Interim Results
Bankers Investment Trust PLC
28 June 2004
28 June 2004
THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2004
HIGHLIGHTS
The Company performed better than both the UK and global stock markets
* NAV rose by 5.8% over the period (FTSE All-Share 5.3%)
* Global markets rose by only 2.9% (ex UK, sterling adjusted)
* The Company will pay a second interim dividend of 1.83p
* Forecast minimum annual dividend of 7.33p, an increase of 4.0% for the current year
Chairman's Statement:
Assets
Equity markets around the world have become increasingly volatile but I am
pleased to report that our net asset value per share rose during the period by
5.8% compared with a rise of 5.3% for the FTSE All-Share Index. Our performance
outside the UK was diminished by the strength of sterling. With interest rates
in the UK now 4.5%, sterling has become an attractive currency for international
investors and appreciated over the period by 4.5% against the US dollar, by 1.3%
against the euro and by 4.9% against the yen. During the last six months
improving economic news and accommodating monetary conditions, principally in
the US, have driven equity markets. Corporate earnings have benefited from this
environment and generally have exceeded analysts' expectations, lifting share
prices.
Japanese and Asian stockmarkets have been amongst the best performing. We have
increased our exposure to Japan, having sold investments in both Europe and
China. Conditions in China are giving concern, as the rapid economic expansion
has reached breakneck speed. A tightening in both policy and monetary conditions
has now started but runs the risk that if handled too aggressively it could
create unrest and instability in the wider region. Recovery in Japan has been
frequently heralded but has proved frustratingly elusive. The key to an economic
turnaround has to start locally with the domestic economy and a recovery in
consumer sentiment and spending. Recent indicators such as new house building
and employment have been improving, which may at last herald better things to
come.
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2004
Chairman's Statement cont'd:
Despite the assets rising by nearly 6% during the period, share price
performance has been disappointing and the discount to net asset value has
widened. Although increasing discounts have been a feature of the global growth
investment trust sector, we have recently utilised our powers to repurchase the
Company's shares in order to enhance both assets and earnings for remaining
shareholders.
Earnings and Dividends
The earnings per share increased by 7.4% to 3.76p per share during the period.
The growth in dividends from our UK investments has been steadily recovering and
we appear to have passed the nadir of dividend cuts. However, income from our
overseas investments is affected by the relevant sterling exchange rate. The
second half of our year is the most important for income and any weakening of
sterling over this period will benefit the Company's earnings per share. Based
upon present estimates, as forecast, we expect to pay a minimum dividend per
share of 7.33p for the current year, an increase of 4.0%.
Outlook
It is interesting how quickly the fears of deflation in western markets have
subsided to be replaced with the exact opposite, namely inflationary pressures
and imminent interest rate increases. The strong rise in the oil price has
become a concern for politicians and investors alike but we are yet to
experience any material economic impact. Economies are structurally far less
reliant on oil compared to the 1970's when far larger oil shocks created genuine
ripples in GDP growth. Ultimately the sharp rise in the price of oil should be
deflationary, in that it can be viewed as a tax on consumption, reducing
corporate profits and impacting consumer spending. Last year, similar sharp
rises in metal prices appeared to be rational but prices collapsed once
positions from financial speculators were unwound. A parallel situation could
well be fuelling oil prices and it may prove unwise to base long-term economic
assumptions upon what may be temporary conditions.
Interest rates in the US appear set to increase over the summer but it is the
speed and frequency of rises that will be important. The Federal Reserve is
focussed on achieving sustainable growth in the economy and any stalling will be
met with a reversal of the interest rate rises. Equity valuations remain
attractive by historic standards. This is especially true in the UK where
earnings upgrades mean that the whole market trades on a lower valuation level
than six months ago. Undoubtedly the outlook is still clouded, with uncertainty
surrounding many issues. Any improvement will be gradual and take time to lift
investors' enthusiasm towards making investments in equities.
