Half-year Report

Chairman’s Statement

During the six months to 30 June 2019 Temple Bar generated a total return on net assets of 11.9%, slightly underperforming the benchmark FTSE All-Share Index total return of 13.0%, as the Value investment style that your managers pursue remained out of fashion.

Dividend

A first quarterly dividend of 11.0p per share was paid on 28 June 2019 and the directors have declared a second interim dividend, also of 11.0p per share, again an increase of 25.7% on the equivalent dividend last year. This will be paid on 30 September 2019 to those shareholders on the register of members as at 13 September 2019. The ex-dividend date for this payment is 12 September 2018. It is important to reiterate the comment made in the announcement of the first interim payment that the scale of the increase relative to the prior year should not be taken as indicative of the likely increase in the dividend for the year as a whole. The large increase in the interim payments reflects a rebalancing exercise between the size of the three interim payments and the final dividend. In the absence of any unforeseen circumstances the Board is hoping to recommend an increase in the total dividend for the year of approximately 10%.

Board

The process of Board refreshment has continued and as from 1^st October Sonita Alleyne and Shefaly Yogendra will be joining the Board. Sonita has extensive experience in both public and private sectors, particularly in media and Shefaly brings a wealth of expertise in digital and tech leadership, risk and decision making. I am sure both these new Directors will bring interesting new perspectives to our discussions. As previously announced, Sir Richard Jewson will not be offering himself for re-election at the next AGM.

Investment Parameters

As highlighted in the Annual Report, we have been having discussions, both internally and with shareholders, re any modifications to our investment parameters. These discussions are ongoing. In the meantime, I would like to thank the many shareholders and other interested parties who have responded thus far.

Outlook

Future movement of UK share prices remain linked to the outcome of the Brexit discussions and global instability. We have no special insight into their likely resolution. However, over many years Temple Bar has demonstrated resilience in even the most difficult of markets. We will endeavour to continue to do so.

Arthur Copple

Chairman

8 August 2019

TWENTY LARGEST HOLDINGS AS AT 30 JUNE 2019

Company	Industry	Place of Primary Listing	Valuation £’000	% of Portfolio
GlaxoSmithKline	Healthcare	UK	66,103	6.84%
Royal Dutch Shell	Oil & Gas	UK	64,914	6.72%
Capita	Industrials	UK	57,661	5.97%
Travis Perkins	Industrials	UK	56,494	5.85%
BP	Oil & Gas	UK	55,207	5.71%
Grafton Group	Industrials	Ireland	43,204	4.47%
Lloyds Banking Group	Financials	UK	40,474	4.19%
SIG	Industrials	UK	37,240	3.85%
Tesco	Consumer Services	UK	37,183	3.85%
Royal Bank of Scotland	Financials	UK	36,238	3.75%
Top Ten Investments			494,718	51.20%
Barclays	Financials	UK	34,380	3.56%
HSBC Holdings	Financials	UK	32,959	3.41%
Forterra	Industrials	UK	24,652	2.55%
Marks & Spencer	Consumer Services	UK	21,416	2.22%
Citigroup	Financials	USA	21,343	2.21%
easyJet	Consumer Services	UK	19,052	1.97%
Land Securities Group REIT	Financials	UK	18,072	1.87%
Kingfisher	Consumer Services	UK	18,050	1.87%
TP ICAP	Financials	UK	17,753	1.84%
Next	Consumer Services	UK	16,617	1.72%
Top Twenty Investments			719,012	74.42%

STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2019 (unaudited)

		30 June 2019 (unaudited)			30 June 2018 (unaudited)			31 December 2018 (audited)
		Revenue £’000	Capital £’000	Total £’000	Revenue £’000	Capital £’000	Total £’000	Revenue £’000	Capital £’000	Total £’000
Investment income		22,387	-	22,387	20,768	-	20,768	37,258	-	37,258
Other operating income		12	-	12	6	-	6	26	-	26
Total Income		22,399	-	22,399	20,774	-	20,774	37,284	-	37,284
Gains/(losses) on investments
Gains/(losses) on investments held at fair value through profit or loss assets		-	79,446	79,446	-	13,321	13,321	-	(131,528)	(131,528)
		22,399	79,446	101,845	20,774	13,321	34,095	37,284	(131,528)	(94,244)
Expenses
Management fees		(755)	(1,089)	(1,844)	(712)	(1,068)	(1,780)	(1,503)	(2,168)	(3,671)
Other expenses including dealing costs		(285)	(260)	(545)	(360)	(901)	(1,261)	(559)	(1,427)	(1,986)
Profit before finance costs and tax		21,359	78,097	99,456	19,702	11,352	31,054	35,222	(135,123)	(99,901)
Finance costs		(983)	(1,488)	(2,471)	(967)	(1,461)	(2,428)	(1,962)	(2,968)	(4,930)
Profit/(loss) before tax		20,375	76,609	96,985	18,735	9,891	28,626	(33,260)	(138,091)	(104,831)
Tax		(96)	-	(96)	(57)	-	(57)	(161)	-	(161)
Profit/(loss) for the period		20,280	76,609	96,889	18,678	9,891	28,569	33,099	(138,091)	(104,992)
Earnings per share (basic and diluted)		30.33p	114.56p	144.89p	27.93p	14.79p	42.72p	49.50p	(206.50)p	(157.00)p

A first interim dividend of 11.0 pence per share in respect of the quarter ended 31 March 2019 was paid on 28 June 2019.

