Final Results - NAV Up 16.5%

Bankers Investment Trust PLC 20 December 1999 THE BANKERS INVESTMENT TRUST PLC Preliminary Unaudited Results for the Year Ended 31 October 1999 Highlights * Net asset value per share up 16.5% to 316.1p * Total dividend per share increased 5.8% to 6.00p * Forecast minimum dividend per share increase of 3.3% to 6.20p The Chairman commented:- Results During the year the Company's net asset value per share rose from 271.4p to 316.1p, an increase over the year of 16.5%. This compares with a rise in our main benchmark, the FTSE All-Share Index of 16.0%. The change in our investment policy in the USA towards more growth oriented stocks and a reduction in special and scrip dividends led to a 6.4% decline in earnings. We propose a final dividend of 1.53p which brings the total for the year to 6.00p per ordinary share, compared to last year's dividend of 5.67p, an increase of 5.8%. This is the thirty-second consecutive annual increase in the dividend. Investment Background Economic growth almost everywhere has been significantly stronger than generally expected a year ago. The upshot has been significant growth with low inflation - a combination that has sent stocks rising again. Inflation, encouragingly, has remained low despite a tighter labour market and significant rises in commodity prices, including the oil price - up 152% during 1999. The USA, UK and Continental Europe have seen the first interest rate rises for some time but these have been viewed as pre-emptive moves, which should extend the economic cycle. Equity markets, this year, have continued to do well outperforming bonds for the second decade in a row and ending 1999 on a strong note despite the rise in bond yields. A very striking feature in the second half of the year has been the high concentration of investor interest in a few growth sectors, notably technology and telecommunications. We remained fully invested throughout the year. The main changes we made were to increase the focus on growth companies in the USA and to add to our UK and Japanese investments. Share Buy-backs At an Extraordinary General Meeting and Separate Class Meetings held in June, shareholders granted the Board authority to buy-back for cancellation up to 23.25 million shares. By the end of October, 900,000 shares had been bought back at an average discount of around 14% which enhanced net assets by about £400,000. The Board will be seeking to renew the authority to purchase up to 14.99% of the existing issued shares for cancellation at this year's Annual General Meeting. This is the maximum authority permitted by the London Stock Exchange. The timing of any purchases will be dependant on market conditions and the level of discount but subject to these provisos we shall be actively seeking to buy back available shares. Forecast Dividend & Accounting Policy Dividends for the year to 31 October 2000 are forecast to be at least 6.20p per share subject, as always, to market conditions. A regular dividend of 1.55p per share will be paid at the end of May, August and November and a minimum of 1.55p will be paid as a final dividend at the end of February 2001. In line with the recommended practice of the Association of Investment Trust Companies (AITC), from 1 November 1999, we have decided to change the accounting policy to reflect the relationship between management fees and interest costs on the one hand, and the long term split of total returns between revenue and capital from the portfolio on the other. The investment management fees and interest payable on loans and debentures, previously charged wholly to the revenue account, will in future be allocated 30% to revenue and 70% to capital reserve. This will provide flexibility to step up investment in lower yielding stocks whilst at the same time allowing the Board to continue to increase dividends. Outlook Confidence in the gradual recovery of the global economy continues to improve, following the traumatic economic events in the autumn of 1998. The robust growth in the US economy continues unabated but we do expect a slowdown next year as the rise in long term and short term interest rates begins to take effect. The major European economies are still growing below trend but an acceleration in real growth to 3% is widely expected, and the weakness of the Euro and low levels of interest rates are providing a major stimulus. Having avoided a recession, the UK economy is now in danger of growing too quickly and although price inflation remains low, asset inflation is becoming a concern leading to early increases in interest rates. Japan is a conundrum. With the Yen having risen to very high levels, economists are equally divided as to whether the recovery can be sustained. We are optimistic