Half-yearly Report

CHAIRMAN’S STATEMENT

Introduction

Despite much happening in the first six months of the year to excite the average political and economic commentator, the net effect was to leave the FTSE All-Share Index little changed from its opening level, rising just 1.1%. As has been common in recent periods, the FTSE250 outperformed the FTSE100, rising by 9.0% against the rather more sedentary increase of 0.7% in the largest stocks.

Temple Bar generated a net asset value total return of 4.5%, outperforming the FTSE All-Share Index by 1.5% in the first six months of 2015.  The biggest contributors to performance were the express delivery company TNT Express, which received a bid from its rival FedEx and distributor of building products Grafton Group. The most notable laggards were Avon Products, Royal Dutch Shell and Royal Bank of Scotland.

One could write much about the Greek situation, but like most tight economic and political events it is impossible to have any confidence in the outcome and, perhaps even more importantly, it may be of little long-term relevance. We prefer seeing such events as potentially offering high levels of volatility and thus encouraging some irrational investor activity.

Dividend

For the current financial year the Company has commenced a policy of paying dividends on a quarterly basis. The first quarterly dividend of 7.93p per share was paid on 30 June 2015 and the directors have declared a second interim dividend, also of 7.93p per share, to be paid on 30 September 2015 to those shareholders on the register as at 11 September 2015. The ex-dividend date for this payment is 10 September 2015.

The Board

As a result of health issues Martin Riley took the decision to stand down as a director of the Company with effect from the AGM on 30 March 2015 rather than seek re-election as originally contemplated. We were extremely sorry to lose the services of Martin Riley in such circumstances. In recent years he provided invaluable advice and guidance based on his vast experience of investment related matters.

I am delighted to report that in order to further strengthen the Board, Lesley Sherratt was appointed a director on 1 April 2015. Dr Sherratt has many years’ experience in the investment company sector and the Board is confident that she will make a significant contribution to Temple Bar in the coming years.

New Share Issues

Throughout the current year the Company’s shares have traded at a modest discount to their underlying net asset value, in common with many Trusts in the sector. Consequently, the Company has not been in a position to issue new shares but there is a block listing in place which enables share issuance to be resumed should circumstances change. There have been no share repurchases in the year to date.

Outlook

In general, equity ratings remain fairly high, particularly in medium-sized companies. Most investors remain reluctant to call an end to the party given a lack of attractive investment alternatives and meaningful catalysts. As always, when others are partying we prefer to be thinking about what might go wrong and preparing for such eventualities. Consequently, we continue to wait for opportunities productively to use the liquidity on the portfolio. 

___________
John Reeve

TWENTY LARGEST HOLDINGS AS AT 30 JUNE 2015

Company	Supersector	Place of Listing	Valuation £’000	% of Portfolio
UK Treasury 4.75% 2015	Fixed Interest	UK	98,308	11.10
HSBC	Financials	UK	71,608	8.09
Royal Dutch Shell	Oil & Gas	UK	59,797	6.76
BP	Oil & Gas	UK	56,096	6.34
GlaxoSmithKline	Healthcare	UK	55,449	6.26
Grafton Group	Industrials	UK	44,421	5.02
Royal Bank of Scotland	Financials	UK	37,778	4.27
Lloyds Banking Group	Financials	UK	36,780	4.16
British American Tobacco	Consumer Goods	UK	29,890	3.38
BT Group	Telecommunications	UK	23,765	2.68
Top Ten Investments			513,892	58.06
Direct Line Insurance	Financials	UK	23,593	2.67
SIG	Industrials	UK	22,800	2.58
Centrica	Utilities	UK	22,087	2.49
TNT	Industrials	Netherlands	20,430	2.31
Gold Bullion Securities ETF	Financials	UK	20,045	2.26
Carnival	Consumer Services	UK	19,652	2.22
Drax	Utilities	UK	17,430	1.97
Citigroup	Financials	USA	16,938	1.91
Qinetiq	Industrials	UK	15,920	1.80
CRH	Industrials	UK	14,750	1.67
Top Twenty Investments			707,537	79.94

STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2015

		30 June 2015 (unaudited)			30 June 2014  (unaudited)			31 December 2014  (audited)
		Revenue £’000	Capital £’000	Total £’000	Revenue £’000	Capital £’000	Total £’000	Revenue £’000	Capital £’000	Total £’000
Investment income		17,152	-	17,152	15,593	-	15,593	30,262	-	30,262
Other operating income		6	-	6	4	-	4	12	-	12
Total income		17,158	-	17,158	15,597	-	15,597	30,274	-	30,274
Gains/(losses) on investments
Gains/(losses) on investments held at  fair value through profit or loss assets
		-	21,644	21,644	-	(7,603)	(7,603)	-	(29,867)	(29,867)
		17,158	21,644	38,802	15,597	(7,603)	7,994	30,274	(29,867)	407
Expenses
Management fees		(658)	(987)	(1,645)	(630)	(945)	(1,575)	(1,315)	(1,938)	(3,253)
Other expenses including dealing costs		(400)	(654)	(1,054)	(298)	(667)	(965)	(538)	(1,009)	(1,547)
Profit /(loss) before finance costs and tax		16,100	20,003	36,103	14,669	(9,215)	5,454	28,421	(32,814)	(4,393)
Finance costs		(1,306)	(1,983)	(3,289)	(1,306)	(1,983)	(3,289)	(2,639)	(3,999)	(6,638)
Profit/(loss)before tax		14,794	18,020	32,814	13,363	(11,198)	2,165	25,782	(36,813)	(11,031)
Tax		-	-	-	-	-	-	-	-	-
Profit/(loss) for the period		14,794	18,020	32,814	13,363	(11,198)	2,165	25,782	(36,813)	(11,031)
Earnings per share (basic and diluted)		22.85p	27.83p	50.68p	20.94p	(17.55p)	3.39p	39.82p	(56.86p)	(17.04p)

