Interim Results

Bankers Investment Trust PLC 22 June 2007 Page 1 of 11 THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2007 HIGHLIGHTS * Net asset value rose over the period by 9.2% (FTSE All-Share 6.9%) * Second interim dividend of 2.52p (2006: 2.22p) declared * Forecast minimum annual dividend of 10.06p, an increase of 6.1% for the current year Extracts from the Chairman's Statement: Assets The first half of our year has started well and it is pleasing to be able to report an increase in both the net asset value and share price. Equity markets have continued to rise, although the key driving force appears to be takeover activity rather than earnings growth. Only Japan has really disappointed in the period, while the best regions to invest in were the Far East and mainland Europe. Overall our net asset value per share rose by 9.2% during the period compared to a rise of 6.9% for the FTSE All-Share Index. Importantly the out-performance of the overall portfolio is being driven by both asset allocation, being the exposure to each region, and our selection of stocks within each region. I am delighted to be able to report that, once again, in the period every one of our regional portfolios out-performed its respective index. The largest part of the portfolio remains invested in the UK, a market that continues to witness very strong bid activity. Despite UK interest rates rising, the yield on longer term debt remains at historically low levels and it is this cheap debt financing, combined with record private equity fund raisings that are driving a wave of mergers and acquisitions. We have resisted reinvesting the proceeds of recent bids back into the UK as the prospects in continental Europe appear better where a far less indebted consumer and lower inflationary pressures should lead to a more stable background for investing. The one dark cloud is the value of the euro against other major currencies; its recent strength, however, does not seem to be denting Europe's competitiveness in world markets. The most buoyant equity market has been China, closely followed by the other Far Eastern stock markets. There seems little to stop China's inexorable economic growth ahead of its hosting the next Olympic Games, while the wider region is still benefiting from export growth to Europe and the US. Share prices have been boosted by very robust local investor demand as opposed to overseas buyers; in China over 300,000 new share-dealing accounts are opened daily and the total now exceeds 100 million. Such flows of money are supporting huge new fund raisings by Chinese companies and the risk of a bubble in share prices is rising rapidly. This market is still reliant on continuing growth in Western markets and even a modest slowdown may present significant difficulties. For these reasons our exposure to the Chinese market is limited to 0.19%. - MORE - Page 2 of 11 THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2007 A short lived market setback in late February now seems long forgotten, its cause initially blamed on a fall in Chinese share prices. It did, however, cause a sharp strengthening in the Japanese yen and highlighted the value of the Japanese currency and stock market. Subsequent economic data from Japan has remained mixed but most consumer related measures are still in a positive trend and we remain confident that value will eventually be proved. By contrast, in the US most measures of the health of the consumer are negative, with house prices falling and job creation slowing. The stock market seems to be shrugging off these concerns, buoyed principally by overseas operations producing record profits and a stabilisation in the value of the US dollar. Revenue Return and Dividends Dividends paid by the companies we invest in continue to show good increases. The stable period of economic growth we are experiencing is enabling many companies to improve profits, which in turn is leading to better distributions to shareholders. The favourable income outlook is global in its reach, from the Far East to the US, where tax changes are now favouring dividends over share buybacks. We must expect a slow down in dividend growth to come about at some point, as dividends cannot indefinitely rise faster than earnings. However the desire for income