Final Results

Bankers Investment Trust PLC 17 December 2001 THE BANKERS INVESTMENT TRUST PLC HENDERSON GLOBAL INVESTORS THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2001 17 December 2001 Highlights * Excellent relative performance during a particularly testing year * Only second year in past ten years there has been a decline in net assets (down 17% compared to a fall of 22% in the FTSE All-Share Index) * Total dividend per share increased by 3.6% to 6.58p * Forecast minimum dividend per share increase of 2.1% to 6.72p Extracts from Chairman's Statement Results In a year when the FTSE All-Share Index dropped by 22% our net asset value per share fell by 17%. Whilst a decrease is always disappointing, it is only the second year in which there has been a decline in the last ten years and on a brighter note we had one of our best years compared to the relevant stockmarket indices and relative to our peer group of global growth investment trusts. The most important factor behind our strong outperformance was the excellent stock selection in UK equities where we have the majority of our assets. Once again the increase in total dividend will exceed the inflation rate and we are forecasting another increase for the current year. Investment Background This has been a particularly difficult year for equity investors with the tragic events in New York and Washington on 11 September adding a totally unexpected shock to the confidence and security of the free world. With sub-standard growth from Europe, Japan trapped in a deflationary vacuum, and the USA now in recession, there has been little positive news for equity markets. However, the US economy would have been far worse without the significant monetary easing and tax cuts which the authorities prescribed. US equities have suffered from an abrupt end to the technology led capital spending boom culminating in the worst profits recession for many decades. Against this background we have favoured the more stable economies in the UK and Europe and consequently we have benefited from a relatively low weighting in the USA. Our gearing has averaged about 7% throughout the year but the negative effects of this in a declining market have been offset by good stock selection overall. Currency movements have been mildly positive with the euro recovering by 6% against sterling and an unchanged US dollar rate. The 11% decline in the yen was somewhat offset by our low exposure to Japan of which 53% is financed with short term yen loans. - MORE - - 2 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2001 Shareholders should expect international trusts such as ours to perform well in all weathers and on your behalf I should like to thank Michael Moule and his team for our excellent relative performance during a particularly testing year. Share Buy-Backs Over the first three months of our financial year we purchased 14.6 million of our own shares for cancellation at a cost of £47.0m. The shares were primarily purchased from Sierra Trading and other institutions who wanted to reduce or eliminate their holdings in your Company. The shares were purchased at an average discount of 10.6% and enhanced net assets by approximately 4.1p per share. Since instigating the buy-back programme in June 1999 we have bought back 18.7% of our then issued capital at a cost of £89.1m. We will be seeking your approval to renew the authority to purchase up to 14.99% of the current issued share capital at our AGM in February 2002, but would only use these powers to provide a meaningful enhancement to net assets. Earnings and Dividends Our earnings per share declined by 6.1% principally through a significant decline in deposit interest caused by interest rate cuts and lower cash balances following our buy-backs earlier in the year. However, we are proposing a final dividend of 1.66p per share making a total of 6.58p, an increase of 3.6% for the year. This is the Company's 34th year of consecutive annual dividend increases. In the current environment the outlook for dividend growth will be subdued. Consequently, for the year to 31 October 2002 we are forecasting, subject to unforeseen circumstances, a minimum total dividend of 6.72p per share, an increase of 2.1%. A regular dividend of 1.68p will be paid at the end of May, August and November with a minimum final of 1.68p payable in February 2003. Outlook Twice a year it is traditional for us to peer into the financial crystal ball. I cannot remember a more uncertain moment to provide you with some economic and financial guidance. It would appear that most economies are in a synchronised financial downturn with rapidly falling corporate profits, rising unemployment and major bankruptcies. Inflation is at its lowest levels for many