Bankers Investment - Half-year Report
22/06/2023 16:08
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RNS Number : 6429D Bankers Investment Trust PLC 22 June 2023
LEGAL ENTITY IDENTIFIER: 213800B9YWXL3X1VMZ69
22 June 2023
THE BANKERS INVESTMENT TRUST PLC
('the Company')
Unaudited results for the half-year ended 30 April 2023
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 2023 30 April 2022
Net asset value ('NAV') per share 112.3p 113.0p
Share price 100.6p 105.9p
Revenue return per share 1.29p 1.08p
Dividends paid or declared in respect of the period(1) 1.24p 1.128p
Total return performance to 30 April 2023 (including dividends reinvested and
excluding transaction costs)
6 months 1 year 3 years 5 years 10 years
% % % % %
NAV(2) 8.1 1.5 32.0 44.3 157.6
FTSE World Index(3) 3.5 3.2 46.6 62.1 131.5
Share price(4) 5.4 -2.6 18.5 30.4 138.3
1 The first interim dividend for 2023 was paid on 31 May 2023; the second
interim dividend has been declared and will be paid on 31 August 2023
2 Net asset value total return per share with income reinvested and with debt
at par
3 For 10 years, this is a composite of the FTSE World Index and the FTSE
All-Share Index
4 Share price total return using mid-market closing price
Sources: Janus Henderson, Morningstar Direct and Refinitiv Datastream
INTERIM MANAGEMENT REPORT
Dear shareholder,
Performance
Your Company has delivered a strong net asset value total return over the six
months ended 30 April 2023 of 8.1% (2022: -5.6%) and a share price total
return of 5.4% (2022: -6.3%), outperforming the FTSE World Index total return
of 3.5% (2022: -2.6%). The Company's portfolio benefitted as equity markets
fared better than last year.
The majority of the regional portfolios, with the exception of Asia Pacific
and China, outperformed their respective benchmark indices. The UK portfolio
performed the best relative to its benchmark, outperforming by 3.1% and
reversing all the underperformance in 2022. The European portfolio benefitted
from positive news from the luxury consumer sector, responding to the opening
of travel and the Chinese economy. The Fund Manager discusses the key drivers
of performance in the period in more detail in his report.
Revenue
We have also seen the Company's revenue increase over the period, as corporate
profits defied the predictions of many commentators and held up well, with
profit margins improving on the back of price rises. This has enabled many of
the companies in the portfolio to increase their dividends paid from 2022
profits.
The change in the US portfolio has also boosted income from that region which,
combined with the continued good dividend growth elsewhere, has allowed us to
increase the Company's quarterly dividends quicker than we anticipated at the
year end. Our net revenue for the six months was £16.5 million (2022: £14.2
million), equivalent to 1.29p per share (2022: 1.08p).
A first interim dividend of 0.62p per share (2022: 0.55p) was paid on 31 May
2023. The Board has declared a second interim dividend of 0.62p (2022:
0.578p) per share, which will be payable on 31 August 2023 to shareholders on
the register on 28 July 2023.
Our current expectation is that our dividend for the full year will be at
least 7% above the level for 2022, higher than the 5% that we forecast
originally for 2023. This is supportive of our progressive dividend policy and
the Board anticipates continuing the Company's track record of successive
annual dividend growth which it has achieved over the past 56 years.
Share buy-backs
It is frustrating to see the Company's share price continue to trade at a wide
discount to its net asset value. However, we have taken advantage of this
opportunity to buy back shares from the market. This activity is beneficial to
ongoing shareholders, as shares are only purchased when the Company's shares
are trading at a discount, thereby enhancing shareholder value.
A total of 24,080,927 shares were bought back at an average discount of 9.0%
to the net asset value in the six months ended 30 April 2023 (2022: 4,243,874
shares bought back at an average discount of 6.0%) for a total consideration
of £24.9 million (2022: £4.5 million). The discount at 30 April 2023 was
10.4% (2022: 6.3%).
Board changes and succession planning
Isobel Sharp, Chair of the Audit Committee, is to step down from the Board on
30 June 2023. On behalf of the Board, I would like to express our gratitude
for her valued contribution during her tenure.
