Half-year Report

RNS Number : 1800Q
Bankers Investment Trust PLC
24 June 2022
 

LEGAL ENTITY IDENTIFIER: 213800B9YWXL3X1VMZ69                                                   24 June 2022

 

THE BANKERS INVESTMENT TRUST PLC

('the Company')

 

Unaudited results for the half-year ended 30 April 2022

 

This announcement contains regulated information

 

INVESTMENT OBJECTIVE 

Over the long term, the Company aims to achieve capital growth in excess of the FTSE World Index and dividend growth greater than inflation, as measured by the UK Consumer Price Index ('CPI'), by investing in companies listed throughout the world.

 

INVESTMENT POLICY

The following investment ranges apply:

· Equities: 80% to 100%

· Debt securities and cash investments: 0% to 20%

· Investment trusts, collective funds and derivatives: 0% to 15%

 

To achieve an appropriate spread of investment risk the portfolio is broadly diversified by geography, sector and company. The Manager ('Janus Henderson') has the flexibility to invest in any geographic region and any sector with no set limits on individual country or sector exposures and, therefore, the make-up and weighting of the portfolio may differ materially from the FTSE World Index.

 

The Manager primarily employs a bottom-up stock picking investment process, across six regional portfolios, to identify suitable opportunities. While each regional portfolio manager employs their own investment style, they all pay particular regard to cash generation and dividend growth over the medium term.

 

The Company can, but normally does not, invest up to 15% of its gross assets in any other investment companies (including listed investment trusts).

 

Derivatives

The Company may use financial instruments known as derivatives for the purpose of efficient portfolio management while maintaining a level of risk consistent with the risk profile of the Company.

 

Gearing

The Company can borrow to make additional investments with the aim of achieving a return that is greater than the cost of the borrowing. The Company can borrow up to 20% of net assets at the time of draw down.

 

PERFORMANCE HIGHLIGHTS

 

 30 April 2022

30 April 2021

Net asset value ('NAV') per share

113.0p

114.3p

Share price

105.9p

114.2p

Revenue return per share

1.08p

0.97p

Dividends paid or declared in respect of the period 1

1.128p

1.076p

 

Total return performance to 30 April 2022 (including dividends reinvested and excluding transaction costs)

 

6 months

%

1 year

%

3 years

%

5 years

%

10 years

 %

NAV 2

-5.6

0.8

29.6

58.2

205.4

Index 3

-2.6

6.1

           40.6

66.6

164.2

Share price 4

-6.3

-5.6

24.2

  53.9

226.2

 

1 The first interim dividend for 2022 was paid on 31 May 2022; the second interim dividend has been declared and will be paid on 31 August 2022

2 Net asset value total return per share with income reinvested and with debt at par

3 Composite of FTSE All-Share Index for the period to 31 October 2017 and FTSE World Index from 1 November 2017 to 30 April 2022

4 Share price total return using mid-market closing price

 

Sources: Janus Henderson, Morningstar Direct and Refinitiv Datastream



INTERIM MANAGEMENT REPORT

 

Review

In February I became Chair and I look forward to working with the Board and the Investment Manager, and to meeting many of our shareholders over the coming years. Founded in 1888, Bankers has a distinguished history. It has experienced a variety of financial and economic crises as well as, of course, its share of bull markets. Its strength has been its ability to adapt to changing circumstances and to grow. I have been involved in the investment trust sector for 30 years and Bankers struck me as interesting for a variety of reasons. First it is an old established and substantial trust. Second it has a sound record on both income and capital growth. Third it is unique in the way in which it manages separate portfolios under the same roof. As a result, it has the ability to appeal to a wide range of investors.

 

We have entered a more uncertain period for markets, with inflationary pressures everywhere and interest rates being raised to counter price demand for goods and services. Over the six months ended 30 April 2022, the NAV total return was -5.6% and the share price total return was -6.3%, both underperforming the FTSE World Index total return of -2.6%. The underperformance was due to mixed performance from stock selection in various regional sleeves combined with weakness in Asia, particularly China. The accompanying Fund Manager's Report contains more information together with a useful market commentary.

 

Dividends

The Company's income has continued to recover this year and our investment income for the six months ended 30 April 2022 was £17.8 million compared to £15.6 million for the same period last year, an increase of 14.1%.  This increase reflects continued dividend growth, the strengthening US dollar and a resumption in dividends from the few remaining companies who suspended dividends. Our net revenue for the six months was £14.2 million (2021: £12.6 million), equivalent to 1.08p per share (2021: 0.97p).

 

A first interim dividend of 0.55p per share (2021: 0.538p) was paid on 31 May 2022.  The Board has declared a second interim dividend of 0.578p (2021: 0.538p) per share, which will be payable on 31 August 2022 to shareholders on the register on 29 July 2022.

 

The Company aims over the long-term to grow dividends in excess of inflation, as measured by the UK Consumer Price Index ('CPI'). This year has seen the highest level of CPI inflation in a generation and while it will not be possible to grow our payments in line with inflation this year, Bankers' long-term record is healthy. Over the past 10 years, to 31 October 2021, dividends have grown by 71% compared to a 20% increase in CPI. The improving outlook for our investment income combined with the revenue reserve leads us to increase our forecast for dividend growth for the current financial year, from at least 3% to at least 5%.

