Final Results

Chairman's Statement The total return on the net assets of Temple Bar during 2008 was -24.7%, which compares with a total return for the FTSE All-Share Index of -29.9%. The return achieved comprises underlying relative portfolio outperformance somewhat offset by the capital gearing of the Trust. While it is never pleasant to report negative returns, particularly of such severity, it should be noted that, after an extraordinarily difficult year, our fund manager's five year record against the benchmark index remains clearly in positive territory. Despite the weakness of the UK equity market, the portfolio generated a significant increase in income. The Board is recommending a final dividend of 22.34p, to produce a total increase of 6% for the year. This dividend will be payable on 31 March 2009 to shareholders on the register at 13 March 2009. This is the 25th consecutive year in which the dividend has been increased. The revenue reserve, after adjusting for the proposed final dividend for 2008, is £ 17.0m, having increased by £1.4m during the year. This is likely to prove an important asset over the next few years against a backdrop of falling dividends in the UK equity market. Post-tax earnings increased by 6.5%; the proposed dividend was more than covered by net earnings generated on the portfolio during the year. At the year end, capital gearing, defined as gross assets divided by net assets, was 118%. A number of investment companies have recently encountered difficulties with their borrowing covenants. Our two debentures, which have a nominal value of £63m, have fixed coupons and are not repayable until 2017 and 2021. The covenants on these debentures are such that our net assets would have to fall below the £63m nominal value of the debt before these would be breached. New Director I am delighted to confirm that David Webster was appointed as an additional director of the Company with effect from the beginning of this year. He brings with him a wealth of experience, notably in retailing where he was formerly the chairman of Safeway plc, and currently, where he is chairman of InterContinental Hotels Group plc. I have no doubt that in the coming years David will add great value to the Board's discussions. Outlook After a year which was the second worst for the UK equity market since the 1920s and which included the bankruptcy of a major American investment bank, the effective nationalisation of some UK banks and large US financial institutions and the virtual demise of a number of major car manufacturers, it is a brave person who provides an investment outlook with any great level of confidence. A number of bubbles have burst in the last twelve months, most notably those of corporate credit, commodities, property and private equity, leaving many investors heavily scarred. These burst bubbles created forced sellers of most asset classes as many investors with significant losses were highly leveraged. It is impossible to know when this forced selling will end (or how much of it has already been achieved) and quite how cheap certain assets may become before they bottom. The Temple Bar portfolio is managed on a long term basis and although the short term economic outlook is poor, it is important to remember that ownership of equity confers the right to a long term stream of a company's dividends. Even if we assume the average company makes no profits whatsoever in the next few years, this affects the discounted cash flow value of a company by a surprisingly small amount. Therefore, a bear market can generate some very attractive opportunities, provided the companies in which we invest have balance sheets strong enough to withstand a serious economic downturn and franchises durable enough to produce good returns over the longer term. At this delicate stage in the cycle, our fund manager continues to believe that selectivity is superior to wide diversification and, therefore, the portfolio remains highly concentrated. Equity valuations are currently low but the risk of an overshoot to even lower valuations is still quite possible given the ongoing dislocations in the financial system. A number of companies across a spread of sectors have already cut their dividends and further cuts must be expected. On current forecasts, the revenue we expect to receive this year will not fully cover an unchanged dividend. However, the