by investors is resulting in many more companies across the globe rethinking their distribution strategies and favouring lower dividend cover and hence higher dividends. The revenue return per share was 3.0% lower than last year, at 4.86p per share, largely attributable to the lower gearing position of the Company which had reduced to 2.9% at the end of April 2007 as compared to 4.3% at 31 October 2006. However, the current retained revenues, which are available for distribution, are approximately twice the current annual dividend for the Company. This is a strong position and gives us confidence when reviewing future distributions. Based upon our current estimates we are on target to pay the forecast minimum total dividend per share of 10.06p for the current year, an increase of 6.1%. The second interim dividend of 2.52p per ordinary share will be paid on 31 August 2007. Outlook The positive background of economic growth has yet to be tempered by the very real spectre of rising interest rates across every region; even Japan has finally raised its overnight rates for the first time since 1990. The tightening of interest rates is designed to fight inflation, which is rising on the back of higher energy and food prices. Much of the increase could be short lived but so far there is little sign of oil prices falling. Meanwhile an increasing proportion of the food crop is being diverted into bio-fuel projects. It seems hard to imagine that interest rates can ease back in the short term, and in certain areas they may need to increase further. - MORE - Page 3 of 11 THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2007 The economic growth forecasts for the US remain uncertain. On balance, we believe that a further downturn in growth could combine with the fall in house prices to create a negative wealth effect. We are keeping the situation under careful review and any stockmarket shake out could allow us to increase our exposure to US equities. Elsewhere in the world economic growth seems to be above trend and shows no sign of abating. Corporate profits in this context should continue to rise, albeit at a slower pace than in recent years, and will provide a solid backbone to share price valuations. These profits will also underpin further corporate takeovers and mergers which look inevitable given the huge fund raisings by private equity and the desire to invest these assets. It would not be a surprise to see another short term setback in share prices, but the long term prospects look fair and should reward investors with the patience to stay the course. For further information contact: Alex Crooke Richard Brewster Fund Manager Chairman The Bankers Investment Trust PLC The Bankers Investment Trust PLC Telephone: 07939 021208 Telephone: 020 7065 0568 James de Sausmarez Sarah Gibbons-Cook Director of Investment Trusts Investor Relations and PR Manager Henderson Global Investors Henderson Global Investors Telephone: 020 7818 3349 Telephone: 020 7818 3198 - MORE - Page 4 of 11 THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2007 FINANCIAL HIGHLIGHTS (Unaudited) (Audited) 30 April 31 October % 2007 2006 Change Assets Net asset value per ordinary share (with debt at book 483.2p 442.5p +9.2 value) Ordinary share mid-market price 425.0p 385.5p +10.2 Discount (share price to net asset value) 12.0% 12.9% Total assets less current liabilities (£'000) £584,903 £540,363 +8.2 Indices FTSE All-Share Index 3,355.60 3,140.47 +6.9 S&P 500 Composite Index 1,482.40 1,377.94 +2.6 # FTSE World Europe (ex UK) Index (£) 428.30 374.90 +14.2 TOPIX (Tokyo First Section Index) 1,701.00 1,617.42 -1.7 # FTSE World (ex UK) Index (£) 327.00 307.76 +6.3 50/50 FTSE All-Share/ FTSE World Index (ex UK) (£) 213.20 200.00 +6.6 # - £ adjusted (Unaudited) (Unaudited) Half year Half year ended ended 30 April 30 April % 2007 2006 Change Revenue Gross revenue (£'000) £7,213 £7,236 -0.3 Revenue return per ordinary share 4.86p 5.01p -3.0 - MORE - Page 5 of 11 THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2007 CONSOLIDATED INCOME STATEMENT for the half year ended 30 April 2007 (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 30 April 2007 30 April 2006 31 October 2006 Revenue Capital Revenue Capital Revenue Capital return return Total return return Total return return Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Investment income 7,014 - 7,014 7,101 - 7,101 14,713 - 14,713 Other operating income 199 - 199 135 - 135 259 - 259 Gains on investments held at fair value through profit or loss - 50,212 50,212 - 86,822 86,822 - 89,095 89,095 --------- --------- --------- --------- --------- --------- --------- --------- ----------- Total income 7,213 50,212 57,425 7,236 86,822 94,058 14,972 89,095 104,067 --------- --------- --------- --------- --------- --------- --------- --------- ----------- Expenses Management fees (546) (294) (840) (370) (328) (698) (929) (498) (1,427) Provision for performance - (2,113) (2,113) - (947) (947) - (959) (959) fee Other expenses (297) - (297) (322) - (322) (632) - (632) --------- --------- --------- --------- --------- --------- --------- --------- ----------- Profit before finance costs and taxation 6,370 47,805 54,175 6,544 85,547 92,091 13,411 87,638 101,049 Finance costs (343) (800) (1,143) (451) (1,052) (1,503) (838) (1,956) (2,794) --------- --------- --------- --------- --------- --------- --------- --------- ----------- Profit before taxation 6,027 47,005 53,032 6,093 84,495 90,588 12,573 85,682 98,255 Taxation (374) 165 (209) (180) - (180) (673) 129 (544) --------- --------- --------- --------- --------- --------- ---------- --------- ----------- Profit for the period 5,653 47,170 52,823 5,913 84,495 90,408 11,900 85,811 97,711 ===== ===== ===== ===== ===== ===== ====== ===== ====== Earnings per ordinary share (note 2) 4.86p 40.56p 45.42p 5.01p 71.53p 76.54p 10.13p 73.04p 83.17p The total columns of this statement represent the Group's Income Statement, prepared in accordance with IFRS. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations. All income is attributable to the equity shareholders of The Bankers Investment Trust PLC. There are no minority interests. - MORE - Page 6 of 11 THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2007 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the half year ended 30 April 2007 Called up Share Capital Other share premium redemption capital Revenue capital account reserve reserves reserve Total Half year ended 30 April 2007 (Unaudited) £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 October 2006 29,115 452 11,095 448,547 26,154 515,363 Buy back of 579,316 ordinary shares (145) - 145 (2,416) - (2,416) Net profit from ordinary activities after - - - 47,170 5,653 52,823 tax Payment of 3rd interim dividend (2.52p) in respect of the year ended 31 October 2006 - - - - (2,935) (2,935) Payment of final dividend (2.52p) in respect of the year ended 31 October 2006 - - - - (2,932) (2,932) ---------- ---------- ---------- ---------- ---------- ---------- Balance at 30 April 2007 28,970 452 11,240 493,301 25,940 559,903 ====== ====== ====== ====== ====== ====== Called up Share Capital Other share premium redemption capital Revenue capital account reserve reserves reserve Total Half year ended 30 April 2006 (Unaudited) £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 October 2005 29,640 452 10,570 370,327 24,634 435,623 Buy back of 854,229 ordinary shares (213) - 213 (3,067) - (3,067) Net profit from ordinary activities after - - - 84,495 5,913 90,408 tax Payment of 3rd interim dividend (1.94p) in respect of the year ended 31 October 2005 - - - - (2,300) (2,300) Payment of final dividend (2.43p) in respect of the year ended 31 October 2005 - - - - (2,872) (2,872) ---------- ---------- ---------- ---------- ---------- ---------- Balance at 30 April 2006 29,427 452 10,783 451,755 25,375 517,792 ====== ====== ====== ====== ====== ====== Called up Share Capital Other share premium redemption capital Revenue capital account reserve reserves reserve Total Year ended 31 October 2006 (Audited) £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 October 2005 29,640 452 10,570 370,327 24,634 435,623 Buy back of 2,100,229 ordinary shares (525) - 525 (7,591) - (7,591) Net profit from ordinary activities after - - - 85,811 11,900 97,711 tax Payment of 3rd interim dividend (1.94p) in respect of the year ended 31 October 2005 - - - - (2,300) (2,300) Payment of final dividend (2.43p) in respect of the year ended 31 October 2005 - - - - (2,872) (2,872) Payment of 1st interim dividend (2.22p) in respect of the year ended 