Annual Financial Report

RNS Number : 5591V
Bankers Investment Trust PLC
13 January 2012
 



Page 1 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

This announcement contains regulated information

 

MANAGEMENT REPORT

Extracts from the Chairman's Statement:

 

Chairman's Statement

I am pleased to report that the Company out performed its benchmark by 1% whilst retaining its prudent and diversified investment policy. The combination of a focus on quality companies and those that have solid dividend yields has allowed us to protect shareholders' investments in what have been very difficult markets during 2011. Despite these markets the total return has increased by 1.5% and supported a dividend increase of 5% whilst net assets remained broadly stable over the year. This performance was against a backdrop of economic stagnation and political inaction where markets fell by 9% in Europe and 5% in Asia.

 

Performance and Markets

It is frustrating that many of the key challenges to global economic growth that I highlighted in my outlook last year have not been addressed by policy makers and, in certain cases, their inaction has created deeper and more serious issues.  Sustainable policies for job creation, rebuilding consumer confidence and encouraging companies to invest have been undermined by a lack of political courage and leadership.  European politicians have made little progress over the year to solve the Euro region's sovereign debt crisis and the lack of a consensus on the solution has affected investment markets, both in fixed interest bonds and equities.  As the crisis spread to countries such as Italy and Spain, equity investors took flight and share prices fell heavily through the second half of our year, with a brief and short lived rally in October.  For the full year the net asset value total return was 1.5%, compared to 0.5% for the composite benchmark index.

 

Our outperformance of the benchmark index was due to good stock selection, where our underlying regional portfolios in the UK, US, Europe and Japan all outperformed their respective local indices.  This justifies our Managers' value based stock picking investment style and they are to be congratulated.  The performance in Japan and Europe was particularly strong, based on purchasing companies with global footprints and well positioned products or services but also careful avoidance of both financials and cyclicals.  Our geographic asset allocation has not been as successful principally due to our underweight position in the US, although a strategic re-positioning over the year did partially offset this.  We increased our investment in America earlier in the year and in Japan following the earthquake in March.  Our overweight position in Asia, which I am confident is correct for the long term, has, in the short term, had an adverse affect on performance, as the region suffered an economic slowdown due to policies enacted in China to control inflation.

 

The year end net gearing position of 3% was roughly the same as at the end of last year but we did increase exposure to equities earlier in the year by drawing down on the bank facility and switching our remaining bonds into equities.  Both these activities enhanced performance up to the April half year, when the net asset value per share had risen by 8.5%.  However markets suffered a sharp setback in the second half and during October we made a number of sales to bring gearing down in order to take advantage of possible buying opportunities in the year ahead.

 

 

 

 

 

 

 

Page 2 of 17

 

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

The stubborn nature of inflation is becoming apparent in all major markets.  Demand from emerging economies for raw materials, energy and foods is driving prices higher despite weak demand in western markets.  Price rises are limiting discretionary spending by consumers and compounding  weak demand caused by high unemployment and the lack of investment spending by companies.  These effects are most apparent in the UK, where the Bank of England has adopted further quantitative easing, effectively printing money, to stimulate activity.  Our stock selection in the UK has mostly avoided banks, which are still reducing lending, and consumer related stocks affected by weak demand. The most rewarding investments have been utilities and telecoms, sectors with limited growth but scope to increase margins and generous dividend distributions.

 

Europe has been affected by fears that the harsh budget cuts and austerity measures being enacted in Greece, Portugal, Spain, Italy and Ireland may lead to a fracturing of Europe and certain countries leaving the Euro. We have selected Northern European countries and those sectors with growth or export led opportunities. Investments in Scandinavia, Germany and Switzerland have performed markedly better than those in the south, although even they have suffered a significant de-rating in valuation terms as earnings growth has not been rewarded by share price appreciation.

 

In North America, we have consolidated the portfolio and performance has beaten all other regions, with a total return of 8.2%.  We increased the North American exposure to 20% of the portfolio, as we believe the region has the best prospect of pulling out of the stagnation affecting other economies.  There are promising signs of recovering retail sales, improving new housing starts and increasing manufacturing activity.  We have focused on medium sized companies with innovative products or services.  The natural optimism and entrepreneurial spirit of Americans combined with the corporate sector beginning to invest seem to be pulling the US economy forward despite the inability of politicians to agree key policies such as raising the debt ceiling.  The petty squabbling of politicians in the US has not helped progress and voters may show their displeasure in the coming elections.

