Final Results
Bankers Investment Trust PLC
11 December 2000
EMBARGOED FOR RELEASE AT 7.00 AM ON MONDAY 11 DECEMBER 2000
THE BANKERS INVESTMENT TRUST PLC
HENDERSON GLOBAL INVESTORS
THE BANKERS INVESTMENT TRUST PLC
Preliminary Unaudited Results
for the Year Ended 31 October 2000
11 December 2000
Highlights
* Net asset value per share up 13.9% to 360.1p
* Total dividend per share increased 5.8% to 6.35p
* Forecast minimum dividend per share increase of 3.3% to 6.56p
Chairman's Statement
Assets
I am pleased to report that the first year of the new millennium has been a
rewarding one for shareholders. The Company's net asset value per share
increased by 13.9% which compares with a rise of 6.0% for our principal
benchmark the FTSE All-Share Index. This has been a good year to be an
'actively managed' international investment trust and it is gratifying to
report that most of our performance was generated from good sector and stock
selection in our three major markets; the UK, Europe and USA. Currencies were
a feature but played very little part in our performance as the 13% rise in
the US dollar against sterling was mostly offset by weakness in European
currencies with the Euro falling by 9%. The biggest disappointment was Japan,
where a positive performance was reversed in the last two months of our
financial year.
For much of our year the economic background has been most favourable with
higher than expected economic growth in the USA and Europe and consumer price
inflation remaining low despite a significant rise in the price of oil. The
risk of future inflation has prompted central bankers to raise interest rates
in the first half of our financial year particularly in the USA.
Any review of the past year in equity markets has to focus on technology
stocks. The three months either side of the end of the twentieth century saw
one of the most dynamic equity booms ever witnessed in the history of world
stock markets. The excitement generated by the rapid advance of consumer
electronics and the internet generated a massive level of emotional enthusiasm
for all stocks and sectors connected with the 'new economy'. Also, the rapid
growth of the internet convinced many analysts that well established
industries would be significantly disadvantaged by the new economy encouraging
a dramatic switch by investors from old to new. The mania for almost any
company connected to the new economy and an equally scathing view of the old
economy caused a massive bubble in the share prices of technology, media and
telecom stocks (TMT) which finally boiled over in the middle of March.
As a consequence of our 'value' based investment style we chose to avoid a
high weighting in technology stocks. Our TMT weightings have been biased
towards well established leaders in the USA, Europe and Japan and we have been
suspicious of the significant premiums paid for UK TMT stocks. Throughout the
year we have remained positively geared and have tended to favour the UK,
Europe and Japan in contrast to the USA.
- MORE -
- 2 -
THE BANKERS INVESTMENT TRUST PLC
Preliminary Unaudited Results
for the Year Ended 31 October 2000
Dividends
Last year we modified our accounting policy. This is the first year that
earnings are stated under our new accounting policy where investment
management fees and interest payable on loans and debentures are allocated 30%
to revenue and 70% to capital. In view of the strong revenue reserves we are
recommending a final dividend of 1.70p making a total dividend of 6.35p, an
increase of 5.8%. This is the thirty-third consecutive annual increase in the
dividend. It remains the Board's intention to increase the annual dividend
above the rate of UK inflation for the foreseeable future. For the year to 31
October 2001 we are forecasting, subject to unforeseen circumstances, a
minimum total dividend of 6.56p per share, an increase of 3.3%. This Company
is one of a very small number of investment trusts to pay a quarterly
dividend. A dividend of 1.64p will be paid at the end of May, August and
November with a minimum final dividend of 1.64p payable in February 2002.
Share Buy-Backs
Over the financial year we have bought back 13,451,015 ordinary shares for
cancellation at a cost of £39.6m. A significant portion of the shares was
purchased from the Prudential in January which reduced their holding from 8.6%
to 1.8% in the Company. The shares were re-purchased at an average discount of
14.5% which has enhanced net assets by approximately £6.7m, equivalent to 4.6p
per share. At this year's Annual General Meeting the Board will be seeking to
renew the authority to purchase up to 14.99% of the existing issued shares for
cancellation. This percentage is the maximum permitted by the UK Listing
Authority.
