Loss)/Profit for the year - - (36,813) 25,782 (11,031)
Issue of share capital 888 42,038 - - 42,926
Dividends paid to equity shareholders - - - (24,538) (24,538)
Balance at
31 December 2014
16,719 96,040 652,304 34,381 799,444
Unclaimed dividends - - - 35 35
(Loss)/Profit for the year - - (38,877) 26,663 (12,214)
Issue of share capital - - - - -
Dividends paid to equity shareholders - - - (31,510) (31,510)

Balance at
31 December 2015
16,719 96,040 613,427 29,569 755,755



Statement of Financial Position
as at 31 December 2015

31 December 2015 31 December 2014
£’000 £’000 £’000 £’000
Non-current assets
Investments held at fair value through profit or loss


855,625


873,781
Current assets
Receivables 2,722 3,256
Cash and cash equivalents 12,262 37,225
14,984 40,481
Total assets 870,609 914,262
Current liabilities
Payables (1,074) (1,064)
Total assets less current liabilities 869,535 913,198
Non-current liabilities
Interest bearing borrowings (113,780) (113,754)
Net assets 755,755 799,444
Equity attributable to equity holders
Ordinary share capital 16,719 16,719
Share premium 96,040 96,040
Capital reserves 613,427 652,304
Retained earnings 29,569 34,381
755,755 799,444
Total equity 755,755 799,444
Net asset value per share 1,130.14p 1,195.47p



Statement of Cash Flows
for the year ended 31 December 2015

2015 2014
£’000   £’000 £000 £’000
Cash flows from operating activities
Loss before tax (12,214) (11,031)
Adjustments for:
Purchases of investments¹ (360,358) (305,944)
Sales of investments¹ 346,899 291,681
(13,459) (14,263)
Losses on investments 31,615 29,867
Financing costs 6,635 6,638

Operating cash flows before movements in working capital

12,577

11,211
Increase/(decrease) in accrued interest 743 (835)
Increase in accrued dividend income 10 757
(Decrease)/increase in receivables (219) 909
Increase/(decrease) in payables 10 (460)
Net cash flows from operating activities before and after income tax 13,121 11,582
Cash flows from financing activities
Proceeds from issue of new shares
Issue costs relating to 4.05% Private Placement Loan
Unclaimed dividends
Interest paid on borrowings
-
(24)

35
(6,585)
42,926
(313)

17
(6,588)
Equity dividends paid (31,510) (24,538)
Net cash used in financing activities (38,084) 11,504
Net (decrease)/increase in cash and cash equivalents (24,963) 23,086
Cash and cash equivalents at the start of the year 37,225 14,139
Cash and cash equivalents at the end of the year
12,262

37,225

¹    Purchases and sales of investments are considered to be operating activities of the Company, given its purpose, rather than investing activities.

Notes

  1. 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 2014 and 31 December 2015.The 2015 accounts will be sent to shareholders shortly.

  2. The financial information contained in this announcement does not constitute full accounts within the meaning of Section 434 of the Companies Act 2006.The 2015 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 2014 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.

23 February 2016

Contact:  Alastair Mundy
                Telephone 020 7597 2000
                Investec Fund Managers Limited

UK 100

Latest directors dealings