 

Share buy-backs

The market uncertainty has led to the Company's shares trading at a discount which has offered an opportunity to buy back shares from the market. This activity is beneficial to ongoing shareholders, as shares are only purchased below net asset value. A total of 4,243,874 shares were bought back at an average discount of 6% to the net asset value in the six months ended 30 April 2022 (30 April 2021: nil), for a total consideration of £4.5 million.  The discount at 30 April 2022 was 6.3% (2021: 0.1%).  Since the period end, a further 4,256,126 shares have been bought back, for a total consideration of £4.3 million. 

 

There have been no share issues in the financial year to date.

 

The Board and Investment Manager 

 

Sue Inglis stepped down from the Board at the Annual General Meeting in February 2022, after nine years on the Board and three years as Chair. I should like to thank her on behalf of the Board for her outstanding contribution. The Board will miss her deep knowledge, experience and understanding of the investment trust world. The search for a new non-executive director has begun and will conclude before the end of the year.

 

A change in Chair allows the Board to reflect on the operation of the Company. The timing of this is prescient, given the market volatility. In the Board's view there is no requirement to alter our long-term objectives but rather there are opportunities to tighten up the way in which the Company operates, communicates and attracts new investors.

 

As part of this process the Company's Manager, Janus Henderson, has decided to appoint Mike Kerley as deputy to Alex Crooke. This appointment recognises the size and importance of the Company to Janus Henderson and the provision of this additional resource is welcomed by the Board. Mike has been in the investment management business for 37 years and he has been managing the Bankers' Pacific (ex Japan and China) portfolio since 2006. To support Mike with his portfolio role, Sat Duhra will co-manage the Pacific portfolio. Sat joined Janus Henderson in 2011 and has over 22 years of experience in financial markets. We are fortunate to have access to such experienced and knowledgeable investment professionals within Janus Henderson.

 

Outlook

 

Events this past year were impossible to predict. The rapid economic recovery from Covid restrictions created rising demand when there were still supply bottlenecks of goods. The  war in the Ukraine places further restrictions on the provision of energy and food supplies. There are some parallels to the economic conditions in the 1970's and 80's but, as is often the case, there are also key differences. Activity will slow this year but market share prices are adjusting to this outturn and, with the banking sector and corporates well capitalised, there should be a solid foundation to rebuild investors' confidence.

 

Simon Miller  

Chair

24 June 2022 

 

FUND MANAGER'S REPORT 

 

Market review

The highest level of price inflation for over 30 years and potential central bank reactions have dominated markets throughout the past half year under review. The reasons for inflation touching 10% in the UK are manyfold but stem from disruption to both labour movement and supply chains throughout the Covid lockdowns. Goods price inflation has been compounded by rising service prices and, more recently, energy and food prices following the invasion of Ukraine. The equity markets have fallen in value since the end of December, with inflation proving far from transitory as central banks assured investors last year. Historically, such levels of inflation would provoke central banks to raise interest rates rapidly to curtail demand and bring prices back down but investors fear that the increase in rates has been too slow.

 

Longer term bond yields have also risen over the period, signalling unusual conditions where both bonds and equities have fallen in value. Essentially, market prices are signalling that central banks will not contain inflation quickly and that it is increasingly likely that a recession will follow. Growth equities, especially technology companies, have been especially hard hit, while energy and other defensive sectors such as utilities and healthcare have been relatively better performers. Ironically, corporate profits are proving resilient and are even rising, but the market valuation of those earnings by investors has been derated because of their cautious outlook. Typically, markets derate stocks well ahead of actual earnings falling.

 

The most resilient stock market has been the UK which has risen in value over the period under review. This has less to do with the strength of the UK economy but rather the high weighting of oil and mining companies and those with large overseas earnings within the market. The US dollar has appreciated by almost 9% over the period against sterling reflecting a flight to quality and the expectation that the Federal Reserve will raise interest rates quicker than the UK. The remaining major markets, the US, Japan and Europe have broadly fallen by the same amount in local currencies, approximately 10% but in sterling terms the US has delivered the better underlying return despite the sell-off in technology shares. China has been a notable laggard in terms of market performance as the policy of zero Covid cases in the community is having a detrimental impact on economic growth. It is proving challenging to understand when this policy will be overturned.

 

Performance

Overall, the portfolio has lagged the FTSE World Index by 3% which is largely attributable to a lower exposure to the US market and the poor performance of the China portfolio. There has also been underperformance in the US and European portfolios that has impacted the return, as both of these portfolios have a significantly higher weight to growth stocks which have derated in current market conditions. The UK and Asian portfolios have delivered performance ahead of their respective benchmarks attributable to good stock picking and the more value based, cash generative and dividend emphasis of the respective managers. Higher yielding stocks have been a noticeable outperformer in Asian markets this year. Unusually, quality as a factor in stock selection has performed poorly during this period which emphasises how macroeconomic events have driven stock market returns rather than fundamentals.

 

The portfolio's income has continued to recover with almost all companies reinstating dividends that were withheld through Covid restrictions. The banking and consumer services sectors were the last to return to normal patterns of dividend payments. The challenging economic outlook combined with many companies facing rising labour and input inflation is likely to limit further dividend growth this year. Similarly, the receipt of special dividends is trending lower than last year.

