Half-yearly Report
Half-yearly financial report
for the six months ended 30 June 2009
The total return on the net assets of Temple Bar during the first
half of 2009 was 4.87%, which compares with a total return for the FTSE
All-Share Index of 0.81%. Temple Bar's total assets, after management and
other expenses, including accrued income, but before deducting interest
payments, rose by 5.58%. Post-tax revenue earnings for the year were £11.5m
compared with £11.9m in the equivalent period last year.
The Board has declared an interim dividend of 10.50p, the same
level as last year, payable on 30 September 2009 to shareholders on the
register at 18 September. While investors may be disappointed that the
dividend has not been increased, it is essential to highlight the large number
of dividend cuts made by companies in the last year. The Temple Bar portfolio
inevitably has been affected by this trend, but our manager believed it was
wrong to sell shares simply because they offered reduced, or nil, dividends.
While this had an effect on the revenue account, it was more than made up in
the capital account.
The concentrated nature of the portfolio means that the dividend
payments of our largest holdings, rather than the market in general, will
determine the strength of the revenue account this year. On current forecasts,
the revenue generated by the portfolio during the year, excluding the one-off
benefit of the VAT recovery, will not cover the gross cost of the dividend.
However, any shortfall comfortably can be financed through the use of retained
earnings. Of course, there is no guarantee that the news on dividends
receivable will not deteriorate further from current forecasts, although the
Board continues to be prepared to use retained earnings to supplement the
dividend payable to shareholders. Overall, the Board feels it is prudent to
target an unchanged dividend for 2009.
Temple Bar issued 370,625 shares in this period at a premium to net
asset value following a sustained period in which the shares had traded above
their underlying asset value.
Shareholders may be aware, as mentioned in my previous statements,
that HMRC have conceded defeat over the charging of VAT on investment
management fees. These results reflect the recovery of a sum of £1,856,694
representing the VAT charged on our management fees in the relevant qualifying
periods for which it is permissible to claim. This has been allocated in
accordance with the Company's accounting policies in force at the relevant
times, with £880,497 being credited to capital and £976,197 being credited to
revenue. In due course we will also receive from HMRC an additional payment
representing the simple interest that has arisen on this amount.
At the end of June, the value of cash, near cash and corporate
bonds was approximately equal to the nominal value of the two debentures in
issue. While the cash is earning only minimal interest, it provides
flexibility if rapid investment action is required.
John Reeve
Chairman
21 July 2009
Twenty largest holdings
as at 30 June 2009
Company Valuation % of
£m portfolio
BP 35,681 8.41
Royal Dutch Shell 34,073 8.03
HSBC 33,601 7.92
GlaxoSmithKline 33,047 7.79
Vodafone 29,740 7.01
Unilever 24,983 5.89
AstraZeneca 21,693 5.11
Signet Jewelers 18,093 4.26
Travis Perkins 16,451 3.88
British American Tobacco 11,168 2.63
Paddy Power 9,410 2.22
BT 9,272 2.19
Centrica 7,720 1.82
Charter International 7,254 1.71
Invensys 6,748 1.59
Wolseley 5,672 1.34
Grafton 4,820 1.14
Market Vectors ETF 4,774 1.13
Computacenter 4,694 1.11
Compass 4,178 0.98
323,072 76.16
Consolidated income statement
for the six months ended 30 June 2009
30 June 30 June 31 December
2009 2008 2008
Income Income Income
statement statement statement
(unaudited) (unaudited) (audited)
Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
Notes £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investment income 11,593 - 11,593 13,169 - 13,169 22,923 - 22,923
Other operating income 384 - 384 251 - 251 595 - 595
Total income 11,977 - 11,977 13,420 - 13,420 23,518 - 23,518
Gains/(losses)on
investments
Gains/(losses) on
fair value through
profit or loss assets - 9,175 9,175 - (94,032) (94,032) - (134,284) (134,284)
11,977 9,175 21,152 13,420 (94,032) (80,612) 23,518 (134,284) (110,766)
Expenses
Management fees (281) (422) (703) (490) (816) (624) (937) (1,561)
Other expenses (255) (133) (388) (326) (570) (801) (449) (1,062) (1,511)
VAT recoverable 976 880 1,856 (231)
Profit before finance
costs and tax
12,417 9,500 21,917 12,863 (95,092) (82,229) 22,445 (136,283) (113,838)
Finance costs (908) (1,363) (2,271) (917) (1,364) (2,281) (1,831) (2,745) (4,576)
Profit before tax 11,509 8,137 19,646 11,946 (96,456) (84,510) 20,614 (139,028) (118,414)
Tax - - - - - - - - -
Profit for the period 11,509 8,137 19,646 11,946 (96,456) (84,510) 20,614 (139,028) (118,414)
Earnings per share
(basic and diluted)
19.61p 13.87p 33.48p 20.48p (165.33)p (144.85)p 35.33p (238.27)p (202.94)p
An interim dividend of 10.50 pence per share (£6,191,000) in
respect of the six months ended 30 June 2009 was declared on 21 July 2009 and
is payable on 30 September 2009. An interim dividend of 10.50 pence per share
(£6,126,000) in respect of the six months ended 30 June 2008 was declared on
22 July 2008 and was paid on 30 September 2008. A final dividend of 22.34
pence per share (£13,172,000) in respect of the year ended 31 December 2008
was declared on 20 February 2009 and was paid on 31 March 2009. The total
column of this statement represents the Group's Income Statement, prepared in
accordance with IFRS. The supplementary revenue return and capital return
columns are both 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 holders of the parent
company. There are no minority interests.
