Interim Results
Bankers Investment Trust PLC
25 June 2003
THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2003
SUMMARY
* Marginal outperformance of benchmark, with NAV declining by 2.1%
compared with a fall of 2.4% in the FTSE All-Share Index
* Total earnings this year expected to be in excess of forecast dividend
of 6.96p per share
* Full year total dividend forecast to be up at least 2.7% on last year
Extracts from the Chairman's Statement:
Assets
Over the half year to 30 April our net asset value declined by 2.1%. Although
this constitutes another period of negative return, I can report that our net
assets and share price have marginally outperformed our benchmark during an
extremely turbulent six months. The FTSE All-Share Index fell 2.4% over that
period. For the first four and a half months of the period most equity markets
were heavily influenced by the increasing uncertainty created by the build up to
war in Iraq. A week before war was declared on 20 March our net asset value and
share price had declined by 17% and 16% respectively, and many equity investors
were extremely concerned about future prospects.
Fortunately, fears of a lengthy military campaign proved unfounded and a rapid
end to hostilities combined with a decline in the oil price to more normal
levels removed two major negatives. Equity markets rebounded strongly as a
result, with overseas equities performing slightly better than the UK in
sterling terms. We remained approximately 10% geared over the period and were
net buyers of UK equities in January when the market was overly depressed by
forced selling from life assurance companies.
Currency movements have been dramatic, with the US authorities prepared to allow
a weaker dollar for economic reasons which has had a particularly positive
effect on the euro. In view of the negative consequences for European economic
growth and profitability of a rapid rise in the euro we have been net sellers in
continental Europe but have held most of our cash in euros.
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2003
Extracts from the Chairman's Statement cont'd:
Earnings and Dividends
Earnings per share increased by 0.6% to 3.50p per share. Franked income was
impacted by dividend cuts and the recent trend by some very large UK companies
to declare dividends in US dollars including Glaxo and BP. In my annual
statement we forecast we would pay three quarterly dividends of 1.74p per share
and a minimum final dividend of 1.74p. Based on present estimates we expect
total earnings this year to exceed the minimum forecast total dividend of 6.96p
per share.
Outlook
Growth in the global economy looks likely to remain painfully slow. World
inflation is forecast at below 2% for the next 12 months. Nominal growth may not
be sufficient to sustain decent profit growth for most companies, unless costs
are cut significantly. In the all important US economy the threat of deflation
is taken seriously but there is very little room to cut short-term interest
rates any further. However, the significant fall in the dollar should help the
profitability of multi-national companies and limit the growth in imports. At
least in the USA, therefore, we can look forward to a stronger economic
recovery. In the euro zone, by contrast, the economic data remain consistently
weak. The great euro experiment could not have come at a worse time for Germany
which needs lower interest rates to ward off the twin threats of stagnation and
deflation. The fall in sterling against the euro is highly beneficial for our
exporters and with most critical commodities priced in US dollars our current
devaluation against the euro should not be inflationary.
Most of the currencies in the Far East, including Japan, have fallen in line
with the US dollar. Consequently their terms of trade versus euroland are the
best that I can remember. The impact of the SARS virus will hopefully be
temporary but is a stark reminder of how fragile many economies are when cut off
from global tourism.
The global bear market in equities has been running for over three years and it
has had a profound impact on the future returns expected by pensioners and
savers alike. Counter-balancing this has been a ten year bull market in UK and
US residential property and long dated fixed interest securities which has
undoubtedly cushioned part of the impact of the third largest equity bear market
in the last 100 years.
The recent post-Iraq equity market rally has been impressive in terms of breadth
and volume. Here in the UK and also in the USA it has been accompanied by better
news on the economy and corporate profits. The mere fact that most commentators
are expecting so little from equities by way of annual returns, together with
some renewed corporate activity, gives me a certain level of optimism for the
future but a sustained upward move will require an improvement in company
profitability.