Julian Chillingworth, our Senior Independent Director, is to retire from the
Board at the conclusion of the 2024 AGM when he will have served for nine
years.
In line with its long-term succession planning, and very mindful of the FCA's
diversity targets, the Nominations Committee has begun the recruitment process
for additional non-executive Directors and the Board expects to make at least
one appointment before the year end.
Outlook
Following the opening of the Chinese economy we expect to see an economic
recovery under way in Asia and Japan where nearly a third of our assets are
invested. However, we should expect further volatility in equity markets due
to the uncertain trajectory of interest rates and the elevated levels of
inflation.
We remain relatively cautious in our outlook but optimistic that our improved
performance can continue. We are confident in the ability of our Fund Manager
and the investment philosophy applied to the portfolio. This provides the
flexibility for the regional portfolio managers to use their best ideas to
drive future growth as they continue to focus on finding quality companies at
the right price.
Simon Miller
Chair
22 June 2023
FUND MANAGER'S
REPORT
Market review
Persistent inflation during the period under review has meant central banks
around the world have continued raising interest rates to depress demand for
goods and services. The bottlenecks and limited supply of certain goods due to
Covid restrictions have generally eased, though the delayed impact of elevated
energy prices in 2022 is still being felt in consumer prices. Initially,
equity valuations were impacted by worries that reduced money supply and
higher borrowing costs would cause a recession. However, corporate earnings
and economic activity have been far more resilient than expected. Time will
tell whether trading down or changing spending patterns by consumers leads
companies to cut prices to maintain volumes or market share.
Growth stocks in the US corrected in price through the start of the period as
a response to rising interest rates, and because investors preferred more
defensive sectors. At the same time China abruptly opened its economy from
Covid restrictions and Asian markets responded favourably to expectations of
increased activity. In recent months there has been quite a reversal in both
these markets. The largest US technology companies, often referred to as the
FAANG stocks, have led a remarkable recovery driven by profit upgrades,
especially at Nvidia and Meta, combined with investors' enthusiasm for
everything related to generative artificial intelligence. Meanwhile the equity
market recovery in China has started to fade, although the 5% GDP target, if
met, would far exceed growth in any Western markets this year.
Europe and the UK have been the standout markets during the period, but it is
hard to put this down to positive news, rather it has been a lack of further
bad news. Investors were very downbeat towards the end of 2022. Although
economies in Europe have been weak, they have not collapsed, and markets had
been clearly oversold. Gas prices have fallen sharply over the winter and the
warmer than usual winter weather has helped limit reserve drawdown. Wage
growth has helped offset the higher interest rates, preserving consumers'
ability to keep spending.
Performance
Overall, the portfolio outperformed the benchmark FTSE World Index by 4.6%
over the period. The portfolio was positioned for a recovery in Asia and
performed well relative to the benchmark through October and November as
Chinese equities recovered. The allocation towards Europe and the UK also
provided an overall positive benefit, with these two portfolios generating a
total return of 19.3% and 12.5% respectively. As there was little actual good
news in the region, we reduced exposure to both in February and lowered the
portfolio's gearing. The gearing remained at 5% through to the period end as
we look forward to repaying the £15 million 2023 debenture at the end of
October. The majority of regional portfolios fared better in the period, with
the exception of Asia Pacific and China. The former was lacking exposure to
technology and in China the state-owned companies were the best performers in
the market, where we have no exposure.
The US portfolio was repositioned in mid-December, reflecting the transfer of
portfolio management to Jeremiah Buckley, who is based in Denver alongside the
large analyst team at Janus Henderson covering the US market. The change has
broadened coverage within the US stock market, increasing exposure to
pharmaceuticals and larger US financials. We held no exposure to US regional
banks which have experienced a flight of deposits in recent months and a sharp
correction in share prices.
The UK portfolio performed the best relative to its benchmark, outperforming
by 3.1% and reversing some of the underperformance in 2022. The European
portfolio benefitted from positive news from the luxury consumer sector,
responding to the opening of travel and the Chinese economy, with companies
such as Moncler and Hermès performing well. Other notable performers in the
portfolio were Microsoft in the US, Sony in Japan and 3i in the UK.
