Final Results
CHAIRMAN'S STATEMENT
The total return, including reinvested dividends, on the net assets of Temple
Bar during 2005 was 21.5%, which compares with a total return for the FTSE-All
Share Index of 22.0%. The return achieved is a combination of underlying
portfolio performance and the effect of the capital gearing of the Trust. While
this is a marginal under-performance for the year as a whole the five year
record versus the benchmark index remains very positive.
The Board is recommending a final dividend of 18.93p per share, to produce a
total increase for the year of 3.0%, backed by strong dividend increases made
by many of the companies held in the portfolio. This dividend will be payable
on 31 March 2006 to those shareholders on the register as at 17 March 2006
Post-tax revenue earnings increased by 7.73%. The proposed dividend was more
than covered by net earnings generated on the portfolio during the year. The
level of capital gearing, at 13.5%, again contributed positively to performance
during the period.
The price of Temple Bar shares traded close to their underlying net asset value
throughout the year, supported by the steady demand created within the
Company's Savings Scheme and ISA products.
IFRS
For the first time the Annual Report and Accounts have been prepared on the
basis of International Financial Reporting Standards. This is consistent with
the approach adopted at the interim stage, and, as I explained at that time,
there is very little financial impact for the Company arising from the adoption
of these standards. Most of the changes are, in fact, of a presentational
nature.
Outlook
The last five years have seen two particular themes prevalent in the UK equity
market: the out-performance of small and medium-sized companies relative to
large companies and the success of investment strategies biased towards a
search for companies whose shares exhibited strong value characteristics, such
as a high dividend yield, rather than those with the greatest long-term growth
prospects. The Temple Bar portfolio has exploited both these themes.
However, the Manager now believes that the valuation discrepancies that
encouraged both of these trends have corrected, or in some cases
over-corrected; as a result, the Temple Bar portfolio is becoming increasingly
reflective of these changed views.
The recovery of the UK equity market from its lows in early 2003 has now lasted
almost three years. Over that period the FTSE-All Share Index has risen nearly
80% and the biggest setback from peak to trough has been just 6.4%. Compared
with other periods when markets have risen strongly, we would appear to be near
the tail-end of this run. Admittedly, valuations do not look expensive,
companies' balance sheets are strong and global economic growth appears
resilient. However, we prefer not to ignore the lessons of history and do not
believe it is the time to be taking heroic positions on the portfolio. The
Manager and his team will, as usual, adhere to their contrarian principles in
the year ahead and we are confident that this will uncover a number of
attractive opportunities.
Annual General Meeting
The AGM will be held on Monday 27 March at the managers' office in London. In
addition to the formal business of the meeting, the managers will make a
presentation to shareholders reviewing the past year and commenting on the
outlook. I look forward to welcoming as many of you as possible. Shareholders
who are unable to attend the meeting are encouraged to use their proxy votes.
21 February 2006
John Reeve
TWENTY LARGEST INVESTMENTS
as at 31 December 2005
Total Assets
Valuation Less Current
Liabilities
COMPANY £'000 %
Royal Dutch Shell 39,750 7.45
Vodafone 36,395 6.83
GlaxoSmithKline 35,123 6.59
Royal Bank of Scotland 25,974 4.87
BP 24,322 4.56
HSBC 18,372 3.45
Prudential 16,299 3.06
BT 15,686 2.94
Centrica 15,285 2.87
AstraZeneca 13,721 2.57
Investec UK Smaller Companies Fund 11,032 2.07
Legal & General 10,980 2.06
ITV 10,913 2.05
Boots 10,285 1.93
Unilever 10,071 1.89
Amvescap 9,945 1.87
HBOS 8,937 1.68
Kingfisher 8,897 1.67
Lloyds TSB 8,756 1.64
Mitchells & Butlers 8,674 1.63
339,417 63.68
Consolidated income statement
for the year ended 31 December 2005
2005 2004
(restated)
Revenue Capital Revenue Capital
Return Return Total Return Return Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment Income 19,637 - 19,637 18,294 - 18,294
Other operating income 483 - 483 466 - 466
Total Income 20,120 - 20,120 18,760 - 18,760
Gains on Investments
Gains on fair value - 72,123 72,123 - 61,752 61,752
through profit or loss
assets
20,120 72,123 92,243 18,760 61,752 80,512
Expenses
Management fees (804) (1,207) (2,011) (684) (1,026) (1,710)
Other expenses (441) (1,679) (2,120) (383) (1,024) (1,407)
Profit before finance 18,875 69,237 88,112 17,693 59,702 77,395
costs and tax
Finance costs (1,799) (2,735) (4,534) (1,842) (2,736) (4,578)
Profit before tax 17,076 66,502 83,578 15,851 56,966 72,817
Tax - - - - - -
Profit for the year 17,076 66,502 83,578 15,851 56,966 72,817
Earnings per share (basic 29.35p 114.32p 143.68p 27.37p 98.37p 125.74p
& diluted)
The total column of this statement represents the Group's Income Statement
prepared in accordance with IFRS. The supplementary revenue return and capital
return columns are both prepared under guidance issued by the Association of
Investment Trust Companies. All items in the above statement derive from
continuing operations.
