Half-year Report

Chairman’s Statement

I am delighted to present my first report to you as Chairman of the Company, having succeeded John Reeve in May of this year.

It is pleasing to report that during the six months to 30 June 2018 Temple Bar generated a total return on net assets of 3.1%, outperforming the benchmark FTSE All-Share Index total return of 1.7%.

Dividend

A first quarterly dividend of 8.75p per share was paid on 29 June 2018 and the directors have declared a second interim dividend, also of 8.75p per share, again an increase of 5% on the equivalent dividend last year. This will be paid on 28 September 2018 to those shareholders on the register of members as at 7 September 2018. The ex-dividend date for this payment is 6 September 2018.

Board changes

As mentioned above, John Reeve retired as a director and chairman of the Company on 24 May 2018, having provided 26 years of outstanding service. We are extremely grateful to John for his leadership during this period which has contributed in no small measure to the Company’s successful development. I am greatly honoured to have been chosen by my fellow directors to succeed John as Chairman.

Outlook

The current macro-economic situation in the U.K. is exceptionally uncertain. Nevertheless, we believe that our managers have the necessary skills to negotiate these choppy waters and find cheap, out of favour stocks that will hopefully generate positive returns and further outperformance.

Arthur Copple

Chairman

26 July 2018

TWENTY LARGEST HOLDINGS AS AT 30 JUNE 2018

Company	Industry	Place of Primary Listing	Valuation £’000	% of Portfolio
UK Treasury 1.25% 2018	Fixed Interest	UK	80,404	7.6%
Capita	Industrials	UK	76,418	7.2%
Royal Dutch Shell	Oil & Gas	UK	68,260	6.4%
GlaxoSmithKline	Healthcare	UK	64,141	6.1%
HSBC Holdings	Financials	UK	62,913	5.9%
BP	Oil & Gas	UK	58,196	5.5%
Lloyds Banking Group	Financials	UK	45,073	4.2%
Barclays	Financials	UK	43,378	4.1%
Royal Bank of Scotland	Financials	UK	42,244	4.0%
Grafton Group	Industrials	UK	41,957	4.0%
Top Ten Investments			582,984	55.0%
SIG	Industrials	UK	37,902	3.6%
Tesco	Consumer Services	UK	32,754	3.1%
Travis Perkins	Industrials	UK	30,987	2.9%
Marks & Spencer	Consumer Services	UK	24,996	2.4%
Wm Morrison Supermarkets	Consumer Services	UK	21,872	2.1%
Land Securities REIT	Financials	UK	20,760	2.0%
Centrica	Utilities	UK	20,042	1.9%
Citigroup	Financials	USA	19,683	1.8%
ETFS Physical Silver	Physical Gold and Silver	UK	19,206	1.8%
Next	Consumer Services	UK	18,187	1.7%
Top Twenty Investments			829,373	78.3%

STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2018 (unaudited)

		30 June 2018 (unaudited)			30 June 2017 (unaudited)			31 December 2017  (audited)
		Revenue £’000	Capital £’000	Total £’000	Revenue £’000	Capital £’000	Total £’000	Revenue £’000	Capital £’000	Total £’000
Investment income		20,768	-	20,768	18,985	-	18,985	33,990	-	33,990
Other operating income		6	-	6	4	-	4	8	-	8
Total Income		20,774		20,774	18,989	-	18,989	33,998	-	33,998
Gains on investments
Gains on investments held at fair value through profit or loss assets		-	13,321	13,321	-	17,767	17,767	-	62,251	62,251
		20,774	13,321	34,095	18,989	17,767	36,756	33,998	62,251	96,249
Expenses
Management fees		(712)	(1,068)	(1,780)	(699)	(1,048)	(1,747)	(1,532)	(2,215)	(3,747)
Other expenses including dealing costs		(360)	(901)	(1,261)	(353)	(511)	(864)	(600)	(969)	(4,569)
Profit before finance costs and tax		19,702	11,352	31,054	17,937	16,208	34,145	31,866	59,067	90,933
Finance costs		(967)	(1,461)	(2,428)	(1,308)	(1,980)	(3,288)	(2,701)	(4,078)	(6,779)
Profit before tax		18,735	9,891	28,626	16,629	14,228	30,857	29,165	54,989	84,154
Tax		(57)	-	(57)	(108)	-	(108)	(207)	-	(207)
Profit for the period		18,678	9,891	28,569	16,521	14,228	30,749	28,958	54,989	83,947
Earnings per share (basic and diluted)		27.93p	14.79p	42.72p	24.71p	21.28p	45.99p	43.30p	82.23p	125.53p

A first interim dividend of 8.75 pence per share in respect of the quarter ended 31 March 2018 was paid on 29 June 2018.

A second interim dividend of 8.75 pence per share in respect of the quarter ended 30 June 2018 was declared on 26 July 2018 and is payable on 28 September 2018. 

The total column of this statement represents the Statement of Comprehensive Income, prepared in accordance with IFRS. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies.

All items in the above statement derive from continuing operations.

STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2018 (unaudited)

	Ordinary share	Share premium	Capital	Retained	Total
	capital	account	reserves	earnings	equity
	£’000	£’000	£’000	£’000	£’000
BALANCE AT 1 JANUARY 2018	16,719	96,040	790,167	33,440	936,366
Profit for the period	-	-	9,891	18,678	28,569
Unclaimed dividends	-	-	-	51	51
Dividends paid to equity shareholders		-		(17,541)	(17,541)
BALANCE AT 30 JUNE 2018	16,719	96,040	800,058	34,628	947,445

STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2017 (unaudited)

	Ordinary share	Share premium	Capital	Retained	Total
	capital	account	reserves	earnings	equity
	£’000	£’000	£’000	£’000	£’000
BALANCE AT 1 JANUARY 2017	16,719	96,040	735,178	32,003	879,940
Profit for the period	-	-	14,228	16,521	30,749
Unclaimed dividends	-	-	-	11	11
Dividends paid to equity shareholders		-		(16,390)	(16,390)
BALANCE AT 30 JUNE 2017	16,719	96,040	749,406	32,145	894,310

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018 (unaudited)

	30 June 2018 (unaudited) £’000	30 June 2017  (unaudited) £’000	31 December 2017  (audited) £’000
NON-CURRENT ASSETS
Investments held at fair value through profit or loss*	1,059,300	986,691	1,035,670
CURRENT ASSETS
Receivables	4,721	4,557	3,613
Cash and cash equivalents	9,834	18,108	12,161
	14,555	22,665	15,774
TOTAL ASSETS	1,073,855	1,009,356	1,051,444
CURRENT LIABILITIES
Interest bearing borrowings	-	(25,000)	-
Payables	(12,508)	(1,200)	(1,159)
TOTAL ASSETS LESS CURRENT LIABILITIES	1,061,347	983,156	1,050,285
NON-CURRENT LIABILITIES
Interest bearing borrowings	(113,902)	(88,846)	(113,919)
NET ASSETS	947,445	894,310	936,366
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
Ordinary share capital	16,719	16,719	16,719
Share premium	96,040	96,040	96,040
Capital reserves	800,058	749,406	790,167
Retained earnings	34,628	32,145	33,440
TOTAL EQUITY	947,445	894,310	936,366
NET ASSET VALUE PER SHARE	1,416.79p	1,337.33p	1,400.22p

*Includes £80.4 million UK Treasury holding considered by the Board to be held in lieu of cash.

STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2018 (unaudited)

				30 June 2018		30 June 2017		31 December 2017
				(unaudited)		(unaudited)		(audited)
				£000		£000		£000
Cash flows from operating activities
Profit before tax				28,626		30,857		84,154
Adjustments for:
Gains on investments			(13,321)		(17,767)		(62,251)
Finance costs			2,428		3,288		6,779
Purchases of investments 1			(292,616)		(180,266)		(437,327)
Sales of investments 1			293,926		184,694		437,261
Dividend income			(20,502)		(18,306)		(32,410)
Interest income			(272)		(683)		(1,588)
Dividends received			18,567		16,525		32,189
Interest received			836		701		1,248
(Increase)/decrease in receivables			(6)		1,470		1,212
(Decrease)/increase in payables			(1)		30		(10)
Overseas withholding tax suffered			(57)		(108)		(207)
				(11,018)		(10,422)		(55,104)
Net cash flows from operating activities				17,608		20,435		29,050
Cash flows from financing activities
Repayment of 9.875% 2017 debenture				-	-		(25,000)
Proceeds from issue of 2.99% Private Placement Loan				-	-		25,000
Issue costs relating to 2.99% Private Placement Loan				-	-		(121)
Unclaimed dividends				51		11		11
Interest paid on borrowings				(2,445)		(3,288)		(6,587)
Equity dividends paid				(17,541)		(16,390)		(27,532)
Net cash used in financing activities				(19,935)		(19,667)		(34,229)
Net (decrease)/increase in cash and cash equivalents				(2,327)		768		(5,179)
Cash and cash equivalents at the start of the period				12,161		17,340		17,340
Cash and cash equivalents at the end of the period				9,834		18,108		12,161

1. Purchases and sales of investments are considered to be operating activities of the Company, given its purpose, rather than investing activities.

RESPONSIBILITY STATEMENT

The Directors confirm to the best of their knowledge that:

• the condensed set of financial statements contained within the half-year report has been prepared in accordance with the Accounting Standards Board’s Statement ‘Half-Yearly Financial Reports’;

• the half yearly financial report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

• in accordance with Disclosure and Transparency Rule 4.2.8R there have been no related parties transactions during the six months to 30 June 2018 and therefore nothing to report on any material effect by such a transaction on the financial position or performance of the Company during that period.

The half-yearly financial report was approved by the Board on 26 July 2018 and the above responsibility statement was signed on its behalf by:

Arthur Copple

Chairman

Notes

1.         Comparative figures

            The financial information contained in this half-year report does not constitute statutory accounts as defined in section 434-436 of the Companies Act 2006.  The financial information for the six months ended 30 June 2018 and 30 June 2017 has not been audited.

            The information for the year ended 31 December 2017 does not constitute statutory accounts, but has been extracted from the latest published audited accounts, which have been filed with the Registrar of Companies.  The report of the auditors on those accounts contained no qualification or statement under section 498(2) or (3) of the Companies Act 2006.

2.         Publication

            This half-year report is being sent to shareholders and copies will be made available to the public at the Company’s registered office and on its website.

For further information please contact:

Alastair Mundy

Investec Fund Managers Limited                        020 7597 2000