- Release Date: 19/01/16 08:30
- Summary: FLLYR: BIT: Final Results
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BIT 19/01/2016 08:30 FLLYR PRICE SENSITIVE REL: 0830 HRS The Bankers Investment Trust Plc FLLYR: BIT: Final Results THE BANKERS INVESTMENT TRUST PLC Annual Financial Report for the year ended 31 October 2015 This announcement contains regulated information Chairman's Statement o Net asset value increase of 5.7% o Dividend increase of 6.8% o 49th consecutive year of dividend increases o Forecast increase in 2016 dividend of at least 4.4% o 20 year ?50m strategic debt issue at an annualised coupon rate of 3.68% Performance I sounded a cautionary tone in my "Outlook" section last year regarding the prospects for stock markets making much progression against a backdrop of growing global macro-economic uncertainty. Despite this uncertainty I am pleased to able to report that our Fund Manager and his team, through a combination of judicious stock selection and asset allocation, have been able to add significant value against virtually every local market index in which Bankers' assets are invested (the only exception being the small asset allocation to emerging markets). This is an excellent result for shareholders and reflects the disciplined focus of the investment team in regard to stock selection and upon medium to longer term investment themes and trends. During the year we have continued to shift our allocation away from the domestic UK equity market and have consequently increased our overseas equity exposure, in particular towards North America and Japan. This deliberate policy shift will continue and I would expect the UK equity market exposure to settle at approximately 30% during the forthcoming year. Overseas markets offer Bankers' an ability to gain greater exposure to higher growth sectors and to global companies within these sectors. As these companies grow their earnings we expect their dividend growth potential to be equal or greater than that to be achieved from our UK equity portfolio. Further detail as to individual market reports can be in the Fund Manager reports section of the Annual Report. Revenue and Dividends Special dividends have continued to help our revenue account this year and this, alongside strong underlying dividend growth across the portfolio, has enabled the Board to recommend a final quarterly dividend of 4.0p per share. If approved by shareholders, this will result in a total dividend payment of 15.8p per share, an increase of 6.8%. This is a pleasing outcome and should be viewed against my forecast last year of an increase of at least 4%. Our earnings per share for the period were 17.22p. Looking to the current year we have some conflicting signals for underlying dividend growth. On the positive is the stock selection approach which the Fund Manager has taken, which emphasises companies that have the ability to grow their dividends over the medium term. On the negative is the potential wider global economic slowdown which has already dampened, and could further dampen, market dividend growth expectations. Despite this mixed backdrop the Board is confident in predicting dividend growth of at least 4.4% for 2016, representing a minimum total dividend for the year of over 16.5p per share. Long Term Debt During the year the Board took the decision to increase structurally the Company's fixed debt. There were two key drivers of this. Namely the historically low level of interest rates which Bankers could lock into and the redemption next year of one of our existing debentures, the ?10 million 10.5% issued at a time when interest rates and inflation were at significantly higher levels than today. We were able to issue 20 year 3.68% ?50m loan notes. This cost approximates to the market dividend yield today. So, when we invest the monies into selected holdings shareholders should be able to benefit from all future dividend growth. At the time of writing some of these funds have been invested but we remain patient in regard to investing the balance. Once fully invested the maximum fixed gearing of the Company would increase to 10%, a level with which your Board remains comfortable. Annual General Meeting ("AGM') The AGM this year will again be held at Trinity House, London, EC3N 4DH on 25 February 2016 at 12 noon. 