31 October 2006 - - - - (2,617) (2,617) Payment of 2nd interim dividend (2.22p) in respect of the year ended 31 October 2006 - - - - (2,591) (2,591) ---------- ---------- ---------- ---------- ---------- ---------- Balance at 31 October 2006 29,115 452 11,095 448,547 26,154 515,363 ====== ====== ====== ====== ====== ====== - MORE - Page 7 of 11 THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2007 CONSOLIDATED BALANCE SHEET at 30 April 2007 (Unaudited) (Unaudited) (Audited) 30 April 2007 30 April 31 October 2006 2006 £'000 £'000 £'000 Non-current assets Investments held at fair value through profit or loss 576,330 557,049 537,557 ---------- ---------- ---------- Current assets Cash and cash equivalents 7,971 1,243 2,936 Other receivables 4,066 9,896 1,115 ---------- ---------- ---------- 12,037 11,139 4,051 ---------- ---------- ---------- Total assets 588,367 568,188 541,608 ---------- ---------- ---------- Current liabilities Bank loans and overdrafts - (19,323) (13) Other payables (3,464) (4,773) (1,232) ---------- ---------- ---------- (3,464) (24,096) (1,245) ---------- ---------- ---------- Total assets less current liabilities 584,903 544,092 540,363 Non-current liabilities Debenture stocks (25,000) (26,300) (25,000) ---------- ---------- ---------- Net assets 559,903 517,792 515,363 ====== ====== ====== Equity attributable to equity shareholders Called up share capital 28,970 29,427 29,115 Share premium account 452 452 452 Capital redemption reserve 11,240 10,783 11,095 Retained earnings Other capital reserves 493,301 451,755 448,547 Revenue reserve 25,940 25,375 26,154 ---------- ---------- ---------- Total equity 559,903 517,792 515,363 ====== ====== ====== Net asset value per ordinary share (note 3) 483.2p 439.9p 442.5p ====== ====== ====== - MORE - Page 8 of 11 THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2007 CONSOLIDATED CASH FLOW STATEMENT for the half year ended 30 April 2007 (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year 30 April 30 April ended 2007 2006 31 October 2006 £'000 £'000 £'000 Net profit before taxation 53,032 90,588 98,255 Add back interest paid 1,144 1,502 2,819 Less: gains on investments held at fair value through profit or loss (50,212) (86,822) (89,095) Net sales of trading stock - 144 144 (Increase)/decrease in accrued income (2,435) (2,178) 94 (Increase)/decrease in other debtors (71) (101) 24 Increase in other payables 1,994 241 383 Net sales of investments 11,477 3,145 24,793 (Increase)/decrease in sales settlement debtor (409) (6,247) 52 Increase/(decrease) in purchase settlement creditor - 1,995 (1,015) Scrip dividends included in investment income - - (74) ---------- ---------- ---------- Net cash inflow from operating activities before interest and taxation 14,520 2,267 36,380 Interest paid (1,144) (1,502) (2,819) Taxation on investment income (244) (184) (472) ---------- ---------- ---------- Net cash inflow from operating activities 13,132 581 33,089 Financing activities Equity dividends paid (5,867) (5,172) (10,380) Purchase of ordinary shares (2,178) (2,455) (7,643) Drawdown/(repayment) of loans - 5,657 (13,458) Repurchase of debenture stock - - (1,300) ---------- ---------- ---------- Net cash used in financing (8,045) (1,970) (32,781) ---------- ---------- ---------- Increase/(decrease) in cash 5,087 (1,389) 308 Cash and cash equivalents at start of period 2,923 2,594 2,594 Realised (loss)/profit on foreign currency (39) 36 21 ---------- ---------- ---------- Cash and cash equivalents at end of period 7,971 1,241 2,923 ====== ====== ====== - MORE - Page 9 of 11 THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2007 NOTES: 1. Accounting Policies The half year financial statements have been prepared on the basis of the accounting policies set out in the Group's financial statements for the year ended 31 October 2006. 