Ann: FLLYR: BIT: Final Results

• Release Date: 20/01/15 08:30
• Summary: FLLYR: BIT: Final Results
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					BIT
20/01/2015 08:30
FLLYR
PRICE SENSITIVE
REL: 0830 HRS The Bankers Investment Trust Plc

FLLYR: BIT: Final Results

Page 1 of 18

THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2014

This announcement contains regulated information

Chairman's Statement
- Net asset value increase of 1.5%.
- 48th consecutive year of dividend increase.
- Forecast increase in 2015 dividend of 4.7%.

Performance

In my report to shareholders last year I suggested that after the strong year
in 2013 it might be sensible to be cautious for the prospects for global
equity markets in the year ahead, albeit that many positive factors remained
in place. As the above net asset value return suggests the confidence that I
expressed has not been demonstrably translated into returns for shareholders
despite a strong performance from the North American equity markets.
Elsewhere the majority of global equity market returns, when adjusted for
currency movements, have been negative for a sterling investor.

It is against this generally poor set of returns from global equity markets
that the moderate increase in net asset value must be assessed. Our net asset
value rose by 1.5% compared to a negative 2.3% return for the FTSE All-Share
Index. Our Fund Manager has again been able to navigate the global equity
markets successfully to generate not just a positive sterling return but also
a further increase in the income generated from our portfolio. For this we
must thank the fund management team responsible. Further detail as to
individual geographic market reports can be found in the Fund Manager Reports
section in the Annual Report and financial statements.

Revenue and Dividends

The underlying portfolio has continued to demonstrate healthy revenue growth
helped by a significant increase in the number of special dividends being
paid by companies within our UK equity section. In continuing the policy of
paying out to shareholders substantially all the distributable income,
through the quarterly dividend, the Board is pleased to be able to recommend
a final dividend of 3.8p per share. This increase, if approved by
shareholders, will result in the total pay-out for the year rising to 14.8p,
an increase of 4.7% which compares favourably to the RPI increase over the
same period of 2.3%.

The strength of our revenue reserve is a key element in the Board's approach
to dividend policy. During more 'normal' market conditions we are always
seeking to distribute substantially all of our income for the year in the
knowledge that if we were to experience more difficult market conditions we
would have the ability to pay out of reserves a maintained or increased
dividend. This prudent approach to dividend policy over the years has created
flexibility which, whilst not unique to Bankers, is a key strength of the
Company. Reflecting this confidence the Board feels able to forecast a
dividend per share for the year ahead of not less than 15.5p per share, an
increase of 4.7%.

Share Buy-Back and Management Fee Changes

During the year the shares of the Company have, at times, traded at a premium
to net asset value. This has allowed the Board to issue new shares when there
has been the demand from the market so as to help provide extra liquidity.
The Board recognises that when the shares trade at an attractive discount we
will sanction the manager to repurchase shares at his discretion. We have

Page 2 of 18

THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2014

not, nor do we intend to implement, a formal buy-back policy but I felt it
important to re-iterate our stance on this important aspect of the Investment
Trust structure.

In further discussion with Henderson we have refined our management fee
arrangements as of 1 November 2014. The revised arrangements introduce a
tiering scale of fees when the Company achieves a certain net asset value
milestone. As such the management fee has been agreed as 0.45% of net assets
up to a value of GBP 750m and 0.4% on any net asset value above this
threshold.

Board Changes

Richard Burns is approaching his tenth year on the Board having joined
Bankers in 2005. Richard indicated to me in 2014 that, in deference to best
Corporate Governance policy, he wished to step
down from the Board at the forthcoming AGM. Richard has served the Board and
shareholders impeccably over the years both as a member of the audit
committee and, more recently, as the Senior Independent Director. Richard's
knowledge of global equity markets and his perceptive views of key global
issues will be a loss to the Company. On behalf of the Board and shareholders
I would like to thank Richard for his contribution to the success of the
Company during this period.

When someone of Richard's stature and knowledge leaves a Board it is always
difficult to find a worthy successor. After a thorough review process by the
Board, however, I am delighted that Julian Chillingworth has decided to join
the Board. Julian is the current Chief Investment Officer of Rathbone
Brothers PLC, a leading discretionary private client manager. Julian has had
a long and successful career in the City, primarily on the investment side of
the business, and thus ensures that the professional background of your Board
remains both diverse and applicable to the underlying business of the
Company. Julian's appointment will be subject to shareholder approval at the
forthcoming AGM.

