Interim Results

Bankers Investment Trust PLC 25 June 2003 THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2003 SUMMARY * Marginal outperformance of benchmark, with NAV declining by 2.1% compared with a fall of 2.4% in the FTSE All-Share Index * Total earnings this year expected to be in excess of forecast dividend of 6.96p per share * Full year total dividend forecast to be up at least 2.7% on last year Extracts from the Chairman's Statement: Assets Over the half year to 30 April our net asset value declined by 2.1%. Although this constitutes another period of negative return, I can report that our net assets and share price have marginally outperformed our benchmark during an extremely turbulent six months. The FTSE All-Share Index fell 2.4% over that period. For the first four and a half months of the period most equity markets were heavily influenced by the increasing uncertainty created by the build up to war in Iraq. A week before war was declared on 20 March our net asset value and share price had declined by 17% and 16% respectively, and many equity investors were extremely concerned about future prospects. Fortunately, fears of a lengthy military campaign proved unfounded and a rapid end to hostilities combined with a decline in the oil price to more normal levels removed two major negatives. Equity markets rebounded strongly as a result, with overseas equities performing slightly better than the UK in sterling terms. We remained approximately 10% geared over the period and were net buyers of UK equities in January when the market was overly depressed by forced selling from life assurance companies. Currency movements have been dramatic, with the US authorities prepared to allow a weaker dollar for economic reasons which has had a particularly positive effect on the euro. In view of the negative consequences for European economic growth and profitability of a rapid rise in the euro we have been net sellers in continental Europe but have held most of our cash in euros. - MORE - - 2 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2003 Extracts from the Chairman's Statement cont'd: Earnings and Dividends Earnings per share increased by 0.6% to 3.50p per share. Franked income was impacted by dividend cuts and the recent trend by some very large UK companies to declare dividends in US dollars including Glaxo and BP. In my annual statement we forecast we would pay three quarterly dividends of 1.74p per share and a minimum final dividend of 1.74p. Based on present estimates we expect total earnings this year to exceed the minimum forecast total dividend of 6.96p per share. Outlook Growth in the global economy looks likely to remain painfully slow. World inflation is forecast at below 2% for the next 12 months. Nominal growth may not be sufficient to sustain decent profit growth for most companies, unless costs are cut significantly. In the all important US economy the threat of deflation is taken seriously but there is very little room to cut short-term interest rates any further. However, the significant fall in the dollar should help the profitability of multi-national companies and limit the growth in imports. At least in the USA, therefore, we can look forward to a stronger economic recovery. In the euro zone, by contrast, the economic data remain consistently weak. The great euro experiment could not have come at a worse time for Germany which needs lower interest rates to ward off the twin threats of stagnation and deflation. The fall in sterling against the euro is highly beneficial for our exporters and with most critical commodities priced in US dollars our current devaluation against the euro should not be inflationary. Most of the currencies in the Far East, including Japan, have fallen in line with the US dollar. Consequently their terms of trade versus euroland are the best that I can remember. The impact of the SARS virus will hopefully be temporary but is a stark reminder of how fragile many economies are when cut off from global tourism. The global bear market in equities has been running for over three years and it has had a profound impact on the future returns expected by pensioners and savers alike. Counter-balancing this has been a