Outlook
World GDP growth for the year 2000 is likely to have been the strongest since
1987. OECD export volume growth averaged 14% in the first quarter of the year
which was stronger than for any period in the last twenty years. However,
there is little doubt that the first half of this year marked a peak in the
rate of global growth and the US economy has been in a consumer led slowdown
for the past six months. For central bankers, particularly the US Federal
Reserve Board, the current slowdown is welcome and if economic growth
continues to weaken US short term interest rates could be cut as early as the
first quarter of 2001. The UK and the leading economies in Europe are also
experiencing an economic slowdown but at a more gradual pace than in the USA.
By contrast in Japan the slow but steady economic recovery continues to exceed
expectations and some inflation would almost be welcome there.
Global equity markets are having to adjust to a reduction in global growth, a
squeeze on profit margins, reduced earnings growth expectations and a
contraction in credit for many medium-sized and smaller businesses. Many
equity markets are now significantly below their earlier peaks. It is no
surprise to find that investors have switched from high growth to defensive
investments with financials, pharmaceuticals and utilities showing strong
relative outperformance. The rapid correction in 'new economy' stocks and
consequent re-appreciation of the merits of solid old economy companies has
re-introduced more realistic equity ratings and a much more balanced
understanding that both new and old economy companies need each other to
survive and prosper. In a low inflationary environment economic slowdowns can
be short-lived as even small movements in interest rates can have a
significant effect on economic activity.
- MORE -
- 3 -
THE BANKERS INVESTMENT TRUST PLC
Preliminary Unaudited Results
for the Year Ended 31 October 2000
Wall Street inevitably will have a great influence on all financial markets.
Any evidence of a severe slowdown in the US economy would make us more
concerned about prospects. However, we expect stock markets to react
favourably to any interest rate reductions in the coming year.
Requisition
The Company announced on 5 December 2000 that it had received a requisition on
behalf of ST Partners L.P. ('ST Partners'). This requires the Company to put a
resolution to shareholders urging the Board to formulate proposals for a
tender offer to repurchase up to 70 per cent. of the Company's shares at a
price equal to 98 per cent. of the net asset value per share. This resolution
will be included with the notice of the Annual General Meeting to be sent to
shareholders shortly.
The Board has considered this resolution and has concluded that ST Partners'
proposals would not be in the best interests of the Company or shareholders as
a whole. Accordingly, the Board will be recommending to shareholders that they
vote against the resolution.
A number of shareholders have expressed to the Board the wish that the Company
should continue in its current form, and the Board would like to thank these
shareholders for their support.
The Board intends to continue its share buy-back programme.
Further details of the Board's views will be circulated to shareholders in due
course.
For further information, please contact:
Michael Moule Vicki Staveacre
The Bankers Investment Trust PLC Henderson Press Office
Telephone: 020 7410 4378 Telephone: 020 7410 4028
Stephen Westwood Alex Child-Villiers
Head of Investment Trusts Financial Dynamics
Henderson Global Investors Telephone: 020 7269 7107
Telephone: 020 7477 5517
- MORE -
- 4 -
THE BANKERS INVESTMENT TRUST PLC
Preliminary Unaudited Results
for the Year Ended 31 October 2000
Highlights of the Year
31 October 31 October Change
2000 1999
%
Assets
Total assets less current liabilities £536,360,000 £513,827,000 +4.4
Net asset value per ordinary share 360.1p 316.1p +13.9
Ordinary share mid-market price 309.5p 273.5p +13.2
Discount (Share Price to Net Asset Value) 14.1% 13.5%
Revenue
Gross revenue £14,306,000 £15,265,000* -6.3
Earnings per ordinary share 7.33p 7.40p* -0.9
Dividends per ordinary share 6.35p 6.00p +5.8
Indices
FTSE All-Share Index 3,078.21 2,904.38 +6.0
Standard & Poor's Composite Index 1,429.39 1,362.92 +18.5+
FTSE World Europe (ex UK) Index (£) 351.72 306.80 +14.6
TOPIX (Tokyo First Section Index) 1,379.96 1,563.89 -4.7+
FTSE World (ex UK) Index (£) 355.63 307.82 +15.5
50/50 FTSE All-Share/
221.60 200.00 +10.8
FTSE World (ex UK) Index (£)
Retail Price Index 171.6 166.5 +3.1
+ £ adjusted
* Restated for change in accounting policies, see note 2.