2. Earnings per Ordinary Share The earnings per ordinary share figure is based on the net profit for the half year of £52,823,000 (half year ended 30 April 2006: £90,408,000; year ended 31 October 2006: £97,711,000) and on 116,300,099 (half year ended 30 April 2006: 118,124,635; year ended 31 October 2006: 117,477,166) ordinary shares, being the weighted average number of ordinary shares in issue during the period. The return per share detailed above can be further analysed between revenue and capital, as below. (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 30 April 2007 30 April 2006 31 October 2006 £'000 £'000 £'000 Net revenue profit 5,653 5,913 11,900 Net capital profit 47,170 84,495 85,811 ---------- ---------- ---------- Profit for the period 52,823 90,408 97,711 ====== ====== ====== Weighted average number of ordinary shares in 116,300,099 118,124,635 117,477,166 issue during each period Pence Pence Pence Revenue return per ordinary share 4.86 5.01 10.13 Capital return per ordinary share 40.56 71.53 73.04 ---------- ---------- ---------- Total earnings per ordinary share 45.42 76.54 83.17 ====== ====== ====== 3. Net Asset Value per Ordinary Share The net asset value per ordinary share is based on the net assets attributable to equity shareholders of £559,903,000 (30 April 2006: £517,792,000; 31 October 2006: £515,363,000) and on 115,881,824 (30 April 2006: 117,707,140; 31 October 2006: 116,461,140), being the number of ordinary shares in issue at the period end. 4. Transaction Costs Purchase transaction costs for the half year ended 30 April 2007 were £170,000 (half year ended 30 April 2006: £156,000; year ended 31 October 2006: £317,000). These comprise mainly stamp duty and commissions. Sales transaction costs for the half year ended 30 April 2007 were £120,000 (half year ended 30 April 2006: £128,000; year ended 31 October 2006: £285,000). - MORE - Page 10 of 11 THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2007 5. Interim Dividend The directors have declared a second interim dividend of 2.52p (2006: 2.22p) net per ordinary share, payable on 31 August 2007 to shareholders registered on 27 July 2007. The shares will be quoted ex-dividend on 25 July 2007. A first interim dividend of 2.52p (2006: 2.22p) was paid on 31 May 2007. 6. Comparative Information The financial information contained in this half year report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information for the half years ended 30 April 2007 and 2006 has not been audited. The information for the year ended 31 October 2006 has been extracted from the latest published audited financial statements. The audited financial statements for the year ended 2006 have been filed with the Registrar of Companies. The report of the auditors on those financial statements contained no qualification or statement under section 237(2) or (3) of the Companies Act 1985. 7. Half Year Report The half year report will be posted to shareholders in July and will be available from the Registered Office at 4 Broadgate, London EC2M 2DA thereafter. - MORE - Page 11 of 11 THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2007 LARGEST INVESTMENTS at 30 April 2007 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 24,373 Impala Platinum 4,362 HSBC 15,962 Richemont 4,255 Royal Bank of Scotland 13,240 ICAP 4,240 GlaxoSmithKline 9,013 Mitsubishi UFJ Financial 4,163 Barclays 8,985 Aviva 3,965 Royal Dutch Shell 8,818 Dexia 3,938 Vodafone 8,307 Deutsche Postbank 3,898 Lloyds TSB 7,669 Christian Dior 3,894 British American Tobacco 6,313 Galliford Try 3,889 Rolls-Royce 5,993 BNP Paribas 3,858 Hunting 5,771 Allied Irish Banks 3,805 Tesco 5,689 Shire 3,803 Fresenius 5,448 Scottish & Southern Energy 3,758 Irish Life & Permanent 5,217 Orchid Developments 3,754 Man Group 5,209 BHP Billiton 3,748 BT 5,060 National Grid Transco 3,727 Unibail 4,883 Total 3,717 Codan 4,836 Anglo American 3,710 ENI 4,596 ICG Intermediate Capital 3,599 Kuhne + Nagel 4,595 Nestle 3,577 BG Group 4,571 Cranswick 3,513 Petroleo Brasileiro 4,549 Fisher (J) 3,443 Deutsche Post 4,398 Reckitt Benckiser 3,301 Inditex 4,398 QBE Insurance 3,285 AstraZeneca 4,384 Prudential 3,239 These investments total £276,718,000 which represents 48.0% of the portfolio. GEOGRAPHICAL DISTRIBUTION Currency exposure of operational Valuation of investments assets 30 April 31 October 30 April 31 October 2007 2006 2007 2006 % % % % UK 53.5 55.0 51.1 52.9 Europe 17.6 16.2 18.2 17.0 North America 12.0 11.8 12.8 12.4 Japan 8.1 8.6 8.4 9.0 Pacific (ex Japan) 6.2 6.2 6.8 6.5 Emerging Markets 2.6 2.2 2.7 2.2 100.0 100.0 100.0 100.0 - ENDS - This information is provided by RNS The company news service from the London Stock Exchange

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