Outlook
Tighter monetary conditions, driven by increasing interest rates and bond
sales from central banks, have a dampening effect on economic activity.
However, the real economy is actually weathering these conditions well, with
many companies having low levels of debt and possessing pricing power, while
consumers are benefitting from wage growth or using savings to bolster
spending. However, the rate of inflation needs to fall. The alternative is
that interest rates will continue to rise or be maintained at a high level for
longer and their impact will be felt more deeply by many. There is good
evidence that prices are starting to moderate and, in the case of energy,
starting to fall. We expect markets in Asia to lead the recovery and are
positioned for better news in that region. However, we remain more cautious in
other regions.
Alex Crooke
Fund Manager
22 June 2023
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 2022. 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
22 June 2023
For further information contact:
Alex Crooke Simon Miller
Fund Manager Chair
The Bankers Investment Trust PLC The Bankers Investment Trust PLC
Telephone: 020 7818 4447 Telephone: 020 7818 4233
Dan Howe Harriet Hall
Head of Investment Trusts PR Manager, Investment Trusts
Janus Henderson Investors Janus Henderson Investors
Telephone: 020 7818 4458 Telephone: 020 7818 2636
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited) (Unaudited) (Audited)
Half-year ended Half-year ended Year ended
30 April 2023 30 April 2022 31 October 2022
Revenue return £'000 Capital return £'000 Revenue return £'000 Capital return £'000 Revenue return £'000 Capital return £'000
Total £'000 Total £'000 Total
£'000
Gains/(losses) on investments held at fair value through profit or loss - 93,419 93,419 - (100,441) (100,441) - (202,031) (202,031)
Investment income 19,070 - 19,070 17,822 - 17,822 37,814 - 37,814
Other operating income 1,073 - 1,073 62 - 62 394 - 394
--------- ----------- --------- --------- ----------- --------- --------- ------------ ------------
Gross revenue and capital gains/(losses) 20,143 93,419 113,562 17,884 (100,441) (82,557) 38,208 (202,031) (163,823)
---------- ------------ ----------- ---------- ------------ ----------- --------- ------------ ------------
Expenses
Management fees (note 2) (887) (2,071) (2,958) (992) (2,314) (3,306) (1,905) (4,446) (6,351)
Other expenses (378) - (378) (687) - (687) (1,364) - (1,364)
--------- ----------- --------- --------- ----------- --------- --------- --------- ---------
Profit/(loss) before finance costs and taxation 18,878 91,348 110,226 16,205 (102,755) (86,550) 34,939 (206,477) (171,538)
Finance costs (712) (1,573) (2,285) (695) (1,550) (2,245) (1,346) (3,141) (4,487)
--------- ------------ --------- --------- ------------ --------- --------- ------------ ---------
Profit/(loss) before taxation 18,166 89,775 107,941 15,510 (104,305) (88,795) 33,593 (209,618) (176,025)
Taxation (1,623) - (1,623) (1,337) - (1,337) (3,001) (145) (3,146)
--------- ------------ --------- --------- ------------ --------- --------- ---------- ---------
Profit/(loss) for the period 16,543 89,775 106,318 14,173 (104,305) (90,132) 30,592 (209,763) (179,171)
===== ======= ====== ===== ======= ====== ====== ======= =======
Earnings/(loss) per ordinary share (note 3) 1.29p 6.97p 8.26p 1.08p (7.95p) (6.87p) 2.34p (16.04p) (13.70p)
===== ====== ====== ====== ====== ====== ====== ======= =======
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
Called up Share premium Capital redemption Other capital
share capital account reserve reserves Revenue reserve
£'000 £'000 £'000 £'000 £'000 Total
£'000
Half-year ended 30 April 2023 (Unaudited)
Total equity at 1 November 2022 32,878 159,797 12,489 1,115,343 40,159 1,360,666