A first interim dividend of 7.93 pence per share in respect of the quarter ended 31 March 2015 was paid on 30 June 2015.  A second interim dividend of 7.93 pence per share in respect of the quarter ended 30 June 2015 was declared on 21 July 2015 and is payable on 30 September 2015.  

An interim dividend of 15.55 pence per share in respect of the six months ended 30 June 2014 was declared on 22 July 2014 and was paid on 30 September 2014. A final dividend of 23.33 pence per share in respect of the year ended 31 December 2014 was declared on 24 February 2015 and was paid on 31 March 2015.  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 2015

	Ordinary share	Share premium	Capital	Retained	Total
	capital	account	reserves	earnings	equity
	£’000	£’000	£’000	£’000	£’000
BALANCE AT 1 JANUARY 2015	16,719	96,040	652,304	34,381	799,444
Profit for the period	-	-	18,020	14,794	32,814
Unclaimed dividends	-	-	-	25	25
Dividends paid to equity shareholders		-		(20,904)	(20,904)
BALANCE AT 30 JUNE 2015	16,719	96,040	670,324	28,296	811,379

STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED
30 JUNE 2014

	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
(Loss)/profit for the period	-	-	(11,198)	13,363	2,165
	15,831	54,002	677,919	46,483	794,235
Issue of share capital*	354	17,287	-	-	17,641
Dividends paid to equity shareholders		-		(14,396)	(14,396)
BALANCE AT 30 JUNE 2014	16,185	71,289	677,919	32,087	797,480

* Due to investor demand 1,418,625 shares were issued during the period for a total consideration of £17,602,319 at a premium to the prevailing net asset value.

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2015

	30 June 2015  (unaudited) £’000	30 June 2014  (unaudited) £’000	31 December 2014  (audited) £’000
NON-CURRENT ASSETS
Investments held at fair value through profit or loss*	885,130	884,634	873,781
CURRENT ASSETS
Receivables	5,851	4,328	3,256
Cash and cash equivalents	37,770	27,775	37,225
	43,621	32,103	40,481
TOTAL ASSETS	928,751	916,737	914,262
CURRENT LIABILITIES
Payables	(3,646)	(5,554)	(1,064)
TOTAL ASSETS LESS CURRENT LIABILITIES	925,105	911,183	913,198
NON-CURRENT LIABILITIES
Interest bearing borrowings	(113,726)	(113,703)	(113,754)
NET ASSETS	811,379	797,480	799,444
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
Ordinary share capital	16,719	16,185	16,719
Share premium	96,040	71,289	96,040
Capital reserves	670,324	677,919	652,304
Retained earnings	28,296	32,087	34,381
TOTAL EQUITY	811,379	797,480	799,444
NET ASSET VALUE PER SHARE	1,213.32p	1,231.78p	1,195.47p

* Includes £98.3 million UK Treasury holding considered by the Board to be held in lieu of cash.

STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2015

	30 June 2015  (unaudited) £’000	30 June 2014 (unaudited) £’000	31 December 2014  (audited) £’000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) before tax	32,814	2,165	(11,031)
Adjustments for:
Purchases of investments	(100,280)	(221,998)	(305,944)
Sales of investments	110,575	219,146	291,681
	10,295	(2,852)	(14,263)
Losses/(gains) on investments	(21,644)	7,603	29,867
Financing costs	3,289	3,289	6,638
Operating cash flows before movements in working capital	24,754	10,205	11,211
Increase in accrued income and prepayments	(496)	(1,171)	(78)
(Increase)/decrease in receivables	(2,099)	930	909
Increase/(decrease) in payables	2,582	4,030	(460)
NET CASH FLOW FROM OPERATING ACTIVITIES BEFORE AND AFTER INCOME TAX	24,741	13,994	11,582
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of new shares	-	17,641	42,926
Issue costs relating to 4.05% Private Placement Loan	-	(311)	(313)
Unclaimed dividends	25	-	17
Interest paid on borrowings	(3,317)	(3,292)	(6,588)
Equity dividends paid	(20,904)	(14,396)	(24,538)
NET CASH USED IN FINANCING ACTIVITIES	24,196	(358)	11,504
NET INCREASE IN CASH AND CASH EQUIVALENTS	545	13,636	23,086
Cash and cash equivalents at the start of the period	37,225	14,139	14,139
Cash and cash equivalents at the end of the period	37,770	27,775	37,225

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 2015 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 21 July 2015 and the above responsibility statement was signed on its behalf by:

  John Reeve

  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 2015 and 30 June 2014 has not been audited.

              The information for the year ended 31 December 2014 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