 

Outlook

While we desperately hope that there will be an end to the conflict in Ukraine, it is clear that energy and food prices are likely to be elevated for some time to come as supply shortages persist. While there is a real risk that economic activity contracts in Europe and elsewhere, purely through demand falling as consumers pay more for basic goods and services, shares are already pricing in a slowing growth outlook. The resilience of the UK stock market should continue despite the uncertainty stemming from UK politics. US interest rates are forecast to rise to over 2% by December, which will have a cooling effect on the US economy, but we still expect US growth to remain positive and therefore US corporate earnings to grow this year. Stock markets will remain volatile until there is a clear downward direction in inflationary pressures and investors can gain confidence in stock valuations.

 

Alex Crooke

Fund Manager 

24 June 2022

 

MANAGING OUR RISKS

 

The principal risks and uncertainties associated with the Company's business are divided into the following main areas:

 

· Investment Activity and Performance Risks

· Portfolio and Market Risks

· Tax, Legal and Regulatory Risks

· Financial Risks

· Operational and Cyber Risks

· Risks associated with Climate Change

 

Information on these risks and uncertainties and how they are managed are given in the Annual Report for the year ended 31 October 2021.  However, risks associated with the global Covid pandemic and other health emergencies are now considered within Portfolio and Market Risks, a grouping which has been extended to cover risks relating to heightened political and military tensions and inflationary pressures. Following a recent review, the Board believes that these principal risks and uncertainties are as applicable to the remaining six months of the financial year as they were to the six months under review.

 

 

 

DIRECTORS' RESPONSIBILITY STATEMENT

 

The Directors (listed in note 15) confirm that, to the best of their knowledge:



(a)

the unaudited condensed set of financial statements has been prepared in accordance with IAS 34 - Interim Financial Reporting ('IAS 34') and gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company as required by Disclosure Guidance and Transparency Rule 4.2.4R;

 

(b)

the interim management report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and



(c)

the interim management report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or the performance of the Company during the period; and any changes in related party transactions described in the latest annual report that could have an impact in the first six months of the current financial year).

 

 On behalf of the Board

 Simon Miller

 Chair

 24 June 2022

 

For further information contact: 

Alex Crooke

Fund Manager

The Bankers Investment Trust PLC

Telephone: 020 7818 4447

 

Simon Miller

Chair

The Bankers Investment Trust PLC

Telephone: 020 7818 4233

Dan Howe

Deputy Head of Investment Trusts

Janus Henderson Investors

Telephone: 020 7818 4458

Harriet Hall

PR Manager, Investment Trusts

Janus Henderson Investors

Telephone: 020 7818 2636

 



CONDENSED STATEMENT OF COMPREHENSIVE INCOME

 

(Unaudited)

Half-year ended

30 April 2022

(Unaudited)

Half-year ended

30 April 2021

(Audited)

Year ended

31 October 2021

 

Revenue return £'000

Capital return £'000

 

Total £'000

Revenue return £'000

Capital return £'000

 

Total £'000

Revenue return £'000

Capital return £'000

 

Total

£'000

(Losses)/gains on investments held at fair value through profit or loss

-

(100,441)

(100,441)

-

220,218

220,218

-

308,991

308,991

Investment income

17,822

-

17,822

15,610

-

15,610

34,939

-

34,939

Other operating income

62

-

62

53

-

53

88

-

88


---------

-----------

---------

---------

---------

---------

---------

---------

---------

Gross revenue and capital (losses)/gains

17,884

(100,441)

(82,557)

15,663

220,218

235,881

35,027

308,991

344,018


----------

------------

---------

----------

-----------

---------

---------

---------

---------

Expenses

 

 

 







Management fees (note 2)

(992)

(2,314)

(3,306)

(880)

(2,055)

(2,935)

(1,843)

(4,300)

(6,143)

Other expenses

(687)

-

(687)

(535)

-

(535)

(1,074)

-

(1,074)


---------

-----------

---------

---------

---------

---------

---------

---------

---------

Profit/(loss) before finance costs and taxation

16,205

(102,755)

(86,550)

14,248

218,163

232,411

32,110

304,691

336,801


 

 

 







Finance costs

(695)

(1,550)

(2,245)

(454)

(1,058)

(1,512)

(1,037)

(2,423)

(3,460)


---------

------------

---------

---------

----------

---------

---------

---------

---------

Profit/(loss) before taxation

15,510

(104,305)

(88,795)

13,794

217,105

230,899

31,073

302,268

333,341


 

 

 







Taxation

(1,337)

-

(1,337)

(1,232)

-

(1,232)

(2,705)

-

(2,705)


---------

------------

---------

---------

-----------

---------

---------

---------

---------

Profit/(loss) for the period

14,173

(104,305)

  (90,132)

12,562

217,105

229,667

28,368

302,268

330,636


=====

=======

=====

=====

=======

=====

=====

=====

=====

Earnings/(loss) per ordinary share (note 3)

1.08p

(7.95)p

(6.87)p

0.97p

16.70p

17.67p

2.17p

23.13p

25.30p


=====

======

======

=====

=======

=====

=====

=====

=====

 

 

The total columns of this statement represent the Statement of Comprehensive Income, prepared in accordance with UK adopted international accounting standards. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. 

 

All income is attributable to the equity shareholders of The Bankers Investment Trust PLC.

 

The accompanying condensed notes are an integral part of the financial statements.