Currencies 31 October 2000 31 October 1999
US Dollar 1.4521 1.6409
Yen 158.549 171.244
Euro 1.7131 1.5612
- MORE -
- 5 -
THE BANKERS INVESTMENT TRUST PLC
Preliminary Unaudited Results
for the Year Ended 31 October 2000
Group Statement of Total Return (incorporating the revenue account)
Restated*
Year ended 31 October Year ended 31 October
2000 1999
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Total capital gains from - 59,372 59,372 - 68,730 68,730
investments
Income from fixed asset 12,647 - 12,647 13,428 - 13,428
investments
Other interest receivable and 1,659 - 1,659 1,837 - 1,837
similar income
---------- ---------- ---------- ---------- ----
Gross revenue and capital gains 14,306 59,372 73,678 15,265 68,730 83,995
Management fee (1,260) (1,103) (2,363) (1,139) (998) (2,137)
Other administrative expenses (753) - (753) (583) - (583)
---------- ---------- ---------- ---------- ----
Net return on ordinary
activities
before interest payable and 12,293 58,269 70,562 13,543 67,732 81,275
taxation
Interest payable (723) (1,688) (2,411) (731) (1,706) (2,437)
---------- ---------- ---------- ---------- ----
Net return on ordinary
activities
before taxation 11,570 56,581 68,151 12,812 66,026 78,838
Taxation on net return on (982) 712 (270) (1,310) 822 (488)
ordinary activities
---------- ---------- ---------- ---------- ----
Net return on ordinary
activities
after taxation 10,588 57,293 67,881 11,502 66,848 78,350
Appropriations - Dividends
Cumulative preference stock - - - (38) - (38)
---------- ---------- ---------- ---------- ----
Available for ordinary 10,588 57,293 67,881 11,464 66,848 78,312
shareholders
Ordinary Shares:
Three interims of 1.55p (1999: (6,457) - (6,457) (6,920) - (6,920)
1.49p)
Proposed final of 1.70p (1999: (2,369) - (2,369) (2,360) - (2,360)
1.53p)
---------- ---------- ---------- ---------- ----
(8,826) - (8,826) (9,280) - (9,280)
---------- ---------- ---------- ---------- ----
Transfer to reserves 1,762 57,293 59,055 2,184 66,848 69,032
====== ====== ====== ====== ====== ======
Return per ordinary share (note 7.33p 39.65p 46.98p 7.40p 43.14p 50.54p
1)
====== ====== ====== ====== ====== ======
The revenue columns of this statement represent the revenue accounts of the
Group.
* Restated for changes in accounting policies, see note 2.
- MORE -
- 6 -
THE BANKERS INVESTMENT TRUST PLC
Preliminary Unaudited Results
for the Year Ended 31 October 2000
Balance Sheets
at 31 October 2000
Restated Restated
* *
Group Group Company Company
2000 1999 2000 1999
£'000 £'000 £'000 £'000
Fixed assets investments:
Listed at market value
In Great Britain 279,023 267,414 279,023 267,414
Outside Great Britain 233,063 221,084 233,063 221,084
Other quoted funds 6,787 4,879 6,787 4,879
Investment in subsidiary undertaking - - 629 595
---------- ---------- ---------- ---
Total fixed asset investments 518,873 493,377 519,502 493,972
---------- ---------- ---------- ---
Current Assets
Investments 39 42 - -
Debtors 2,967 3,980 2,901 3,921
Bank balances and short term deposits 36,197 40,031 36,156 40,009
---------- ---------- ---------- ---
39,203 44,053 39,057 43,930
Creditors: amounts falling due within one (21,716) (23,603) (22,199) (24,075)
year
---------- ---------- ---------- ---
Net current assets 17,487 20,450 16,858 19,855
---------- ---------- ---------- ---
Total assets less current liabilities 536,360 513,827 536,360 513,827
Creditors: amounts falling due after more (29,453) (26,300) (29,453) (26,300)
than one year
Provisions for liabilities and charges - (66) - (66)
---------- ---------- ---------- ---
Total net assets 506,907 487,461 506,907 487,461
====== ====== ====== ======
Capital and reserves
Called up share capital 35,192 38,555 35,192 38,555
Share premium account 452 452 452 452
Other capital reserves 454,967 433,920 455,596 434,515
Revenue reserve 16,296 14,534 15,667 13,939
---------- ---------- ---------- ---
Shareholders' funds (all equity) 506,907 487,461 506,907 487,461
====== ====== ====== ======
Net asset value per ordinary share 360.1p 316.1p 360.1p 316.1p
---------- ---------- ---------- ---
* Restated for changes in accounting policies, see note 2.
