Interim Results - 6 Months to 30 April 2000
Bankers Investment Trust PLC
22 June 2000
THE BANKERS INVESTMENT TRUST PLC
Unaudited Interim Results for the Half Year Ended 30 April 2000
HIGHLIGHTS
* Net asset value per share up 9.5% to 346.2p.
* Second interim dividend of 1.55p net per ordinary share
(1999: 1.49p).
Extracts from the Chairman's Statement
Assets
Net assets per ordinary share increased by 9.5% compared to a
rise of 3.4% in the FTSE All- Share Index. Most equity
markets surged to new all time peak levels in the first two
months of our financial year stimulated by the onset of the
new millennium. However, the past six months will be
remembered for the massive rise in popularity of technology,
media and telephone stocks (TMT) which were eventually driven
to unsustainable ratings and since the middle of March have
lost a significant part of their rise.
Overseas equity markets have generally performed better in
sterling terms than the UK where the outlook for corporate
profits has been tempered by rising interest rates and the
strength of sterling. The UK equity market experienced the
greatest mania for TMT stocks which created a bear market in
old economy blue chips whilst our new economy stocks were
driven to significant premiums relative to their overseas
counterparts. In a particularly volatile environment, I am
pleased to report that we outperformed the main stock market
indices in our four major markets, UK, Europe, USA and Japan.
Earnings and Dividends
Earnings per share declined by 8.6% influenced by two main
factors. First, by a move towards more growth oriented but
lower yielding investments overseas. Second, there has also
been a slowdown in the rate of dividend increases. The
outlook for our total earnings is that they should exceed the
minimum forecast total dividend of 6.20p per share, an
increase of 3.3% over last year.
- 2 -
THE BANKERS INVESTMENT TRUST PLC
Unaudited Interim Results for the Half Year Ended 30 April 2000
Share Buy-backs
We purchased 12,356,000 of our own shares in the first half at
a cost of £36.2 million. The shares were bought on an average
discount of 16% to net asset value which represents an
enhancement of 4.2p per ordinary share to existing
shareholders. We renewed the authority to buy back shares at
the Annual General Meeting in February and currently have the
power to repurchase a further 22.25 million shares.
Directors
I am delighted to welcome David Thomas to the Board. He has
had a long and distinguished career as the Chief Investment
Officer of Equitable Life; and has a wealth of experience in
global investment. He is very supportive of investment trusts
in general and Bankers in particular.
Outlook
Most developed countries are experiencing economic growth with
moderate inflation. Very recently there have been signs of
the US economy slowing but it is too early to be sure that the
economy is on the Federal Reserve Board's desired path.
Further increases in short term interest rates may be
necessary before the economy slows down. Apart from Japan,
monetary policy may be tightened particularly in the USA,
Europe and the UK although the main boost to inflation from
the rapid rise in oil prices has probably now been absorbed.
Although the near term outlook for corporate profits is
favourable and equity markets have become more rational since
the puncturing of the TMT bubble, considerable growth
expectations remain priced in to fashionable areas of the
stockmarket. Many other sectors are far more reasonably
valued since the market correction. The world economy is in
better shape than for some time. Key to the outlook will be
the strength of the US economy and any evidence that interest
rates are peaking should reassure stock markets.
For further information contact:
Michael Moule Vicki Staveacre
The Bankers Investment Trust PLC Henderson Press
Office
Tel: 020 7410 4100 Tel: 020 7410 4028
Stephen Westwood
Head of Investment Trusts
Tel: 020 7477 5517
- 3 -
THE BANKERS INVESTMENT TRUST PLC
Unaudited Interim Results for the Half Year Ended 30 April 2000
HIGHLIGHTS
30 April 31 October % Change
2000 1999
Assets
Total assets less current £517,464,000 £513,827,000 +0.7
liabilities
Net asset value per ordinary 346.2p 316.1p +9.5
share
Ordinary share mid-market price 293.0p 273.5p +7.1
Discount (Share Price to Net 15.4% 13.5%
Asset Value)
Indices
FTSE All-Share Index 3,001.92 2,904.38 +3.4
Standard & Poor's Composite 1,452.42 1,362.92 +11.7*
Index
FT/S&P World Europe (ex UK) 350.43 306.80 +14.2
Index (£)
TOPIX (Tokyo First Section 1,648.87 1,563.89 +6.8*
Index)
FT/S&P World (ex UK) Index (£) 347.03 307.82 +12.7
50/50 FTSE All-Share/
FT/S&P World (ex UK) (£) 216.20 200.00 +8.1
*£ adjusted
(Restated+)
Half year
ended Half year % Change
30 April ended
2000 30 April
1999
Revenue
Gross revenue £6,699,000 £7,447,000 -10.0
Earnings per ordinary share 3.29p 3.60p -8.6
+Restated for changes in accounting policies, see note 1 on page 5.
