Final Results

RNS Number : 9122V

Bankers Investment Trust PLC

18 January 2013

 



    Page 1 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

This announcement contains regulated information

MANAGEMENT REPORT

Chairman's Statement:

·     Net Asset Value total return was 9.4% over the year

·     Total annual dividend for 2012 increased by 5% and forecasting a minimum increase of 4% for 2013

·     46^th consecutive year of dividend increases

Performance and Markets

It is pleasing to be able to present to shareholders an increase in net asset value, share price and dividend. Our careful and diverse selection of investments continues to deliver steady growth. A further recovery in investment income has allowed us to exceed our forecast and raise the annual dividend again.

However, it is dissapointing to repeat the same problems that have overhung markets in recent years being high levels of government debt and little evidence of a lasting resolution in Europe. It appeared that a degree of progress was being made in the US during the first half of our year and this lifted expectations. The summer months witnessed a return to uncertainty which held back consumer spending and corporate investment, delaying orders and causing company earnings to stall. The second half of the year produced little progress in share prices and a return to more volatile market conditions. Despite all of this the Company achieved a net asset value total return of  9.4% over the year, which compared to a total return of 9.8% for the composite benchmark index, with the majority of our investment returns being made in the first half. Our performance has closely matched the index returns for much of the year with our, Portfolio Manager making gainings by successful stock selection in most markets, but which were eroded by the overall regional asset allocation. Asset allocation is always challenging as it involves so many variable global factors, but we expect to add value in this area, in addition to gains from stock selection. Greater resources are being engaged by our Manager to assist in optimising returns from geographic allocations and this should further improve results over time.

As I reported to you last year, stock selection has in general exceeded the returns from local indices but this useful work has been negated by an underweight position in US stocks, which delivered the greatest returns, in sterling terms, for a second year. The UK, European, Japanese and Pacific regional portfolios all beat their local index returns, reflecting our Portfolio Managers' careful selection of stocks that pay good dividends and have strong franchises. The results in the Pacific region were particularly welcome, delivering a 15.7% total return and justifying our overweight stance in this area of the world. The two regions that underperformed their respective indices were the US and Emerging Markets. The strategy of focusing on medium sized companies in the US resulted in under performance relative to the largest capitalised stocks, which increased in value more, possibly benefiting from their additional overseas earnings and a flight to safety by investors. The shortfall in the emerging markets portfolio was due to the decline in the value of commodities which impacted the holdings of both Impala Platinum and Petroleo Brasileiros. In recent months our position in Petroleo Brasileiros has been reduced significantly while we expect a recovery in the platinum price will improve the prospects for Impala.

Page 2 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

Revenue and Dividends

There has been a substantial recovery in our investment income over the year, with gross revenue up 13.4% compared to last year. While a portion of the growth in income has been as a result of a number of special dividends, the underlying investment income increased by 11.9%, year on year. There is typically a time lag between the recovery of earnings and dividends as companies wait for confidence to return to their businesses before they increase dividends. It is encouraging that we are

now seeing the benefits of the recovery in corporate profits. It is interesting to note that our overseas investment income has exceeded that of our UK based investments for the second year running. This reflects both the increased asset allocation overseas in recent years, and most especially the fact that in the US market companies like Apple are paying dividends for the first time. The rate of growth in income will moderate in the coming year but our forecasts still show further progress in revenue even excluding any uplift from further special dividends.

We are recommending a final dividend of 3.43p, making a total of 13.33p for the year, an increase of 5%. This reflects a better outturn than we predicted last year and extends our long term record of increasing dividends to shareholders every year since 1966. The great strength of the size of our revenue reserve is the ability to protect shareholders from the volatility of earnings and smooth the dividends we pay out. Looking to 2013, we are able to forecast a dividend per share of not less than 13.86p, which represents an increase of 4%.

Annual General Meeting

The Annual General Meeting this year will be held at Stationers' Hall, Ave Maria Lane, London EC4M 7DD on 26 February 2013 at 12 noon.

Governance and Board changes

Investment Trust Boards are proud of being able to demonstrate levels of governance that open-ended investment products do not have. Your Board is independent and takes its responsibilities most seriously. We review the Manager's performance throughout the year and hold a major review of all aspects of the service provided by your Manager at the end of the financial year. Our priority is to ensure that the management agreement serves the best interests of shareholders as a whole. It is our opinion that the current relationship with Henderson Global Investors achieves this. Good governance is dependent on having a Board of Directors with the right blend of skills, experience and character. In this respect I am pleased to bring you up to date with developments.