ten year bull market in UK and US residential property and long dated fixed interest securities which has undoubtedly cushioned part of the impact of the third largest equity bear market in the last 100 years. The recent post-Iraq equity market rally has been impressive in terms of breadth and volume. Here in the UK and also in the USA it has been accompanied by better news on the economy and corporate profits. The mere fact that most commentators are expecting so little from equities by way of annual returns, together with some renewed corporate activity, gives me a certain level of optimism for the future but a sustained upward move will require an improvement in company profitability. - MORE - - 3 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2003 Extracts from the Chairman's Statement cont'd: For further information contact: Michael Moule Alex Crooke The Bankers Investment Trust PLC The Bankers Investment Trust PLC Telephone: 020 7818 4378 Telephone: 020 7818 4447 Stephen Westwood Stephen Phillips Head of Investment Trusts Investor Relations Manager Henderson Global Investors Henderson Global Investors Telephone: 020 7818 5517 Telephone: 020 7818 6417 Vicki Staveacre Henderson Press Office Telephone: 020 7818 4222 - MORE - - 4 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2003 SUMMARY (Unaudited) (Audited) % 30 April 31 October Change 2003 2002 Assets Total assets less current liabilities (Â£'000) Â£334,092 Â£340,887 -2.0 Net asset value per ordinary share 244.0p 249.3p -2.1 Ordinary share mid-market price 232.0p 233.8p -0.8 Discount (share price to net asset value) 4.9% 6.2% Indices FTSE All-Share Index 1,891.50 1,938.71 -2.4 Standard & Poor's Composite Index 916.92 885.76 +1.3* FTSE World Europe (ex UK) Index (Â£) 208.52 202.24 +3.1 TOPIX (Tokyo First Section Index) 796.56 862.24 -7.1* FTSE World (ex UK) Index (Â£) 205.63 203.88 0.9 50/50 FTSE All-Share/ 198.40 200.00 -0.8 FTSE World (ex UK) (Â£) *Â£ adjusted (Unaudited) (Unaudited) % Half year ended Half year ended % 30 April 2003 30 April 2002 Change Revenue Gross revenue (Â£'000) Â£6,035 Â£6,074 -0.6 Earnings per ordinary share 3.50p 3.48p +0.6 - MORE - - 5 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2003 GROUP STATEMENT OF TOTAL RETURN (incorporating the revenue account*) for the half year ended 30 April 2003 (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 30 April 2003 30 April 2002 31 October 2002 Revenue Capital Total Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Total capital (losses) - (5,741) (5,741) - 39,572 39,572 - (61,161) (61,161) /gains from investments Income from fixed asset 5,760 - 5,760 5,719 - 5,719 11,579 - 11,579 Investments Other interest receivable 275 - 275 355 - 355 724 - 724 and similar income --------- --------- --------- --------- --------- --------- --------- --------- --------- Gross revenue and capital 6,035 (5,741) 294 6,074 39,572 45,646 12,303 (61,161) (48,858) (losses)/gains Management fee (546) (487) (1,033) (645) (574) (1,219) (1,265) (1,128) (2,393) Other administrative expenses (330) - (330) (319) - (319) (627) - (627) --------- --------- --------- --------- --------- --------- --------- --------- --------- Net return/(loss) on ordinary activities before finance costs and taxation 5,159 (6,228) (1,069) 5,110 38,998 44,108 10,411 (62,289) (51,878) Interest payable and similar charges (357) (833) (1,190) (361) (843) (1,204) (722) (1,685) (2,407) --------- --------- --------- --------- --------- --------- --------- --------- --------- Net return/(loss) on ordinary activities before taxation 4,802 (7,061) (2,259) 4,749 38,155 42,904 9,689 (63,974) (54,285) Taxation on net return on ordinary activities (389) 243 (146) (361) 233 (128) (831) 494 (337) --------- --------- --------- --------- --------- --------- --------- --------- --------- Net return/(loss) on ordinary activities after taxation 4,413 (6,818) (2,405) 4,388 38,388 42,776 8,858 (63,480) (54,622) --------- --------- --------- --------- --------- --------- --------- --------- --------- Dividends - ordinary shares 1st interim 1.74p (2002: 1.68p) (2,195) - (2,195) (2,120) - (2,120) (2,120) - (2,120) 2nd interim 1.74p (2002: 1.68p) (2,195) - (2,195) (2,120) - (2,120) (2,120) - (2,120) 