- 4 -
THE BANKERS INVESTMENT TRUST PLC
Unaudited Interim Results for the Half Year Ended 30 April 2000
Group Statement of Total Return (incorporating the revenue account)
(Restated*)
Half year ended 30 Half year ended 30
April 2000 April 1999
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Total capital gains from - 40,430 40,430 - 77,019 77,019
investments
Income from fixed asset 5,909 - 5,909 6,662 - 6,662
investments
Other interest receivable 790 - 790 785 - 785
and similar income
------ ------ ------ ------ ------ ------
Gross revenue and capital 6,699 40,430 47,129 7,447 77,019 84,466
gains
Management fee (618) (541) (1,159) (567) (496) (1,063)
Other administrative (444) - (444) (248) - (248)
expenses
------ ------ ------ ------ ------ ------
Net return on ordinary
activities 5,637 39,889 45,526 6,632 76,523 83,155
before interest payable
and taxation
Interest payable (360) (840) (1,200) (370) (862) (1,232)
------ ------ ------ ------ ------ ------
Net return on ordinary
activities 5,277 39,049 44,326 6,262 75,661 81,923
before taxation
Taxation on net return on (421) 314 (107) (654) 413 (241)
ordinary activities
------ ------ ------ ------ ------ ------
Net return on ordinary
activities 4,856 39,363 44,219 5,608 76,074 81,682
after taxation
Appropriations - Dividends
Cumulative preference - - - (25) - (25)
stock
------ ------ ------ ------ ------ ------
Available for ordinary 4,856 39,363 44,219 5,583 76,074 81,657
shareholders
------ ------ ------ ------ ------ ------
Dividends - Ordinary
shares:
Over provision in prior 116 - 116 - - -
year
1st interim of 1.55p (2,199) - (2,199) (2,311) - (2,311)
(1999: 1.49p)
2nd interim of 1.55p (2,199) - (2,199) (2,311) - (2,311)
(1999: 1.49p)
------ ------ ------ ------ ------ ------
(4,282) - (4,282) (4,622) - (4,622)
------ ------ ------ ------ ------ ------
Transfer to reserves 574 39,363 39,937 961 76,074 77,035
====== ====== ===== ====== ====== =====
Return per ordinary share 3.29p 26.67p 29.96p 3.60p 49.04p 52.64p
(Note 2)
====== ====== ===== ====== ====== =====
The revenue columns of this statement represent the revenue accounts of
the Group.
* Restated for changes in accounting policies, see note 1 on page 5.
- 5 -
THE BANKERS INVESTMENT TRUST PLC
Unaudited Interim Results for the Half Year Ended 30 April 2000
SUMMARY OF GROUP NET ASSETS (Audited)
30 April 30 April 31
2000 1999 October
1999
£'000 £'000 £'000
Valuation of investments 507,915 520,333 493,377
Net current assets 9,549 6,987 20,450
--------- --------- ---------
Total assets less current 517,464 527,320 513,827
liabilities
Creditors: falling due after more (26,300) (27,861) (26,300)
than one year
Provision for liabilities and - - (66)
charges
--------- --------- ---------
Total net assets 491,164 499,459 487,461
Cumulative preference stock - (1,430) -
--------- --------- ---------
Net assets attributable to 491,164 498,029 487,461
ordinary shareholders ====== ====== ======
Number of ordinary shares in issue 141,865,000 155,121,015 154,221,015
Net asset value per ordinary share
after deducting prior charges at 346.2p 321.1p 316.1p
par
NOTES:
1.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 with effect from 1 November 1999. This represents a
change in accounting policy from prior periods in which
management fee and borrowing costs were charged wholly to
revenue. The comparatives for the half year ended 30 April 1999
have been restated accordingly. The effect of this change is
that net return on ordinary activities after taxation is
increased by £1,067,000 (1999: increased by £945,000).