On 1 November 2012 we strengthened your Board by the appointment of Susan Inglis. Sue is the first woman to join the Board in our long history and she is a most welcome addition bringing with her a legal and investment company corporate finance background.

It is eight years since I became Chairman and it is time to pass on the baton to a younger person. I am pleased to tell you that Richard Killingbeck has agreed to take on the Chairmanship from this summer. Richard has served your Company most diligently for nine years and especially as senior independent director over the last two years. He has very considerable experience in financial services and fund management in particular and I am confident that he will maintain the values and standards that are the hallmark of Bankers' long term success.

Page 3 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

Retail Distribution Review

From 1 January 2013, the market place for selling retail investment products in the UK has changed radically, as commissions paid to advisers by funds have been banned. This should provide a more level playing field for investment companies such as Bankers when competing for investors with open-ended products and we hope more advisers will recommend investment companies to their clients.

In view of the above comments we have decided to simplify the management fee arrangements and drop the performance fee paid to our Manager and return to a simple fixed percentage fee of 0.4% per annum of net assets (following regulatory approval). On 1 November 2013 this is expected to move to 0.45%, subject to review (more details can be found in the Annual Report and Financial Statements). This fee remains one of the lowest in the Global Growth sector, and indeed amongst all investment trusts. We believe that the key characteristics of Bankers, offering consistent growth in income and capital from a broadly diversified portfolio of global companies, is very attractive and your Board is working with our Manager to spread this message to a wider audience of new investors.

We are also making changes to how we present figures to allow a better comparison with the wider spectrum of investment funds. We have adopted the standardised definitions of gearing and expenses (now called "ongoing charges") recently recommended by the AIC.

Outlook

The Company will be 125 years old in April and, at times over those years, my predecessors had to contend with an outlook that must have been truly bleak. However, the Company has endured and remained true to its long term commitment of growing shareholders' capital and income. There remain some notable barriers to returning the world to a steady state of economic growth but it is likely that the events that currently trouble investors such as the slowing Chinese economy or balancing the US defeat will in due course be resolved. The high level of debt in the world may mean that economies will grow at a slower pace than in previous periods of expansion but well managed companies should succeed in growing at a greater pace. The quality of corporate balance sheets and earnings has significantly improved since the downturn which gives us comfort that their dividends and in turn their attraction to investors should continue to increase. Good quality companies can provide both attractive yields and a degree of protection from rising inflation that bonds do not.

A global equity fund such as Bankers is therefore well placed to offer an attractive investment for people saving for their future. £1,000 invested 30 years ago with all dividends re-invested would today have a value of £38,951. This compares with the return from cash invested in a bank deposit account with interest over that same period of £4,145. These are difficult times for savers, as cash deposits carry negative real interest rates; whereas there are real merits of investing in a savings product offering such as Bankers. It has a superior track record of long-term capital growth and increasing dividends in real terms. The above figures showing the comparison of returns over 30 years speak for themselves.

Page 4 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

Principal Risks and Uncertainties

The Board has drawn up a matrix of risks facing the Company and has put in place a schedule of investment limits and restrictions, appropriate to the Company's investment objectives and policy,

in order to mitigate these risks as far as practicable. The principal risks which have been identified and the steps taken by the Board to mitigate these are as follows:

• Portfolio and market

Although the Company invests almost entirely in securities that are quoted on recognised markets, share prices may move sharply. The companies in which investments are made may operate unsuccessfully, or fail entirely. A fall in the market value of the Company's portfolio would have an adverse effect on the shareholders' funds. The Board reviews the portfolio each month and mitigates this risk through diversification of investments in the portfolio.

• Investment activity and performance

An inappropriate investment strategy (for example, in terms of asset allocation or the level of gearing) may result in underperformance against the Company's benchmark index and the companies in its peer group. The Board monitors investment performance at each Board meeting and regularly reviews the extent of its borrowings.