Total comprehensive income:
Profit for the period - - - 89,775 16,543 106,318
Transactions with owners, recorded
directly to equity:
Buy-back of shares to treasury (note 5) - - - (24,881) - (24,881)
Ordinary dividends paid (note 12) - - - - (15,535) (15,535)
---------- ---------- ---------- ------------- ---------- --------------
Total equity at 30 April 2023 32,878 159,797 12,489 1,180,237 41,167 1,426,568
====== ====== ====== ======== ====== ========
Called up Share premium Capital redemption Other capital
share capital account £'000 reserve reserves £'000 Revenue reserve
£'000 £'000 £'000 Total
Half-year ended 30 April 2022 (Unaudited) £'000
Total equity at 1 November 2021 32,827 159,797 12,540 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 (note 5) 51 - (51) (4,533) - (4,533)
Ordinary dividends paid (note 12) - - - - (14,289) (14,289)
---------- ---------- ---------- ------------- ---------- --------------
Total equity at 30 April 2022 32,878 159,797 12,489 1,234,793 38,473 1,478,430
====== ====== ====== ======== ====== ========
Called up Share premium Capital redemption Other capital
share capital account £'000 reserve £'000 reserves £'000 Revenue reserve Total
£'000 £'000 £'000
Year ended 31 October 2022 (Audited)
Total equity at 1 November 2021 32,827 159,797 12,540 1,343,631 38,589 1,587,384
Total comprehensive income:
- (Loss)/profit for the year - - - (209,763) 30,592 (179,171)
Transactions with owners, recorded directly to equity:
Buy-back of shares to treasury (note 5) 51 - (51) (18,525) - (18,525)
Ordinary dividends paid (note 12) - - - - (29,022) (29,022)
---------- ---------- ----------- ------------- ---------- -------------
Total equity at 31 October 2022 32,878 159,797 12,489 1,115,343 40,159 1,360,666
====== ====== ====== ======== ====== ========
The accompanying condensed notes are an integral part of the financial
statements.
CONDENSED STATEMENT OF FINANCIAL POSITION
(Unaudited) (Unaudited) (Audited)
As at 30 April As at 30 April As at 31 October
2023 2022 2022
£'000 £'000 £'000
Non-current assets
Investments held at fair value through profit or loss 1,489,862 1,575,875 1,433,728
------------- ------------- --------------
Current assets
Investments held at fair value through profit or loss (note 4) 26,353 1 1
Other receivables 13,619 7,241 4,497
Cash and cash equivalents 43,863 39,458 65,871
-------------- ------------- --------------
83,835 46,700 70,369
-------------- -------------- --------------
Total assets 1,573,697 1,622,575 1,504,097
-------------- -------------- --------------
Current liabilities
Other payables (6,801) (5,649) (4,151)
Debenture stock (15,000) - (15,000)
-------------- --------------- --------------
(21,801) (5,649) (19,151)
-------------- -------------- --------------
Total assets less current liabilities 1,551,896 1,616,926 1,484,946
-------------- -------------- --------------
Non-current liabilities
Debenture stock - (15,000) -
Unsecured loan notes (125,328) (123,496) (124,280)
------------ ------------ ------------
(125,328) (138,496) (124,280)
-------------- -------------- --------------
Net assets 1,426,568 1,478,430 1,360,666
======== ======== ========
Equity attributable to equity shareholders
Share capital (note 5) 32,878 32,878 32,878
Share premium account 159,797 159,797 159,797
Capital redemption reserve 12,489 12,489 12,489
Retained earnings:
Other capital reserves 1,180,237 1,234,793 1,115,343
Revenue reserve 41,167 38,473 40,159
-------------- -------------- --------------
Total equity 1,426,568 1,478,430 1,360,666
======== ======== ========
Net asset value per ordinary share (note 6) 112.3p 113.0p 105.1p
====== ====== ======
The accompanying condensed notes are an integral part of the financial
statements.