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2003
Extracts from the Chairman's Statement cont'd:
For further information contact:
Michael Moule Alex Crooke
The Bankers Investment Trust PLC The Bankers Investment Trust PLC
Telephone: 020 7818 4378 Telephone: 020 7818 4447
Stephen Westwood Stephen Phillips
Head of Investment Trusts Investor Relations Manager
Henderson Global Investors Henderson Global Investors
Telephone: 020 7818 5517 Telephone: 020 7818 6417
Vicki Staveacre
Henderson Press Office
Telephone: 020 7818 4222
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2003
SUMMARY
(Unaudited) (Audited) %
30 April 31 October Change
2003 2002
Assets
Total assets less current liabilities (£'000) £334,092 £340,887 -2.0
Net asset value per ordinary share 244.0p 249.3p -2.1
Ordinary share mid-market price 232.0p 233.8p -0.8
Discount (share price to net asset value) 4.9% 6.2%
Indices
FTSE All-Share Index 1,891.50 1,938.71 -2.4
Standard & Poor's Composite Index 916.92 885.76 +1.3*
FTSE World Europe (ex UK) Index (£) 208.52 202.24 +3.1
TOPIX (Tokyo First Section Index) 796.56 862.24 -7.1*
FTSE World (ex UK) Index (£) 205.63 203.88 0.9
50/50 FTSE All-Share/ 198.40 200.00 -0.8
FTSE World (ex UK) (£)
*£ adjusted
(Unaudited) (Unaudited) %
Half year ended Half year ended %
30 April 2003 30 April 2002 Change
Revenue
Gross revenue (£'000) £6,035 £6,074 -0.6
Earnings per ordinary share 3.50p 3.48p +0.6
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2003
GROUP STATEMENT OF TOTAL RETURN (incorporating the revenue account*)
for the half year ended 30 April 2003
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
30 April 2003 30 April 2002 31 October 2002
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total capital (losses) - (5,741) (5,741) - 39,572 39,572 - (61,161) (61,161)
/gains from investments
Income from fixed asset 5,760 - 5,760 5,719 - 5,719 11,579 - 11,579
Investments
Other interest receivable 275 - 275 355 - 355 724 - 724
and similar income
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Gross revenue and capital 6,035 (5,741) 294 6,074 39,572 45,646 12,303 (61,161) (48,858)
(losses)/gains
Management fee (546) (487) (1,033) (645) (574) (1,219) (1,265) (1,128) (2,393)
Other administrative expenses (330) - (330) (319) - (319) (627) - (627)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Net return/(loss) on ordinary
activities before finance
costs and taxation 5,159 (6,228) (1,069) 5,110 38,998 44,108 10,411 (62,289) (51,878)
Interest payable and
similar charges (357) (833) (1,190) (361) (843) (1,204) (722) (1,685) (2,407)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Net return/(loss) on
ordinary activities
before taxation 4,802 (7,061) (2,259) 4,749 38,155 42,904 9,689 (63,974) (54,285)
Taxation on net return on
ordinary activities (389) 243 (146) (361) 233 (128) (831) 494 (337)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Net return/(loss) on
ordinary activities
after taxation 4,413 (6,818) (2,405) 4,388 38,388 42,776 8,858 (63,480) (54,622)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Dividends - ordinary shares
1st interim 1.74p
(2002: 1.68p) (2,195) - (2,195) (2,120) - (2,120) (2,120) - (2,120)
2nd interim 1.74p
(2002: 1.68p) (2,195) - (2,195) (2,120) - (2,120) (2,120) - (2,120)
3rd interim
(2002: 1.68p) - - - - - - (2,119) - (2,119)
Final (2002: 1.74p) - - - - - - (2,195) - (2,195)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
(4,390) - (4,390) (4,240) - (4,240) (8,554) - (8,554)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Transfer to/(from) reserves 23 (6,818) (6,795) 148 38,388 38,536 304 (63,480) (63,176)
========= ========= ========= ========= ========= ========= ========= ========= ========
Return/(loss) per ordinary
share (note 1) 3.50p (5.41)p (1.91)p 3.48p 30.42p 33.90p 7.02p (50.31)p (43.29)p
========= ========= ========= ========= ========= ========= ========= ========= ========
* The revenue columns of this statement represent the revenue accounts of the
Group.
