Final Results

Bankers Investment Trust PLC 22 December 2003 THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2003 19 December 2003 Highlights * NAV per share rose 13.6% compared to a rise of 9.6% in the benchmark FTSE All- Share Index * 35th consecutive year of dividend increases. 4% increase for the year, making the total dividend payment 7.05p per share * Forecast dividend for 2004 to rise by 4% Extracts from the Chairman's Statement I am very pleased to report that the recovery in stock markets around the world has resulted in both the net asset value and share price rising over the past year. The net asset value per share rose 13.6%, which compares very favourably with a 9.6% rise in the main benchmark, the FTSE All-Share Index. Overseas stock markets have generally outpaced the UK in terms of performance; this has been further compounded by the weakness of sterling against most currencies other than the US dollar. I can also report another increase in dividends, our 35th consecutive year of delivering a rising distribution to shareholders. This year's total dividend will rise by 4.0% and we anticipate being able to further increase the dividend in 2004. Assets It may be a cliche, but it is true to say that over the past year investing in equities really has been a game of two halves. At the interim stage we reported a fall in net assets of 2.1%, whereas the second half of the year saw a dramatic recovery resulting in a rise in net assets of 16.0%. The war in Iraq proved the turning point for markets, but it was not just a case of easing investors' worst fears; a string of positive economic news has been driving equity markets forward. The US policy makers have been the most active, in providing both fiscal and monetary stimulus in order to stop their economy slipping into recession. Negative real interest rates and huge tax rebates have helped to keep consumer confidence buoyant. The downside has been an unprecedented level of government borrowing and a ballooning US budget deficit, resulting in a weaker dollar. Currency moves have been particularly volatile this year: the euro strengthened by 7.6% relative to sterling, while the South African rand rose by 25.3% and the Australian dollar by 15.1%. - MORE - - 2 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2003 Extracts from Chairman's Statement cont'd The Company's gearing peaked at 16.6% in March, partly as a result of lower share prices but also due to the increased investment in equities. As the market rose over the summer further investments were made, particularly in the Far East, resulting in gearing of approximately 12% at the October year-end. Over the year gearing has had a positive impact on the Company's net asset value. The European, UK, Far Eastern and Emerging Markets' portfolios all added value and the overall asset allocation was also a key driver of performance. We remained wary of the US equity market over the year, based upon the expensive valuation of shares and a negative stance on the US dollar. We kept faith with Japan, which was the top perfoming major stock market in 2003 and overseas investors flocked back looking for bargains, especially amongst the exporters and the banks. The increased interest in Japan forced an appreciation of the yen, the Central Bank of Japan proving ineffective at limiting the rise. We maintained significant exposure to Europe that proved to be a volatile, but ultimately rewarding, market to be invested in. Europe is rich in cyclical and recovery stocks that prospered well in the second half of the year. The UK market was dull by comparison; the economy grew by 2% (below its trend rate) and shows little sign of accelerating faster. However the UK portfolio contained an above average mixture of smaller and medium sized companies that outperformed the general market. Over the year, we have switched money from the mature western markets, increasing the Far East (ex Japan) element of the portfolio from 3.4% to 5.4%. Our favoured companies are capitalising on China's growing emergence in world trade and exploiting increased outsourcing from US companies. Earnings and Dividends The earnings per share increased by 1.4% to 7.12p per share. While reduced expenses and a lower management fee have helped, gross revenue was broadly flat due to lower interest rates impacting interest received. Dividend growth was restrained by increased investment in lower yielding parts of the world and the continued, albeit at a reduced frequency, dividend cuts in the UK. The weakness of the US dollar has also affected income from the UK portfolio. Companies such as BP, HSBC and BHP Billiton now declare their dividend in US dollars, comprising together almost a quarter of the FTSE All-Share Index dividend. The year ahead should see some improvement, as