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 looks forward to seeing many shareholders at this meeting at which Alex Crooke and his investment team will present their investment views and how these are reflected in the portfolio. Following the formal business of the meeting light refreshments will be served. Outlook As for the future, I remain cautious! I continue to see headwinds across the globe from both a political and an economic perspective. Some of these, such as low economic growth, disinflation and falling commodity prices have been with us for many months if not years and new ones will emerge in the year ahead such as the UK's membership of the EU. But what I also continue to observe is that by taking the medium to long term view on companies and major economies one can escape the "noise" and focus on building on the returns that have been achieved by the current investment team and their predecessors. These returns also reflect the power of compounding which should never be underestimated and this can be powerfully demonstrated by our dividend growth record of 92% over the past ten years and our net asset value growth record of 73%. I think you will agree these are impressive figures, especially when you compare them with the ten year return of the Retail Prices Index of 34% and the FTSE All-Share Index return of 30%. So looking ahead over the next year is actually really quite a short time span in the context of what our investment team are trying to achieve and, indeed, the context of the life of Bankers Investment Trust. Markets will rise, and will fall, and they remain unpredictable which in turn has the ability to negatively impact investor sentiment. However, as long as the underlying companies in which we invest are sound and improving, then we should remain optimistic for the long term. As I stated in my report last year and, as has been borne out this year, patience and careful stock selection will again be a key requisite for outperformance in the year ahead. Richard Killingbeck Chairman Principal Risks and Uncertainties The Board, with the assistance of Henderson, has carried out a robust assessment of the principal risks facing the Company including those that would threaten its business model, future performance, solvency or liquidity. 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 objective 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 as far as practicable, and whether the Board considers the impact of such risks has changed over the past year, are as follows: Risk Controls and Mitigation Investment Activity and Performance Risks 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. Portfolio and Market Risks Although the Company invests almost entirely in securities that are listed on recognised markets, share prices may move rapidly. 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 shareholders' funds. The Fund Manager seeks to maintain a diversified portfolio to mitigate against this risk. The Board regularly reviews the portfolio, investment activity and performance. Tax and Regulatory Risks A breach of Section 1158 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 UK Listing Rules could result in suspension of the Company's shares, while a breach of the Companies Act could lead to criminal proceedings. All breaches could result in 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 confirm regulatory compliance. Financial Risks 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. The Company minimises the risk of a counterparty failing to deliver securities or cash by dealing through organisations that have undergone rigorous due diligence by Henderson. The Company has a diversified portfolio which comprises mainly investments in large and medium-sized companies and mitigates the Company's exposure to liquidity risk. Operational Risks Disruption to, or failure of, Henderson's accounting, dealing or payment systems or the Depositary'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 service providers may not provide the required level of service. The Board monitors the services provided by Henderson and its other suppliers and receives reports on the key elements in place to provide effective internal control. The Board considers these risks to have remained unchanged throughout the year under review. Viability Statement The Directors have assessed the viability of the Company over a three year period, taking account of the Company's current position and the potential impact of the principal risks and uncertainties documented in this Strategic Report. The Directors conducted the assessment based on a period of three years because they consider this to be an appropriate period over which they do not expect there to be any significant change in the current principal risks and adequacy of the mitigating controls in place. Also the Directors do not envisage any change in strategy or objectives or any events that would prevent the Company from continuing to operate over that period as the Company's assets are liquid, its commitments are limited and the Company intends to continue to operate as an investment trust. The assessment has considered the impact of the likelihood of the principal risks and uncertainties facing the Company, in particular Investment Activity and Performance, Portfolio and Market and Financial risks, in severe but plausible scenarios, and the effectiveness of any mitigating controls in place. The Directors also took into account the liquidity of the portfolio, the gearing and the income stream from the portfolio in