Final Results and Dividends

Chairman's statement


Results and Dividends


After a quiet first half of 2004, UK equities moved higher in the second half
to produce another year of good returns.


The total return in net assets of Temple Bar during 2004 was 21.8%, which
compares with a total return of 12.8% for the FTSE All-Share Index.  The
underlying outperformance of the portfolio was amplified by the Trust's capital
gearing, which is maintained at a conservative level. 

 
The Board is recommending an increase in the final dividend of 3.3% to produce
a total increase for the year of 3%, reflecting the positive dividend
announcements made in 2004 by many of the companies in the portfolio.  This
dividend will be payable on 31 March 2005 to those shareholders on the register
as at 18 March 2005.

 
Gross revenue was lower compared with 2003, due mainly to the absence of a
large special dividend received in the prior year.  As a result post-tax
earnings were reduced by 3.8% but still cover the increased dividend.

 
The Board closely monitors the relationship between the price of Temple Bar's
shares and their underlying net asset value and is pleased to note that the
shares have traded close to asset value for much of 2004; at the year end the
shares were trading at a small discount of 0.6%.  The operation of a low cost
Savings Scheme together with general marketing and shareholder support
activities facilitate the maintenance of the discount at an acceptable level. 
The Board recognizes that the market ultimately determines the value of the
Trust's shares and aims to maintain a good dialogue with both current and
potential shareholders and to provide a presentation on the portfolio at the
AGM, with a view to ensuring that the Trust's investment strategies and
potential are widely understood. 

 
Board

 
One of the Trust's directors, John Hudson, will be retiring from the Board at
this year's AGM. John has served on the Board for over a decade during which
time we have benefited greatly from his wise counsel and thoughtful views.  We
wish him well in his other pursuits.  In September 2004 we were delighted to
confirm the appointment to the board of Martin Riley.  He has a wealth of
investment trust knowledge which will be available to the board in the coming
years.  We expect to make a further appointment to the board over the course of
this year.
 

Debt

 
As stated above, the Trust's capital gearing enhanced shareholder returns for
the year.  The board remains comfortable that the £63m of debenture debt is
appropriate in current circumstances.

 
International Financial Reporting Standards (IFRS)

 
This will be the last occasion that our financial statements are prepared on
the basis of UK Generally Accepted Accounting Principles (GAAP).  For the 2005
financial year our accounts will be prepared under the requirements of IFRS in
accordance with the Listing Rules.  The 2005 interim accounts will be prepared
under the IFRS measurement and recognition principles that will apply at the
year end.  The principal differences resulting from this change, based on
current guidance, will be the need to adopt bid price valuations for the
portfolio, which is currently valued on the basis of mid price valuations, and
the requirement not to accrue for any dividends that have not been approved by
shareholders at the balance sheet date.  There will also be some presentational
changes to the primary financial statements.  None of these changes is expected
to have a material impact on Temple Bar.  If the accounts for the year ended 31
December 2004 had been prepared under IFRS the NAV per ordinary share would
have been approximately 688.8p rather than 672.06p as stated.

 
Outlook

 
The last few years have proved to be an excellent environment for investing in
high yielding equities.  The collapse of the technology bubble left many stocks
significantly undervalued and those investors willing to stand apart from the
crowd have had ample opportunity to produce attractive returns. However,
valuation anomalies do not persist indefinitely.  The importance of dividends
as a part of overall returns is now firmly re-established in investors' minds. 
In fact dividend yield seemed to be of pre-eminent importance in 2004.

 
Correspondingly, investing in those companies with superior long-term growth
prospects has become relatively unfashionable and, consequently, the ratings of
these companies have converged with those of higher yielding stocks.

 
Thus, while your Board and the Manager remain strong believers in the long term
value of investing in high yielding out of favour companies, current market
conditions suggest that we are entering a period in which we should be slightly
more cautious in the application of our standard approach.  Accordingly, we
expect to supplement our typical holdings with investments in those companies
with under-appreciated recovery prospects, undervalued growth opportunities or
with assets which are likely to attract interest from competitor companies.  In
addition, we will be prepared to hold a higher than normal level of cash
pending the identification of sufficiently attractive investments.  We are
confident that this approach will generate a number of interesting investment
opportunities in the year ahead.  