A second interim dividend of 11.0 pence per share in respect of the quarter ended 30 June 2019 was declared on 8 August 2019 and is payable on 30 September 2019. 

The total column of this statement represents the Statement of Comprehensive Income, prepared in accordance with IFRS. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies.

All items in the above statement derive from continuing operations.

STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2019 (unaudited)

	Ordinary share	Share premium	Capital	Retained	Total
	capital	account	reserves	earnings	equity
	£’000	£’000	£’000	£’000	£’000
BALANCE AT 1 JANUARY 2019	16,719	96,040	652,076	37,342	802,182
Profit for the period	-	-	76,609	20,280	96,889
Unclaimed dividends	-	-	-	9	9
Dividends paid to equity shareholders		-		(21,045)	(21,045)
BALANCE AT 30 JUNE 2019	16,719	96,040	728,685	36,591	878,035

STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2018 (unaudited)

	Ordinary share	Share premium	Capital	Retained	Total
	capital	account	reserves	earnings	equity
	£’000	£’000	£’000	£’000	£’000
BALANCE AT 1 JANUARY 2018	16,719	96,040	790,167	33,440	936,366
Profit for the period	-	-	9,891	18,678	28,569
Unclaimed dividends	-	-	-	51	51
Dividends paid to equity shareholders		-		(17,541)	(17,541)
BALANCE AT 30 JUNE 2018	16,719	96,040	800,058	34,628	947,445

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019 (unaudited)

	30 June 2019 (unaudited) £’000	30 June 2018  (unaudited) £’000	31 December 2018  (audited) £’000
NON-CURRENT ASSETS
Investments held at fair value through profit or loss	966,271	1,059,300	905,125
CURRENT ASSETS
Receivables	5,584	4,721	3,231
Cash and cash equivalents	21,204	9,834	9,005
	26,788	14,555	12,236
TOTAL ASSETS	993,059	1,073,855	917,361
CURRENT LIABILITIES
Payables	(1,014)	(12,508)	(1,208)
TOTAL ASSETS LESS CURRENT LIABILITIES	992,045	1,061,347	916,153
NON-CURRENT LIABILITIES
Interest bearing borrowings	(114,010)	(113,902)	(113,971)
NET ASSETS	878,035	947,445	802,182
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
Ordinary share capital	16,719	16,719	16,719
Share premium	96,040	96,040	96,040
Capital reserves	728,685	800,058	652,076
Retained earnings	36,591	34,628	37,347
TOTAL EQUITY	878,035	947,445	802,182
NET ASSET VALUE PER SHARE	1,312.99p	1,416.79p	1,199.56p

STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2019 (unaudited)

			30 June 2019		30 June 2018		31 December 2018
			(unaudited)		(unaudited)		(audited)
			£000		£000		£000
Cash flows from operating activities
Profit before tax			96,985		28,626		(104,831)
Adjustments for:
Gains on investments			(79,446)		(13,321)		131,528
Finance costs			2,471		2,428		4,930
Purchases of investments 1			(56,898)		(292,616)		(513,298)
Sales of investments 1			75,046		293,926		512,712
Dividend income			(22,224)		(20,502)		(36,728)
Interest income			(175)		(272)		(545)
Dividends received			19,591		18,567		36,115
Interest received			359		836		1,365
Decrease/(increase) in receivables			-		(6)		25
Increase/(decrease) in payables			54		(1)		(199)
Overseas withholding tax suffered			(96)		(57)		(161)
			(61,318)		(11,018)		135,744
Net cash flows from operating activities			35,667		17,608		30,913
Cash flows from financing activities
Unclaimed dividends			9		51		51
Interest paid on borrowings			(2,432)		(2,445)		(4,877)
Equity dividends paid			(21,045)		(17,541)		(29,243)
Net cash used in financing activities			(23,468)		(19,935)		(34,069)
Net (decrease)/increase in cash and cash equivalents			12,199		(2,327)		(3,156)
Cash and cash equivalents at the start of the period			9,005		12,161		12,161
Cash and cash equivalents at the end of the period			21,204		9,834		9,005

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

RESPONSIBILITY STATEMENT

The Directors confirm to the best of their knowledge that:

• the condensed set of financial statements contained within the half-year report has been prepared in accordance with the Accounting Standards Board’s Statement ‘Half-Yearly Financial Reports’;

• the half yearly financial report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

• in accordance with Disclosure and Transparency Rule 4.2.8R there have been no related parties transactions during the six months to 30 June 2019 and therefore nothing to report on any material effect by such a transaction on the financial position or performance of the Company during that period.

The half-yearly financial report was approved by the Board on 8 August 2019 and the above responsibility statement was signed on its behalf by:

Arthur Copple

Chairman

Notes

1.         Comparative figures

            The financial information contained in this half-year report does not constitute statutory accounts as defined in section 434-436 of the Companies Act 2006.  The financial information for the six months ended 30 June 2019 and 30 June 2018 has not been audited.

            The information for the year ended 31 December 2018 does not constitute statutory accounts, but has been extracted from the latest published audited accounts, which have been filed with the Registrar of Companies.  The report of the auditors on those accounts contained no qualification or statement under section 498(2) or (3) of the Companies Act 2006.

2.         Publication

            This half-year report is being sent to shareholders and copies will be made available to the public at the Company’s registered office and on its website.

For further information please contact:

Alastair Mundy

Investec Fund Managers Limited                        020 7597 2000