• Tax and regulatory risks

A breach of Section 1158 of the Corporation Taxes Act 2011 could lead to a loss of investment trust status, resulting in capital gains realised within the portfolio being subject to corporation tax. A breach of the UKLA Listing Rules could result in suspension of the Company's shares, while a breach of the Companies Act 2006 could lead to criminal proceedings, or financial or reputational damage. The Company must also ensure compliance with the listing rules of the New Zealand Stock Exchange.  The Manager has contracted to provide investment, company secretarial, administration and accounting services through qualified professionals. The Board receives internal control reports produced by the Manager on a quarterly basis, which confirmed regulatory compliance during the year.

• Financial

By its nature as an investment trust, the Company's business activities are exposed to market risk (including market price risk, currency risk and interest rate risk), liquidity risk, and credit and counterparty risk. Details of these risks and how they are managed are contained in the notes in the Annual Report and Financial Statements.

• Operational

Disruption to, or failure of, the Manager's accounting, dealing or payment systems or the Custodian's records could prevent the accurate reporting and monitoring of the Company's financial position. The Company is also exposed to the operational risk that one or more of its suppliers may not provide the required level of service.  Details of how the Board monitors the services provided by the Manager and its other suppliers, and the key elements designed to provide effective internal control, are explained further in the internal controls section in the Annual Report and Financial Statements.

Page 5 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

Related Party Transactions

Other than the relationship between the Company and its directors, the provison of services by Henderson is the only related party arrangement currently in place.  Other than the fees payable by the Company in the ordinary course of business, there have been no material transactions with this related party which has affected the financial position or performance of the Company in the financial year.

Statement of Directors' Responsibilities under DTR 4.1.12

Each of the directors confirms that, to the best of his or her knowledge:

• the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

• the Report of the Directors includes a fair review of the development and performance of the business and the position of the Group and Company, together with a description of the principal risks and uncertainties that it faces.

For and on behalf of the Board of Directors

Richard Brewster

Chairman

For further information contact:                                                            

Alex Crooke Fund Manager The Bankers Investment Trust PLC Telephone: [phone]	Richard Brewster Chairman The Bankers Investment Trust PLC Telephone: [phone]
James de Sausmarez Director of Investment Trusts Henderson Global Investors Telephone: [phone]	Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Global Investors Telephone: [phone]

Page 6 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

SUMMARY OF THE YEAR

	31 October 2012	31 October 2011	Change %
Consolidated Assets
Total assets less current liabilities (£'000)	551,214	521,331	+5.7
Net asset value per ordinary share	474.5p	446.9p	+6.2
Ordinary share mid-market price	433.1p	385.0p	+12.5
Discount (Share Price to Net Asset Value)	8.7%	13.9%
Consolidated Revenue
Gross revenue (£'000)	18,593	16,389	+13.4
Revenue earnings per ordinary share	13.84p	11.98p	+15.5
Dividends per ordinary share in respect of the year	13.33p	12.70p	+5.0
Total Return
Total return per ordinary share	40.42p	7.51p
Indices (capital return)
FTSE All-Share Index	3,024.40	2,860.86	+5.7
S&P 500 Composite Index	1,412.66	1,253.30	+12.9	#
FTSE All-World Developed Europe (ex UK) Index (£)	134.44	126.52	+6.3
TOPIX (Tokyo First Section Index)	742.33	764.06	-5.0	#
FTSE World (ex UK) Index (£)	347.98	325.93	+6.8
Composite Index (capital return)
50/50 FTSE All-Share Index/     FTSE World (ex UK) Index (£)	212.6	200.0*	+6.3
Ongoing Charges**	0.42%	0.40%
Retail Prices Index	245.6	238.0	+3.2