  

15 February 2005

John Reeve

 
Twenty largest investments

as at 31 December 2004

                                                                             

                                                                               

Company                         Valuation       % of      
                                                               
                                  £'000      Total assets  
                                                               
                                                               
                                                               
GlaxoSmithKline                  29,217         6.30           
                                                               
Shell                            20,679         4.46           
                                                               
BP                               19,911         4.29           
                                                               
British American Tobacco         17,145         3.69           
                                                               
Vodafone                         14,805         3.19           
                                                               
HSBC                             14,456         3.11           
                                                               
BT                               13,264         2.86           
                                                               
Royal Bank of Scotland           13,136         2.83           
                                                               
Severn Trent                     12,695         2.74           
                                                               
Prudential                       11,632         2.51           
                                                               
Investec UK Smaller                                            
                                                               
  Companies Fund                 10,146         2.19           
                                                               
Legal & General                  9,878          2.13           
                                                               
Rentokil Initial                 9,137          1.97           
                                                               
Unilever                         8,938          1.93           
                                                               
Diageo                           8,771          1.89           
                                                               
Mitchells & Butlers              8,647          1.86           
                                                               
Lloyds TSB                       8,479          1.83           
                                                               
HBOS                             7,918          1.71           
                                                               
Barclays                         7,839          1.69           
                                                               
United Utilities                 7,131          1.54           
                                                               
                               253,824         54.72          
                                                               


  Consolidated Statement of total return (incorporating the revenue account)   
                                  of the group                                  
                      for the year ended 31 December 2004                       

 

                                     2004                       2003           
                                                                               
                                                                               
                                                                               
                            Revenue  Capital  Total   Revenue  Capital  Total  
                                                                               
                            £'000    £'000    £'000    £'000    £'000   £'000  
                                                                               
Gains on investments           -     60,416   60,416     -     56,544   56,544 
                                                                               
Income                       18,760  -        18,760   19,301  -        19,301 
                                                                               
Investment management fee    (684)   (1,026) (1,710)   (584)   (875)   (1,459) 
                                                                               
Other expenses               (402)   -        (402)    (411)   -        (411)  
                                                                               
                                                                               
                                                                               
Net return before finance                                                      
costs and taxation                                                             
                             17,674  59,390   77,064   18,306  55,669   73,975 
                                                                               
Interest payable            (1,823)  (2,736) (4,559)  (1,823)  (2,736) (4,559) 
                                                                               
                                                                               
                                                                               
Return on ordinary                                                             
activities before taxation                                                     
                             15,851  56,654   72,505   16,483  52,933   69,416 
                                                                               
Taxation                       -     -          -        -     -          -    
                                                                               
                                                                               
                                                                               
Return on ordinary                                                             
activities after taxation                                                      
                             15,851  56,654   72,505   16,483  52,933   69,416 
                                                                               
Ordinary dividends          (15,648) -       (15,648) (15,190) -       (15,190)
                                                                               
                                                                               
                                                                               
Transfer to reserves          203    56,654   56,857   1,293   52,933   54,226 
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Return per ordinary share    27.37p  97.83p  125.20p   28.46p  91.41p  119.87p 
                                                                               
                                                                               
                                                                               
Dividends per ordinary       27.02p                    26.23p                  
share                                                                          
                                                                               
                                                                               
                                                                               

 

The revenue column of this statement is the profit and loss account of the
Group.

 

All principal activities of the Group are continuing operations as defined by
Financial Reporting Standard 3.  No operations were acquired or discontinued in
the period.


Consolidated cash flow statement

                                                                               

                             2004                      2003       
                                                                  
                             £'000              £'000             
                                       £'000               £'000  
                                                                  
                                                                  
                                                                  
Net cash inflow from                    16,523             17,643 
operating activities                                              
                                                                  
                                                                  
                                                                  
Return on investments and                                         
servicing of finance                                              
                                                                  
Interest paid                (4,559)            (4,559)           
                                                                  
                                                                  
                                                                  
Net cash outflow from return                                      
on investments and servicing                                      
of finance                             (4,559)            (4,559) 
                                                                  
                                                                  
                                                                  
Capital expenditure and                                           
financial investment                                              
                                                                  
Purchases of investments     (125,049)          (163,564)         
                                                                  
Sales of investments         152,779            151,726           
                                                                  
                                                                  
                                                                  
Net cash inflow/(outflow)                                         
from capital expenditure and                                      
financial investment                    27,730            (11,838)
                                                                  
Equity dividends paid                  (15,312)           (14,940)
                                                                  
                                                                  
                                                                  
Cash inflow/(outflow) before                                      
management of liquid                                              
resources and financing                 24,382            (13,694)
                                                                  
                                                                  
                                                                  
Management of liquid                                              
resources                                                         
                                                                  
Short term money market                                           
deposits (placed)/ withdrawn                                      
                                       (20,993)            11,850 
                                                                  