Andrew Barker
Chairman
25 June 2004
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2004
Chairman's Statement cont'd:
For further information contact:
Alex Crooke Stephen Westwood
Fund Manager Head of Investment Trusts
The Bankers Investment Trust PLC Henderson Global Investors
Telephone: 020 7818 4447 Telephone: 020 7818 5517
Stephen Phillips Vicki Staveacre
Associate Director Henderson Press Office
Henderson Global Investors Henderson Global Investors
Telephone: 020 7818 6417 Telephone: 020 7818 4222
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2004
FINANCIAL HIGHLIGHTS
(Unaudited) (Audited) %
30 April 31 October Change
2004 2003
Assets
Total assets less current liabilities (£'000) £403,990 £383,449 +5.4
NAV per ordinary share (with debt at book 299.4p 283.1p +5.8
value)
Ordinary share mid-market price 261.0p 265.5p -1.7
Discount (share price to net asset value) 12.8% 6.2%
NAV per ordinary share (with debt at market 294.7p 278.4p +5.9
value)
Indices
FTSE All-Share Index 2,237.34 2,125.37 +5.3
S&P 500 Composite Index 1,107.30 1,050.71 +0.8*
FTSE World Europe (ex UK) Index (£) 250.01 233.01 +7.3
TOPIX (Tokyo First Section Index) 1,186.31 1,043.36 +8.4*
FTSE World (ex UK) Index (£) 237.59 230.99 +2.9
50/50 FTSE All-Share/ 208.20 200.00# +4.1
FTSE World (ex UK) (£)
* £ adjusted
# rebased as at 31/10/03
(Unaudited) (Unaudited) %
Half year ended Half year ended Change
30 April 2004 30 April 2003
Revenue
Gross revenue (£'000) £6,093 £6,035 +1.0
Earnings per ordinary share 3.76p 3.50p +7.4
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2004
GROUP STATEMENT OF TOTAL RETURN (incorporating the revenue account*)
for the half year ended 30 April 2004
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
30 April 2004 30 April 2003 31 October 2003
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Total capital gains/ - 21,687 21,687 - (5,741) (5,741) - 44,605 44,605
(losses) from
Investments
Income from fixed asset 5,944 - 5,944 5,760 - 5,760 11,719 - 11,719
Investments
Other interest receivable 149 - 149 275 - 275 475 - 475
and
Similar income
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Gross revenue and capital 6,093 21,687 27,780 6,035 (5,741) 294 12,194 44,605 56,799
Gains/(losses)
Management fee (494) (439) (933) (546) (487) (1,033) (1,051) (937) (1,988)
Other administrative (344) - (344) (330) - (330) (622) - (622)
expenses
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Net return/(loss) on
ordinary
5,255 21,248 26,503 5,159 (6,228) (1,069) 10,521 43,668 54,189
Activities before finance
costs
And taxation
Interest payable and (358) (837) (1,195) (357) (833) (1,190) (717) (1,672) (2,389)
similar
Charges
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Net return/(loss) on 4,897 20,411 25,308 4,802 (7,061) (2,259) 9,804 41,996 51,800
ordinary
Activities before
taxation
Taxation on net return on (149) - (149) (389) 243 (146) (823) 480 (343)
Ordinary activities
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Available for ordinary 4,748 20,411 25,159 4,413 (6,818) (2,405) 8,981 42,476 51,457
Shareholders
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Dividends - ordinary
shares
1st interim 1.83p (2003: (2,309) - (2,309) (2,195) - (2,195) (2,195) - (2,195)
1.74p)
2nd interim 1.83p (2003: (2,309) - (2,309) (2,195) - (2,195) (2,195) - (2,195)
1.74p)
3rd interim (2003: 1.74p) - - - - - - (2,196) - (2,196)
Final (2003: 1.83p) - - - - - - (2,309) - (2,309)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
(4,618) - (4,618) (4,390) - (4,390) (8,895) - (8,895)
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Transfer to/(from) 130 20,411 20,541 23 (6,818) (6,795) 86 42,476 42,562
reserves
===== ===== ===== ===== ===== ===== ====== ====== =====
Return/(loss) per 3.76p 16.18p 19.94p 3.50p (5.41)p (1.91)p 7.12p 33.66p 40.78p
ordinary
Share (note 1)
===== ===== ===== ===== ===== ===== ====== ====== =====
* The revenue columns of this statement represent the profit and loss accounts
of the Group.