# £ adjusted

*    rebased as at 31 October 2012

**  excluding borrowing costs

Page 7 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 October 2012

		Year ended 31 October 2012			Year ended 31 October 2011
	Notes	Revenue Return £'000	Capital Return £'000	Total £'000	Revenue Return £'000	Capital Return £'000	Total £'000
Gains/(losses) on investments held at fair value through profit or loss		-	31,623	31,623	-	(2,786)	(2,786)
Investment income	2	18,349	-	18,349	15,988	-	15,988
Other operating income	3	244	-	244	401	-	401
		---------	---------	---------	---------	---------	---------
Total income/(loss)		18,593	31,623	50,216	16,389	(2,786)	13,603
		---------	---------	---------	---------	---------	---------
Expenses
Management fees	4	(1,026)	(552)	(1,578)	(979)	(528)	(1,507)
Other expenses		(725)	-	(725)	(696)	-	(696)
		---------	---------	---------	---------	------------	---------
Profit/(loss) before finance costs and taxation		16,842	31,071	47,913	14,714	(3,314)	11,400
Finance costs		(678)	(1,582)	(2,260)	(706)	(1,647)	(2,353)
		---------	---------	---------	---------	------------	---------
Profit/(loss) before taxation		16,164	29,489	45,653	14,008	(4,961)	9,047
Taxation	5	(805)	-	(805)	(701)	-	(701)
		---------	---------	---------	---------	------------	---------
Profit/(loss) for the year and total comprehensive income		15,359	29,489	44,848	13,307	(4,961)	8,346
		=====	=======	======	=====	=======	======
Earnings/(loss) per ordinary share	6	13.84p	26.58p	40.42p	11.98p	(4.47p)	7.51p

The total column of this statement represents the Consolidated Statement of Comprehensive Income, prepared in accordance with IFRS as adopted by the European Union.  The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. 

All income is attributable to the equity shareholders of The Bankers Investment Trust PLC. 

As permitted by the Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income.  The net profit of the Company for the year was £44,848,000 (2011: £8,346,000). 

Page 8 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

AUDITED CONSOLIDATED AND PARENT COMPANY STATEMENT OF CHANGES IN EQUITY for the year ended 31 October 2012

Consolidated year ended 31 October 2012	Called up share capital £'000	Share premium account £'000	Capital  redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
Total equity at 1 November 2011	27,763	452	12,447	425,185	30,484	496,331
Total comprehensive income:
Profit for the year	-	-	-	29,489	15,359	44,848
Transactions with owners, recorded directly to equity:
Buy back of 145,000 ordinary shares	(36)	-	36	(594)	-	(594)
Ordinary dividends paid	-	-	-	-	(14,371)	(14,371)
	----------	----------	----------	----------	----------	----------
Total equity at 31 October 2012	27,727	452	12,483	454,080	31,472	526,214
	======	======	======	======	======	======

Consolidated year ended 31 October 2011	Called up share capital £'000	Share premium account £'000	Capital  redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
Total equity at 1 November 2010	27,772	452	12,438	430,286	31,007	501,955
Total comprehensive income:
(Loss)/ profit for the year	-	-	-	(4,961)	13,307	8,346
Transactions with owners, recorded directly to equity:
Buy back of 34,000 ordinary shares	(9)	-	9	(140)	-	(140)
Ordinary dividends paid	-	-	-	-	(13,830)	(13,830)
	----------	----------	----------	----------	----------	----------
Total equity at 31 October 2011	27,763	452	12,447	425,185	30,484	496,331
	======	======	======	======	======	======

Company year ended 31 October 2012	Called up share capital £'000	Share premium account £'000	Capital  redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
Total equity at 1 November  2011	27,763	452	12,447	426,372	29,297	496,331
Total comprehensive income:
(Loss)/profit for the year	-	-	-	28,398	16,450	44,848
Transactions with owners, recorded directly to equity:
Buy back of 145,000 ordinary shares	(36)	-	36	(594)	-	(594)
Ordinary dividends paid	-	-	-	-	(14,371)	(14,371)
	----------	----------	----------	----------	----------	----------
Total equity at 31 October 2012	27,727	452	12,483	454,176	31,376	526,214
	======	======	======	======	======	======

Company year ended 31 October 2011	Called up share capital £'000	Share premium account £'000	Capital  redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
Total equity at 1 November 2010	27,772	452	12,438	431,271	30,022	501,955
Total comprehensive income:
Profit for the year	-	-	-	(4,759)	13,105	8,346
Transactions with owners, recorded directly to equity:
Buy back of 34,000 ordinary shares	(9)	-	9	(140)	-	(140)
Ordinary dividends paid	-	-	-	-	(13,830)	(13,830)
	----------	----------	----------	----------	----------	----------
Total equity at 31 October 2011	27,763	452	12,447	426,372	29,297	496,331
	======	======	======	======	======	======