- MORE -
- 7 -
THE BANKERS INVESTMENT TRUST PLC
Preliminary Unaudited Results
for the Year Ended 31 October 2000
Group Cash Flow Statement
For the year ended 31 October 2000
2000 2000 1999 1999
£'000 £'000 £'000 £'000
Net cash inflow from operating activities 9,826 12,700
Servicing of finance
Debenture interest paid (2,302) (2,302)
Bank and loan interest paid (114) (160)
Dividends paid on preference stock - (59)
---------- ----------
Net cash outflow from servicing of finance (2,416) (2,521)
Taxation
UK tax recovered (including ACT) 454 142
Withholding and income tax recovered 493 864
---------- ----------
Net tax recovered 947 1,006
Financial Investment
Purchase of investments (129,438) (158,188)
Sales of investments 165,727 171,620
---------- ----------
Net cash inflow from financial investment 36,289 13,432
Equity dividends paid (8,932) (9,044)
Management of liquid resources
Cash withdrawn from/(placed on) deposit 3,704 (1,252)
---------- -------
Net cash inflow before financing 39,418 14,321
Financing
Purchase of ordinary shares (39,609) (2,448)
Purchase of preference stock - (1,430)
Expenses paid in respect of share buy-backs (56) (61)
Drawdown/(repayment) of loans 22 (13)
----------- ----------
Net cash outflow from financing (39,643) (3,952)
---------- -------
(Decrease)/increase in cash (225) 10,369
====== ======
Reconciliation of net cash flow to movement
in net debt
(Decrease)/increase in cash as above (225) 10,369
Net cash (inflow)/outflow from (increase)/ (22) 13
decrease in loans
Cash (inflow)/outflow from movement in (3,704) 1,252
liquid resources
--------- --------
Change in net debt resulting from cash flows (3,951) 11,634
Exchange movements (1,053) (2,004)
--------- --------
Movement in net debt in the year (5,004) 9,630
Net debt at 1 November (2,766) (12,396)
---------- -------
Net debt at 31 October (7,770) (2,766)
====== ======
- MORE -
- 8 -
THE BANKERS INVESTMENT TRUST PLC
Preliminary Unaudited Results
for the Year Ended 31 October 2000
Notes:
1. Return Per Ordinary Share
Revenue return per ordinary share is based on earnings
attributable to ordinary shares of £10,588,000 (1999: £11,464,000 - as
restated), and on the weighted average number of ordinary shares in
issue during the year of 144,498,237 (1999: 154,950,329).
Capital return per ordinary share is based on earnings
attributable to ordinary shares of £57,293,000 (1999: £66,848,000 - as
restated) and on the weighted average number of ordinary shares in
issue during the year of 144,498,237 (1999: 154,950,329).
2. Changes in accounting policies
On the basis of the Board's expected long term split of returns
between capital gains and income, the Company charges 70% of its
interest payable and management fee (insofar as they relate to the
maintenance or enhancement of the value of investments) to capital.