 

CONDENSED STATEMENT OF CHANGES IN EQUITY

   

 

 

 

 

Half-year ended 30 April 2022 (Unaudited)

 Called up

share capital

£'000

 Share premium

account

£'000

Capital redemption

reserve

£'000

Other capital

reserves

£'000

 

Revenue reserve

£'000

 

 

Total

£'000

Total equity at 1 November 2021

32,827

159,797

12,540

1,343,631

38,589

1,587,384

Buy-back of shares into treasury 2021 (note 5)

51

-

(51)

-

-

-

 

----------

----------

----------

-------------

----------

--------------

Total equity at 1 November 2021

32,878

159,797

12,489

1,343,631

38,589

1,587,384

Total comprehensive income:

 

 

 

 

 

 

  (Loss)/profit for the period

-

-

-

(104,305)

14,173

(90,132)

Transactions with owners, recorded

directly to equity:

 

 

 

 

 

 

  Buy-back of shares to treasury

-

-

-

(4,533)

-

(4,533)

  Ordinary dividends paid

-

-

-

-

(14,289)

(14,289)


----------

----------

----------

-------------

----------

--------------

Total equity at 30 April 2022

32,878

159,797

12,489

1,234,793

38,473

1,478,430

 

======

======

======

========

======

========








 

 

 

Half-year ended 30 April 2021 (Unaudited)

 Called up

share capital

£'000

Share premium

account £'000

Capital redemption

reserve

£'000

Other capital

reserves £'000

 

Revenue reserve

£'000

 

 

Total

£'000

Total equity at 1 November 2020

32,289

134,125

12,489

1,043,682

38,386

1,260,971

Total comprehensive income:







  Profit for the period

-

-

-

217,105

12,562

229,667

Transactions with owners, recorded

directly to equity:







  Issue of new shares

471

20,580

-

-

-

21,051

  Share issue costs

-

(190)

-

-

-

(190)

  Costs relating to sub-division of shares

-

-

-

(45)

-

(45)

  Ordinary dividends paid

-

-

-

-

(14,043)

(14,043)


----------

----------

----------

-------------

----------

--------------

Total equity at 30 April 2021

32,760

154,515

12,489

1,260,742

36,905

1,497,411


======

======

======

========

======

========















 

 

 

Year ended 31 October 2021 (Audited)

 Called up

share capital

£'000

 Share premium

account £'000

Capital redemption

reserve £'000

Other capital

reserves £'000

 

Revenue reserve

£'000

 

Total

£'000

Total equity at 1 November 2020

32,289

134,125

12,489

1,043,682

38,386

1,260,971

Total comprehensive income:







  Profit for the year

-

-

-

302,268

28,368

330,636

Transactions with owners, recorded directly to equity:







  Buy-back of shares to treasury

(51)

-

51

(2,274)

-

(2,274)

  Issue of new shares

589

25,862

-

-

-

26,451

  Share issue costs

-

(190)

-

-

-

(190)

  Costs relating to sub-division of shares

-

-

-

(45)

-

(45)

  Ordinary dividends paid

-

-

-

-

(28,165)

(28,165)


----------

----------

-----------

-------------

----------

-------------

Total equity at 31 October 2021

32,827

159,797

12,540

1,343,631

38,589

1,587,384


======

======

======

========

======

========

 

The accompanying condensed notes are an integral part of the financial statements.

CONDENSED STATEMENT OF FINANCIAL POSITION

 


(Unaudited)

As at 30 April

2022

£'000

(Unaudited)

As at 30 April

2021

£'000

(Audited)

As at 31 October

2021

£'000


 



Non-current assets

 



Investments held at fair value through profit or loss

1,575,875

1,534,028

1,692,169


-------------

-------------

-------------

 

 



Current assets

 



Investments held at fair value through profit or loss (note 4)

1

4,230

8,598

Other receivables

7,241

6,042

3,621

Cash and cash equivalents

39,458

21,202

25,429


------------

------------

------------

 

46,700

31,474

37,648


-------------

-------------

-------------

Total assets

1,622,575

1,565,502

1,729,817


-------------

-------------

-------------

Current liabilities

 



Other payables

(5,649)

(3,255)

(3,750)


-------------

-------------

------------

Total assets less current liabilities

1,616,926

1,562,247

1,726,067


 



Non-current liabilities

 



Debenture stock

(15,000)

(15,000)

(15,000)

Unsecured loan notes

(123,496)

(49,836)

(123,683)


-------------

-------------

--------------

Net assets

1,478,430

1,497,411

1,587,384

 

========

========

========


 



Equity attributable to equity shareholders

 



Share capital (note 5)

32,878

32,760

32,827

Share premium account

159,797

154,515

159,797

Capital redemption reserve

12,489

12,489

12,540

Retained earnings:

 



  Other capital reserves

1,234,793

1,260,742

1,343,631

  Revenue reserve

38,473

36,905

38,589


------------

------------

-------------

Total equity

1,478,430

1,497,411

1,587,384

 

=======

=======

=======

Net asset value per ordinary share (note 6)

113.0p

114.3p

120.9p

 

=======

=======

=======

 

 



 

The accompanying condensed notes are an integral part of the financial statements.