Page 9 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

AUDITED CONSOLIDATED AND PARENT COMPANY BALANCE SHEETS

at 31 October 2012

	Consolidated 2012 £'000	Consolidated 2011 £'000	Company 2012 £'000	Company 2011 £'000
Non-current assets
Investments held at fair value through profit or loss	546,819	512,257	546,915	513,444
	----------	----------	----------	----------
Current assets
Investments held at fair value through profit or loss	1,301	3,650	1,301	3,650
Other receivables	2,046	2,628	2,251	2,809
Cash and cash equivalents	3,126	6,360	2,825	4,992
	----------	----------	----------	----------
	6,473	12,638	6,377	11,451
	----------	----------	----------	----------
Total assets	553,292	524,895	553,292	524,895
	----------	----------	----------	----------
Current liabilities
Bank loan	(1,000)	-	(1,000)	-
Other payables	(1,078)	(3,564)	(1,078)	(3,564)
	----------	----------	----------	----------
	(2,078)	(3,564)	(2,078)	(3,564)
	----------	----------	----------	----------
Total assets less current liabilities	551,214	521,331	551,214	521,331
	----------	----------	----------	----------
Non-current liabilities
Debenture stocks	(25,000)	(25,000)	(25,000)	(25,000)
	----------	----------	----------	----------
Net assets	526,214	496,331	526,214	496,331
	======	======	======	======
Equity attributable to equity shareholders
Called up share capital (note 7)	27,727	27,763	27,727	27,763
Share premium account	452	452	452	452
Capital redemption reserve	12,483	12,447	12,483	12,447
Retained earnings:
Other capital reserves	454,080	425,185	454,176	426,372
Revenue reserve	31,472	30,484	31,376	29,297
	----------	----------	----------	----------
Total equity	526,214	496,331	526,214	496,331
	======	======	======	======
Net asset value per Ordinary share (pence)   - basic and diluted (Note 8)	474.5p	446.9p	474.5p	446.9p
	======	======	======	======

Page 10 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

AUDITED CONSOLIDATED AND PARENT COMPANY CASH FLOW STATEMENTS

for the year ended 31 October 2012

Reconciliation of operating revenue to net cash flow from operating activities	Consolidated 2012 £'000	Company 2012 £'000	Consolidated 2011 £'000	Company 2011 £'000
Profit before taxation	45,653	45,629	9,047	9,047
Add interest payable ("finance costs")	2,260	2,260	2,353	2,353
(Less)/add: (gains)/losses on investments held at fair value through profit or loss	(31,623)	(30,532)	2,786	2,521
(Increase)/decrease in accrued income	(573)	(573)	383	383
Decrease/(Increase) in other receivables	2	2	(7)	(7)
(Decrease)/Increase in other payables and accruals	(123)	(123)	23	23
Purchases of investments	(131,873)	(131,873)	(114,549)	(114,549)
Sales of investments	128,980	128,980	121,530	121,530
Amounts received from subsidiary undertaking	-	-	-	4,000
Purchases of current asset investments	(22,899)	(22,016)	(35,682)	(34,975)
Sales of current asset investments	25,364	24,365	39,242	37,625
Decrease in amounts due from brokers	1,179	1,179	767	767
Decrease in amounts due to brokers	(2,363)	(2,363)	(7,285)	(6,674)
Dealing profits	(116)	-	(261)	-
	----------	----------	----------	----------
Net cash inflow from operating activities before interest and taxation	13,868	14,935	18,347	22,044
Interest paid	(2,260)	(2,260)	(2,374)	(2,374)
Taxation on investment income	(831)	(831)	(641)	(641)
	----------	----------	----------	----------
Net cash inflow from operating activities	10,777	11,844	15,332	19,029
Financing activities
Equity dividends paid	(14,371)	(14,371)	(13,830)	(13,830)
Purchase of ordinary shares	(594)	(594)	(140)	(140)
Drawdown/(repayment) of loan	1,000	1,000	(4,000)	(4,000)
	----------	----------	----------	----------
Net cash outflow from financing activities	(13,965)	(13,965)	(17,970)	(17,970)
	----------	----------	----------	----------
(Decrease)/increase in cash	(3,188)	(2,121)	(2,638)	1,059
Cash and cash equivalents at start of the year	6,360	4,992	8,910	3,845
Exchange movements	(46)	(46)	88	88
	----------	----------	----------	----------
Cash and cash equivalents at end of the year	3,126	2,825	6,360	4,992
	======	======	======	======

Page 11 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

NOTES:

1.