                                        3,389             (1,844) 
                                                                  
                                                                  
                                                                  
Financing                                                         
                                                                  
Gross proceeds from issue of              -                  49   
shares                                                            
                                                                  
                                                                  
                                                                  
Increase/(decrease) in cash             3,389             (1,795) 
                                                                  
                                                                  
                                                                  
Reconciliation of net cash                                        
flow to movement in net debt                                      
                                                                  
Increase/(decrease) in cash  3,389              (1,795)           
                                                                  
Short term money market                                           
deposits placed/(withdrawn)                                       
                              20,993            (11,850)          
                                                                  
Exchange movements           (179)              -                 
                                                                  
                                                                  
                                                                  
                                                                  
                                                                  
Change in net debt                      24,203            (13,645)
                                                                  
Net debt at 1 January                  (61,722)           (48,077)
                                                                  
                                                                  
                                                                  
Net debt at 31 December                (37,519)           (61,722)
                                                                  


Reconciliation of operating revenue to net cash inflow from operating
activities


                                                                 2004    2003 
                                                                              
                                                                 £'000  £'000 
                                                                              
Return on ordinary activities before finance costs and taxation 17,674  18,306
                                                                              
Scrip dividends                                                  (194)  (235) 
                                                                              
Decrease in accrued income                                       (225)    97  
                                                                              
(Increase)/decrease in debtors                                    29     (25) 
                                                                              
Increase in creditors                                             90      86  
                                                                              
Management fees charged to capital                              (1,026) (875) 
                                                                              
Effective yield adjustment                                        175    289  
                                                                              
                                                                              
                                                                              
Net cash inflow from operating activities                       16,523  17,643
                                                                              


Consolidated balance sheet

 

                                 2004                  2003       
                                                                  
                             £'000              £'000             
                                       £'000              £'000   
                                                                  
Fixed Assets                                                      
                                                                  
Investments                            435,090            402,895 
                                                                  
Current Assets                                                    
                                                                  
Debtors                      3,489              2,874             
                                                                  
Cash at bank                 25,481             1,278             
                                                                  
                             28,970             4,152             
                                                                  
                                                                  
                                                                  
Creditors: amounts falling   11,862             11,706            
due within one year                                               
                                                                  
                                                                  
                                                                  
Net current assets/                    17,108             (7,554) 
(liabilities)                                                     
                                                                  
                                                                  
                                                                  
Total assets less current              452,198            395,341 
liabilities                                                       
                                                                  
                                                                  
                                                                  
Creditors: amounts falling                                        
due after more than one year                                      
                                       63,000             63,000  
                                                                  
                                                                  
                                                                  
Net Assets                             389,198            332,341 
                                                                  
                                                                  
                                                                  
Capital and Reserves                                              
                                                                  
Called up share capital                14,478             14,478  
                                                                  
Share premium account                   2,193              2,193  
                                                                  
Other reserves                                                    
                                                                  
   Capital reserve -                   284,976            266,019 
realised                                                          
                                                                  
   Capital reserve -                   74,608             36,911  
unrealised                                                        
                                                                  
Revenue reserves                       12,943             12,740  
                                                                  
                                                                  
                                                                  
Total shareholders' funds              389,198            332,341 
                                                                  


Dividend
 

The directors will recommend to shareholders at the annual general meeting to
be held on 29 March 2005 that a final dividend of 18.38p per ordinary share be
paid on 31 March 2005 to shareholders on the Register at the close of business
on 18 March 2005.

Net Assets

 

                                     2004      2003   
                                                      
                                   (audited) (audited)
                                                      
                                                      
                                                      
Net asset value per ordinary share  672.06p   573.88p 
  

Notes

 
The figures set out above are derived from the audited consolidated accounts of
Temple Bar Investment Trust Plc and its subsidiaries for the years ended 31
December 2003 and 31 December 2004.  The 2004 accounts will be sent to
shareholders shortly.

The financial information contained in this announcement does not constitute
full accounts within the meaning of section 254 of the Companies Act 1985.  The
2004 accounts, on which the report of the auditors is unqualified, will be
filed with the Registrar of Companies in due course.  The audited accounts for
the year ended 31 December 2003, on which the report of the auditors was
unqualified and did not contain a statement under either Section 237(2) or 237
(3) of the Companies Act 1985, have been filed with the Registrar of Companies.

 
15 February 2005

 

Contact:           Alastair Mundy           Telephone [phone]

                   Investec Investment Management Limited