CONDENSED CASH FLOW STATEMENT
(Unaudited) (Unaudited) (Audited)
Half-year ended Half-year ended Year ended
30 April 30 April 31 October
Reconciliation of profit before taxation to net cash flow 2023 2022 2022
from operating activities £'000 £'000 £'000
Operating activities
Profit/(loss) before taxation 107,941 (88,795) (176,025)
Less:(gain)/loss on investments held at fair value through profit or loss (93,419) 100,441 202,031
Purchases of investments (611,067) (179,198) (419,661)
Sales of investments 649,246 195,164 476,954
Purchases of current asset investments (44,581) (17,498) (17,498)
Sales of current asset investments 18,229 26,095 26,095
Increase in securities purchased for future settlement 2,915 1,807 1,602
Increase in securities sold for future settlement (5,983) (662) -
(Increase)/decrease in other receivables (87) (76) 1
(Decrease)/increase in other payables (236) 117 (1,479)
(Increase)/decrease in accrued income (2,854) (2,769) (257)
Add back interest payable ('finance costs') 2,285 2,245 4,487
------------ ------------ --------------
Net cash inflow from operating activities 22,389 36,871 96,250
before interest and taxation
Interest paid (1,265) (2,456) (4,503)
Taxation on investment income (1,822) (1,451) (3,766)
------------ ------------ -------------
Net cash inflow from operating activities 19,302 32,964 87,981
======= ======= =======
Financing activities
Equity dividends paid (15,535) (14,289) (29,022)
Share buy-backs (24,881) (4,533) (18,207)
------------ ------------ -------------
Net cash outflow from financing activities (40,416) (18,822) (47,229)
======= ======= =======
(Decrease)/increase in cash (21,114) 14,142 40,752
Cash and cash equivalents at the start of the period 65,871 25,429 25,429
Exchange movements (894) (113) (310)
----------- ----------- -------------
Cash and cash equivalents at the end of the period 43,863 39,458 65,871
======= ======= =======
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 2023. 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 July 2022, 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
in any material way from those described in the annual report for the year
ended 31 October 2022.
These financial statements have not been either audited or reviewed by the
Company's Auditor.
2. Management fees
(Unaudited) (Unaudited) (Audited)
Half-year ended Half-year ended Year ended
30 April 2023 30 April 2022 31 October 2022
Revenue return Capital return Total Revenue return Capital return Total Revenue return Capital return Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investment management 887 2,071 2,958 992 2,314 3,306 1,905 4,446 6,351
===== ===== ===== ===== ===== ===== ===== ===== =====
3. Earnings per ordinary share
The earnings per ordinary share figure is based on the net profit for the
half-year of £106,318,000 (30 April 2022: net loss of £90,132,000; 31
October 2022: net loss of £179,171,000) and on 1,286,965,652 (30 April 2022:
1,312,859,609; 31 October 2022: 1,307,589,615) 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) (Unaudited) (Audited)
Half-year ended Half-year ended Year ended
30 April 2023 30 April 2022 31 October 2022
£'000 £'000 £'000
Revenue profit 16,543 14,173 30,592
Capital profit/(loss) 89,775 (104,305) (209,763)
------------ ------------ ------------
Total profit/(loss) 106,318 (90,132) (179,171)
======= ======= =======
Weighted average number of ordinary shares 1,286,965,652 1,312,859,609 1,307,589,615
in issue during each period
Revenue earnings per ordinary share 1.29p 1.08p 2.34p
Capital earnings/(loss) per ordinary share 6.97p (7.95p) (16.04p)
------------ ------------ ------------
Total earnings/(loss) per ordinary share 8.26p (6.87p) (13.70p)
======= ======= =======
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 2023 this holding had a value of
£26,353,000 (30 April 2022: £1,000; 31 October 2022: £1,000).
5. Share capital
At 30 April 2023 there were 1,315,102,830 ordinary shares of 2.5p each in
issue of which 44,332,551 were held in treasury (with no voting rights) (30
April 2022: 1,315,102,830 and 6,275,628 shares held in treasury; 31 October
2022: 1,315,102,830 of which 20,251,624 shares were held in treasury). During
the half-year ended 30 April 2023, 24,080,927 shares were bought back into
treasury at a total cost of £24,881,000 (half year to 30 April 2022:
4,243,874 shares were bought back into treasury for a total cost of
£4,533,000; year to 31 October 2022: 18,219,870 shares were bought back into
treasury for a total cost of £18,525,000). Since the period end, the Company
has not bought back any shares.