 

The Japanese people have suffered greatly this year, with the devastating earthquake and resulting tsunami threatening the safety of a large part of the population, through the flooding of a nuclear power plant.  The Japanese have always shown a resilience and strong spirit to rebuild and, in our opinion, markets overreacted immediately after the quake. We increased investment at that time, focusing on infrastructure spending and domestically orientated businesses.  The recovery has been impressive, although share prices have not responded so quickly, with the majority of returns being generated by the appreciation of the yen.  We remain optimistic about the country and the wider Asian region.   Many of the global problems involving high levels of debt and under capitalised banks are not issues for the Asian countries.  We believe markets will respond positively when China signals that it has finished tightening economic policy to stem inflationary pressures. 

 

Revenue and Dividends

The positive outlook for dividends that I alluded to last year has gained strength during 2011. The de-leveraging of balance sheets and low payout ratios have prompted companies to increase  dividends at a greater pace than the growth in earnings.  Managements have sought to reassure shareholders of the sound nature of their businesses by increasing distributions, and in some cases, paying special dividends or indicating that these will be paid in coming years. Our Company's substantial revenue reserves which we have built up over the years and are now equivalent to two years' dividends which continues to allow us to strategically re-position the portfolio whilst maintaining our progressive dividend policy. The revenue for the full year  has reduced marginally

due to  the sale of our remaining bonds with higher yields than equities and the decision to increase

 

Page 3 of 17

 

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

exposure to lower yielding regions like the US and Japan at the expense of higher yielding regions such as  the UK and Asia. This asset re-allocation has already added value this year and a greater exposure to equities should enhance returns in the years ahead.

 

We are recommending a final dividend of 3.175p, making a total of 12.7p, an increase of 5% for the year, building on our long term commitment to growing dividends. We are proud of our record of having done this for the last 45 years. Looking to 2012, the year has started well, with a substantial special dividend of £270,000 from Vodafone, and we are forecasting a dividend per share for 2012 of not less than 13.2p, an increase of 4%.

 

Annual General Meeting

The Annual General Meeting this year will be held at the Stationers' Hall, Ave Maria Lane, EC4M 7DD on Thursday 23 February 2012 at 12  noon. 

 

Outlook

Sentiment for the future is at an extremely low level and while it may seem odd to make a virtue out of such a depressing position, it would take a very little good news to motivate marginal buyers of  equities.  Where might good news come from?  China could, for instance, cut interest rates or signal an increase in lending activity as the inflationary pressures in the economy are clearly easing.  The US economy could surprise on the upside, especially if house prices stop falling.  After falls of 40% or more, house prices are at affordability levels not seen for a generation and an increase in residential building and housing activity would stimulate broad swathes of the US economy.

 

Europe remains the region with the most troubled outlook.  I see only two paths. Either certain indebted countries need to leave the Euro or the European Central Bank needs to step in and print money, allowing banks to recapitalise. Unfortunately, both options are costly and the pain will not be shared equally. Ultimately markets will force a resolution by closing bond markets or creating a crisis for banks. It must be pointed out that much of this is already reflected in share prices and any resolution could well create a rally in asset prices based on sheer relief.

 

While the outlook remains uncertain in the short term, equity shares have de-rated over the past year as increased earnings and dividends have been overlooked. It may be that some economies contract over the coming year but a fall in corporate earnings would still result in many sound companies trading on yields over 5% and single figure P/E's. Valuations are the key to future returns and whilst we maintain a cautious stance, we have faith that our portfolio will reward patient investors over the coming years.

 

 

 

 

 

 



Page 4 of 17

 

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

Principal Risks and Uncertainties

The Board has drawn up a matrix of risks facing the Company and has put in place a schedule of investment limits and restrictions, appropriate to the Company's investment objectives and policy, in order to mitigate these risks as far as practicable. The principal risks which have been identified and the steps taken by the Board to mitigate these are as follows:

 

• Portfolio and market

Although the Company invests almost entirely in securities that are quoted on recognised markets, share prices may move sharply. The companies in which investments are made may operate unsuccessfully, or fail entirely. A fall in the market value of the Company's portfolio would have an adverse effect on the shareholders' funds. The Board reviews the portfolio each month and mitigates this risk through diversification of investments in the portfolio.