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2004
GROUP BALANCE SHEET
at 30 April 2004
(Unaudited) (Unaudited) (Audited)
At 30 April 2004 At 30 April At 31 October 2003
2003
£'000 £'000 £'000
Fixed asset investments
Listed at market value:
In the UK 233,018 198,661 224,749
Outside the UK 183,306 134,514 166,332
Other quoted funds 1,570 3,304 1,337
Unquoted investment 1,050 750 750
---------- ---------- ----------
Total fixed asset investments 418,944 337,229 393,168
---------- ---------- ----------
Current assets
Debtors 4,685 3,084 4,550
Bank balances and short term deposits 7,569 16,145 11,480
---------- ---------- ----------
12,254 19,229 16,030
Creditors: amounts falling due within one year (27,208) (22,366) (25,749)
---------- ---------- ----------
Net current liabilities (14,954) (3,137) (9,719)
---------- ---------- ----------
Total assets less current liabilities 403,990 334,092 383,449
Creditors: amounts falling due after more than one (26,300) (26,300) (26,300)
Year
---------- ---------- ----------
Total net assets 377,690 307,792 357,149
====== ====== ======
Capital and reserves
Called up share capital 31,542 31,542 31,542
Share premium account 452 452 452
Other reserves 328,100 258,395 307,689
Revenue reserve 17,596 17,403 17,466
---------- ---------- ----------
Shareholders' funds (all equity) 377,690 307,792 357,149
====== ====== ======
Net asset value per ordinary share (note 2) 299.4p 244.0p 283.1p
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2004
GROUP CASH FLOW STATEMENT (Unaudited) (Unaudited) (Audited)
for the half year ended 30 April 2004 Half year ended Half year ended Year
30 April 30 April ended
2004 2003 31 October 2003
£'000 £'000 £'000
Net cash inflow from operating activities 3,054 2,917 9,314
Interest paid (2,319) (1,175) (1,260)
Net tax recovered 92 34 162
Net cash (outflow)/inflow from purchases and sales of (3,946) 6,725 98
Investments
Equity dividends paid (4,505) (4,314) (8,705)
Cash withdrawn from/(placed on) short term deposit 3,601 (69) (318)
---------- ---------- ----------
Net cash (outflow)/inflow before financing (4,023) 4,118 (709)
Net cash inflow from financing 3,653 970 1,099
---------- ---------- ----------
(Decrease)/increase in cash (370) 5,088 390
====== ====== ======
Reconciliation of operating revenue to net cash inflow
From operating activities
Net revenue before interest payable and taxation 5,255 5,159 10,521
(Increase)/decrease in accrued income (1,736) (1,986) 177
Decrease in other debtors 12 401 49
Increase in creditors 173 36 5
Management charge taken to other reserves (439) (487) (937)
Overseas withholding tax (211) (206) (489)
Scrip dividends included in investment income - - (12)
---------- ---------- ----------
Net cash inflow from operating activities 3,054 2,917 9,314
====== ====== ======
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash as above (370) 5,088 390
Net cash inflow from financing (3,653) (970) (1,099)
Net cash (inflow)/outflow from liquid resources (3,601) 69 318
---------- ---------- ----------
Change in net debt resulting from cash flows (7,624) 4,187 (391)
Exchange movements 625 623 (81)
---------- ---------- ----------
Movement in net debt during the period (6,999) 4,810 (472)
Net debt at beginning of the period (32,244) (31,772) (31,772)
---------- ---------- ----------
Net debt at the end of the period (39,243) (26,962) (32,244)
====== ====== ======
Represented by:
Cash at bank and short term deposits less bank overdrafts 7,567 16,145 11,480
Debt falling due within one year (20,510) (16,807) (17,424)
Debt falling due after more than one year (26,300) (26,300) (26,300)
---------- ---------- ----------
(39,243) (26,962) (32,244)
====== ====== ======
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THE BANKERS INVESTMENT TRUST PLC
Unaudited Preliminary Results for the half year ended 30 April 2004
NOTES:
Return/(loss) per ordinary share
Revenue return per ordinary share is based on earnings attributable to ordinary shares of £4,748,000 (half year
ended 30 April 2003: £4,413,000; year ended 31 October 2003: £8,981,000) and on the number of ordinary shares
in issue during the period of 126,169,781 (half year ended 30 April 2003 and year ended 31 October 2003:
126,169,781).