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 £1,426,568,000 (30 April 2022: £1,478,430,000; 31
October 2022: £1,360,666,000) and on 1,270,770,279 (30 April 2022:
1,308,827,202; 31 October 2022: 1,294,851,206) ordinary shares, being the
number of ordinary shares in issue with voting rights at the period end.
7. Bank loan
At 30 April 2023, the Company had drawn down £nil (30 April 2022 and 31
October 2022: £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 2023 was £15,224,000 (30 April 2022: £16,211,000; 31 October 2022:
£15,578,000). 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 2023 has been estimated to be £94,815,000 (30
April 2022: £114,900,000; 31 October 2022: £97,069,000) 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 2023 Level 1 £'000 Level 2 Level 3 Total
(Unaudited)
£'000 £'000 £'000
Investments including derivatives:
- Equity investments 1,489,862 - - 1,489,862
- Current asset investments 26,353 - - 26,353
-------------- --------- -------- --------------
Total financial assets carried at fair value 1,516,215 - - 1,516,215
======== ===== ==== ========
Financial assets at fair value through profit or loss at Level 1 Level 2 Level 3 Total
30 April 2022 (Unaudited) £'000 £'000 £'000 £'000
Investments including derivatives:
- Equity investments 1,575,874 - - 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 Level 1 Level 2 Level 3 Total
31 October 2022 (Audited) £'000 £'000 £'000 £'000
Investments including derivatives:
- Equity investments 1,433,727 - - 1,433,727
- Fixed interest investments - - 1 1
- Current asset investments 1 - - 1
------------- --------- ------ -------------
Total financial assets carried at fair value 1,433,728 - 1 1,433,729
======== ===== ==== =======
Level 3 investments at fair value through profit or loss (Unaudited) (Unaudited) (Audited)
Half-year ended Half-year Year ended
30 April 2023 ended 31 October 2022
£'000 30 April 2022 £'000
£'000
Opening balance 1 1 1
Disposal proceeds (1) - -
------ ------ ------
Closing balance - 1 1
==== ==== ====
10. Reconciliation of liabilities arising from financing activities
Non-cash changes
At Cash Amortisation Foreign At
1 November flows of issue costs exchange 30 April
2022 £'000 £'000 £'000 2023
£'000 £'000
Financing activities
Financing liabilities 139,280 - 12 1,036 140,328
----------- ------- -------- --------- ------------
Closing liabilities from financing 139,280 - 12 1,036 140,328
activities
======= ==== ==== ===== =======
Non-cash changes
At Cash Amortisation Foreign At
1 November flows of issue costs exchange 30 April
2021 £'000 £'000 £'000 2022
£'000 £'000
Financing activities
Financing liabilities 138,683 - 11 (198) 138,496
----------- ------- -------- --------- ------------
Closing liabilities from financing 138,683 - 11 (198) 138,496
activities
======= ==== ==== ===== =======
Non-cash changes
At Cash Amortisation Foreign At
1 November flows of issue costs exchange 31 October 2022
2021 £'000 £'000 £'000 £'000
£'000
Financing activities
Financing liabilities 138,683 - 24 573 139,280
---------- -------- -------- --------- ------------
Closing liabilities from financing 138,683 - 24 573 139,280
activities
====== ===== ==== ===== ======
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 and an assessment of the
liquidity of the portfolio. 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 0.62p (2022: 0.55p) per ordinary share was paid on
31 May 2023 to shareholders registered on 28 April 2023. The shares were
quoted ex-dividend on 27 April 2023. Based on the number of ordinary shares in
issue at 30 April 2023 (excluding the shares held in treasury) of
1,270,770,279 the cost of this dividend was £7,879,000.
The Directors have declared a second interim dividend of 0.62p (2022: 0.578p)
per ordinary share which will be payable on 31 August 2023 to shareholders on
the register on 28 July 2023. The shares will be quoted ex-dividend on 27 July
2023. Based on the number of shares in issue, excluding shares held in
treasury, at 22 June 2023 of 1,270,770,279 the cost of this dividend will be
£7,879,000.
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 2023 and
2022 have not been audited or reviewed by the Auditor.
The figures and financial information for the year ended 31 October 2022 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.