considering the viability of the Company over the next three years and its ability to meet liabilities as they fall due. This included consideration of the duration of the Company's long term borrowings, how the forecast income stream, expenditure and levels of reserves could impact on the Company's ability to pay dividends to shareholders over that period in line with its current dividend policy. Whilst detailed forecasts are only made over a shorter time frame, the nature of the Company's business as an investment trust means that such forecasts are equally valid to be considered over the longer three year period as a means of assessing whether the Company can continue in operation. This included consideration of the duration of the Company's fixed term debt and how a breach of the gearing covenants could impact on the Company's net asset value and share price. Based on their assessment, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the next three year period. Only a substantial financial crisis affecting the global economy could have an impact on this assessment. Related Party Transactions The Company's transactions with related parties in the year were with its Directors and Henderson. There have been no material transactions between the Company and its Directors during the year other than the amounts paid to them 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 sales and marketing services, there have been no 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: o the Company's 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 o the Strategic Report in the 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 Fund Manager's Review To some extent this last year has mirrored the previous year in terms of a lack of sustainable growth, low inflation and dull investment returns. There was the usual bout of enthusiasm at the start of the year but stock markets peaked around April/May and took a turn down in the later summer. All through the recovery from the 2008-9 financial crash, there has been a distinct lack of demand by consumers and corporates, partly a result of a dysfunctional banking sector but also due to high levels of unemployment and a lack of wage growth. The effects of this poor demand profile were shown up in the significant crash in the oil prices and mirrored in other commodities. The oil price fell sharply through the second half of 2014 and was $81 a barrel at the start of our financial year on 1 November 2014 but still nearly halved in value from there, a year later at $47. Ultimately this fall should feed through to greater spending power for consumers around the world but this will take time and stock markets reacted quicker, forcing down prices for oil and commodity stocks. We have had to tread carefully this year avoiding too much exposure to commodities and side stepping a number of profit warnings across many sectors, which generally were caused by the weak growth in the major economies. Our efforts were ultimately rewarded in that all of our major geographic portfolios exceeded their local benchmark indices, (with special mention to the US outperforming by 5.5%, Europe by 7.3% and Japan by 10.1%). Only the Emerging Market sleeve missed its benchmark, underperforming by 7.4% where we had too much exposure to Latin America and were impacted in particular by the fall in currencies. It is worth reviewing the two strategic changes we implemented in the previous year, namely a change of investment style and manager in the US and initial investments in Chinese "A" shares. The US portfolio is undoubtedly now more growth orientated but we believe that the US economy is entering a period of steady recovery and a growth bias should reward us better in terms of returns. The portfolio has a lower dividend yield than the market but should grow more quickly, while the overall valuation in terms of P/E for the US portfolio is below that of the index. In the first full year of performance the portfolio produced a sterling return of 12.7% against 7.2% for the index. We have some exciting investments which are positioned in areas that we expect to exhibit strong growth and should be less exposed to increasing US interest rates. The Chinese portfolio had a very volatile year but still exceeded all our expectations. We started this investment to gain greater exposure to the growth in Chinese consumer spending and because we felt share prices were extremely cheap by historic standards. We didn't think that the market would recover so strongly but prices quickly ran ahead of fundamentals. Even with the setback in the market over the summer, our portfolio produced a return of 51.7% over the year and valuations still look appealing with an attractive dividend yield. We now have roughly 20% cash in the Chinese QFII account and a more cautious mix of stocks compared to a year ago. For a number of years we have been carefully monitoring the cost of long term debt