Capital return per ordinary share is based on gains attributable to ordinary shares of £20,411,000 (half year
ended 30 April 2003: losses of £6,818,000; year ended 31 October 2003: gains of £42,476,000) and on the number
of ordinary shares in issue during the period of 126,169,781 (half year ended 30 April 2003 and year ended 31
October 2003: 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 £377,690,000
(30 April 2003: £307,792,000; 31 October 2003: £357,149,000) and on the 126,169,781 ordinary shares in issue at
30 April 2004 (30 April 2003 and 31 October 2003: 126,169,781).
3. Accounts for the year ended 31 October 2003
The figures and financial information for the year ended 31 October 2003 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 1.83p (2003: 1.74p) net per ordinary share, payable on
31 August 2004 to shareholders registered on 30 July 2004. The shares will be quoted ex-dividend on 28 July
2004.
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 2004
LARGEST INVESTMENTS
at 30 April 2004
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 18,086 Alliance & Leicester 2,802
HSBC 12,282 NTT Docomo 2,752
GlaxoSmithKline 9,593 Man 2,701
Vodafone 9,248 BHP Billiton 2,644
Shell Transport & Trading 7,741 Prudential 2,591
Royal Bank of Scotland 7,178 Keyence 2,584
HBOS 6,139 Anglo American 2,542
Barclays 5,263 Nippon Telegraph & Telephone 2,529
Lloyds TSB 4,637 Mitsubishi Tokyo Financial 2,469
AstraZeneca 4,219 ABN-Amro 2,453
Diageo 3,934 Canon 2,451
Samsung Electronics 3,921 General Electric 2,398
Total 3,755 Galen 2,391
BT Group 3,748 Ashtenne 2,352
Unibail 3,736 Unilever 2,341
Irish Life & Permanent 3,617 Richemont 2,322
ENI 3,555 National Grid Transco 2,310
British American Tobacco 3,480 ICAP 2,300
Ito-Yokado 3,233 Codan 2,278
Nestle 3,141 Daiwa Securities 2,256
Novartis 3,116 Toppan Printing 2,250
Tesco 3,059 Greene King 2,238
Aventis 3,006 QBE Insurance 2,234
Philips Electronics 2,948 Eircom 2,221
Carnival 2,840 Yell 2,220
These investments total £196,104,000 which represents 46.8% of the portfolio.
GEOGRAPHICAL DISTRIBUTION
Valuation of investments Currency exposure
30 April 31 October 30 April 31 October
2004 2003 2004 2003
% % % %
UK 55.9 56.6 55.7 55.0
Europe 16.3 17.2 18.4 20.9
North America 11.1 11.7 12.7 12.9
Japan 10.1 7.2 5.8 3.2
Pacific (ex Japan) 5.0 5.4 5.7 6.0
Emerging Markets 1.6 1.9 1.7 2.0
100.0 100.0 100.0 100.0
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