 

• Investment activity and performance

An inappropriate investment strategy (for example, in terms of asset allocation or the level of gearing) may result in underperformance against the Company's benchmark index and the companies in its peer group. The Board monitors investment performance at each Board meeting and regularly reviews the extent of its borrowings.

 

• Tax and regulatory risks

A breach of Section 1158 of the Corporation Taxes Act 2010 could lead to a loss of investment trust status, resulting in capital gains realised within the portfolio being subject to corporation tax. A breach of the UKLA Listing Rules could result in suspension of the Company's shares, while a breach of the Companies Act 2006 could lead to criminal proceedings, or financial or reputational damage. The Company must also ensure compliance with the listing rules of the New Zealand Stock Exchange.  The Manager has contracted to provide investment, company secretarial, administration and accounting services through qualified professionals. The Board receives internal control reports produced by the Manager on a quarterly basis, which confirmed regulatory compliance during the year.

 

• Financial

By its nature as an investment trust, the Company's business activities are exposed to market risk (including market price risk, currency risk and interest rate risk), liquidity risk, and credit and counterparty risk. Details of these risks and how they are managed are contained in the notes in the Annual Report and Financial Statements.

 

• Operational

Disruption to, or failure of, the Manager's accounting, dealing or payment systems or the Custodian's records could prevent the accurate reporting and monitoring of the Company's financial position. The Company is also exposed to the operational risk that one or more of its suppliers may not provide the required level of service.  Details of how the Board monitors the services provided by the Manager and its other suppliers, and the key elements designed to provide effective internal control, are explained further in the internal controls section in the Annual Report and Financial Statements.

 

 

 

 



Page 5 of 17

 

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

 

Related Party Transactions

Investment management, accounting, company secretarial and administration services are provided to the Group by wholly owned subsidiary companies of Henderson Group plc ("Henderson").    This is the only related party arrangement currently in place.  Other than the fees payable by the Company in the ordinary course of business, and the investment in Deutsche Bank Liquidity Fund (formerly the Henderson Liquid Assets Fund), a money market fund, there have been no material transactions with this related party which has affected the financial position or performance of the Company in the financial year. 

 

Statement of Directors' Responsibilities under DTR 4.1.12

Each of the directors confirm that, to the best of their knowledge:

 

• the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

 

• the Report of the Directors includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

 

For and on behalf of the Board of Directors

 

 

 

 

Richard Brewster

Chairman

 

 

 

For further information contact:                                                            

 

 

Alex Crooke

Fund Manager

The Bankers Investment Trust PLC

Telephone: 020 7818 4447

 

Richard Brewster

Chairman

The Bankers Investment Trust PLC

Telephone: 020 7818 4233

James de Sausmarez

Director of Investment Trusts

Henderson Global Investors

Telephone: 020 7818 3349

Sarah Gibbons-Cook

Investor Relations and PR Manager

Henderson Global Investors

Telephone: 020 7818 3198

 

 

 

 

 

 



Page 6 of 17

 

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

 

SUMMARY OF THE YEAR

 


31 October

2011

31 October

2010

Change %


Consolidated Assets





Total assets less current liabilities (£'000)

 

521,331

526,955

-1.1


Net asset value per ordinary share

446.9p

451.9p

-1.1


Ordinary share mid-market price

385.0p

379.9p

+1.3


Discount (Share Price to Net Asset Value)

13.9%

15.9%








Consolidated Revenue





Gross revenue (£'000)

16,431

16,478

-0.3


Revenue earnings per ordinary share

11.98p

12.26p

-2.3


Dividends per ordinary share in respect of the year

 

12.70p

12.10p

+5.0







Total Return





Total return per ordinary share

7.51p

63.39p








Indices (capital return)





FTSE All-Share Index

2,860.86

2,936.15

-2.6


S&P 500 Composite Index

1,253.30

1,183.26

+4.9

#

FTSE All-World Developed Europe (ex UK) Index (£)

 

120.7

137.7

-12.4


TOPIX (Tokyo First Section Index)

764.06

810.91

-5.8

#

FTSE World (ex UK) Index (£)

325.93

333.23

-2.2







Composite Index (capital return)





50/50 FTSE All-Share Index/

    FTSE World (ex UK) Index (£)

 

195.2

200.00*

-2.4







Total Expense Ratio**

0.45%

0.42%



Retail Prices Index

238.00

225.80

+5.4







 