 

 

 



CONDENSED CASH FLOW STATEMENT

 

 

 

 

Reconciliation of profit before taxation to net cash flow from operating activities

(Unaudited)

Half-year ended

 30 April

2022

£'000

(Unaudited)

Half-year ended

30 April

2021

£'000 

(Audited)

Year ended

31 October

 2021

£'000

Operating activities

 



(Loss)/profit before taxation

(88,795)

230,899

333,341

Add back: interest payable ('finance costs')

2,245

1,512

3,460

Losses/(gains) on investments held at fair value through profit or loss

100,441

(220,218)

(308,991)

(Increase)/decrease in accrued income

(2,769)

(2,261)

42

(Increase)/decrease in other receivables

(76)

(54)

2

Increase in other payables

117

61

374

Purchases of investments

(179,198)

(330,735)

(614,490)

Sales of investments

195,164

263,779

478,300

Purchases of current asset investments

(17,498)

(33,066)

(67,151)

Sales of current asset investments

26,095

53,606

83,323

Increase in securities sold for future settlement

(662)

(214)

-

Increase in securities purchased for future settlement

1,807

208

-


------------

------------

------------

Net cash inflow/(outflow) from operating activities before interest and taxation

36,871

(36,483)

 

(91,790)

Interest paid

(2,456)

(1,512)

(3,072)

Taxation on investment income

(1,451)

(1,479)

(3,103)


------------

------------

------------

Net cash inflow/(outflow) from operating activities

32,964

(39,474)

(97,965)


=======

=======

=======


 



Financing activities

 



Equity dividends paid (net of refund of unclaimed distributions)

(14,289)

(14,043)

(28,165)

Issue of loan notes (net of issue costs)

-

-

74,232

Cash relating to sub-division of shares

-

(45)

(45)

Share issue proceeds

-

21,051

26,451

Share issue costs

-

(190)

(190)

Share buy-backs

(4,533)

-

(2,274)


------------

------------

------------

Net cash (outflow)/inflow from financing activities

(18,822)

6,773

70,009


=======

=======

=======


 



Increase/(decrease) in cash

14,142

(32,701)

(27,956)

Cash and cash equivalents at start of period

25,429

54,221

54,221

Exchange movements

(113)

(318)

(836)


-----------

-----------

------------

Cash and cash equivalents at end of period

39,458

21,202

25,429

 

=======

=======

=======

 

  The accompanying condensed notes are an integral part of the financial statements.

 


 

NOTES TO THE CONDENSED FINANCIAL STATEMENTS:

 

1.

Accounting policies

 

The Bankers Investment Trust PLC ('the Company') is a company incorporated and domiciled in the United Kingdom under the Companies Act 2006.

 

These condensed financial statements comprise the unaudited results of the Company for the half-year ended 30 April 2022. They have been prepared on a going concern basis and in accordance with UK adopted international accounting standards and with the Statement of Recommended Practice for Investment Trusts ('SORP') dated April 2021, where the SORP is consistent with the requirements of UK adopted international accounting standards.

 

For the period under review, the Company's accounting policies have not varied from those described in the annual report for the year ended 31 October 2021.

 

These financial statements have not been either audited or reviewed by the Company's Auditor.

 


2.

Management fees

 

 

(Unaudited)

(Unaudited)

(Audited)

 

 

Half-year ended

30 April 2022

Half-year ended

30 April 2021

Year ended

31 October 2021

 

 

Revenue return

£'000

Capital return

£'000

Total

£'000

Revenue return

£'000

Capital return

£'000

Total

£'000

Revenue return

£'000

Capital return

£'000

Total

£'000


Investment management

992

2,314

3,306

880

2,055

2,935

1,843

4,300

6,143



=====

=====

====

=====

=====

=====

=====

=====

====

 

 

With effect from 1 November 2021 the management fee is charged at a rate of 0.45% per annum on the first £750 million of net assets, 0.40% per annum on net assets in excess of £750 million up to £1.5 billion and 0.35% of net assets in excess of £1.5 billion. For the purposes of the fee calculation, the net assets are as at the last day of the quarter immediately preceding the quarter in which the calculation is made.

 

Up to 31 October 2021 the management fee was calculated on a quarterly basis as the aggregate of 0.45% per annum of the first £750 million and 0.40% per annum on the excess over £750 million of the value of the net assets on the last day of the quarter immediately preceding the quarter in respect of which the calculation was made.

 

3.

Earnings per ordinary share

 

The earnings per ordinary share figure is based on the net loss for the half-year of £90,132,000 (30 April 2021: net profit of £229,667,000; 31 October 2021: net profit of £330,636,000) and on 1,312,859,609 (30 April 2021: 1,300,003,244; 31 October 2021: 1,306,988,584) ordinary shares, being the weighted average number of ordinary shares in issue excluding treasury shares during the period.

 

 

The return per share detailed above can be further analysed between revenue and capital, as below.



(Unaudited)

Half-year ended

30 April 2022

£'000

(Unaudited)

 Half-year ended

30 April 2021

£'000

(Audited)

Year ended

31 October 2021

£'000


Revenue profit

14,173

12,562

28,368


Capital (loss)/profit

(104,305)

217,105

302,268



------------

------------

------------


Total (loss)/profit

(90,132)

229,667

330,636



=======

=======

=======


Weighted average number of ordinary shares in issue during each period

1,312,859,609

1,300,003,244

1,306,988,584


Revenue earnings per ordinary share

1.08p

0.97p

2.17p


Capital (loss)/earnings per ordinary share

(7.95)p

16.70p

23.13p



------------

------------

------------


Total (loss)/earnings per ordinary share

(6.87)p

17.67p

25.30p



=======

=======

=======

4.