The Company has also adopted Financial Reporting Standard (FRS)
16 'Current Tax' under which UK franked dividend income should be
accounted for net of the attributable tax credits. The
comparative figures for the half year ended 30 April 1999 have
been restated accordingly. The effect of this change is that net
return on ordinary activities before taxation is reduced by
£473,000 (1999: £558,000). However, there is no effect on the
revenue or capital returns per ordinary share, nor on the net
asset value per ordinary share.
2.Return per Ordinary Share
Revenue return per ordinary share is based on earnings
attributable to ordinary shares of £4,856,000 (1999: £5,583,000
as restated), and on the weighted average number of ordinary
shares in issue during the period of 147,598,231 (1999:
155,121,015).
Capital return per ordinary share is based on net capital gains
for the period of £39,363,000 (1999: £76,074,000 as restated),
and on the weighted average number of ordinary shares in issue
during the period of 147,598,231 (1999: 155,121,015).
- 6 -
THE BANKERS INVESTMENT TRUST PLC
Unaudited Interim Results for the Half Year Ended 30 April 2000
3.Share Buy-Backs
During the half year to 30 April 2000, the Company made
authorised market purchases for cancellation of 12,356,015 of its
own issued ordinary shares of 25p, representing 8.01% of its
called up share capital for an aggregate consideration of
£36,234,000.
4.Accounts for the year ended 31 October 1999
The figures and financial information for the year ended 31
October 1999 are extracted from the latest published accounts of
the Company and do not constitute the statutory accounts for that
year. These 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.
5.Dividend
The directors have declared a second interim dividend of 1.55p
(1999: 1.49p) net per ordinary share payable on 31 August 2000 to
shareholders registered on 28 July 2000. The shares will be
quoted ex-dividend on 24 July 2000.
6.Interim Report
The Interim Report will be posted to shareholders in July and
will be available from the Registered Office at 3 Finsbury
Avenue, London EC2M 2PA thereafter.
- 7 -
THE BANKERS INVESTMENT TRUST PLC
Unaudited Interim Results for the Half Year Ended 30 April 2000
LARGEST INVESTMENTS AT 30 APRIL 2000
The 50 largest investments (convertibles and all classes of equity
in any one company being treated as one investment) were as
follows:
Market Market
value value
£'000 £'000
Vodafone AirTouch 15,903 Toshiba 3,408
British 13,467 Oracle Systems 2,994
Telecommunications
BP Amoco 12,975 Prudential 2,958
Shell Transport & 12,018 Diageo 2,909
Trading
Glaxo Wellcome 11,094 Kyocera 2,885
Philips Electronics 10,516 Pearson 2,874
SmithKline Beecham 5,886 Reuters 2,873
Lloyds TSB 5,778 CGU 2,847
Total Fina 5,637 Tokyo Broadcasting 2,779
Systems
Siemens 5,482 Novartis 2,774
Henderson American 5,296 Granada 2,754
Smaller Co's
Royal Bank of Scotland 5,282 H.I.S. 2,729
Cable & Wireless 5,102 Nestle 2,717
VNU 4,798 Takefuji 2,704
Barclays 4,598 Tele Danmark 2,704
KPN 4,519 Deutsche Telekom 2,669
HSBC 4,408 Samsung Electronics 2,656
Cisco Systems 4,404 ABN-Amro 2,638
France Telecom 4,261 Citigroup 2,615
AstraZeneca 4,168 US Treasury 3.625% 2,573
(TIPS) 2028
Alcatel 4,155 Abbey National 2,560
General Electric 3,809 ENI 2,546
Marconi 3,687 Richemont 2,488
Telefonos de Mexico 3,458 Slough Estates 2,485
NTT DoCoMo 3,416 Aventis 2,469
These investments total £232,725,000 which represents 45.8% of the
portfolio.
GEOGRAPHICAL DISTRIBUTION
Valuation of Currency exposure
investments
30 April 31 30 April 31
2000 October 2000 October
% 1999 % 1999
% %
UK 51.5 53.0 50.6 51.8
Europe 19.3 17.7 20.6 19.7
USA 15.0 15.0 17.0 17.2
Japan 8.3 8.3 5.7 5.0
Hong Kong 1.1 1.3 1.2 1.3
Other Countries 4.8 4.7 4.9 5.0
100.0 100.0 100.0 100.0
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