There are no minority interests.
Consolidated statement of changes in equity
for the year ended 31 December 2005
Share Capital Capital
Share Premium Reserve Reserve Retained Total
Capital Reserve Realised Unrealised Earnings equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 31 December 14,478 2,193 264,951 36,705 23,048 341,375
2003
Changes in equity for
2004
Profit for the year - - 18,182 38,784 15,851 72,817
14,478 2,193 283,133 75,489 38,899 414,192
Dividends paid to - - - - (15,312) (15,312)
equity shareholders
Balance at 31 December 14,478 2,193 283,133 75,489 23,587 398,880
2004
Changes in Equity for
2005
Profit for the year - - 49,908 16,594 17,076 83,578
14,478 2,193 333,041 92,083 40,663 482,458
Dividends paid to - - - - (15,834) (15,834)
equity shareholders
Issue of share capital 107 2,890 - - - 2,997
Balance at 31 December 14,585 5,083 333,041 92,083 24,829 469,621
2005
CONSOLIDATED BALANCE SHEET
As at 31 December 2005
31 December 2005 31 December 2004
(Restated)
£'000 £'000 £'000 £'000
NON-CURRENT ASSETS 513,012 434,128
Investment held at fair value
through profit or loss
CURRENT ASSETS
Cash and cash equivalent 26,663 25,481
Other receivables 8,953 3,201
35,616 28,682
TOTAL ASSSETS 548,628 462,810
CURRENT LIABILITIES
Other payables (15,663) (556)
TOTAL ASSETS LESS CURRENT 532,965 462,254
LIABILITIES
NON CURRENT LIABILITIES
Interest bearing borrowings (63,344) (63,374)
NET ASSETS 469,621 398,880
EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS
Ordinary share capital 14,585 14,478
Share premium 5,083 2,193
Capital reserve - realised 333,041 283,133
Capital reserve - unrealised 92,083 75,489
Retained earnings 24,829 23,587
469,621 398,880
TOTAL EQUITY 469,621 398,880
NET ASSET VALUE PER SHARE 804.96p 688.78p
Consolidated Group and Company cash flow statement
For the year ended 31 December 2005
2005 2004
£'000 £'000 £'000 £'000
CASH FLOWS FROM OPERATING
ACTIVITIES
Profit before tax 83,578 72,817
Adjustments for:
Purchases of investments¹ (210,423) (124,198)
Sales of investments¹ 203,662 153,443
(6,761) 29,245
Gains on investments (72,123) (61,752)
Financing costs 4,534 4,578
Operating cash flows before 9,228 44,888
movements in working capital
Increase in accrued income and (592) (225)
prepayments
Increase in receivables (5,160) (390)
Increase/decrease in payables 15,107 (180)
NET CASH FLOW FROM OPERATING 18,583 44,093
ACTIVITIES BEFORE AND AFTER INCOME
TAX
CASH FLOWS FROM FINANCING
ACTIVITES
Equity shares issued 2,997 -
Interest paid on borrowings (4,559) (4,577)
Bank interest paid (5) (1)
Equity dividends paid (15,834) (15,312)
NET CASH USED IN FINANCING (17,401) (19,890)
ACTIVITIES
NET INCREASE IN CASH AND CASH 1,182 24,203
EQUIVALENTS
CASH EQUIVALENTS AT THE BEGINNING 25,481 1,278
OF THE YEAR
CASH AND CASH EQUIVALENTS AT THE 26,663 25,481
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.
Dividend
The directors will recommend to shareholders at the annual general meeting to
be held on 27 March 2006 that a final dividend of 18.93p per ordinary share be
paid on 31 March 2006 to shareholders on the Register at the close of business
on 17 March 2006.
Notes
i. The figures set out above are derived from the audited consolidated
accounts of Temple Bar Investment Trust Plc and its subsidiaries for the
years ended 31 December 2004 and 31 December 2005. The 2005 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 254 of the Companies
Act 1985. The 2005 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 2004 on which the
report of the auditors was unqualified and did not contain a statement
under either Section 237(2) or 237(3) of the Companies Act 1985, have been
filed with the Registrar of Companies.
21 February 2006
Contact: Alastair Mundy Telephone 020 7597 2000
Investec Investment Management Limited
Tuesday, 16th July 2024
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