Current asset investment

 

The Company has a holding in the Deutsche Bank Global Liquidity Series Fund, a money market fund which is viewed as a readily disposable store of value and which is used to invest cash balances that would otherwise be placed on short-term deposit.  At 30 April 2022 this holding had a value of £1,000 (30 April 2021: £4,230,000;

31 October 2021: £8,598,000).

 

5.

Share capital

 

At 30 April 2022 there were 1,315,102,830 ordinary shares of 2.5p each in issue of which 6,275,628 were held in treasury (with no voting rights) (30 April 2021: 1,310,402,830 and no shares held in treasury; 31 October 2021: 1,315,102,830 of which 2,031,754 shares were held in treasury).  During the half-year ended 30 April 2022, 4,243,874 shares were bought back into treasury at a total cost of £4,533,000 (30 April 2021: 975,000 shares were issued prior to the 10 for 1 share split and 13,775,000, following the 10 for 1 share split for proceeds of £26,261,000 and 2,031,754 shares were bought back into treasury for a net payment of £2,274,000. Since the period end, the Company has bought back 4,256,126 new shares for a total cost of £4,335,000.

 

The nominal value of the share buy-backs which were held in treasury during the year to 31 October 2021 was transferred to the capital redemption reserve but should have remained in share capital. This transfer has been reversed in the current period.

 

6.

Net asset value per ordinary share

 

The net asset value per ordinary share is based on the net assets attributable to equity shareholders of £1,478,430,000 (30 April 2021: £1,497,411,000; 31 October 2021: £1,587,384,000) and on 1,308,827,202 (30 April 2021: 1,310,402,830; 31 October 2021: 1,313,071,076) ordinary shares, being the number of ordinary shares in issue with voting rights at the period end.

 

7.

Bank loan

 

At 30 April 2022, the Company had drawn down £nil (30 April 2021 and 31 October 2021: £nil) of its £20 million multi-currency loan facility with SMBC Bank International plc.

 

8.

Related party transactions

 

The Company's transactions with related parties during the period were with its Directors and Janus Henderson.  There have been no material transactions between the Company and its Directors during the period other than the amounts paid to them in respect of Directors' remuneration for which there were no outstanding amounts payable at the period end.

 

In relation to the provision of services by Janus 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 Janus Henderson affecting the financial position or performance of the Company during the period under review.

 

9.

Financial instruments

 

At the period end the carrying value of financial assets approximates their fair value.

 

Financial instruments carried at fair value

 

Fair value hierarchy

The debenture stock and unsecured loan notes are valued at par in the Statement of Financial Position. The fair value of the 8% debenture stock at 30 April 2022 was £16,211,000 (30 April 2021: £18,018,000; 31 October 2021: £17,537,000). The fair value of the debenture stock has been calculated using prices quoted on the exchange on which the instrument trades and is categorised as Level 1 as described below. In order to comply with fair value accounting disclosures only, the fair value of the loan notes at 30 April 2022 have been estimated to be £114,900,000 (30 April 2021: £58,785,000; 31 October 2021: £134,199,000) and is categorised as Level 3 in the fair value hierarchy as described below. However, for the purpose of the daily NAV announcements, the unsecured loan notes are valued at amortised cost in the fair value NAV because they are not traded and the Directors expect them to be held to maturity and, accordingly, the Directors have assessed that this is the most appropriate value to be applied for this purpose. 

 

The following table analyses recurring fair value measurements for financial assets. These fair value measurements are categorised into different levels in the fair value hierarchy based on the inputs to valuation techniques used.













 

 

 


Financial assets at fair value through profit or loss at

30 April 2022 (Unaudited)

  Level 1  £'000

Level 2

£'000

Level 3

£'000

Total

£'000


Investments including derivatives:

 

 

 

 


- Equity investments

-

1,575,874


- Fixed interest investments

-

-

1

1


 - Current asset investments

1

-

-

1


 

--------------

---------

--------

--------------


Total financial assets carried at fair value

1,575,875

-

1

1,575,876



========

=====

====

========








Financial assets at fair value through profit or loss at

30 April 2021 (Unaudited)

Level 1

£'000

Level 2

£'000

Level 3

£'000

Total

£'000


Investments including derivatives:






- Equity investments

1,534,027

-

-

1,534,027


- Fixed interest investments

-

-

1

1


- Current asset investments

4,230

-

-

4,230



-------------

---------

--------

--------------


Total financial assets carried at fair value

1,538,257

-

1

1,538,258



========

=====

====

========








Financial assets at fair value through profit or loss at

31 October 2021 (Audited)

  Level 1

£'000

Level 2

£'000

Level 3

£'000

Total

£'000


Investments including derivatives:






- Equity investments

1,692,168

-

-

1,692,168


- Fixed interest investments

-

-

1

1


- Current asset investments

8,598

-

-

8,598



-------------

----------

---------

-------------


Total financial assets carried at fair value

1,700,766

-

1

1,700,767



==========

======

====

=======







 

Level 3 investments at fair value through profit or loss

(Unaudited)

Half-year ended

30 April 2022

£'000

(Unaudited)

Half-year

ended

30 April 2021

£'000

(Audited)

Year ended

31 October 2021

£'000

 

 



Opening balance

1

3

3

Disposal proceeds

-

   (2)

  (2)

 

  -------

  -------

  -------

Closing balance

1

1

1

 

====

====

====

 




 

10.