A glossary of terms and details of alternative performance measures can be
found in the annual report for the year ended 31 October 2022.
14. Half-year report
The half-year report is available on the Company's website
(www.bankersinvestmenttrust.com) or in hard copy from the Company's registered
office. An abbreviated version of this half-year report, the 'Update', will be
circulated to shareholders in early July 2023.
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
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), Hannah Philp, Isobel Sharp (Audit Committee
Chair), Charlotte Valeur 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 (http://www.bankersinvestmenttrust.com) .
25 Largest Investments
At 30 April 2023
Rank Rank Company Country Valuation Purchases Sales proceeds Appreciation/ Valuation
31 Oct
(depreciation)
30 Apr
30 Apr 2023 31 Oct 2022
£'000 £'000
2022 £'000 2023
£'000 £'000
1 7 Microsoft US 28,749 18,887 (2,423) 8,657 53,870
2 # Apple US 12,434 27,991 (5,010) 3,711 39,126
3 # Accenture US - 26,682 - (1,508) 25,174
4 # JP Morgan Chase US - 22,585 (938) 368 22,015
5 17 AstraZeneca UK 19,657 - (2,157) 2,556 20,056
6 # United Health US - 20,377 - (2,026) 18,351
7 9 Visa US 26,113 645 (9,693) 36 17,101
8 # KLA Corp US - 18,029 - (1,146) 16,883
9 24 TotalEnergies France 15,978 - (1,584) 1,138 15,532
10 # United Parcel US - 16,154 - (631) 15,523
11 5 American Express US 28,920 - (12,982) (518) 15,420
12 25 Nestlé Switzerland 15,693 - (1,555) 1,207 15,345
13 # Texas Instruments US - 16,282 - (1,036) 15,246
14 # McDonald's US - 14,175 - 863 15,038
15 # Deere & Co US - 19,308 (1,950) (2,820) 14,538
16 # Novo-Nordisk Denmark 9,332 1,572 (1,212) 4,170 13,862
17 # Sony Japan 10,482 376 - 2,957 13,815
18 22 Diageo UK 16,926 - (3,252) 83 13,757
19 # Toyota Motor Japan 15,011 222 (561) (1,456) 13,216
20 # Procter & Gamble US - 13,086 - 88 13,174
21 # Reckitt Benckiser UK 13,089 - (1,400) 1,284 12,973
22 # Chevron US - 13,214 - (504) 12,710
23 # Comcast US - 10,927 - 1,653 12,580
24 # Lloyds Banking UK 12,251 - (1,701) 1,968 12,518
25 # Sanofi France 11,393 195 (1,149) 1,820 12,259
236,028 240,707 (47,567) 20,914 450,082
All securities are equity investments
# Not in top 25 at 31 October 2022
Convertibles and all classes of equity in any one company are treated as one
investment
REVENUE GENERATED
30 April 2023 30 April 2022
£million £million
UK 4.7 6.1
Europe (ex UK) 3.1 4.0
North America 5.4 3.4
Japan 2.4 2.1
Pacific (ex Japan and China) 3.4 2.2
China 0.1 -
--------- ---------
19.1 17.8
===== =====
Source: Janus Henderson
GEOGRAPHICAL ANALYSIS Valuation of investments
Equities excluding cash held
30 April 2023 31 October 2022
% %
UK 16.8 17.3
Europe (ex UK) 17.1 17.0
North America 38.0 38.8
Japan 12.9 12.3
Pacific (ex Japan and China) 9.5 9.7
China 5.7 4.9
--------- ---------
100.0 100.0
===== =====
Source: Janus Henderson
SECTOR ANALYSIS
As a percentage of the investment portfolio excluding cash
30 April 2023 31 October 2022
% %
Financials 17.9 21.4
Industrials 16.5 19.3
Consumer Discretionary 15.4 12.3
Technology 14.2 13.9
Health Care 13.1 10.9
Consumer Staples 10.7 10.0
Telecommunications 3.7 2.3
Energy 3.1 2.5
Basic Materials 3.1 3.5
Real Estate 1.2 2.4
Utilities 1.1 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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