for Investment Companies. The coupons have steadily fallen and this year we decided to move after the coupon on long term borrowings fell below 4%. Our ?10 million 10.5% long term debenture will be repaid in October 2016 and we have prefunded this debenture payment with the issue of ?50 million of 20 year loan notes in May. The 3.68% coupon on these notes will be close to the dividend yield on new investments and should enhance returns for shareholders over time. In the short term we have repaid and cancelled our short term borrowing facility with Commonwealth Bank of Australia as we do not need the funds and this avoids extra costs. In time we can add extra short term borrowings when needed. The new loan notes increase our fully invested gearing position to roughly 10% but, at the year end, we still retained the bulk of the new funds, accepting an element of "cash drag" while awaiting suitable buying opportunities. Net gearing was 2%. All year we have been cautious on Emerging Markets and Asia, reflecting pressures on commodity prices and slowing growth in China. The investment in both areas was reduced, most noticeably in Asia which fell to 11.3% of the portfolio. Extra funds were invested into Europe and Japan. The latter was the best performing of the major regions and there is some good evidence that "Abenomics" is working. Corporate profits have been recovering and valuations are at historically low levels reflecting the market's scepticism. North America now accounts for 25.4% of the portfolio mainly through good performance while the UK allocation continues to be reduced. If all of the available funds were invested outside the UK the allocation would fall to 35%. The UK remains a key market for income generation and produced a larger number of special dividends which boosted our overall income by over ?2m. This has been an exceptional year for specials and is a function of low growth in that companies have limited need to invest new capital. We expect further special dividends in the coming year but not to the same extent. The Company's income was boosted by US dollar currency gains and some of our recent regional allocation movements. A further positive factor in recent years has been an investment focus on companies that have the capacity to increase dividends and this is now generating good returns. Pressure on dividends is undoubtedly rising in the commodity sectors and, while major oil companies will keep their dividends for a time, we will see some stress this year if the price of oil stays below $50 a barrel. We are keeping a cautious eye on markets to judge the right time to invest the cash balances from the loan notes issue and also to protect our investment income. Alex Crooke Fund Manager 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 Investment Funds Limited Telephone: 020 7818 3349 Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Global Investors Limited Telephone: 020 7818 3198 Performance Highlights 31 October 2015 Change since 31 October 2014 Net Asset Value per share 630.2p +5.7% Share price 618.5p +9.9% Total Assets (less current liabilities) ?777.4m +12.1% Dividend for year(1) 15.8p +6.8% Revenue return per share 17.2p +13.9% 31 October 2015 31 October 2014 Dividend yield(2) 2.6% 2.6% Net gearing 2.0% 2.6% Ongoing charge 0.52% 0.53% Retail Prices Index increase over year 0.7% 2.3% Discount at year end 1.9% 5.5% (1) This represents the four ordinary dividends recommended or paid for the year. (2) Based on the share price at the year end. Sources: Morningstar for the AIC, Henderson, Datastream. STATEMENT OF COMPREHENSIVE INCOME Year ended 31 October 2015 Year ended 31 October 2014 Notes Revenue return ?'000 Capital return ?'000 Total ?'000 Revenue return ?'000 Capital return ?'000 Total ?'000 Gains on investments held at fair value through profit or loss - 40,745 40,745 - 11,615 11,615 Investment income 2 22,621 - 22,621 20,577 - 20,577 Other operating income 3 146 17 163 171 - 171 --------- --------- --------- --------- --------- --------- Total income 22,767 40,762 63,529 20,748 11,615 32,363 --------- --------- --------- --------- --------- --------- Expenses Management fees 4 (892) (2,082) (2,974) (1,726) (929) (2,655) Other expenses (788) (7) (795) (720) - (720) --------- --------- --------- --------- --------- --------- Profit before finance costs and taxation 21,087 38,673 59,760 18,302 10,686 28,988 Finance costs (925) (2,157) (3,082) (685) (1,598) (2,283) --------- --------- --------- --------- --------- --------- Profit before taxation 20,162 36,516 56,678 17,617 9,088 26,705 Taxation 5 (849) (6) (855) (775) - (775) --------- --------- --------- --------- --------- --------- Profit for the year and total comprehensive income 19,313 36,510 55,823 16,842 9,088 25,930 ===== ====== ====== ===== ====== ====== Earnings per ordinary share - basic and diluted 6 17.22p 32.54p 49.76p 15.05p 8.12p 23.17p The total columns of this statement represent