Accounting policies

The consolidated and parent company financial statements for the year ended 31 October 2012 have been prepared in accordance with the International Financial Reporting Standards ("IFRSs") as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRSs.  IFRSs comprise standards and interpretations approved by the International Accounting Standards Board ("IASB"), together with interpretations of the International Accounting Standards and Standing Interpretations Committee approved by the International Accounting Standards Committee ("IASC") that remain in effect, to the extent that IFRSs have been adopted by the European Union. The financial statements have been prepared on a going concern basis and on the historical cost basis, except for the revaluation of certain financial instruments.  The principal accounting policies are set out in the audited accounts.  Where presentational guidance set out in the Statement of Recommended Practice ("the SORP") for investment trusts issued by the Association of Investment Companies ("the AIC") in January 2009 is consistent with the requirements of IFRSs, the directors have sought to prepare the financial statements on a basis consistent with the recommendations of the SORP.

		2012	2011
2.	Investment income	£'000	£'000
	UK dividend income  - listed	8,146	7,456
	UK dividend income  - special dividends	687	50
	Overseas dividend income - listed	9,078	7,890
	Overseas dividend income - special dividends	118	170
	Property income distributions	320	333
	Income from fixed interest securities	-	89
		--------	--------
		18,349	15,988
		=====	=====
	Analysis of investment income by geographical region:
	UK	9,842	8,459
	Europe (ex UK)	2,110	2,351
	North America	2,437	1,433
	Japan	1,102	971
	Pacific (ex Japan)	2,608	2,367
	Emerging markets	250	407
		--------	---------
		18,349	15,988
		=====	=====

 

Page 12 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

		2012	2011
3.	Other operating income	£'000	£'000
	Bank interest	20	15
	Stock lending revenue	108	125
	Dealing profits from subsidiary	116	261
		--------	--------
		244	401
		=====	=====

At 31 October 2012 the total value of securities on loan by the Group for stock lending purposes was £19,200,000 (2011: £37,200,000).  The maximum aggregate value of securities on loan at any one time during the year ended 31 October 2012 was £39,000,000 (2011: £45,800,000).  The Group's agent held collateral at 31 October 2012 with a value of £20,200,000 in respect of securites on loan, the value of which is reviewed on a daily basis, comprising CREST Delivery By Value ("DBVs") and Government Bonds with a market value of 105% of the market value of any securities on loan.

4.	Management fees	Revenue Return 2012 £'000	Capital Return 2012 £'000	Total 2012 £'000	Revenue Return 2011 £'000	Capital Return 2011 £'000	Total 2011 £'000
	Investment management	237	552	789	226	528	754
	Accounting, secretarial and administration	789	-	789	753	-	753
		-------	-------	-------	-------	-------	-------
		1,026	552	1,578	979	528	1,507
		====	====	====	====	====	====

5.	Taxation	Revenue Return 2012 £'000	Capital Return 2012 £'000	Total 2012 £'000	Revenue Return 2011 £'000	Capital Return 2011 £'000	Total 2011 £'000
	(a) Analysis of the charge for the year
	Overseas tax suffered	925	-	925	874	-	874
	Overseas tax reclaimable	(120)	-	(120)	(173)	-	(173)
		-------	-------	-------	-------	-------	-------
	Taxation	805	-	805	701	-	701
		====	====	====	====	====	====

Page 13 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

(b) Factors affecting the tax charge for the year The differences are explained below:

		Revenue Return 2012 £'000	Capital Return 2012 £'000	Total 2012 £'000	Revenue Return 2011 £'000	Capital Return 2011 £'000	Total 2011 £'000
	Profit before taxation	16,164	29,489	45,653	14,008	(4,961)	9,047
		--------	-----------	-----------	--------	-----------	-----------
	Corporation tax at 24.83% (2011: 26.83%)	4,014	7,322	11,336	3,760	(1,332)	2,428
	Non taxable UK dividends	(2,193)	-	(2,193)	(1,988)	-	(1,988)
	Non taxable scrip dividends and other income	(2,238)	-	(2,238)	(2,119)	-	(2,119)
	Income taxable in different years	4	-	4	-	-	-
	Overseas withholding tax suffered	805	-	805	701	-	701
	Excess management expenses	413	530	943	347	584	931
	Capital losses/(gains) not subject to tax	-	(7,852)	(7,852)	-	748	748
		--------	-----------	-----------	--------	---------	---------
		805	-	805	701	-	701
		====	=====	=====	====	=====	=====