years and there is even a risk of deflation and high financial gearing. The threat of further terrorist attacks adds to the level of uncertainty. In the increasingly important US economy the consumer may have stopped flying but continues to respond to zero rate finance on consumer durables. As I write the key interest rate in the USA is 1.75%, the lowest rate since 1961 and more importantly the first time short term interest rates have been below the rate of inflation since 1993. Most equity markets have rallied strongly since their lows on 21 September and are now standing above the levels prior to the terrorist attacks on 11 September. Recovery in the USA will be a key factor in the coming year. We take an optimistic view about the economic prospects although US equities are already highly valued. The 'can do' attitude of the American population and its willingness to rally round both the flag and the President bode well for a sustained economic recovery and with inventory de-stocking nearly complete this should lead through into corporate profits fairly rapidly. A significant fall in the oil price is also highly beneficial to America where this lightly taxed commodity can have an immediate impact through lower transport and fuel bills. - MORE - - 3 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2001 Turning to Europe, the UK, having suffered through foot and mouth problems in 2001, would now appear to be the best positioned of the major economies in Europe with the public finances here still in a reasonably strong position. In mainland Europe fears of a recession have galvanised the ultra-cautious European Central Bank into larger than expected rate cuts. However, industrial confidence is still falling and Germany is currently experiencing a mild recession. A synchronised global economic slow down could not have come at a worse time for the Japanese economy. Consumer prices are deflating at approximately 1% per annum. Tension between the government and the independent Central Bank of Japan has led to a further fall in confidence and the lack of effective measures to re-finance the banking system combined with rising unemployment will continue to hamper any government inspired measures to stimulate recovery. Recollecting the financial excesses of the last technology inspired bull market it would be easy to dismiss the current liquidity driven upswing as a massive bear market rally. However, after such a long period of relative peace, prosperity, productivity and low inflation I consider it is too early to join the economic doomsters who feel that the USA may well be heading for deflationary problems similar to Japan's. I would be surprised if there is not an economic recovery in the USA next year and although the upturn in economic growth and profitability may be muted by past standards, I expect it to prove sufficient to sustain a reasonable level of optimism in equity markets whilst interest rates and inflation remain so low. For further information, please contact: Michael Moule The Bankers Investment Trust PLC Telephone: 020 7818 4378 Vicki Staveacre Henderson Press Office Telephone: 020 7818 4028 Stephen Westwood Head of Investment Trusts Henderson Global Investors Telephone: 020 7818 5517 - MORE - - 4 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2001 Highlights of the Year 31 October 2001 31 October 2000 Change % Assets Total assets less current liabilities £404,063,000 £536,360,000 -24.7 Net asset value per ordinary share 299.4p 360.1p -16.9 Ordinary share mid-market price 280.5p 309.5p -9.4 Discount (Share Price to Net Asset 6.3% 14.1% Value) Revenue Gross revenue £12,852,000 £14,306,000 -10.2 Earnings per ordinary share 6.88p 7.33p -6.1 Dividends per ordinary share 6.58p 6.35p +3.6 Indices FTSE All-Share Index 2,413.50 3,078.21 -21.6 Standard & Poor's Composite Index 1,059.78 1,429.39 -26.0* FTSE World Europe (ex UK) Index (£) 260.64 351.72 -25.9 TOPIX (Tokyo First Section Index) 1,059.37 1,379.96 -31.6* FTSE World (ex UK) Index (£) 259.77 355.63 -27.0 50/50 FTSE All-Share/ 151.40 200.00 -24.3 FTSE World (ex UK) (£) Retail Prices Index 174.30 171.60 +1.6 *£ adjusted - MORE - - 5 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2001 Group Statement of Total Return (incorporating the revenue account) for the year ended 31 October 2001 Year ended 31 October 2001 Year ended 31 October 2000 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital - (80,550) (80,550) - 59,372 59,372 (losses)/gains from investments Income from 12,062 - 12,062 12,647 - 12,647 fixed asset investments Other interest 790 - 790 1,659 - 1,659 receivable and similar income ---------- ---------- ---------- ---------- ---------- ---------- Gross revenue 12,852 (80,550) (67,698) 14,306 59,372 73,678 