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%.
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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.
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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
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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
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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.
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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
====== ====== ====== ====== ====== ======
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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
====== ====== ======
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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
====== ====== ======
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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).
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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.
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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 -
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