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2003
GROUP BALANCE SHEET
at 30 April 2003
(Unaudited) (Unaudited) (Audited)
At 30 April 2003 At 30 April At 31 October 2002
2002
£'000 £'000 £'000
Fixed asset investments:
Listed at market value
In Great Britain 198,661 260,698 202,917
Outside Great Britain 134,514 177,673 139,136
Other quoted funds 3,304 3,220 3,370
Unlisted - directors' valuation 750 1,350 1,125
---------- ---------- ----------
Total fixed asset investments 337,229 442,941 346,548
---------- ---------- ----------
Current assets
Investments - 67 -
Debtors 3,084 6,015 8,367
Bank balances and short term deposits 16,145 15,121 11,215
---------- ---------- ----------
19,229 21,203 19,582
Creditors: amounts falling due within one year (22,366) (21,545) (25,243)
---------- ---------- ----------
Net current liabilities (3,137) (342) (5,661)
---------- ---------- ----------
Total assets less current liabilities 334,092 442,599 340,887
Creditors: amounts falling due after more than one year (26,300) (26,300) (26,300)
---------- ---------- ----------
Total net assets 307,792 416,299 314,587
========== ========== ==========
Capital and reserves
Called up share capital 31,542 31,542 31,542
Share premium account 452 452 452
Other reserves 258,395 367,081 265,213
Revenue reserve 17,403 17,224 17,380
---------- ---------- ----------
Equity shareholders' funds 307,792 416,299 314,587
========== ========== ==========
Net asset value per ordinary share (note 2) 244.0p 330.0p 249.3p
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2003
GROUP CASH FLOW STATEMENT (Unaudited) (Unaudited) (Audited)
for the half year ended 30 April 2003 Half year ended Half year ended Year
30 April 30 April ended
2003 2002 31 October 2002
£'000 £'000 £'000
Net cash inflow from operating activities 2,917 3,120 8,794
Interest paid (1,175) (1,208) (2,424)
Net tax recovered 34 63 154
Net cash inflow/(outflow) from purchases and sales of 6,725 (1,297) (7,535)
investments
Equity dividends paid (4,314) (4,163) (8,403)
Cash (placed on)/withdrawn from short term deposit (69) 5,000 1,757
---------- ---------- ----------
Net cash inflow/(outflow) before financing 4,118 1,515 (7,657)
Net cash inflow from financing 970 2,059 3,117
---------- ---------- ----------
Increase/(decrease) in cash 5,088 3,574 (4,540)
========== ========== ==========
Reconciliation of operating revenue to net cash inflow
from operating activities
Net revenue before interest payable and taxation 5,159 5,110 10,411
Net sales of trading stock - 16 83
(Increase)/decrease in accrued income (1,986) (2,003) 78
Decrease in other debtors 401 461 17
Increase/(decrease) in creditors 36 349 (8)
Management charge taken to other reserves (487) (574) (1,128)
Overseas withholding tax (206) (186) (499)
Scrip dividends included in investment income - (53) (160)
---------- ---------- ----------
Net cash inflow from operating activities 2,917 3,120 8,794
========== ========== ==========
Reconciliation of net cash flow to movement in net debt
Increase/(decrease) in cash as above 5,088 3,574 (4,540)
Cash inflow from financing (970) (2,059) (3,117)
Cash outflow/(inflow) from liquid resources 69 (5,000) (1,757)
---------- ---------- ----------
Change in net debt resulting from cash flows 4,187 (3,485) (9,414)
Exchange movements 623 735 1,306
---------- ---------- ----------
Movement in net debt during the period 4,810 (2,750) (8,108)
Net debt at beginning of the period (31,772) (23,664) (23,664)
---------- ---------- ----------
Net debt at the end of the period (26,962) (26,414) (31,772)
========== ========== ==========
Represented by:
Cash at bank and short term deposits less bank overdrafts 16,145 15,121 10,444
Debt falling due within one year (16,807) (15,235) (15,916)
Debt falling due after more than one year (26,300) (26,300) (26,300)
---------- ---------- ----------
(26,962) (26,414) (31,772)
========== ========== ==========
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2003
NOTES:
1. Return/(loss) per Ordinary Share
Revenue return per ordinary share is based on earnings attributable to
ordinary shares of £4,413,000 (half year ended 30 April 2002:
£4,388,000; year ended 31 October 2002: £8,858,000) and on the weighted
average number of ordinary shares in issue during the period of
126,169,781 (half year ended 30 April 2002 and year ended 31 October
2002: 126,169,781).