Consolidated cash flow statement
for the six months ended 30 June 2009
30 June 2009 30 June 31 December
(unaudited) 2008 2008
£'000 (unaudited) (audited)
£'000 £'000
CASH FLOWS FROM OPERATING
ACTIVITIES
Profit/(loss) before tax 19,646 (84,510) (118,414)
Adjustments for:
Purchases of investments ¹ (137,225) (80,925) (184,030)
Sales of investments ¹ 126,505 99,107 199,855
(10,720) 18,182 15,825
(Gains)/losses on investments (9,175) 94,032 134,284
Financing costs 2,271 2,281 4,576
Operating cash flows before
movements in working capital
2,022 29,985 36,271
Decrease in accrued income
and prepayments
(552) (748) -
Decrease/(increase) in 1,001 19 (1,251)
receivables
Decrease/(increase) in - (2,256) (2,619)
payables
NET CASH FLOW FROM OPERATING
ACTIVITIES BEFORE AND AFTER
INCOME TAX
2,471 27,000 32,401
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of new 2,067 - 1,512
shares
Interest paid on borrowings (2,261) (2,273) (4,558)
Bank interest paid - - (2)
Equity dividends paid (13,171) (12,292) (18,418)
NET CASH USED IN FINANCING
ACTIVITIES
(13,365) (14,565) (21,466)
NET (DECREASE)/ INCREASE IN
CASH AND CASH EQUIVALENTS
(10,894) 12,435 10,935
Cash and cash equivalents at 3,412
the start of the period
14,347 3,412
Cash and cash equivalents at
the end of the period
3,453 15,847 14,347
¹ Purchases and sales of investments are considered to be operating activities
of the Company, given its purpose, rather than investing activities.
Consolidated balance sheet as at 30 June 2009
30 June 2009 30 June 31 December
(unaudited) 2008 2008
£'000 (unaudited) (audited)
£'000 £'000
NON-CURRENT ASSETS
Investments held at fair
value through profit or
loss 424,340 442,356 404,467
CURRENT ASSETS
Cash and cash equivalents 3,453 15,847 14,347
Other receivables 3,610 3,538 4,059
7,063 19,385 18,406
TOTAL ASSETS 431,403 461,741 422,873
CURRENT LIABILITIES
Other payables (464) (828) (465)
TOTAL ASSETS LESS CURRENT 430,939 460,913 422,408
LIABILITIES
NON-CURRENT LIABILITIES
Interest bearing (63,377) (63,374) (63,388)
borrowings
NET ASSETS 367,562 397,539 359,020
EQUITY ATTRIBUTABLE TO
EQUITY HOLDERS
Ordinary share capital 14,740 14,585 14,647
Share premium 8,424 5,083 6,533
Capital reserves 315,850 350,286 307,713
Retained earnings 28,548 27,585 30,127
TOTAL EQUITY 367,562 397,539 359,020
NET ASSET VALUE PER SHARE 623.40p 681.41p 612.76p
Consolidated statement of changes in equity
for the six months ended 30 June 2009
Ordinary Share
premium
share Capital Retained Total
capital account reserve earnings equity
£'000 £'000 £'000 £'000 £'000
BALANCE AT 1 JANUARY
2009
14,647 6,533 307,713 30,127 359,020
Profit for the - - 8,137 11,509 19,646
period
14,647 6,533 315,850 41,636 378,666
Dividend (transfer
from share premium
in respect of 2008
final dividend)
- (83) - 83 -
Dividends paid to
equity shareholders
- - - (13,171) (13,171)
Issue of share 93 1,974 - - 2,067
capital
BALANCE AT 30 JUNE 14,740 8,424 315,850 28,548 367,562
2009
Consolidated statement of changes in equity
for the six months ended 30 June 2008
Ordinary Share
premium
share Capital Retained Total
capital account reserve earnings equity
£'000 £'000 £'000 £'000 £'000
BALANCE AT 1 JANUARY
2008
14,585 5,083 446,741 27,931 494,340
Profit for the - - (96,455) 11,946 (84,509)
period
14,585 5,083 350,286 39,877 409,831
Dividends paid to
equity shareholders
- - - (12,292) (12,292)
Issue of share - - - - -
capital
BALANCE AT 30 JUNE 14,585 5,083 350,286 27,585 397,539
2008
Responsibility Statement
The Directors confirm to the best of their knowledge that:
- The condensed set of financial statements contained within the
half-year report has been prepared in accordance with the Accounting Standards
Board's Statement `Half-Yearly Financial Reports';
- The half yearly financial report, which incorporates the interim
management report, includes a fair review of the information required by
Disclosure and Transparency Rule 4.2.7R of important events that have occurred
during the first six months of the financial year, and their impact on the
condensed set of financial statements, and a description of the principal
risks and uncertainties for the remaining six months of the financial year;
and
- In accordance with Disclosure and Transparency Rule 4.2.8R there
have been no related parties transactions during the six months to 30 June
2009 and therefore nothing to report on any material effect by such a
transaction on the financial position or performance of the Company during
that period.
The half-yearly financial report was approved by the Board on 21 July 2009 and
the above responsibility statement was signed on its behalf by:
John Reeve
Chairman
NOTES
1. Comparative figures
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 six months ended 30 June 2009 and
30 June 2008 has not been audited.
The information for the year ended 31 December 2008 does not
constitute statutory accounts, but has been extracted from the latest
published audited accounts, which have been filed with the Registrar of
Companies. The report of the auditors on those accounts contained no
qualification or statement under section 237(2) or (3) of the Companies Act
1985.
2. Publication
This half-year report is being send to shareholders and copies
will be made available to the public at the registered office of the Company.
For further information please contact:
Alastair Mundy
Investec Investment Management Limited 020 7597 2000
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