# £ adjusted

* rebased as at 31 October 2010

** excluding borrowing costs

 

 

 

 

 


Page 7 of 17

 

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

AUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 October 2011

 


Year ended 31 October 2011

Year ended 31 October 2010


 

 

Notes

Revenue Return £'000

Capital Return £'000

 

Total £'000

Revenue Return £'000

Capital Return £'000

 

Total

£'000









(Losses)/gains on investments held at fair value through profit or loss

 

 

 

-

 

(2,786)

 

(2,786)

 

-

 

59,081

 

59,081

Investment income

2

15,988

-

15,988

16,108

-

16,108

Other operating income

3

443

-

443

370

-

370



---------

---------

---------

---------

------------

---------

Total income/ (Loss)


16,431

(2,786)

13,645

16,478

59,081

75,559



---------

---------

---------

---------

------------

---------

Expenses








Management fees

4

(979)

(528)

(1,507)

(862)

(464)

(1,326)

Other expenses


(738)

-

(738)

(655)

-

(655)



---------

------------

---------

---------

------------

---------

Profit/(loss) before finance costs and taxation


 

14,714

 

(3,314)

 

11,400

 

14,961

 

58,617

 

73,578









Finance costs


(706)

(1,647)

(2,353)

(684)

(1,596)

(2,280)



---------

------------

---------

---------

------------

---------

Profit/(loss) before taxation


14,008

(4,961)

9,047

14,277

57,021

71,298









Taxation

5

(701)

-

(701)

(608)

-

(608)



---------

------------

---------

---------

------------

---------

Profit/(loss) for the year and total comprehensive income


 

13,307

 

(4,961)

 

8,346

 

13,669

 

57,021

 

70,690



=====

=======

======

=====

=======

======

Earnings/(loss) per ordinary share

6

11.98p

(4.47p)

7.51p

12.26p

51.13p

63.39p

 

 

The total column of this statement represents the Consolidated Statement of Comprehensive Income, prepared in accordance with IFRS as adopted by the European Union.  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 non-controlling interests.

 

As permitted by the Companies Act 2006, the Company has not presented its own Statement of Comprehensive Income.  The net profit of the Company for the year was £8,346,000 (2010: £70,690,000). 

 

The Group does not have any other comprehensive income hence the net profit for the year as above is the same as the Group's total comprehensive income.

 

 

 


Page 8 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

AUDITED CONSOLIDATED AND PARENT COMPANY STATEMENT OF CHANGES IN EQUITY for the year ended 31 October 2011

 

 

 

 

Company year ended

31 October 2011

 Called up

share capital

£'000

 Share premium

account

£'000

Capital  redemption

reserve

£'000

Other capital

reserves

£'000

 

 Revenue reserve

£'000

 

 

Total

£'000

Total equity at 31 October 2010

27,772

452

12,438

431,271

30,022

501,955

Total comprehensive income:







(Loss)/profit for the year

-

-

-

(4,759)

13,105

8,346

Transactions with owners, recorded directly to equity:







Buy back of 34,000 ordinary shares

(9)

-

9

(140)

-

(140)

Ordinary dividends paid

-

-

-

-

(13,830)

(13,830)


----------

----------

----------

----------

----------

----------

Total equity at 31 October 2011

27,763

452

12,447

426,372

29,297

496,331


======

======

======

======

======

======

 

 

 

Company year ended

31 October 2010

 Called up

share capital

£'000

 Share premium

account

£'000

Capital  redemption

reserve

£'000

Other capital

reserves

£'000

 

 Revenue reserve

£'000

 

 

Total

£'000

Total equity at 31 October 2009

28,062

452

12,148

378,368

29,833

448,863

Total comprehensive income:







Profit for the year

-

-

-

57,100

13,590

70,690

Transactions with owners, recorded directly to equity:







Buy back of 1,160,211 ordinary shares

(290)

-

290

(4,197)

-

(4,197)

Ordinary dividends paid

-

-

-

-

(13,401)

(13,401)


----------

----------

----------

----------

----------

----------

Total equity at 31 October 2010

27,772

452

12,438

431,271

30,022

501,955


======

======

======

======

======

======


Page 9 of 17

 

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

 

AUDITED CONSOLIDATED AND PARENT COMPANY BALANCE SHEETS

at 31 October 2011

 