Capital return per ordinary share is based on losses attributable to
ordinary shares of £6,818,000 (half year ended 30 April 2002: gains of
£38,388,000; year ended 31 October 2002: losses of £63,480,000) and on
the weighted average number of ordinary shares in issue during the
period of 126,169,781 (half year ended 30 April 2002 and year ended
31 October 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 £307,792,000 (30 April 2002:
£416,299,000; 31 October 2002: £314,587,000) and on the 126,169,781
ordinary shares in issue at 30 April 2003 (30 April 2002 and 31 October
2002: 126,169,781).
3. Accounts for the year ended 31 October 2002
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 the 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 either Section 237(2) or Section 237(3) of the
Companies Act 1985.
4. Dividend
The directors have declared a second interim dividend of 1.74p
(2002: 1.68p) net per ordinary share payable on 29 August 2003 to
shareholders registered on 1 August 2003. The shares will be quoted
ex-dividend on 30 July 2003.
5. Interim Report
The Interim Report will be posted to shareholders in July and will be
available from the Registered Office at 4 Broadgate, London EC2M 2DA
thereafter.
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2003
LARGEST INVESTMENTS
at 30 April 2003
The 50 largest investments (convertibles and all classes of equity in any one
company being treated as one investment) were as follows:
Market value Market value
£'000 £'000
BP 13,719 Slough Estates 2,217
GlaxoSmithKline 12,816 Henderson American Smaller Cos 2,214
Vodafone 8,336 Rio Tinto 2,189
HSBC 8,089 ABN-Amro 2,114
Shell Transport & Trading 7,458 Deutsche Boerse 2,109
Royal Bank of Scotland 5,530 Anglo American 2,007
HBOS 5,058 Samsung Electronics 1,975
Barclays 4,841 BHP Billiton 1,878
Lloyds TSB 4,527 Gallaher 1,866
Total Fina Elf 4,349 Prudential 1,858
AstraZeneca 3,928 BSkyB 1,843
Unilever 3,813 D/S Svendborg 1,815
Diageo 3,609 Alliance & Leicester 1,784
BT 3,316 ISS 1,775
Nestle 3,064 BNP Paribas 1,762
Novartis 3,062 Carnival 1,748
ENI 3,035 NTT Docomo 1,732
Irish Life & Permanent 2,945 Galen 1,727
Philips Electronics 2,933 Dexia 1,725
Unibail 2,912 Greene King 1,689
British American Tobacco 2,442 Man 1,688
Tesco 2,435 Aviva 1,672
Allied Irish Banks 2,413 Swire Pacific 1,664
Aventis 2,226 Reckitt Benckiser 1,655
National Grid Transco 2,219 National Australia Bank 1,655
These investments total £165,436,000 which represents 49.1% of the portfolio.
GEOGRAPHICAL DISTRIBUTION
Valuation of investments Currency exposure
30 April 31 October 30 April 31 October
2003 2002 2003 2002
% % % %
UK 58.4 58.1 55.6 56.3
Europe 17.2 17.6 22.6 21.3
North America 12.6 12.2 14.2 14.3
Japan 6.5 7.0 1.7 2.4
Far East 3.6 3.4 4.0 3.9
Other Countries 1.7 1.7 1.9 1.8
100.0 100.0 100.0 100.0
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