Reconciliation of liabilities arising from financing activities

 

 

 

 

 

  Non-cash changes

 

 

 

 

At

1 November

2021

£'000

Cash

flows

£'000

Amortisation

of issue costs

£'000

Foreign

exchange

£'000

At

30 April

2022

£'000

 

 

 

 

 

 

 

 

 

 

 Financing activities

 





 

 

 Financing liabilities

138,683

-

11

(198)

138,496

 

 

 

-----------

--------

--------

---------

------------

 

 

 Closing liabilities from financing

 activities

138,683

-

11

(198)

138,496

 

 

 

=======

====

====

=====

=======

 

 

 

 

 

 

 

 

  Non-cash changes

 

 

 

 

At

1 November

2020

£'000

Cash

flows

£'000

Amortisation

of issue costs

£'000

Foreign

exchange

£'000

At

30 April

2021

£'000

 








 


 Financing activities






 


 Financing liabilities

64,832

-

4

-

64,836

 


 

----------

--------

--------

---------

------------

 


 Closing liabilities from financing

 activities

64,832

-

4

-

64,836

 



======

====

====

=====

======

 

 

 

 

 

 

 

 

  Non-cash changes

 

 



At

1 November

2020

£'000

Cash

flows

£'000

Amortisation

of issue costs

£'000

Foreign

exchange

£'000

At

31 October 2021

£'000

 








 


 Financing activities






 


 Financing liabilities

64,832

74,232

13

(394)

138,683

 



----------

---------

--------

---------

------------

 


 Closing liabilities from financing

 activities

64,832

74,232

13

(394)

138,683

 



======

=====

====

=====

======

 



 

11.

Going concern

 

 

In assessing the Company's going concern, the Directors have considered among other things, cash flow forecasts, a review of covenant compliance including the headroom above the most restrictive covenants, an assessment of the liquidity of the portfolio and the impact of Covid-19. The assets of the Company consist mainly of securities that are listed and readily realisable. Thus, after making due enquiry, the Directors believe that the Company has adequate financial resources to meet its financial obligations, including the repayment of any borrowings, and to continue in operational existence for at least 12 months from the date of approval of the financial statements. Accordingly, the Directors continue to adopt the going concern basis in preparing the financial statements.

 

 

 

 

 

12.

 

Dividends

 

A first interim dividend of 0.55p (2021: 0.538p) per ordinary share, was paid on 31 May 2022 to shareholders registered on 29 April 2022. The shares were quoted ex-dividend on 28 April 2022. Based on the number of ordinary shares in issue at 30 April 2022 (excluding shares held in treasury) of 1,308,827,202 the cost of this dividend was £7,199,000.

 

The Directors have declared a second interim dividend of 0.578p (2021: 0.538p) per ordinary share which will be payable on 31 August 2022 to shareholders on the register on 29 July 2022.  The shares will be quoted ex-dividend on 28 July 2022.  Based on the number of shares in issue excluding shares held in treasury at 24 June 2022 of 1,304,571,076 the cost of this dividend will be £7,540,000.

 

13.

Comparative information

 

The financial information contained in this half-year report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the half-years ended 30 April 2022 and 2021 have not been audited or reviewed by the Auditor.

 

The figures and financial information for the year ended 31 October 2021 have been extracted from the latest published financial statements of the Company. These financial statements have been delivered to the Registrar of Companies and included the report of the Auditor which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.

 

 

14.

Half-year report

 

15.

General information

 

Company Status

The Company is a UK domiciled investment trust company.

London Stock Exchange Daily Official List (SEDOL): BN4NDR3 / ISIN number: GB00BN4NDR39

London Stock Exchange (TIDM) Code: BNKR

New Zealand Stock Exchange Code: BIT

Global Intermediary Identification Number (GIIN): L5YVFP.99999.SL.826

Legal Entity Identifier (LEI): 213800B9YWXL3X1VMZ69

 

Registered Office

UK: 201 Bishopsgate, London EC2M 3AE.

 

Company Registration Number

UK:  00026351

NZ:   645360

 

Directors

The Directors of the Company are Simon Miller (Chair), Julian Chillingworth (Senior Independent Director),

Isobel Sharp (Audit Committee Chair) and Richard West.

 

Corporate Secretary

Janus Henderson Secretarial Services UK Limited, represented by Wendy King FCG.

 

Website

Details of the Company's share price and net asset value, together with general information about the Company, monthly factsheets and data, copies of announcements, reports and details of general meetings can be found at www.bankersinvestmenttrust.com .

 











 

50 Largest Investments

At 30 April 2022

 

Rank

30 Apr 2022

Rank

31 Oct 2021

Company

Country

Valuation
31 Oct

2021

£'000

Purchases

£'000

Sales proceeds

£'000

Appreciation/
(depreciation)

£'000

 Valuation
30 Apr

2022

£'000

1

2

American Express

US

34,616

-

-

3,386

38,002

2

1

Microsoft

US

46,870

-

(5,506)

(4,217)

 37,147

3

4

CME

US

30,852

-

-

2,678

33,530

4

5

Automatic Data

US

29,085

-

-

1,777

30,862

5

21

Roper Technologies

US

18,630

9,620

-

1,846

30,096

6

9

Otis Worldwide

US

25,547

5,047  

-

(539)

30,055

7

11

Union Pacific

US

24,456

2,967  

-

1,449

28,872

8

6

American Tower

US

28,797

-

-

(1,881)