Consolidated

2011

£'000

Consolidated

2010

£'000

Company

2011

£'000

 Company

2010

£'000






Non-current assets





Investments held at fair value through profit or loss

512,257

522,112

513,444

523,097


----------

----------

----------

----------






Current assets





Investments held at fair value through profit or loss

3,650

6,949

3,650

6,300

Other receivables

2,628

3,831

2,809

7,949

Cash and cash equivalents

6,360

8,910

4,992

3,845


----------

----------

----------

----------


12,638

19,690

11,451

18,094


----------

----------

----------

----------

Total assets

524,895

541,802

524,895

541,191


----------

----------

----------

----------

Current liabilities





Other payables

(3,564)

(14,847)

(3,564)

(14,236)


----------

----------

----------

----------

Total assets less current liabilities

521,331

526,955

521,331

526,955






Non-current liabilities





Debenture stocks

(25,000)

(25,000)

(25,000)

(25,000)


----------

----------

----------

----------

Net assets

496,331

501,955

496,331

501,955


======

======

======

======






Equity attributable to equity shareholders





Called up share capital

27,763

27,772

27,763

27,772

Share premium account

452

452

452

452

Capital redemption reserve

12,447

12,438

12,447

12,438

Retained earnings:





  Other capital reserves

425,185

430,286

426,372

431,271

  Revenue reserve

30,484

31,007

29,297

30,022


----------

----------

----------

----------

Total equity

496,331

501,955

496,331

501,955


======

======

======

======

Net asset value per Ordinary share (pence) 
(Note 8)

446.9p

451.9p

446.9p

451.9p


======

======

======

======






 

 

 

 



Page 10 of 17

 

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

AUDITED CONSOLIDATED AND PARENT COMPANY CASH FLOW STATEMENTS

for the year ended 31 October 2011

 

 

Reconciliation of operating revenue to net cash flow from operating activities

Consolidated

2011

£'000 

Company

2011

£'000

Consolidated

2010

£'000 

Company

2010

£'000






Net profit before tax

9,047

9,047

71,298

71,298

Add interest payable ("finance costs")

2,353

2,353

2,280

2,280

Add/(less): loss/(gains) on investments held at fair value through profit or loss

 

2,786

 

2,521

 

(59,081)

 

(59,180)

Decrease in accrued income

383

383

570

570

Increase in other debtors

(7)

(7)

(2)

(2)

Increase in other creditors and accruals

23

23

162

162

Purchases of investments

(114,549)

(114,549)

(119,885)

(119,885)

Sales of investments

121,530

121,530

110,009

110,009

Amounts received/(paid) from/(to) subsidiary undertaking

 

-

 

4,000

 

-

 

(5,000)

Purchases of current asset investments

(35,682)

(34,975)

(47,002)

(46,010)

Sales of current asset investments

39,242

37,625

53,652

53,210

Decrease/(increase) in amounts due from brokers

767

767

(2,096)

(2,096)

(Decrease)/increase in amounts due to brokers

(7,285)

(6,674)

9,869

9,258

Dealing profits

(261)

-

(99)

-


----------

----------

----------

----------






Net cash inflow from operating activities before interest and taxation

 

18,347

 

22,044

 

19,675

 

14,614

Interest paid

(2,374)

(2,374)

(2,259)

(2,259)

Taxation on investment income

(641)

(641)

(704)

(704)


----------

----------

----------

----------

Net cash inflow from operating activities

15,332

19,029

16,712

11,651






Financing activities





Equity dividends paid

(13,830)

(13,830)

(13,401)

(13,401)

Purchase of ordinary shares

(140)

(140)

(4,197)

(4,197)

(Repayment)/drawdown of loan

(4,000)

(4,000)

4,000

4,000


----------

----------

----------

----------

Net cash outflow from financing activities

(17,970)

(17,970)

(13,598)

(13,598)


----------

----------

----------

----------






(Decrease)/increase in cash

(2,638)

1,059

3,114

(1,947)

Cash and cash equivalents at start of the year

8,910

3,845

5,989

5,985

Exchange movements

88

88

(193)

(193)


----------

----------

----------

----------

Cash and cash equivalents at end of the year

6,360

4,992

8,910

3,845


======

======

======

======

 

 

 



Page 11 of 17

 

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

NOTES:

 

1.