the Statement of Comprehensive Income, prepared in accordance with IFRSs 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. STATEMENT OF CHANGES IN EQUITY Year ended 31 October 2015 Called up share capital ?'000 Share premium account ?'000 Capital redemption reserve ?'000 Other capital reserves ?'000 Revenue reserve ?'000 Total equity ?'000 Total equity at 1 November 2014 28,027 7,053 12,483 587,744 32,889 668,196 Total comprehensive income: Profit for the year - - - 36,510 19,313 55,823 Transactions with owners, recorded directly to equity: Issue of 1,000,000 ordinary shares 250 5,669 - - - 5,919 Buy-back of 25,000 ordinary shares (6) - 6 (155) - (155) Ordinary dividends paid - - - - (17,150) (17,150) ---------- ---------- ---------- ---------- ---------- ---------- Total equity at 31 October 2015 28,271 12,722 12,489 624,099 35,052 712,633 ====== ====== ====== ====== ====== ====== Year ended 31 October 2014 Called up share capital ?'000 Share premium account ?'000 Capital redemption reserve ?'000 Other capital reserves ?'000 Revenue reserve ?'000 Total equity ?'000 Total equity at 1 November 2013 27,814 2,352 12,483 578,656 32,256 653,561 Total comprehensive income: Profit for the year - - - 9,088 16,842 25,930 Transactions with owners, recorded directly to equity: Issue of 850,000 ordinary shares 213 4,701 - - - 4,914 Ordinary dividends paid - - - - (16,209) (16,209) ---------- ---------- ---------- ---------- ---------- ---------- Total equity at 31 October 2014 28,027 7,053 12,483 587,744 32,889 668,196 ====== ====== ====== ====== ====== ====== STATEMENT OF FINANCIAL POSITION At 31 October 2015 ?'000 At 31 October 2014 ?'000 Non-current assets Investments held at fair value through profit or loss 726,831 685,456 ----------- ----------- Current assets Investments held at fair value through profit or loss 28,323 3,896 Other receivables 2,360 3,685 Cash and cash equivalents 31,762 5,023 ----------- ----------- 62,445 12,604 ----------- ----------- Total assets 789,276 698,060 ----------- ----------- Current liabilities Bank loans - (2,788) Other payables (1,848) (2,076) Debenture stocks (10,000) - ---------- ---------- (11,848) (4,864) ---------- ---------- Total assets less current liabilities 777,428 693,196 ----------- ----------- Non-current liabilities Debenture stocks (15,000) (25,000) Unsecured loan notes (49,795) - ----------- ----------- (64,795) (25,000) ----------- ----------- Net assets 712,633 668,196 ======= ======= Equity attributable to equity shareholders Share capital (note 7) 28,271 28,027 Share premium account 12,722 7,053 Capital redemption reserve 12,489 12,483 Retained earnings: Other capital reserves 624,099 587,744 Revenue reserve 35,052 32,889 ----------- ----------- Total equity 712,633 668,196 ======= ======= Net asset value per ordinary share (pence) - basic and diluted (Note 8) 630.2p 596.0p ====== ====== CASH FLOW STATEMENT Reconciliation of profit before taxation to net cash flow from operating activities At 31 October 2015 ?'000 At 31 October 2014 ?'000 Operating activities Profit before taxation 56,678 26,705 Add back interest payable ("finance costs") 3,082 2,283 Amortisation of loan note issue costs 5 - Less gains on investments held at fair value through profit or loss (40,745) (11,615) Increase in accrued income (70) (345) (Increase)/decrease in other receivables (46) 12 Increase in other payables 59 50 Purchases of investments (185,007) (319,724) Sales of investments 184,706 301,007 Purchases of current asset investments (61,777) (24,770) Sales of current asset investments 37,350 20,895 Decrease in securities sold for future settlement 1,263 14,553 Decrease in securities purchased for future settlement (1,077) (6,373) ------------ ------------ Net cash (outflow)/inflow from operating activities before interest and taxation (5,579) 2,678 Interest paid (2,291) (2,282) Taxation on investment income (672) (880) ------------ ------------ Net cash outflow from operating activities (8,542) (484) Financing activities Equity dividends paid (17,150) (16,209) Share issue 5,919 4,914 Buy-back of own shares (155) - (Repayment)/drawdown of loan (2,947) 2,874 New unsecured loan note issued 49,790 - ------------ ------------ Net cash inflow /(outflow) from financing activities 35,457 (8,421) ------------ ------------ Increase/(decrease) in cash 26,915 (8,905) Cash and cash equivalents at start of the year 5,023 14,130 Exchange movements (176) (202) ------------ ------------ Cash and cash equivalents at end of the year 31,762 5,023 ======== ======= NOTES: 1. Accounting policies The financial statements for the year ended 31 October 2015 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 measurement at fair value of investments. The principal accounting policies adopted are set out in the audited accounts and have been applied consistently throughout the year. 