26,916

9

16

AstraZeneca

UK

21,880

-

-

3,838

25,718

10

#

Oracle

US

-

24,963

-

730

25,693

11

13

Visa

US

22,418

-

-

2,188

24,606

12

7

Home Depot

US

27,220

-

-

(3,201)

24,019

13

3

Estée Lauder

US

31,924

-

(5,030)

(3,028)

23,866

14

10

Intercontinental Exchange

US

25,072

-

-

(2,171)

22,901

15

17

MasterCard

US

21,732

-

(2,848)

3,399

22,283

16

19

Diageo

UK

19,733

-

(315)

2,092

21,510

17

14

Sherwin-Williams

US

22,082

-

-

(1,162)

20,920

18

34

Thermo Fisher Scientific

US

14,326

7,129

-

(591)

20,864

19

12

Moody's

US

23,309

-

-

(3,381)

19,928

20

8

Intuit

US

26,526

-

-

(7,149)

19,377

21

15

Alphabet

US

22,024

-

-

(3,412)

18,612

22

22

Toyota Motor

Japan

17,305

-

-

1,244

18,549

23

39

Roche

Switzerland

12,289

5,064

-

935

18,288

24

20

Zoetis

US

19,578

-

-

(2,060)

17,518

25

24

RELX

UK

16,544

-

-

935

17,479

 








 



 

Rank

30 Apr 2022

Rank

31 Oct 2021

Company

Country

Valuation
31 Oct

2021

£'000

Purchases

£'000

Sales proceeds

£'000

Appreciation/
(depreciation)

£'000

 Valuation
30 Apr

2022

£'000

26

27

Reckitt Benckiser

UK

15,378

-

-

812

16,190

27

46

British American Tobacco

UK

11,157

-

-

3,526

14,683

28

23

ICON

US

16,947

-

-

(2,335)

14,612

29

35

Nestlé

Switzerland

13,607

-

-

983

14,590

30

26

Lloyds Banking

UK

15,495

-

-

(1,339)

14,156

31

#

Anglo American

UK

10,619

-

-

3,067

13,686

32

40

Compass

UK

12,136

-

-

1,194

13,330

33

30

Novo-Nordisk

Denmark

14,986

-

(3,346)

1,615

13,255

34

#

Total Energies

France

9,791

2,328

-

914

13,033

35

42

Bunzl

UK

11,582

-

(316)

1,700

12,966

36

#

Rio Tinto

UK

10,353

-

-

2,600

12,953

37

41

Macquarie Bank

Australia

12,050

-

-

876

12,926

38

29

Sony

Japan

15,086

-

-

(2,670)

12,416

39

#

Sanofi

France

10,235

-

-

1,689

11,924

40

37

Taiwan Semiconductor Manufacturing

Taiwan

13,339

-

-

(1,433)

11,906

41

18

Apple

US

21,083

-

(12,426)

3,059

11,716

42

36

DSM

Netherlands

13,568

-

-

(2,100)

11,468

43

45

OZ Minerals

Australia

11,233

-

-

185

11,418

44

43

3i

UK

11,481

-

-

(332)

11,149

45

#

RWE

Germany

9,194

-

-

1,713

10,907

46

44

The Cooper Companies

US

11,304

-

-

(620)

10,684

47

#

Daiichi Sankyo

Japan

9,170

493

-

953

10,616

48

#

KPN

Netherlands

8,386

-

-

2,208

10,594

49

28

Bawag

Austria

15,301 

-

(2,401)

(2,408)

10,492

50

#

Tokio Marine

Japan

10,260 

-

(1,228)

1,309

10,341

 

 

 

 

896,556

57,611

(33,416)

8,871

929,622

 

All securities are equity investments

# Not in top 50 at 31 October 2021

Convertibles and all classes of equity in any one company are treated as one investment

 

 

 

GEOGRAPHICAL DISTRIBUTION

 

   Valuation of investments


30 April 2022

%

31 October 2021

%

UK

19.7

18.1

Europe (ex UK)

16.6

18.8

North America

35.7

35.4

Japan

11.8

11.8

Pacific (ex Japan and China)

10.5

10.0

China

5.7

5.9


---------

---------


100.0

100.0


=====

=====

Source: Janus Henderson

 

 


REVENUE GENERATED

 


 

30 April 2022

£million

30 April 2021

£million

UK

6.1

5.6

Europe (ex UK)

4.0

3.4

North America

3.4

2.3

Japan

2.1

2.1

Pacific (ex Japan and China)

2.2

2.0

China

-

0.2


---------

---------


17.8

15.6


=====

=====

Source: Janus Henderson

 



 


SECTOR ANALYSIS

As a percentage of the investment portfolio excluding cash


30 April 2022

%

31 October 2021

%

Industrials

19.3

18.8

Financials

18.9

19.4

Consumer Discretionary

14.5

16.9

Technology 

14.5

15.6

Health Care 

10.7

9.4

Consumer Staples 

8.0

7.2

Basic Materials

4.4

4.6

Telecommunications

3.3

3.1

Real Estate

3.0

2.5

Energy

1.8

1.0

Utilities 

1.6

1.5


---------

---------


100.0

100.0


=====

=====

Source: Janus Henderson

 



 


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) are incorporated into, or forms part of, this announcement.

 

*********************************

 

 

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