Accounting policies


The consolidated and parent company financial statements for the year ended 31 October 2011 have been prepared in accordance with the International Financial Reporting Standards ("IFRSs") as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRSs.  IFRSs comprise standards and interpretations approved by the International Accounting Standards Board ("IASB"), together with interpretations of the International Accounting Standards and Standing Interpretations Committee approved by the International Accounting Standards Committee ("IASC") that remain in effect, to the extent that IFRSs have been adopted by the European Union.

 

The financial statements have been prepared on a going concern basis and on the historical cost basis, except for the revaluation of certain financial instruments.  The principal accounting policies are set out in the audited accounts.  Where presentational guidance set out in the Statement of Recommended Practice ("the SORP") for investment trusts issued by the Association of Investment Companies ("the AIC") in January 2009 is consistent with the requirements of IFRSs, the directors have sought to prepare the financial statements on a basis consistent with the recommendations of the SORP.

 



2011

2010

2.

Investment income

£'000

£'000


UK dividend income  - listed

7,506

7,661


Overseas dividend income - listed

8,268

7,516


Property income distributions

125

99


Income from fixed interest securities

89

832



--------

--------



15,988

16,108



=====

=====


Analysis of investment income by geographical region:




UK

8,459

9,475


Europe (ex UK)

2,351

1,523


North America

1,433

1,203


Japan

971

1,057


Pacific (ex Japan)

2,367

2,423


Emerging Markets

407

427



---------

---------



15,988

16,108



=====

=====

 

 

 



Page 12 of 17

 

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 



2011

2010

3.

Other operating income

£'000

£'000


Bank interest

15

4


Stock lending revenue

167

107


Underwriting commission

-

160


Dealing profits from subsidiary

261

99



--------

--------



443

370



=====

=====

 


At 31 October 2011 the total value of securities on loan by the Group for stock lending purposes was £37,200,000 (2010: £35,227,000).  The maximum aggregate value of securities on loan at any one time during the year ended 31 October 2011 was £45,800,000 (2010: £53,835,000).  The Group's agent holds collateral, which is reviewed on a daily basis, comprising CREST Delivery By Value ("DBVs") and Government Bonds with a market value of 105% of the market value of any securities on loan.

 

 

 

 

4.

 

 

 

Management fees

Revenue Return

2011

£'000

Capital

Return

2011

£'000

 

Total

2011

£'000

Revenue Return

2010

£'000

Capital

Return

2010

£'000

 

Total

2010

£'000


Investment management

226

528

754

199

464

663


Accounting, secretarial and administration

 

753

 

-

 

753

 

663

 

-

 

663



-------

-------

-------

-------

-------

-------



979

528

1,507

862

464

1,326



====

====

====

====

====

====

 

 

 

 

5.

 

 

 

Taxation

Revenue Return

2011

£'000

Capital

Return

2011

£'000

 

Total

2011

£'000

Revenue Return

2010

£'000

Capital

Return

2010

£'000

 

Total

2010

£'000


(a) Analysis of the charge for the year








UK Corporation tax at 26.83% (2010: 28%)

 

-

 

-

 

-

 

-

 

-

 

-


Double taxation relief

-

-

-

-

-

-


Overseas tax reclaimable

(173)

-

(173)

(129)

-

(129)


Tax relief on expenses charged to capital

 

-

 

-

 

-

 

-

 

-

 

-



-------

-------

-------

-------

-------

-------



(173)

-

(173)

(129)

-

(129)


Overseas tax suffered

874

-

874

737

-

737



-------

-------

-------

-------

-------

-------


Taxation

701

-

701

608

-

608



====

====

====

====

====

====

 

 

 



Page 13 of 17

 

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

 


(b) Factors affecting the tax charge for the year

The differences are explained below:

 



Revenue Return

2011

£'000

Capital

Return

2011

£'000

 

Total

2011

£'000

Revenue Return

2010

£'000

Capital

Return

2010

£'000

 

Total

2010

£'000


Profit before taxation

14,008

(4,961)

9,047

14,277

57,021

71,298



--------

-----------

-----------

--------

-----------

-----------


Corporation tax at 26.83% (2010: 28%)

 

3,760

 

(1,332)

 

2,428

 

3,997

 

15,966

 

19,963


Non taxable UK dividends

(1,988)

-

(1,988)

(2,098)

-

(2,098)


Non taxable scrip dividends and other income

 

(2,119)

 

-

 

(2,119)

 

(2,006)

 

-

 