3rd interim (2002: 1.68p) - - - - - - (2,119) - (2,119) Final (2002: 1.74p) - - - - - - (2,195) - (2,195) --------- --------- --------- --------- --------- --------- --------- --------- --------- (4,390) - (4,390) (4,240) - (4,240) (8,554) - (8,554) --------- --------- --------- --------- --------- --------- --------- --------- --------- Transfer to/(from) reserves 23 (6,818) (6,795) 148 38,388 38,536 304 (63,480) (63,176) ========= ========= ========= ========= ========= ========= ========= ========= ======== Return/(loss) per ordinary share (note 1) 3.50p (5.41)p (1.91)p 3.48p 30.42p 33.90p 7.02p (50.31)p (43.29)p ========= ========= ========= ========= ========= ========= ========= ========= ======== * The revenue columns of this statement represent the revenue accounts of the Group. - MORE - - 6 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2003 GROUP BALANCE SHEET at 30 April 2003 (Unaudited) (Unaudited) (Audited) At 30 April 2003 At 30 April At 31 October 2002 2002 Â£'000 Â£'000 Â£'000 Fixed asset investments: Listed at market value In Great Britain 198,661 260,698 202,917 Outside Great Britain 134,514 177,673 139,136 Other quoted funds 3,304 3,220 3,370 Unlisted - directors' valuation 750 1,350 1,125 ---------- ---------- ---------- Total fixed asset investments 337,229 442,941 346,548 ---------- ---------- ---------- Current assets Investments - 67 - Debtors 3,084 6,015 8,367 Bank balances and short term deposits 16,145 15,121 11,215 ---------- ---------- ---------- 19,229 21,203 19,582 Creditors: amounts falling due within one year (22,366) (21,545) (25,243) ---------- ---------- ---------- Net current liabilities (3,137) (342) (5,661) ---------- ---------- ---------- Total assets less current liabilities 334,092 442,599 340,887 Creditors: amounts falling due after more than one year (26,300) (26,300) (26,300) ---------- ---------- ---------- Total net assets 307,792 416,299 314,587 ========== ========== ========== Capital and reserves Called up share capital 31,542 31,542 31,542 Share premium account 452 452 452 Other reserves 258,395 367,081 265,213 Revenue reserve 17,403 17,224 17,380 ---------- ---------- ---------- Equity shareholders' funds 307,792 416,299 314,587 ========== ========== ========== Net asset value per ordinary share (note 2) 244.0p 330.0p 249.3p - MORE - - 7 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2003 GROUP CASH FLOW STATEMENT (Unaudited) (Unaudited) (Audited) for the half year ended 30 April 2003 Half year ended Half year ended Year 30 April 30 April ended 2003 2002 31 October 2002 Â£'000 Â£'000 Â£'000 Net cash inflow from operating activities 2,917 3,120 8,794 Interest paid (1,175) (1,208) (2,424) Net tax recovered 34 63 154 Net cash inflow/(outflow) from purchases and sales of 6,725 (1,297) (7,535) investments Equity dividends paid (4,314) (4,163) (8,403) Cash (placed on)/withdrawn from short term deposit (69) 5,000 1,757 ---------- ---------- ---------- Net cash inflow/(outflow) before financing 4,118 1,515 (7,657) Net cash inflow from financing 970 2,059 3,117 ---------- ---------- ---------- Increase/(decrease) in cash 5,088 3,574 (4,540) ========== ========== ========== Reconciliation of operating revenue to net cash inflow from operating activities Net revenue before interest payable and taxation 5,159 5,110 10,411 Net sales of trading stock - 16 83 (Increase)/decrease in accrued income (1,986) (2,003) 78 Decrease in other debtors 401 461 17 Increase/(decrease) in creditors 36 349 (8) Management charge taken to other reserves (487) (574) (1,128) Overseas withholding tax (206) (186) (499) Scrip dividends included in investment income - (53) (160) ---------- ---------- ---------- Net cash inflow from operating activities 2,917 3,120 8,794 ========== ========== ========== Reconciliation of net cash flow to movement in net debt Increase/(decrease) in cash as above 5,088 3,574 (4,540) Cash inflow from financing (970) (2,059) (3,117) Cash outflow/(inflow) from liquid resources 69 (5,000) (1,757) ---------- ---------- ---------- Change in net debt resulting from cash flows 4,187 (3,485) (9,414) Exchange movements 623 735 1,306 ---------- ---------- ---------- Movement in net debt during the period 4,810 (2,750) (8,108) Net