Audit Tender

At the last AGM shareholders gave approval for PricewaterhouseCoopers LLP to
remain as Auditor until another audit firm could be appointed. After a review
undertaken by the Audit Committee, Grant Thornton UK LLP has been appointed
as our new Auditor. I would like to place on record my thanks to
PricewaterhouseCoopers LLP and welcome Grant Thornton as our new Auditor.
This is the first time that we have changed Auditor in our 126 year history.

Regulatory & Alternative Investment Fund Managers Directive ('AIFMD')

In accordance with the AIFMD the Company has appointed Henderson Investment
Funds Limited to act as its Alternative Investment Fund Manager. BNP Paribas
Securities Services has been appointed as the Company's Custodian and
Depositary. The work associated with the implementation of the AIFMD was
completed in due time with the support of Henderson.

Annual General Meeting ("AGM")

The Annual General Meeting will this year be held at 12 noon at Trinity
House, London, EC3N 4DH on 25 February 2015. Full details of the business to
be conducted at the meeting are set out in the Notice of Meeting which will
be sent to shareholders with the Annual Report. Directions and a map showing
the location of the AGM can also be found in the Notice of Meeting. The Board
and I look forward to seeing many of you at this meeting at which Alex Crooke
and his investment team will be making a presentation on their investment
views and how these are being reflected in the composition of the Company's
portfolio. Following the formal business of the meeting light refreshments
will be served.

Page 3 of 18
THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2014
Outlook

The global economic outlook is more polarised than for some time. Strong
growth is being witnessed in both North America and the United Kingdom,
whilst Continental Europe and many emerging markets continue to suffer
downgrades to growth expectations. Japan seems to oscillate on a quarterly
basis between growth and recession. Headwinds of deflation are now apparent
to all central banks, albeit the policy response is far from uniform (if
indeed it is in evidence at all). Corporate profit expectations for 2015 are
slowly being reined in as these competitive pressures create an unhelpful
backdrop for earnings growth. Valuations, even with flat market levels, are
becoming more stretched as corporate profit warnings become more prevalent.

Against this broad macro economic scenario it is difficult for even the most
optimistic of Chairman to be more than cautiously optimistic for the year
ahead. If policy makers do halt the advance of deflation, if the decline in
the oil price does help western economic growth, if China is able to maintain
its current GDP growth rates and if the various elections result in investor
friendly governments then we could witness better markets next year,
especially in the second half. The problem remains that there are a lot of
'ifs'. Patience and careful stock consideration will again be a key requisite
for outperformance in the year ahead.

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 meeting 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 various indices 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
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.  Any such breaches
could also lead to financial or reputational damage. The Company must also
ensure compliance with the listing rules of the New Zealand Stock Exchange.
Henderson has contracted to provide investment, company secretarial,
administration and accounting services through qualified professionals. The
Board receives internal control reports produced by Henderson 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 financial statements.

Page 4 of 18

THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2014

- Operational
Disruption to, or failure of, Henderson 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 Hendersn 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.

Related Party Transactions

The Company's current related parties are its Directors and Henderson.There
have been no material transactions between the Company and its Directors
during the year and the only amounts paid to them were in respect of
Directors' remuneration for which there were no outstanding amounts payable
at the year end. In relation to the provision of services by Henderson, other
than fees payable by the Company in the ordinary course of business and the
provision of marketing services, there have been no material transactions
with Henderson affecting the financial position of the Company during the
year under review.

Statement of Directors' Responsibilities under DTR 4.1.12

Each of the Directors confirms that, to the best of his or her knowledge:

- the Company 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 Company; and

- the Strategic Report in this Annual Report and financial statements
includes a fair review of the development and performance of the business and
the position of the Company, together with a description of the principal
risks and uncertainties that it faces.

For and on behalf of the Board of Directors

Richard Killingbeck
Chairman

For further information contact:

Alex Crooke
Fund Manager
The Bankers Investment Trust PLC
Telephone: 020 7818 4447

Richard Killingbeck
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

(Please see attachment for the full report)
End CA:00259866 For:BIT    Type:FLLYR      Time:2015-01-20 08:30:54