(2,006)


Tax relief on expenses charged to capital

 

-

 

-

 

-

 

112

 

-

 

112


Income taxable in different years

 

-

 

-

 

-

 

(5)

 

-

 

(5)


Overseas withholding tax suffered

 

701

 

-

 

701

 

608

 

-

 

608


Excess management expenses

 

347

 

-

 

347

 

-

 

-

 

-


Capital losses/(gains) not subject to tax

 

-

 

1,332

 

1,332

 

-

 

(15,966)

 

(15,966)



--------

---------

---------

--------

---------

---------



701

-

701

608

-

608



====

=====

=====

====

=====

=====

 


(c) Provision for deferred taxation

No provision for deferred taxation has been made in the current year or in the prior year.  The Company has not provided for deferred tax on capital gains or losses arising on the revaluation or disposal of investments as it is exempt from tax on these items because of its status as an investment trust company.




(d) Factors that may affect future tax charges

The Company has not recognised a deferred tax asset totalling £3,373,000 (2010: £2,706,000) arising as a result of having unutilised non trade loan relationship deficits of £2,639,000 (2010: £2,355,000), excess management expenses of £734,000 (2010: £351,000) and deferred tax liability of £nil (2010: £321,000) on offshore funds.  These expenses will only be utilised if the Group has profits chargeable to corporation tax in the future.

 

 

6.

Earnings per ordinary share


The total earnings per ordinary share is based on the net profits attributable to the ordinary shares of £8,346,000 (2010: £70,690,000) and on 111,072,713 ordinary shares (2010: 111,521,997) being the weighted average number of shares in issue during the year. 

 

The total earnings can be further analysed as follows:

 

 

 

 



Page 14 of 17

 

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

 



2011

2010



£'000

£'000


Revenue earnings

13,307

13,669


Capital (loss)/earnings

(4,961)

57,021



-----------

-----------


Earnings for the year

8,346

70,690



-----------

-----------






Weighted average number of ordinary shares

111,072,713

111,521,997



---------------

---------------






Revenue earnings per ordinary share

11.98p

12.26p


Capital (loss)/earnings per ordinary share

(4.47p)

51.13p



-----------

-----------


Earnings per ordinary share

7.51p

63.39p



=======

=======






The Company does not have any dilutive securities, therefore basic and dilutive earnings are the same.

 

 

7.

 

Called up share capital

2011

£'000

2010

£'000


Allotted, issued and fully paid:




111,051,839 (2010: 111,085,839) ordinary shares of 25p each

27,763

27,772



=====

=====






During the year, 34,000 (2010:  1,160,211) ordinary shares were bought back for cancellation at a cost of £140,000 (2010:  £4,197,000).

 

8.

Net asset value per ordinary share


The net asset value per ordinary share is based on net assets attributable to ordinary shares of £496,331,000 (2010: £501,955,000) and on the 111,051,839 ordinary shares in issue at 31 October 2011 (2010: 111,085,839).  The Company has no securities in issue that could dilute the net asset value per ordinary share.

 

The movements during the year in net assets attributable to the ordinary shares were as follows:

     



£'000


Net assets attributable to ordinary shares at 1 November 2010

501,955


Total net profit on ordinary activities after taxation

8,346


Dividends paid

(13,830)


Buy back of ordinary shares

(140)



------------


Net assets attributable to ordinary shares at 31 October 2011

496,331



=======

 

 



Page 15 of 17

 

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

9.

Going Concern Statement


The directors believe that it is appropriate to continue to adopt the going concern basis in preparing the financial statements as the assets of the Company consist mainly of securities which are readily realisable and, accordingly, it has adequate financial resources to continue in operational existence for the foreseeable future. In reviewing the position as at the date of this report, the Board has considered the "Going Concern and Liquidity Risk: Guidance for Directors of UK Companies 2009", published by the Financial Reporting Council in October 2009.

 

10.

2011 financial information


The figures and financial information for the year ended 31 October 2011 are extracted from the Company's annual financial statements for that period and do not constitute statutory accounts.  The Company's annual financial statements for the year to 31 October 2011 have been audited but have not yet been delivered to the Registrar of Companies.  The auditors' report on the 2011 annual financial statements was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain any statements under section 498 of the Companies Act 2006.



11.