based on the current strength of consumer spending there and a renewed determination by their government to use measures to stimulate growth. Japan has also been helped by the size and speed of the recovery in the Asia Pacific region, where real growth of 5-6% is expected to continue in 2000, stimulated by strong export growth and a boom in technology hardware. With most of the world growing strongly in 2000, inflation is almost bound to increase, principally because of the rise in oil and commodity prices. However, excess global capacity and the deflationary implications of the internet should keep the increase down. In this economic environment the outlook for corporate profits and hence the equity market would normally be quite promising but unfortunately markets are far from normal. We are currently experiencing a speculative hunger for technology stocks which is driving the market overall to overvalued levels. The average company, particularly in the USA, has been in a bear market since April 1998 and their valuations would normally be attractive. However, any bursting of the technology bubble will also have a major negative impact on the rest of the equity market. At these levels we are cautious about the outlook for stock markets. We will aim to steer a course which balances risk with reward and to find sustainable growth at reasonable prices. For further information, please contact: Michael Moule Vicki Staveacre The Bankers Investment Trust PLC Henderson Press Office Telephone: 0171 410 4378 Telephone: 0171 410 4028 Stephen Westwood Client Service Director Telephone: 0171 477 5517 Highlights of the Year 31 31 Change October October % 1999 1998 Assets Total assets less current £513,827,000 £451,486,000 +13.8 liabilities Net asset value per ordinary 316.1p 271.4p +16.5 share Ordinary share mid-market price 273.5p 234.3p +16.7 Discount (share price to net 13.5% 13.7% asset value) Indices FTSE All-Share Index 2,904.38 2,504.85 +16.0 Standard & Poor's Composite 1,362.92 1,098.67 +26.6* Index FT/S&P World Europe (ex UK) 306.80 270.96 +13.2 Index (£) TOPIX (Tokyo First Section 1,563.89 1,035.60 +72.1* Index) FT/S&P World (ex UK) Index (£) 307.82 239.10 +28.7 50/50 FTSE All-Share/ FT/S&P World (ex UK) Index 244.70 200.00 +22.4 (£) * £ adjusted Revenue Gross revenue £16,457,000 £17,359,000 -5.2 Earnings per ordinary share 6.18p 6.60p -6.4 Dividends per ordinary share 6.00p 5.67p +5.8 Retail Prices Index 166.5 164.5 +1.2 Currencies US Dollar 1.6409 1.6747 Yen 171.244 195.147 D Mark 3.054 2.774 Euro 1.5612 - Preliminary Unaudited Group Results for the Year Ended 31 October 1999 Group Statement of Total Return (incorporating the revenue account) Year ended 31 October 1999 Year ended 31 October 1998 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital gains - 68,730 68,730 - 14,077 14,077 from investments Income from fixed asset 14,620 - 14,620 15,424 - 15,424 investments Other interest 1,837 - 1,837 1,935 - 1,935 receivable and similar income ------ ------- ------- ------- ------- ------- Gross revenue and 16,457 68,730 85,187 17,359 14,077 31,436 capital gains Management fee (2,137) - (2,137) (2,025) - (2,025) Other administrative (583) - (583) (458) - (458) expenses ------ ------- ------- ------- ------- ------- Net return on ordinary activities before interest 13,737 68,730 82,467 14,876 14,077 28,953 payable and taxation Interest payable (2,437) - (2,437) (2,440) - (2,440) ------ ------- ------- ------- ------- ------- Net return on ordinary activities before taxation 11,300 68,730 80,030 12,436 14,077 26,513 Taxation on net return (1,680) - (1,680) (2,155) - (2,155) on ordinary activities ------ ------- ------- ------- ------- ------- Net return on ordinary activities after taxation 9,620 68,730 78,350 10,281 14,077 24,358 Appropriations - Dividends Cumulative preference (38) - (38) (50) - (50) stock ------ ------- ------- ------- ------- ------- Available for ordinary 9,582 68,730 78,312 10,231 14,077 24,308 shareholders ------ ------- ------- ------- ------- ------- Ordinary shares: Three interims of 1.49p (6,920) - (6,920) (6,556) - (6,556) (1998 - 1.41p) Fourth interim of nil - - - (1,551) - (1,551) (1998 - 1.00p) Proposed final of 1.53p (2,360) - (2,360) (683) - (683) (1998 - 0.44p) ------ ------- ------- ------- ------- ------- (9,280) - (9,280) (8,790) - (8,790) ------ ------- ------- ------- ------- ------- Transfer to reserves 302 68,730 69,032 1,441 14,077 15,518 ====== ====== ====== ====== ====== ====== Return per ordinary 6.18p 44.36p 50.54p 6.60p 9.07p 15.67p share (note 1) ====== ====== ====== ====== ====== ====== The revenue columns of this statement represent the revenue accounts of the Group. Preliminary Unaudited Group Results for the Year Ended 31 October 1999 Summary