dividend growth in most markets is forecast at 5% or better. We are proposing a final dividend of 1.83p per share, making a total of 7.05p, an increase of 4.0% for the year and comfortably ahead of the current rate of inflation. For the current year we are forecasting a minimum rise in the total dividend per share of 4.0% to 7.33p. A quarterly dividend of 1.83p will be paid at the end of May, August and November with a minimum final of 1.84p payable in February 2005. We recognise the importance of dividends to shareholders, which is shown in the record of increasing dividends every year since 1967. Despite a difficult period when many companies reduced or in extreme cases omitted dividends, we have continued to increase distributions without the need for a transfer from the revenue reserves. Shareholders should be comforted that the Company has revenue reserves to help us meet our objective to achieve regular dividend growth. - MORE - - 3 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2003 Extract from Chairman's Statement cont'd New Zealand In 1995 Bankers Investment Trust was listed on the New Zealand Stock Exchange and started to pay dividends to local investors directly in New Zealand dollars. The New Zealand register has grown rapidly and now accounts for over 4% of our shares in issue. We are very grateful for this support from New Zealand and hope that the Company's attractions gather more investors. We are examining ways of improving the service to New Zealand shareholders: our portfolio manager has made his first, of what will hopefully be regular, marketing trips to New Zealand and the appointment of First NZ Securities as our local broker, is an indication of our commitment to this market. Outlook The good news is that the global economic cycle has clearly turned. The very strong economic recovery in the USA is perhaps unsurprising given interest rates as low as 1% and strong government spending. This begs the question of how long can these levels of stimulus persist before inflationary pressures reappear. We feel that GDP growth will moderate from the large increase in the third quarter towards above trend growth through 2004. Inflation should slowly pick up due partly to the weakness of the US dollar. However, the US Federal Reserve has clearly indicated that interest rates will be kept low for longer in order to firmly establish growth and job creation. A supportive US economy should set the tone for global stock markets given its scale and consumption of the world's goods and services. Valuations are undoubtedly less attractive now that stock markets have recovered. The average US stock is trading on a P/E ratio of 18x, which compares with 12 to 13x for UK and European stocks. Also stock market indices in the USA such as Value Line, which weight each company equally, indicate that the US market is hitting new highs; therefore much of the recovery and maybe more is already factored into prices. Prospects for mainland Europe could prove to be the most appealing, especially at such an early stage in its recovery. Elsewhere, the UK is cheap on a valuation basis and should deliver solid performance. Japan and the Far East should continue to attract overseas investors seeking the heady mix of recovery and explosive growth respectively. - MORE - - 4 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2003 Extract from Chairman's Statement cont'd It would be imprudent of me to say that the stockmarket outlook is without risk. Geopolitical risk is not so dominant in investors' minds as it was in the aftermath of 11 September 2001 and the run up to the Iraq war but it still remains a concern. The weakness of the US dollar particularly against the euro probably is welcome. The question is whether the trend will be gradual and manageable, helping to rebalance global demand or rapid and severe, spreading fear among investors. However, we consider that investors have not yet fully bought into a sustainable global recovery with improving corporate profitability. On balance we expect that 2004 should be a favourable year to be invested in equities. Andrew Barker Chairman For further information, please contact: Alex Crooke Vicki Staveacre Fund Manager Press Office The Bankers Investment Trust PLC Henderson Global Investors Tel: 020 7818 4447 Tel: 020 7818 4442 Stephen Westwood Stephen Phillips Head of Investment Trusts Associate Director Henderson Global Investors Henderson Global Investors Tel: 020 7818 5517 Tel: 020 7818 6417 - MORE - - 5 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2003 Highlights of the Year 31 October 2003 31 October 2002 Change % Assets Total assets less current liabilities £383,449,000 £340,887,000 +12.5 Net asset value per ordinary share 283.1p 249.3p +13.6 Ordinary share mid-market price 265.5p 233.8p +13.6 Discount (Share Price to Net Asset Value) 6.2% 6.2% Revenue Gross revenue £12,194,000 £12,303,000 -0.9 Earnings per ordinary share 7.12p 7.02p +1.4 Dividends per ordinary share 7.05p 6.78p +4.0 Indices FTSE All-Share Index 2,125.37 1,938.71 +9.6 Standard & Poor's Composite Index 1,050.71 885.76 +9.4* FTSE World Europe (ex UK) Index (£) 233.01 202.24 +15.2 TOPIX (Tokyo First Section Index) 1,043.36 862.24 +24.3* FTSE World (ex UK) Index (£) 230.99 203.88 +13.3 50/50 FTSE All-Share/ +11.5 222.90 200.00+ FTSE World (ex UK) Index (£) Retail Prices Index 182.6 177.9 +2.6 *£ adjusted + rebased as at 31/10/02 - MORE - - 6 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2003 Group Statement of Total Return (incorporating the revenue account) for the year ended 31 October 2003 Year ended 31 October 2003 Year ended 31 October 2002 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital gains/(losses) from - 44,605 44,605 - (61,161) (61,161) investments Income from fixed asset investments 11,719 - 11,719 11,579 - 11,579 Other interest receivable and similar 475 - 475 724 - 724 income ---------- ---------- ---------- ---------- ---------- ---------- Gross revenue and capital gains/ 12,194 44,605 56,799 12,303 (61,161) (48,858) (losses) Management fee (1,051) (937) (1,988) (1,265) (1,128) (2,393) Other administrative expenses (622) - (622) (627) - (627) ---------- ---------- ---------- ---------- ---------- ---------- Net return/(loss) on ordinary activities before interest payable and taxation 10,521 43,668 54,189 10,411 (62,289) (51,878) Interest payable (717) (1,672) (2,389) (722) (1,685) (2,407) ---------- ---------- ---------- ---------- ---------- ---------- Net return/(loss) on ordinary activities before taxation 9,804 41,996 51,800 9,689 (63,974) (54,285) Taxation on net return on ordinary (823) 480 (343) (831) 494 (337) activities ---------- ---------- ---------- ---------- ---------- ---------- Available for ordinary shareholders 8,981 42,476 51,457 8,858 (63,480) (54,622) ---------- ---------- ---------- ---------- ---------- ---------- Dividends on Ordinary Shares: Three interims of 1.74p (2002: 1.68p) (6,586) - (6,586) (6,359) - (6,359) Proposed final of 1.83p (2002: 1.74p) (2,309) - (2,309) (2,195) - (2,195) ---------- ---------- ---------- ---------- ---------- ---------- (8,895) - (8,895) (8,554) - (8,554) ---------- ---------- ---------- ---------- ---------- ---------- Transfer to/(from) reserves 86 42,476 42,562 304 (63,480) (63,176) ====== ====== ====== ====== ====== ====== Return/(loss) per ordinary share (note 7.12p 33.66p 40.78p 7.02p (50.31)p (43.29)p 1) The revenue columns of this statement represent the profit and loss accounts of the Group. - MORE - - 7 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2003 Balance Sheets at 31 October 2003 Group Group Company Company 2003 2002 2003 2002 £'000 £'000 £'000 £'000 Fixed asset investments Listed at market value in the UK 224,749 202,917 224,749 202,917 outside the UK 166,332 139,136 166,332 139,136 Other quoted funds 1,337 3,370 1,337 3,370 Unquoted investments 750 1,125 750 1,125 Investment in subsidiary undertaking - - 709 705 ---------- ---------- ---------- ---------- Total fixed asset investments 393,168 346,548 393,877 347,253 ---------- ---------- ---------- ---------- Current assets Debtors 4,550 8,367 4,550 8,350 Bank balances and short term deposits 11,480 11,215 11,275 11,027 ---------- ---------- ---------- ---------- 16,030 19,582 15,825 19,377 Creditors: amounts falling due within one year (25,749) (25,243) (26,253) (25,743) ---------- ---------- ---------- ---------- Net current liabilities (9,719) (5,661) (10,428) (6,366) ---------- ---------- ---------- ---------- Total assets less current liabilities 383,449 340,887 383,449 340,887 Creditors: amounts falling due after more than one year (26,300) (26,300) (26,300) (26,300) ---------- ---------- ---------- ---------- Total net assets 357,149 314,587 357,149 314,587 ====== ====== ====== ====== Capital and reserves Called up share capital 31,542 31,542 31,542 31,542 Share premium account 452 452 452 452 Other reserves 307,689 265,213 308,398 265,918 Revenue reserve 17,466 17,380 16,757 16,675 ---------- ---------- ---------- ---------- Shareholders' funds (all equity) 357,149 314,587 357,149 314,587 ====== ====== ====== ====== Net asset value per ordinary share (note 2) 283.1p 249.3p 283.1p 249.3p ====== ====== ====== ====== - MORE - - 8 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2003 Group Cash Flow Statement For the year ended 31 October 2003 2003 2003 2002 2002 £'000 £'000 £'000 £'000 Net cash inflow from operating activities 9,314 8,794 Servicing of finance Debenture interest paid (1,177) (2,302) Bank and loan interest paid (83) (122) ---------- ---------- Net cash outflow from servicing of