2010 financial information


The figures and financial information for the year ended 31 October 2010 are compiled from an extract of the published accounts for that year and do not constitute statutory accounts.  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 sections 498(2) or 498(3) of the Companies Act 2006.



12.

Dividend


A final dividend of 3.175p per ordinary share will be paid, if approved by shareholders at the AGM, on 28 February 2012 to shareholders on the register on 3 February 2012.   The Company's shares go ex‑dividend on 1 February 2012.



13.

Annual report and financial statements


Copies of the Annual Report and Financial Statements will be posted to shareholders by the end of January 2012 and will be available on the Company's website (www.bankersinvestmenttrust.com) or in hard copy format from the Registered Office, 201 Bishopsgate, London EC2M 3AE. 



14.

Annual General Meeting

The Annual General Meeting will be held on Thursday 23 February 2012 at 12 noon at the Stationers' Hall, Ave Maria Lane, London  EC4M 7DD.

 

 

 

 



Page 16 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

LARGEST INVESTMENTS at 31 October 2011

The 25 largest investments (convertibles and all classes of equity in any one company being treated as one investment) were as follows:

 

 

Rank

 

 

(2010)


Valuation

2010

£'000

 

Purchases

£'000

Sales proceeds

£'000

Appreciation/

(depreciation)

£'000

Valuation

2011

£'000

1

(1)

BP

14,543

-

-

1,202

15,745

2

(2)

Vodafone

11,531

-

-

204

11,735

3

(4)

British American Tobacco

9,687

-

-

1,972

11,659

4

(5)

GlaxoSmithKline

9,426

-

-

1,382

10,808

5

(6)

Royal Dutch Shell

8,993

-

-

1,067

10,060

6

(7)

Catlin

8,336

-

-

1,157

9,493

7

(3)

HSBC

10,299

-

-

(1,653)

8,646

8

(9)

BG

7,658

-

-

888

8,546

9

(13)

Jardine Lloyd Thompson

5,328

-

-

1,157

6,485

10

(12)

National Grid

5,979

-

-

279

6,258

11

(8)

Petroleo Brasileiros

7,674

-

-

(1,650)

6,024

12

(15)

Xstrata

4,898

1,389

-

(746)

5,541

13

(*)

Apple

3,140

420

-

1,126

4,686

14

(*)

Shire

3,236

-

-

1,056

4,292

15

(14)

Aviva

5,012

-

-

(721)

4,291

16

(*)

Amcor

3,800

-

-

468

4,268

17

(19)

Christian Dior

4,331

-

-

(88)

4,243

18

(*)

Anadarko Petroleum

1,579

2,156

-

504

4,239

19

(*)

Taiwan Semiconductor Manufacturing

 

3,648

 

-

 

-

 

535

 

4,183

20

(10)

Rolls-Royce

7,123

-

(3,046)

94

4,171

21

(21)

Kasikornbank

4,220

-

-

(161)

4,059

22

(24)

Petrofac

4,096

-

-

(75)

4,021

23

(*)

Microsoft

2,924

1,104

-

(62)

3,966

24

(*)

Wetherspoon (J.D.)

3,757

-

-

194

3,951

25

(18)

BHP Billiton

4,427

-

-

(492)

3,935




----------

----------

----------

----------

----------




155,645

5,069

(3,046)

7,637

165,305




======

======

======

======

======

These investments total 32.3% of the portfolio.

(*) Not in the top 25 last year.

 

 

 

 

 

 

Page 17 of 17

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2011

 

CHANGES IN INVESTMENTS at 31 October 2011

 


 

 

Valuation

2010

 

 

 

Purchases

 

 

Sales proceeds

 

 

Appreciation/

(depreciation)

 

 

Valuation

2011


£'000

£'000

£'000

£'000

£'000

United Kingdom

242,310

11,790

(21,981)

1,070

233,189

Europe (ex UK)

68,309

6,122

(11,248)

(1,441)

61,742

North America

84,280

64,188

(51,662)

5,334

102,140

Japan

41,479

16,166

(10,432)

1,386

48,599

Pacific (ex Japan)

66,100

15,280

(18,359)

(6,501)

56,520

Emerging Markets

16,052

1,003

(4,460)

(2,626)

9,969

Fixed Interest

3,582

-

(3,388)

(96)

98


-----------

-----------

----------

-----------

-----------

Total

522,112

114,549

(121,530)

(2,874)

512,257


======

======

======

======

======

 

 

- ENDS -

 

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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