and capital (losses)/gains Management fee (1,388) (1,215) (2,603) (1,260) (1,103) (2,363) Other (1,075) - (1,075) (753) - (753) administrative expenses ---------- ---------- ---------- ---------- ---------- ---------- Net return/ (loss) on ordinary activities before 10,389 (81,765) (71,376) 12,293 58,269 70,562 interest payable and taxation Interest (727) (1,697) (2,424) (723) (1,688) (2,411) payable ---------- ---------- ---------- ---------- ---------- ---------- Net return/ (loss) on ordinary activities before 9,662 (83,462) (73,800) 11,570 56,581 68,151 taxation Taxation on (800) 489 (311) (982) 712 (270) net return on ordinary activities ---------- ---------- ---------- ---------- ---------- ---------- Available for 8,862 (82,973) (74,111) 10,588 57,293 67,881 ordinary shareholders ---------- ---------- ---------- ---------- ---------- ---------- Dividends on Ordinary Shares: Three interims (5,988) - (5,988) (6,457) - (6,457) of 1.64p (2000: 1.55p) Proposed final (2,094) - (2,094) (2,369) - (2,369) of 1.66p (2000: 1.70p) ---------- ---------- ---------- ---------- ---------- ---------- (8,082) - (8,082) (8,826) - (8,826) ---------- ---------- ---------- ---------- ---------- ---------- Transfer to/ 780 (82,973) (82,193) 1,762 57,293 59,055 (from) reserves ====== ====== ====== ====== ====== ====== Return/(loss) 6.88p (64.44p) (57.56p) 7.33p 39.65p 46.98p per ordinary share (note 1) The revenue columns of this statement represent the revenue accounts of the Group. - MORE - - 6 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2001 Balance Sheets at 31 October 2001 Group Group Company Company 2001 2000 2001 2000 £'000 £'000 £'000 £'000 Fixed assets investments: Listed at market value In Great Britain 233,134 279,023 233,134 279,023 Outside Great Britain 164,091 233,063 164,091 233,063 Other quoted funds 4,545 6,787 4,545 6,787 Unquoted investments 1,500 - 1,500 - Investment in subsidiary - - 651 629 undertaking ---------- ---------- ---------- ---------- Total fixed asset investments 403,270 518,873 403,921 519,502 ---------- ---------- ---------- ---------- Current Assets Investments 83 39 - - Debtors 3,343 2,967 3,342 2,901 Bank balances and short term 16,697 36,197 16,552 36,156 deposits ---------- ---------- ---------- ---------- 20,123 39,203 19,894 39,057 Creditors: amounts falling due (19,330) (21,716) (19,752) (22,199) within one year ---------- ---------- ---------- ---------- Net current assets 793 17,487 142 16,858 ---------- ---------- ---------- ---------- Total assets less current 404,063 536,360 404,063 536,360 liabilities Creditors: amounts falling due (26,300) (29,453) (26,300) (29,453) after more than one year ---------- ---------- ---------- ---------- Total net assets 377,763 506,907 377,763 506,907 ====== ====== ====== ====== Capital and reserves Called up share capital 31,542 35,192 31,542 35,192 Share premium account 452 452 452 452 Other reserves 328,693 454,967 329,344 455,596 Revenue reserve 17,076 16,296 16,425 15,667 ---------- ---------- ---------- ---------- Shareholders' funds (all equity) 377,763 506,907 377,763 506,907 ====== ====== ====== ====== Net asset value per ordinary share 299.4p 360.1p 299.4p 360.1p (note 2) ====== ====== ====== ====== - MORE - - 7 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2001 Group Cash Flow Statement For the year ended 31 October 2001 2001 2001 2000 2000 £'000 £'000 £'000 £'000 Net cash inflow from operating 8,668 9,826 activities Servicing of finance Debenture interest paid (2,302) (2,302) Bank and loan interest paid (128) (114) ---------- ---------- Net cash outflow from servicing of (2,430) (2,416) finance Taxation UK tax recovered - 454 Withholding and income tax 24 493 recovered ---------- ---------- Net tax recovered 24 947 Financial Investment Payments made under futures (51) - contracts Purchases of investments (104,503) (129,438) Sales of investments 135,526 165,727 ---------- ---------- Net cash inflow from financial 30,972 36,289 investment Equity dividends paid (8,469) (8,932) Management of liquid resources Cash withdrawn from deposit 13,170 3,704 ---------- ---------- Net cash inflow before financing 41,935 39,418 Financing Purchases of ordinary shares (46,951) (39,609) Expenses paid in respect of share - (56) buy-backs (Repayment)/drawdown of loans (1,834) 22 ---------- ----------- Net cash outflow from financing (48,785) (39,643) --------- ---------- Decrease in cash (6,850) (225) ====== ====== Reconciliation of net cash flow to movement in net debt Decrease in cash as above (6,850) (225) Net cash outflow/(inflow) from 1,834 (22) decrease/(increase) in loans Cash inflow from movement in (13,170) (3,704) liquid resources --------- --------- Change in net debt resulting from (18,186) (3,951) cash flows