debt at beginning of the period (31,772) (23,664) (23,664) ---------- ---------- ---------- Net debt at the end of the period (26,962) (26,414) (31,772) ========== ========== ========== Represented by: Cash at bank and short term deposits less bank overdrafts 16,145 15,121 10,444 Debt falling due within one year (16,807) (15,235) (15,916) Debt falling due after more than one year (26,300) (26,300) (26,300) ---------- ---------- ---------- (26,962) (26,414) (31,772) ========== ========== ========== - MORE - - 8 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2003 NOTES: 1. Return/(loss) per Ordinary Share Revenue return per ordinary share is based on earnings attributable to ordinary shares of Â£4,413,000 (half year ended 30 April 2002: Â£4,388,000; year ended 31 October 2002: Â£8,858,000) and on the weighted average number of ordinary shares in issue during the period of 126,169,781 (half year ended 30 April 2002 and year ended 31 October 2002: 126,169,781). Capital return per ordinary share is based on losses attributable to ordinary shares of Â£6,818,000 (half year ended 30 April 2002: gains of Â£38,388,000; year ended 31 October 2002: losses of Â£63,480,000) and on the weighted average number of ordinary shares in issue during the period of 126,169,781 (half year ended 30 April 2002 and year ended 31 October 2002: 126,169,781). 2. Net Asset Value per Ordinary Share The net asset value per ordinary share is based on net assets attributable to ordinary shares of Â£307,792,000 (30 April 2002: Â£416,299,000; 31 October 2002: Â£314,587,000) and on the 126,169,781 ordinary shares in issue at 30 April 2003 (30 April 2002 and 31 October 2002: 126,169,781). 3. Accounts for the year ended 31 October 2002 The figures and financial information for the year ended 31 October 2002 are extracted from the latest published accounts of the Company and do not constitute the 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 under either Section 237(2) or Section 237(3) of the Companies Act 1985. 4. Dividend The directors have declared a second interim dividend of 1.74p (2002: 1.68p) net per ordinary share payable on 29 August 2003 to shareholders registered on 1 August 2003. The shares will be quoted ex-dividend on 30 July 2003. 5. Interim Report The Interim Report will be posted to shareholders in July and will be available from the Registered Office at 4 Broadgate, London EC2M 2DA thereafter. - MORE - - 9 - THE BANKERS INVESTMENT TRUST PLC Unaudited Preliminary Results for the half year ended 30 April 2003 LARGEST INVESTMENTS at 30 April 2003 The 50 largest investments (convertibles and all classes of equity in any one company being treated as one investment) were as follows: Market value Market value Â£'000 Â£'000 BP 13,719 Slough Estates 2,217 GlaxoSmithKline 12,816 Henderson American Smaller Cos 2,214 Vodafone 8,336 Rio Tinto 2,189 HSBC 8,089 ABN-Amro 2,114 Shell Transport & Trading 7,458 Deutsche Boerse 2,109 Royal Bank of Scotland 5,530 Anglo American 2,007 HBOS 5,058 Samsung Electronics 1,975 Barclays 4,841 BHP Billiton 1,878 Lloyds TSB 4,527 Gallaher 1,866 Total Fina Elf 4,349 Prudential 1,858 AstraZeneca 3,928 BSkyB 1,843 Unilever 3,813 D/S Svendborg 1,815 Diageo 3,609 Alliance & Leicester 1,784 BT 3,316 ISS 1,775 Nestle 3,064 BNP Paribas 1,762 Novartis 3,062 Carnival 1,748 ENI 3,035 NTT Docomo 1,732 Irish Life & Permanent 2,945 Galen 1,727 Philips Electronics 2,933 Dexia 1,725 Unibail 2,912 Greene King 1,689 British American Tobacco 2,442 Man 1,688 Tesco 2,435 Aviva 1,672 Allied Irish Banks 2,413 Swire Pacific 1,664 Aventis 2,226 Reckitt Benckiser 1,655 National Grid Transco 2,219 National Australia Bank 1,655 These investments total Â£165,436,000 which represents 49.1% of the portfolio. GEOGRAPHICAL DISTRIBUTION Valuation of investments Currency exposure 30 April 31 October 30 April 31 October 2003 2002 2003 2002 % % % % UK 58.4 58.1 55.6 56.3 Europe 17.2 17.6 22.6 21.3 North America 12.6 12.2 14.2 14.3 Japan 6.5 7.0 1.7 2.4 Far East 3.6 3.4 4.0 3.9 Other Countries 1.7 1.7 1.9 1.8 100.0 100.0 100.0 100.0 - ENDS - This information is provided by RNS The company news service from the London Stock Exchange

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