of Group Net Assets 31 October 1999 31 October 1998 £'000 £'000 Valuation of fixed asset 493,377 444,535 investments Net current assets 20,450 6,951 ---------- ---------- Total assets less current 513,827 451,486 liabilities Creditors: amounts falling due (26,300) (28,991) after more than one year Provisions for liabilities and (66) (71) charges ---------- ---------- Total net assets 487,461 422,424 Cumulative preference stock - (1,430) ---------- ---------- Net assets attributable to 487,461 420,994 ordinary shares ====== ====== Number of ordinary shares in 154,221,015 155,121,015 issue Net asset value per ordinary share after deducting prior charges at par 316.1p 271.4p Notes: 1. Return Per Ordinary Share Revenue return per ordinary share is based on net earnings attributable to ordinary shares of £9,582,000 (1998: £10,231,000) and on the weighted average number of ordinary shares in issue throughout the year of 154,950,329 (1998: 155,121,015). Capital return per ordinary share is based on net capital gains in the year of £68,730,000 (1998: £14,077,000) and on the weighted average number of ordinary shares in issue, as shown above. 2. 1998 Accounts The figures and financial information for the year ended 31 October 1998 are an extract of the latest published accounts of the Group 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 under Section 237(2) or 237(3) of the Companies Act 1985. 3. 1999 Accounts The preliminary figures for the year ended 31 October 1999 have been extracted from the latest Group accounts. These accounts have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. 4. Dividend A final dividend of 1.53p per ordinary share will, if approved by shareholders, be paid on 28 February 2000 to shareholders on the register on 28 January 2000. The Company's shares go ex- dividend on 24 January 2000. 5. AGM The annual report will be posted to shareholders in January 2000 and thereafter copies will be available at the registered office at 3 Finsbury Avenue, London EC2M 2PA. The Annual General Meeting of the Company will be held at Drapers' Hall, Throgmorton Avenue, London EC2 on Friday 18 February 2000 at 12.00 noon. 6. Year 2000 Statement Henderson plc and its subsidiaries ('Henderson'), which provide investment management, UK custodial, accounting, administrative and company secretarial services to The Bankers Investment Trust PLC, has undertaken a corporate action programme, under its Board's supervision, to establish the precise scope of the risks posed to The Bankers Investment Trust PLC by the consequences of the Year 2000 date change and to address those risks. Henderson's strategy is to validate that its computer systems achieve Year 2000 conformity (as defined by British Standards Institute in its paper DISC PD2000-1), and to require both its suppliers and the suppliers to The Bankers Investment Trust PLC to ensure that their computer systems achieve the same or an equivalent standard. Costs relating to the Year 2000 project are to be borne by Henderson. Largest Investments at 31 October 1999 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 31 Oct 31 Oct 99 99 £'000 £'000 British Telecommunications 13,242 Unilever 3,387 BP Amoco 13,227 General Electric 3,374 Shell Transport & Trading 10,730 VNU 3,295 Glaxo Wellcome 10,058 Diageo 3,259 Vodafone AirTouch 7,641 France Telecom 2,946 Lloyds TSB 7,573 ABN-Amro 2,945 HSBC 6,521 Microsoft 2,877 Total 6,423 Seguros 2,873 Tranquilidade Philips Electronics 6,033 Prudential 2,864 National Westminster 5,221 Novartis 2,822 Barclays 5,216 Cisco Systems 2,778 SmithKline Beecham 5,096 CGU 2,748 AstraZeneca 4,128 Alcatel 2,667 Henderson American Smaller 3,913 Pharmacia Upjohn 2,631 Companies Abbey National 3,808 NTT Mobile 2,588 Communications Cable & Wireless 3,555 Banco Santander 2,533 Siemens 3,554 Johnson & Johnson 2,528 Royal Bank of Scotland 3,505 ENI 2,502 Nestle 3,500 Telefonos de Mexico 2,501 General Electric Co (USA) 3,419 Citigroup 2,479 These investments total £182,960,000 or 37.1% of the portfolio. Changes in Investments at 31 October 1999 Valuation Sales Appreciation/ Valuation Purchases Proceeds 1998 (Depreciation) 1999 £'000 £'000 £'000 £'000 £'000 United Kingdom 235,210 39,247 36,662 23,942 261,737 Europe 77,563 16,635 20,373 13,434 87,259 USA 67,313 75,508 78,332 6,767 71,256 Japan 20,862 15,181 14,594 19,370 40,819 Hong Kong 7,205 137 1,745 833 6,430 Australia 7,365 608 267 1,165 8,871 Far East 3,235 353 21 2,496 6,063 Latin America 4,307 - 3,453 2,459 3,313 Other 7,980 1,360 6,246 575 3,669 Countries Fixed Interest 13,495 - 9,251 (284) 3,960 -------- -------- ------- ---------- ------- 444,535 149,029 170,944 70,757 493,377 ====== ====== ====== ====== ======

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