Exchange movements 2,292 (1,053) --------- --------- Movement in net debt in the year (15,894) (5,004) Net debt at 1 November (7,770) (2,766) ---------- ---------- Net debt at 31 October (23,664) (7,770) ====== ====== - MORE - - 8 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2001 Notes: 1. Return/(loss) per Ordinary Share Revenue return per ordinary share is based on earnings attributable to ordinary shares of £8,862,000 (2000: £10,588,000), and on the weighted average number of ordinary shares in issue during the year of 128,746,915 (2000: 144,498,237). Capital loss per ordinary share is based on losses attributable to ordinary shares of £82,973,000 (2000: gains of £57,293,000), and on the weighted average number of ordinary shares in issue during the year of 128,746,915 (2000: 144,498,237). 2. Net Asset Value per Ordinary Share The net asset value per ordinary share is based on net assets attributable to ordinary shares of £377,763,000 (2000: £506,907,000) and on the 126,169,781 ordinary shares in issue at 31 October 2001 (2000: 140,770,000). 3. Share Buy-Backs During the year to 31 October 2001, the Company made authorised market purchases for cancellation of 14,600,219 of its own issued ordinary shares of 25p, representing 10.4% of its called up share capital, for an aggregate consideration of £46,951,000. 4. Preliminary Results The preliminary figures for the year ended 31 October 2001 have been extracted from the latest Group accounts and do not constitute statutory accounts as defined by Section 240 of the Companies Act 1985. These accounts have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. 5. 2000 Report and Accounts The figures and financial information for the year ended 31 October 2000 are extracted from the latest published accounts of the Company and do not constitute statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement either under Section 237(2) or 237(3) of the Companies Act 1985. 6. 2001 Report and Accounts Copies of the Report and Accounts will be posted to shareholders in January 2002 and will thereafter be available from the Secretary at 4 Broadgate, London EC2M 2DA. The Annual General Meeting will be held at the Drapers' Hall, Throgmorton Avenue, London EC2 on Friday 15 February 2002 at 12 noon. 7. Dividend A final dividend of 1.66p per ordinary share will, if approved by shareholders, be paid on 28 February 2002 to shareholders on the register on 1 February 2002. The Company's shares go ex-dividend on 30 January 2002. - MORE - - 9 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2001 Largest Investments at 31 October 2001 The 40 largest investments (convertibles and all classes of equity in any one company being treated as one investment) were as follows: Market Market Value Value Rank 31 Oct Rank 31 Oct 2001 2001 (2000) £'000 (2000) £'000 1 (*) GlaxoSmithKline 16,701 21 Henderson American Smaller 2,885 (12) Companies Fund 2 (2) BP 15,707 22 (*) Unibail 2,783 3 (1) Vodafone 11,115 23 Irish Life & Permanent 2,746 (29) 4 (3) Shell Transport & 10,300 24 (*) British American Tobacco 2,700 Trading 5 (6) HSBC 7,987 25 Pfizer 2,672 (28) 6 (8) Royal Bank of 7,402 26 Dexia 2,545 Scotland (39) 7 (9) Lloyds TSB 6,767 27 Unilever 2,497 (38) 8 (11) Barclays 6,417 28 (*) Sodexho Alliance 2,484 9 (13) Total Fina 5,604 29 (*) Slough Estates 2,425 10 AstraZeneca 4,962 30 (*) Tesco 2,425 (14) 11 (5) British 4,524 31 (*) Anglo American 2,323 Telecommunications 12 (7) Philips 3,938 32 (*) Akzo Nobel 2,257 Electronics 13 Diageo 3,707 33 (*) Citigroup 2,191 (21) 14 Aventis 3,544 34 General Electric & Co 2,191 (24) (20) 15 ENI 3,456 35 Richemont 2,187 (36) (34) 16 Nestle 3,429 36 (*) American International 2,108 (25) 17 Abbey National 3,376 37 ABN-Amro 2,101 (22) (31) 18 Novartis 3,194 38 Exxon Mobil 2,081 (30) (26) 19 Prudential 3,168 39 (*) ISS International 2,071 (40) 20 CGNU 3,135 40 (*) Credit Suisse 2,010 (19) These investments total £176,115,000 or 43.67% of the portfolio. (*) Not in the top 40 largest investments last year. Changes in Investments Valuation Purchases Sales Appreciation/ Valuation 2000 £'000 Proceeds (Depreciation) 2001 £'000 £'000 £'000 £'000 United Kingdom 274,811 39,031 55,124 (26,830) 231,888 Europe 98,040 24,413 28,540 (20,319) 73,594 North America 79,344 28,309 32,823 (20,889) 53,941 Japan 39,290 6,350 6,508 (12,574) 26,558 Hong Kong 6,016 1,968 714 (913) 6,357 Australia 7,871 283 4,637 116 3,633 Far East 4,519 - 849 (1,013) 2,657 Latin America 4,365 307 1,529 (651) 2,492 Other Countries 1,779 333 241 279 2,150 Fixed Interest 2,838 2,429 5,219 (48) - ---------- ---------- ---------- ---------- ---------- 518,873 103,423 136,184 (82,842) 403,270 ====== ====== ====== ====== ====== - ENDS -

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