	(c) Provision for deferred taxation No provision for deferred taxation has been made in the current year or in the prior year.  The Company has not provided for deferred tax on capital gains or losses arising on the revaluation or disposal of investments as it is exempt from tax on these items because of its status as an investment trust company, which it intends to maintain for the foreseeable futue.
	(d) Factors that may affect future tax charges The Company has not recognised a deferred tax asset totalling £3,976,000 (2011: £3,373,000) arising as a result of having unutilised non trade loan relationship deficits of £2,910,000 (2011: £2,639,000), excess management expenses of £1,066,000 (2011: £734,000) and deferred tax liability of £nil (2011: Nil) on offshore funds.  These expenses will only be utilised if the Group has profits chargeable to corporation tax in the future. The standard rate of corporation tax in the UK changed from 26% to 24% with effect from 1 April 2012. Accordingly, the Company's profits for this accounting period are taxed at the effective rate of tax of 24.83%.

6.	Earnings per ordinary share
	The total earnings per ordinary share is based on the net profits attributable to the ordinary shares of £44,848,000 (2011: £8,346,000) and on 110,946,334 ordinary shares (2011: 111,072,713) being the weighted average number of shares in issue during the year.  The total earnings can be further analysed as follows:

Page 14 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

		2012	2011
		£'000	£'000
	Revenue profit	15,359	13,307
	Capital profit/(loss)	29,489	(4,961)
		----------	-----------
	Profit for the year	44,848	8,346
		----------	-----------
	Weighted average number of ordinary shares	110,946,334	111,072,713
		----------	---------------
	Revenue earnings per ordinary share	13.84p	11.98p
	Capital earnings /(loss) per ordinary share	26.58p	(4.47p)
		----------	-----------
	Earnings per ordinary share	40.42p	7.51p
		=======	=======
	The Company does not have any dilutive securities, therefore basic and dilutive earnings are the same.

7.	Called up share capital	2012 £'000	2011 £'000
	Authorised, allotted, issued and fully paid:
	110,906,839 (2011: 111,051,839) ordinary shares of 25p each	27,727	27,763
		=====	=====
	During the year, 145,000 (2011: 34,000) ordinary shares were bought back for cancellation at a cost of £594,000 (2011: £140,000).

8.

Net asset value per ordinary share

The net asset value per ordinary share is based on net assets attributable to ordinary shares of £526,214,000 (2011: £496,331,000) and on the 110,906,839 ordinary shares in issue at 31 October 2012 (2011: 111,051,839).  The Company has no securities in issue that could dilute the net asset value per ordinary share. The movements during the year in net assets attributable to the ordinary shares were as follows:

		2012	2011
		£'000	£'000
	Net assets attributable to ordinary shares at start of year	496,331	501,955
	Total net profit on ordinary activities after taxation	44,848	8,346
	Dividends paid	(14,371)	(13,830)
	Buy back of ordinary shares	(594)	(140)
		------------	------------
	Net assets attributable to ordinary shares at end of year	526,214	496,331
		=======	=======