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. Having assessed the principal risks and the other matters discussed in connection with the viability statement, the Directors considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements. 2015 2014 2. Investment income ?'000 ?'000 UK dividend income - listed 8,370 8,490 UK dividend income - special dividends 2,011 638 Overseas dividend income - listed 11,872 11,115 Overseas dividend income - special dividends 188 206 Property income distributions 180 128 -------- -------- 22,621 20,577 ===== ===== Analysis of investment income by geographical region: UK 12,841 11,119 Europe (ex UK) 2,306 2,271 North America 2,193 1,734 Japan 1,345 1,304 China 997 1,501 Pacific (ex Japan, China) 2,510 2,165 Emerging markets 429 483 -------- --------- 22,621 20,577 ===== ===== 2015 2014 3. Other operating income ?'000 ?'000 Bank interest 39 19 Underwriting revenue 41 69 Stock lending revenue 66 83 -------- -------- 146 171 ===== ===== At 31 October 2015 the total value of securities on loan by the Company for stock lending purposes was ?50,889,000 (2014: ?31,281,000). The maximum aggregate value of securities on loan at any one time during the year ended 31 October 2015 was ?69,710,000 (2014: ?38,547,000). The Company's agent held collateral at 31 October 2015 with a value of ?56,493,000 (2014: ?32,955,000) in respect of securities on loan. The value of securities held on loan is reviewed on a daily basis, comprising CREST Delivery By Value ("DBVs") and Government Bonds with a market value of 105% (2014: 105%) of the market value of any securities on loan. 4. Management fees Revenue return 2015 ?'000 Capital return 2015 ?'000 Total 2015 ?'000 Revenue return 2014 ?'000 Capital return 2014 ?'000 Total 2014 ?'000 Investment management 892 2,082 2,974 398 929 1,327 Accounting, secretarial and administration - - - 1,328 - 1,328 ------- ------- ------- ------- ------- ------- 892 2,082 2,974 1,726 929 2,655 ==== ==== ==== ==== ==== ==== A summary of the terms of the management agreement is given in the Strategic Report in the Annual Report and financial statements. 5. Taxation Revenue return 2015 ?'000 Capital return 2015 ?'000 Total 2015 ?'000 Revenue return 2014 ?'000 Capital return 2014 ?'000 Total 2014 ?'000 (a) Analysis of the charge for the year Overseas tax suffered 956 6 962 906 - 906 Overseas tax reclaimable (107) - (107) (131) - (131) ------- ------- ------- ------- ------- ------- Taxation 849 6 855 775 - 775 ==== ==== ==== ==== ==== ==== (b) Factors affecting the tax charge for the year The differences are explained below: Revenue return 2015 ?'000 Capital return 2015 ?'000 Total 2015 ?'000 Revenue return 2014 ?'000 Capital return 2014 ?'000 Total 2014 ?'000 Profit before taxation 20,162 36,516 56,678 17,617 9,088 26,705 --------- ----------- ----------- --------- ----------- ----------- Corporation tax for the year at 20.42% (2014: 21.83%) 4,117 7,457 11,574 3,846 1,984 5,830 Non taxable UK dividends (2,097) - (2,097) (1,970) - (1,970) Non taxable scrip dividends and other income (2,370) - (2,370) (2,422) - (2,422) Income taxable in different years (4) - (4) (2) - (2) Overseas withholding tax suffered 849 6 855 775 - 775 Excess management expenses and loan relationships 353 - 353 548 552 1,100 Disallowable expenses 1 - 1 - - - Capital gains not subject to tax - (7,457) (7,457) - (2,536) (2,536) -------- ----------- ----------- -------- ----------- ---------- 849 6 855 775 - 775 ==== ====== ===== ==== ====== ===== (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, which it intends to maintain for the foreseeable future. (d) Factors that may affect future tax charges The Company has not recognised a deferred tax asset of ?6,561,000 (2014: ?5,374,000) arising as a result of having unutilised management expenses ?12,690,000 (2014: ?9,658,000) and loan relationship deficits of ?20,115,000 (2014: ?17,210,000). These expenses will only be utilised, to any material extent, if changes are made either to the tax treatment of the capital gains made by investment trusts or to the Company's investment profile which require them to be used. The standard rate of corporation tax in the UK changed from 21% to 20% with effect from 1 April 2015. Accordingly, the Company's profits for this accounting period are taxed at the effective rate of tax of 20.42%. 