finance (1,260) (2,424) Taxation UK tax paid - (54) Withholding tax recovered 162 208 ---------- ---------- Net tax recovered 162 154 Financial investment Cash received under futures contracts 38 133 Purchases of investments (61,567) (86,209) Sales of investments 61,627 78,541 ---------- ---------- Net cash inflow/(outflow) from financial investment 98 (7,535) Equity dividends paid (8,705) (8,403) Management of liquid resources Cash (placed on)/withdrawn from deposit (318) 1,757 ---------- ---------- Net cash outflow before financing (709) (7,657) Financing Drawdown of loans 1,099 3,117 ---------- ---------- Net cash inflow from financing 1,099 3,117 ---------- ---------- Increase/(decrease) in cash 390 (4,540) ====== ====== Reconciliation of net cash flow to movements in net debt Increase/(decrease) in cash as above 390 (4,540) Net cash inflow from increase in loans (1,099) (3,117) Cash outflow/(inflow) from movement in liquid resources 318 (1,757) ---------- ---------- Change in net debt resulting from cash flows (391) (9,414) Exchange movements (81) 1,306 ---------- ---------- Movement in net debt in the year (472) (8,108) Net debt at 1 November (31,772) (23,664) ---------- ---------- Net debt at 31 October (32,244) (31,772) ====== ====== - MORE - - 9 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2003 Notes: 1. Return/(loss) per Ordinary Share Revenue return per ordinary share is based on earnings attributable to ordinary shares of £8,981,000 (2002: £8,858,000), and on the number of ordinary shares in issue during the year of 126,169,781 (2002: 126,169,781). Capital gain per ordinary share is based on gains attributable to ordinary shares of £42,476,000 (2002: losses of £63,480,000), and on the number of ordinary shares in issue during the year of 126,169,781 (2002: 126,169,781). 2. Net Asset Value per Ordinary Share The net asset value per ordinary share is based on net assets attributable to ordinary shares of £357,149,000 (2002: £314,587,000) and on the 126,169,781 ordinary shares in issue at 31 October 2003 (2002: 126,169,781). 3. Preliminary Results The preliminary figures for the year ended 31 October 2003 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. 4. 2002 Report and Accounts The figures and financial information for the year ended 31 October 2002 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. 5. 2003 Report and Accounts Copies of the Report and Accounts will be posted to shareholders in January 2004 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 20 February 2004 at 12 noon. 6. Dividend A final dividend of 1.83p per ordinary share will, if approved by shareholders, be paid on 27 February 2004 to shareholders on the register on 30 January 2004. The Company's shares go ex-dividend on 28 January 2004. - MORE - - 10 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the Year Ended 31 October 2003 Largest Investments at 31 October 2003 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 2003 Rank 31 Oct 2003 (2002) £'000 (2002) £'000 1 (2) BP 15,174 21 (30) Tesco 2,906 2 (3) HSBC 13,452 22 (15) British American Tobacco 2,900 3 (1) GlaxoSmithKline 12,898 23 (*) AP Moller-Maersk 2,848 4 (5) Vodafone 8,353 24 (17) Novartis 2,784 5 (4) Shell Transport & Trading 7,323 25 (*) BHP Billiton 2,716 6 (7) Royal Bank of Scotland 5,321 26 (35) Anglo American 2,701 7 (6) Barclays 5,144 27 (29) Prudential 2,675 8 (9) Total Fina Elf 4,851 28 (32) ABN-Amro 2,473 9 (10) HBOS 4,732 29 (*) Yell 2,437 10 (8) Lloyds TSB 4,502 30 (*) Deutsche Boerse 2,379 11 (12) AstraZeneca 4,429 31 (*) Carnival 2,331 12 (18) BT Group 3,896 32 (*) Man Group 2,318 13 (19) Philips Electronics 3,685 33 (37) ICAP 2,310 14 (13) Diageo 3,604 34 (*) Galen 2,262 15 (22) Irish Life & Permanent 3,410 35 (*) Dexia 2,230 16 (20) Unibail 3,255 36 (21) Aventis 2,183 17 (16) ENI 3,183 37 (23) Allied Irish Banks 2,169 18 (11) Unilever 3,116 38 (*) ISS International 2,157 19 (14) Nestle 3,111 39 (39) Richemont 2,120 20 (28) Samsung Electronics 3,000 40 (*) Greene King & Sons 2,032 These investments total £165,370,000 or 42.1% of the portfolio. (*) Not in the top 40 largest investments last year. Changes in Investments Valuation Purchases Sales Appreciation Valuation 2002 Proceeds 2003 £'000 £'000 £'000 £'000 £'000 United Kingdom 201,366 28,120 28,639 21,655 222,502 Europe 60,916 3,538 8,842 11,980 67,592 North America 42,372 15,482 12,510 592 45,936 Japan 24,367 2,614 2,616 4,130 28,495 Pacific (ex Japan) 11,730 10,270 5,130 4,434 21,304 Emerging Markets 5,797 - 340 1,882 7,339 ---------- ---------- ---------- ---------- ---------- 346,548 60,024 58,077 44,673 393,168 ====== ====== ====== ====== ====== - ENDS - This information is provided by RNS The company news service from the London Stock Exchange

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