Board is prepared to utilise part of the significant revenue reserve to supplement the total dividend for the year. Discount to Net Asset Value The price of Temple Bar shares ended the year at a small discount to their underlying net asset value adjusted for the market value of the Company's debt, having also traded at a premium for periods of the year. This was a positive development in a year when discounts widened significantly in the investment trust market and probably reflects a combination of the perceived stability of the dividend payments as well as recognition of the good long term performance of Temple Bar relative to the UK Growth & Income Sector. In December, following a sustained period during which the shares traded at a premium to their net asset value, 250,000 new shares were issued to a market participant at a 2% premium to net asset value. A further 200,000 shares were similarly issued at a premium on 12 February 2009. The manager continues to communicate closely with representatives of both current and potential new shareholders. Our smaller investors remain informed via a monthly fact sheet and detailed manager commentaries. These can be found on the Company's website, www.templebarinvestments.co.uk. VAT on Management Fees As shareholders may be aware from my previous statements, VAT is no longer charged on investment management fees following a ruling by the European Court of Justice in October 2007. Negotiations with the manager, paralleling those with the Revenue authorities, are continuing with respect to reclaiming past VAT payments. Recoverable amounts will be reflected in the accounts in proportion to the original basis of allocation of expenses between income and capital applicable to each year in respect of which a recovery is made. Articles of Association The directors are proposing that the existing Articles of Association are replaced with new articles which reflect changes in the law brought about by the implementation of the Companies Act 2006. The directors do not believe that these changes will have a material impact on the activities of the Company as they largely relate to administrative matters. Annual General Meeting The annual general meeting will be held at 2 Gresham Street, London EC2V 7QP on Monday 30 March 2009 at 11.00am. In addition to the formal business of the meeting our manager, Alastair Mundy, will provide a review of the past year and comment on the outlook. There will be an opportunity for shareholders to meet the directors at the conclusion of the AGM. I look forward to meeting as many of you as are able to attend. Shareholders who are unable to attend are encouraged to use their proxy votes. John Reeve Chairman 17 February 2009 TWENTY LARGEST INVESTMENTS As at 31 December 2008 Total Valuation Assets 31 December Less current Company 2008 Liabilities £'000 % BP 39,247 9.29 Royal Dutch Shell 38,519 9.12 Vodafone 37,158 8.80 GlaxoSmithKline 36,576 8.66 Unilever 27,702 6.56 HSBC 25,720 6.09 AstraZeneca 22,793 5.40 BT 12,350 2.92 British American 11,982 2.84 Tobacco Centrica 11,208 2.65 Wetherspoon (JD) 8,524 2.02 Travis Perkins 8,045 1.90 Paddy Power 7,141 1.69 Signet 6,637 1.57 Wolseley 6,556 1.55 Lloyds TSB Group 6,551 1.55 International 6,144 1.45 Personal Finance Aviva 5,711 1.35 Legal & General 5,606 1.33 Charter 5,528 1.31 International 329,698 78.05 All securities in any one company are treated as one investment. Consolidated income statement for the year ended 31 December 2008 2008 2007 Revenue Capital Revenue Capital return return Total return return Total £'000 £'000 £'000 £'000 £'000 £'000 INVESTMENT INCOME 22,923 - 22,923 20,989 - 20,989 Other operating income 595 - 595 1,535 - 1,535 Total income 23,518 - 23,518 22,524 - 22,524 LOSSES ON INVESTMENTS Losses on fair value - (134,284) (134,284) - (37,522) (37,522) through profit or loss assets 23,518 (134,284) (110,766) 22,524 (37,522) (14,998) EXPENSES Management fees (624) (937) (1,561) (890) (1,335) (2,225) Other expenses (449) (1,062) (1,511) (442) (1,165) (1,607) Profit/(loss) before 22,445 (136,283) (113,838) 21,192 (40,022) (18,830) finance costs and tax Finance costs (1,831) (2,745) (4,576) (1,831) (2,747) (4,578) PROFIT/(LOSS) BEFORE TAX 20,614 (139,028) (118,414) 19,361 (42,769) (23,408) Tax - - - - - - PROFIT/(LOSS) FOR THE 20,614 (139,028) (118,414) 19,361 (42,769) (23,408) YEAR EARNINGS PER