6. Earnings per ordinary share The total earnings per ordinary share is based on the net profit attributable to the ordinary shares of ?55,823,000 (2014: ?25,930,000) and on 112,178,757 ordinary shares (2014: 111,898,962), being the weighted average number of shares in issue during the year. The total earnings can be further analysed as follows: 2015 2014 ?'000 ?'000 Revenue profit 19,313 16,842 Capital profit 36,510 9,088 ---------- ---------- Profit for the year 55,823 25,930 ---------- ---------- Weighted average number of ordinary shares 112,178,757 111,898,962 ---------------- ---------------- Revenue earnings per ordinary share 17.22p 15.05p Capital earnings per ordinary share 32.54p 8.12p ---------- ---------- Earnings per ordinary share 49.76p 23.17p ======= ======= The Company does not have any dilutive securities, therefore basic and diluted earnings are the same. 7. Called up share capital 2015 ?'000 2014 ?'000 Authorised, allotted, issued and fully paid: 113,081,839 (2014: 112,106,839) ordinary shares of 25p each 28,271 28,027 ===== ===== During the year, 1,000,000 ordinary shares were issued for net proceeds of ?5,919,000 (2014: 850,000 issued for net proceeds of ?4,914,000). Also during the year, 25,000 ordinary shares were purchased for cancellation at a cost of ?155,000 (2014: nil). Since the year end, the Company issued a further 1,450,000 ordinary shares for net proceeds of ?9,086,000. 8. Net asset value per ordinary share The net asset value per ordinary share is based on net assets attributable to ordinary shares of ?712,633,000 (2014: ?668,196,000) and on the 113,081,839 ordinary shares in issue at 31 October 2015 (2014: 112,106,839). 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: 2015 2014 ?'000 ?'000 Net assets attributable to ordinary shares at start of year 668,196 653,561 Total net profit on ordinary activities after taxation 55,823 25,930 Dividends paid (17,150) (16,209) Issue of ordinary shares 5,919 4,914 Purchase of ordinary shares (155) - ------------ ------------ Net assets attributable to ordinary shares at end of year 712,633 668,196 ====== ====== 9. 2015 Financial Information The figures and financial information for the year ended 31 October 2015 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 2015 have been audited but have not yet been delivered to the Registrar of Companies. The Auditors' report on the 2015 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. 10. 2014 Financial Information The figures and financial information for the year ended 31 October 2014 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. 11. Dividend A final dividend of 4.00p per ordinary share will be paid, if approved by shareholders at the AGM, on 29 February 2016 to shareholders on the register on 29 January 2016. The Company's shares go ex-dividend on 28 January 2016. 12. Annual Report and Financial Statements Copies of the Annual Report and financial statements will be posted to shareholders by the end of January 2016 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. 13. Annual General Meeting The Annual General Meeting will be held on Thursday 25 February 2016 at 12 noon at Trinity House, London, EC3N 4DH. LARGEST INVESTMENTS at 31 October 2015 The 25 largest investments (convertibles and all classes of equity in any one company being treated as one investment) were as follows: Rank (2014) Valuation 2014 ?'000 Purchases ?'000 Sales proceeds ?'000 Appreciation/ (depreciation) ?'000 Valuation 2015 ?'000 1 (1) BP 15,335 - - (2,138) 13,197 2 (2) British American Tobacco 9,932 - - 875 10,807 3 (6) Delphi Automative 8,301 322 - 2,120 10,743 4 (13) Apple 7,635 1,247 - 1,162 10,044 5 (11) ITV 8,009 - - 1,948 9,957 6 (5) Sports Direct International 9,066 - - 738 9,804 7 (10) Galliford Try 8,013 1,009 (1,522) 1,808 9,308 8 (12) Barclays 7,795 1,551 - (365) 8,981 9 (9) American Tower 8,090 - - 695 8,785 10 (17) BT 6,875 - - 1,824 8,699 11 # CVS Health 4,830 2,719 - 1,072 8,621 12 (8) Royal Dutch Shell 8,094 2,596 - (2,156) 8,534 13 # Roper Technologies 4,279 2,753 - 1,458 8,490 14 # Fresenius 3,358 3,548 (453) 1,972 8,425 15 # Cardinal Health - 8,218 - (301) 7,917 16 (15) Comcast 7,515 1,534 (2,355) 933 7,627 17 (24) Reckitt Benckiser 6,300 - - 1,313 7,613 18 # Fidelity National Information Services 3,052 2,583 - 1,617 7,252 19 # Persimmon 2,926 2,662 - 1,401 6,949 20 # The Cooper Companies 4,546 2,674 - (359) 6,861 21 # Accenture 3,930 1,027 - 1,743 6,700 22 (21) GlaxoSmithKline 6,576 - - (58) 6,518 23 (7) HSBC 8,174 - - (1,686) 6,488 24 (18) American Express 6,822 772 - (1,204) 6,390 25 # Visa 2,855 2,111 - 1,333 6,299 ----------- ----------- ----------- ----------- ----------- 162,308 37,286 (4,330) 15,745 211,009 ====== ====== ====== ====== ====== All securities are equity investments # Not in the top 25 last year. CHANGES IN INVESTMENTS at 31 October 2015 Valuation 2014 ?'000 Purchases?'000 Sales proceeds ?'000 Appreciation/ (depreciation) ?'000 Valuation 2015 ?'000 United Kingdom 281,599 13,406 (25,334) 7,567 277,238 Europe 78,035 19,256 (59,264) 54,994 93,021 North America 153,925 67,342 (11,876) (31,670) 177,721 Japan 60,287 31,454 (21,391) 14,214 84,564 China 16,642 28,366 (36,011) 14,089 23,086 Pacific (ex Japan, China) 75,847 20,655 (25,618) (12,097) 58,787 Emerging Markets 19,121 4,638 (5,211) (6,134) 12,414 ----------- ----------- ------------ ----------- ----------- 685,456 185,117 (184,705) 40,963 726,831 ====== ====== ======= ====== ====== 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. ****** End CA:00276512 For:BIT Type:FLLYR Time:2016-01-19 08:30:08
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