This represents a change in accounting policy from prior periods in
which management expenses and borrowing costs were charged wholly to
revenue. The comparatives for the year ended 1999 have been restated
accordingly, the effect of this change is that net revenue on ordinary
activities after taxation is increased by £2,079,000 (1999: £
1,882,000).
The Company has adopted Financial Reporting Standard (FRS) 16 'Current
Tax' under which dividend income should be accounted for net of the
attributable tax credits. The comparative figures for the year ended
31 October 1999 have been restated accordingly. The effect of this
change is that net return on ordinary activities before taxation is
reduced to £1,068,000 (1999: £1,192,000). However, there is no effect
on the revenue or capital returns per ordinary share, nor on the net
asset value per ordinary share.
3. 1999 Accounts
The figures and financial information for the year ended 31 October
1999 are extracted from the latest published accounts of the Company
as restated and do not constitute statutory accounts for that year.
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 either under Section 237(2) or 237(3) of the
Companies Act 1985.
4. 2000 Accounts
The preliminary figures for the year ended 31 October 2000 have
been extracted from the latest Group accounts. These accounts have not
yet been delivered to the Registrar of Companies, nor have the
auditors yet reported on them.
5. Dividend
A final dividend of 1.70p per ordinary share will, if approved by
shareholders, be paid on 28 February 2001 to shareholders on the
register on 26 January 2001. The Company's shares go ex-dividend on 22
January 2001.
- MORE -
- 9 -
THE BANKERS INVESTMENT TRUST PLC
Preliminary Unaudited Results
for the Year Ended 31 October 2000
Largest Investments
at 31 October 2000
The 40 largest investments (convertibles and all classes of equity in any one
company being treated as one investment) were as follows:
Market Market
Value
Value
31 Oct 31 Oct
2000 2000
£'000 £'000
Vodafone 16,547 Diageo 3,643
BP Amoco 14,788 Abbey National 3,519
Shell Transport & Trading 12,199 Pharmacia 3,514
Glaxo Wellcome 11,110 Aventis 3,465
British Telecommunications 9,454 Nestle 3,426
HSBC 9,132 Exxon Mobil 3,412
Philips Electronics 8,839 Reuters 3,355
Royal Bank of Scotland 7,271 Pfizer 3,333
Lloyds TSB 6,739 Irish Life 3,243
SmithKline Beecham 6,408 Novartis 3,240
Barclays 6,310 ABN-Amro 3,187
Henderson American Smaller 5,783 Cisco Systems 3,135
Companies Fund
Total Fina 5,706 Alcatel 3,100
AstraZeneca 5,165 Richemont 3,090
Cable & Wireless 4,680 Pearson 3,059
Siemens 4,641 ENI 2,972
VNU 4,536 US Treasury 3.625% Infl 2,838
Index 15/04/28
Marconi 4,002 Unilever 2,797
CGNU 3,780 Dexia 2,795
General Electric 3,718 Prudential 2,781
These investments total £214,712,000 or 41.4% of the portfolio.
Changes in Investments
Valuation Purchases Sales Appreciation/ Valuation
1999 (Depreciation) 2000
£'000 £'000
£'000 £'000 £'000
United Kingdom 261,737 35,894 55,648 32,828 274,811
Europe 87,259 25,026 29,594 15,349 98,040
North America 71,256 41,362 48,688 15,414 79,344
Japan 40,819 25,430 21,494 (5,465) 39,290
Hong Kong 6,430 1,025 2,519 1,080 6,016
Australia 8,871 - 939 (61) 7,871
Far East 6,063 - 1,145 (399) 4,519
Latin America 3,313 1,140 1,565 1,477 4,365
Other Countries 3,669 97 1,810 (177) 1,779
Fixed Interest 3,960 - 1,501 379 2,838
---------- ---------- ---------- ---------- ----------
493,377 129,974 164,903 60,425 518,873
====== ====== ====== ====== ======
- ENDS -
Friday, 31st May 2024
COMPANIES COVERED:
Latest directors dealings
- 2 days ago FDM Group (Holdings)
- 2 days ago Neo Energy Metals
- 2 days ago DCC (CDI)
- 2 days ago 3i Group
- 2 days ago 3i Group