Page 15 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

9.	Going Concern Statement
	The directors believe that it is appropriate to continue to adopt the going concern basis in preparing the financial statements as the assets of the Company consist mainly of securities which are readily realisable and, accordingly, it has adequate financial resources to continue in operational existence for the foreseeable future. In reviewing the position as at the date of this report, the Board has considered the "Going Concern and Liquidity Risk: Guidance for Directors of UK Companies 2010", published by the Financial Reporting Council in October 2010.
10.	2012 financial information
	The figures and financial information for the year ended 31 October 2012 are extracted from the Company's annual financial statements for that period and do not constitute statutory accounts.  The Company's annual financial statements for the year to 31 October 2012 have been audited but have not yet been delivered to the Registrar of Companies.  The auditors' report on the 2012 annual financial statements was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain any statements under section 498 of the Companies Act 2006.
11.	2011 financial information
	The figures and financial information for the year ended 31 October 2011 are compiled from an extract of the published accounts for that year and do not constitute statutory accounts.  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 sections 498(2) or 498(3) of the Companies Act 2006.
12.	Dividend
	A final dividend of 3.43p per ordinary share will be paid, if approved by shareholders at the AGM, on 28 February 2013 to shareholders on the register on 1 February 2013.   The Company's shares go ex‑dividend on 30 January 2013.
13.	Annual report and financial statements
	Copies of the Annual Report and Financial Statements will be posted to shareholders by the end of January 2013 and will be available on the Company's website (www.bankersinvestmenttrust.com) or in hard copy format from the Registered Office, 201 Bishopsgate, London EC2M 3AE.
14.	Annual General Meeting The Annual General Meeting will be held on Tuesday 26 February 2013 at 12 noon at the Stationers' Hall, Ave Maria Lane, London  EC4M 7DD.

 

Page 16 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

LARGEST INVESTMENTS at 31 October 2012

The 25 largest investments (convertibles and all classes of equity in any one company being treated as one investment) were as follows:

Rank	(2011)		Valuation 2011 £'000	Purchases £'000	Sales proceeds £'000	(Depreciation) /appreciation £'000	Valuation 2012 £'000
1	(1)	BP	15,745	-	-	(605)	15,140
2	(3)	British American Tobacco	11,659	-	(752)	872	11,779
3	(4)	GlaxoSmithKline	10,808	-	-	(104)	10,704
4	(5)	Royal Dutch Shell	10,060	-	-	(203)	9,857
5	(2)	Vodafone	11,735	-	(2,558)	(250)	8,927
6	(6)	Catlin	9,493	-	(2,516)	1,716	8,693
7	(7)	HSBC	8,646	-	(1,279)	771	8,138
8	(8)	BG	8,546	-	-	(1,317)	7,229
9	(13)	Apple	4,686	-	(729)	2,243	6,200
10	(*)	Galliford Try	3,623	-	-	2,118	5,741
11	(*)	Sports Direct International	1,607	2,072	-	1,932	5,611
12	(22)	Petrofac	4,021	729	-	547	5,297
13	(20)	Rolls-Royce	4,171	-	-	903	5,074
14	(9)	Jardine Lloyd Thompson	6,485	-	(1,710)	148	4,923
15	(16)	Amcor	4,268	-	-	412	4,680
16	(*)	Smiths News	2,861	-	-	1,797	4,658
17	(*)	Reckitt Benckiser	3,838	-	-	662	4,500
18	(*)	General Electric	-	3,722	-	723	4,445
19	(*)	Time Warner Cable	-	3,413	-	893	4,306
20	(17)	Christian Dior	4,243	-	-	33	4,276
21	(*)	Rio Tinto	-	3,705	-	437	4,142
22	(*)	ITV	3,050	-	-	1,071	4,121
23	(23)	Microsoft	3,966	327	(612)	401	4,082
24	(11)	Petroleo Brasileiros	6,024	-	(572)	(1,373)	4,079
25	(*)	Fisher (J) & Sons	2,872	-	-	1,175	4,047
			----------	----------	----------	----------	----------
			142,407	13,968	(10,728)	15,002	160,649
			======	======	======	======	======

These investments total 29.4% of the portfolio.

(*) Not in the top 25 last year.

 

Page 17 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2012

CHANGES IN INVESTMENTS at 31 October 2012

	Valuation 2011	Purchases	Sales proceeds	Appreciation/ (depreciation)	Valuation 2012
	£'000	£'000	£'000	£'000	£'000
United Kingdom	233,189	30,747	(32,973)	17,677	248,640
Europe (ex UK)	61,742	8,479	(14,570)	3,358	59,009
North America	102,140	43,900	(39,674)	7,972	114,338
Japan	48,599	19,102	(18,427)	(1,473)	47,801
Pacific (ex Japan)	56,520	23,125	(21,881)	6,175	63,939
Emerging Markets	9,969	6,520	(1,410)	(2,070)	13,009
Fixed Interest	98	-	(45)	30	83
	-----------	-----------	----------	-----------	-----------
Total	512,257	131,873	(128,980)	31,669	546,819
	======	======	======	======	======

- ENDS -

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

 

END

 

 

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