SHARE 35.33p (238.27)p (202.94)p 33.19p (73.31)p (40.12)p (BASIC & DILUTED) The total column of this statement represents the Group's Income Statement prepared in accordance with IFRS. The supplementary revenue return and capital return columns are both prepared under guidance issued by the Association of Investment Companies. All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the year. There are no minority interests. Consolidated statement of changes in equity for the year ended 31 December 2008 Ordinary Share share premium Capital Retained Total capital account reserve earnings equity £'000 £'000 £'000 £'000 £'000 BALANCE AT 1 JANUARY 14,585 5,083 489,510 25,950 535,128 2007 CHANGES IN EQUITY FOR 2007 Profit for the year - - (42,769) 19,361 (23,408) 14,585 5,083 446,741 45,311 511,720 Dividends paid to - - - (17,380) (17,380) equity shareholders BALANCE AT 31 14,585 5,083 446,741 27,931 494,340 DECEMBER 2007 CHANGES IN EQUITY FOR 2008 Profit for the year - - (139,028) 20,614 (118,414) 14,585 5,083 307,713 48,545 375,926 Dividends paid to - - - (18,418) (18,418) equity shareholders Issue of share 62 1,450 - - 1,512 capital BALANCE AT 31 14,647 6,533 307,713 30,127 359,020 DECEMBER 2008 Consolidated balance sheet as at 31 December 2008 31 December 2008 31 December 2007 £'000 £'000 £'000 £'000 NON-CURRENT ASSETS 404,467 554,576 Investments held at fair value through profit or loss CURRENT ASSETS Cash and cash equivalents 14,347 3,412 Other receivables 4,059 2,808 18,406 6,220 TOTAL ASSETS 422,873 560,796 CURRENT LIABILITIES Other payables (465) (3,084) TOTAL ASSETS LESS CURRENT 422,408 557,712 LIABILITIES NON-CURRENT LIABILITIES Interest bearing borrowings (63,388) (63,372) NET ASSETS 359,020 494,340 EQUITY ATTRIBUTABLE TO EQUITY HOLDERS Ordinary share capital 14,647 14,585 Share premium 6,533 5,083 Capital reserve 307,713 446,741 Retained earnings 30,127 27,931 359,020 494,340 TOTAL EQUITY 359,020 494,340 NET ASSET VALUE PER SHARE 612.76p 847.33p Consolidated cash flow statement for the year ended 31 December 2008 2008 2007 £'000 £'000 £000 £'000 CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax (118,414) (23,408) Adjustments for: Purchases of investments¹ (184,030) (182,309) Sales of investments¹ 199,855 169,316 15,825 (12,993) Losses on investments 134,284 37,522 Financing costs 4,576 4,578 Operating cash flows before 36,271 5,699 movements in working capital (Decrease)/increase in receivables (1,251) 1,527 (Decrease)/increase in payables (2,619) 2,379 NET CASH FLOW FROM OPERATING 32,401 9,605 ACTIVITIES BEFORE AND AFTER INCOME TAX CASH FLOWS FROM FINANCING ACTIVITES Proceeds from issue of new shares 1,512 - Interest paid on borrowings (4,558) (4,559) Bank interest paid (2) (4) Equity dividends paid (18,418) (17,380) NET CASH USED IN FINANCING (21,466) (21,943) ACTIVITIES NET DECREASE IN CASH AND CASH 10,935 (12,338) EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE 3,412 15,750 BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE 14,347 3,412 END OF THE YEAR ¹ Purchases and sales of investments are considered to be operating activities of the Company, given its purpose, rather than investing activities. Dividend The directors will recommend to shareholders at the annual general meeting to be held on 30 March 2009 that a final dividend of 22.34p per ordinary share be paid on 31 March 2009 to shareholders on the Register at the close of business on 13 March 2009. Notes i. The figures set out above are derived from the audited consolidated accounts of Temple Bar Investment Trust Plc and its subsidiaries for the years ended 31 December 2007 and 31 December 2008. The 2008 accounts will be sent to shareholders shortly. ii. The financial information contained in this announcement does not constitute full accounts within the meaning of section 254 of the Companies Act 1985. The 2008 accounts, on which the report of the auditors is unqualified, will be filed with the Registrar of Companies in due course. The audited accounts for the year ended 31 December 2007 on which the report of the auditors was unqualified and did not contain a statement under either Section 237(2) or 237(3) of the Companies Act 1985, have been filed with the Registrar of Companies. 17 February 2009 Contact: Alastair Mundy Telephone 020 7597 2000 Investec Investment Management Limited

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