REG - Bankers Investment - Final Results
16/01/2025 07:00
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RNS Number : 5067T Bankers Investment Trust PLC 16 January 2025
LEGAL ENTITY IDENTIFIER: 213800B9YWXL3X1VMZ69
THE BANKERS INVESTMENT TRUST PLC
Financial results for the year ended 31 October 2024
This announcement contains regulated information
PERFORMANCE HIGHLIGHTS (1, 2)
31 October 2024 31 October 2023
NAV per share total return 21.1% 5.2%
Share price at year end(3) 110.8p 93.5p
NAV per ordinary share with debt at fair value 127.9p 111.0p
Dividend per share for year(4) 2.688p 2.56p
Dividend growth 5.0% 10.0%
(Discount)/premium with debt at fair value at year end(5) (13.4%) (15.8%)
Net (gearing)/cash at year end(6) (1.5%) (7.1%)
Ongoing Charge for year 0.51% 0.50%
LONG TERM TRACK RECORD TO 31 OCTOBER 2024
1 year 3 years 5 years 10 years 15 years
% % % % %
Total Return(7)
Net Asset Value 21.1 12.9 50.3 168.7 364.1
Share price 21.4 4.4 33.7 148.3 365.7
FTSE World Index(8) 26.1 29.5 78.8 174.0 341.1
( )
(1) A glossary of terms can be found in the Annual Report
(2) The alternative performance measures can be found in the Annual Report
(3) Share price is the mid-market closing price
(4) This represents the four ordinary dividends recommended or paid for the year
(see the Annual Report for more details)
(5) Based on the mid-market closing price with debt at fair value
(6) Net (gearing)/cash calculated in accordance with the gearing definition in the
alternative performance measures in the
Annual Report
(7) Total return assumes dividends reinvested and debt at fair value
(8) For the 10 and 15 years, this is a composite of the FTSE World Index and the
FTSE All-Share Index
Sources: Morningstar Direct, Janus Henderson, LSEG Datastream
CHAIR'S STATEMENT
Dear Shareholder,
Performance
In the year to 31 October 2024, your Company delivered strong absolute
performance with a net asset value total return of 21.1% (2023: 5.2%) and a
share price total return of 21.4% (2023: -0.7%). This underperformed the FTSE
World Index total return of 26.1% (2023: 5.7%). It is worth noting that only a
few investment funds have outperformed our global benchmark index this year.
Markets were dominated by returns in the US, led once more by the Magnificent
Seven technology companies. The US market rose by 30.3% in sterling terms
during the year, roughly double the return from European and Japanese stocks
over the same period. Both stock selection in the US and the Company's
relative underweight to the US market contributed to the underperformance.
Further discussion of performance is contained in the Fund Manager's report.
I believe that one of the benefits for shareholders of the Company's approach
to global investing is exposure to market experts, based in their regions.
This was demonstrated by the Japanese portfolio this year. While most
economies have suffered in recent years from higher inflation, the emergence
of Japan from decades of deflation has supported their stock market. The
declining working age population is leading to better wage growth. Japanese
companies are also improving productivity and increasing return on equity by
paying out a higher proportion of profits and buying back stock. Our Japanese
portfolio was able to benefit from these trends and outperformed the local
market during the year.
Portfolio changes
As reported in our half-year update, the portfolio is now managed through four
regional sleeves: Pan Europe, North America, Japan and Pan Asia. The
restructuring has concentrated the number of holdings to approximately 100.
The impact of dedicating more capital towards the best ideas in the portfolio
can be seen in the top 10 holdings amounting to 22.8% of gross assets this
year, compared to 17.4% last year.
The allocation towards the US equity market has increased from 40% a year ago
to 50% at the year end and is currently 60% at the time of writing. We hope to
see improved performance relative to the benchmark next year as a result of
these changes.
Revenue, dividends and share buybacks
Revenue earnings per share of 2.63p (2023: 2.72p) allows the Board to
recommend a final quarterly dividend of 0.672p per share, resulting in total
dividends per share for the year of 2.688p (2023: 2.56p), an increase over
last year of 5%. The final dividend will be paid on 28 February 2025 to
shareholders on the register of members at the close of business on 24 January
2025.
This will be the Company's 58(th) successive year of annual dividend growth,
the second longest record in the investment trust sector. As discussed in the
half-year update, the dominance of the low-yielding US stocks over global
markets has meant our income mandate has put the Company at some disadvantage
when it comes to capturing future capital returns. Revenue reserves will be
used to top up future dividends in the short to medium-term in order to give
the Manager the flexibility to invest in some of the lower-yielding sectors of
the market. The build-up in revenue reserves over the past decade will support
these efforts. The Company remains committed to progressive dividend growth.
For the current financial year, the Board expects to recommend dividend growth
of at least 2.0%, which is in line with the forecast for UK Consumer Price
Index ('CPI') inflation in a year's time and equates to a full year dividend
of 2.742p per share.
Discount management
In common with our investment trust peers, the Company's shares have continued
to trade at a wide discount to net asset value. A total of 88,341,407 shares
were bought back in the year ended 31 October 2024 (2023: 60,618,929 shares
were repurchased). This activity is beneficial to ongoing shareholders, as
shares are only purchased when the Company's shares are trading at a wide
discount thereby enhancing shareholder value. The Company will continue to
buyback shares to be held in treasury as appropriate.
Annual General Meeting ('AGM')
I look forward to welcoming shareholders to the Company's AGM, scheduled to
take place at 12 noon on Tuesday, 25 February 2025 at the offices of Janus
Henderson Investors at 201 Bishopsgate, London EC2M 3AE. Light refreshments
will be served. All voting will be on a poll and therefore we would ask that
you submit your proxy votes in advance of the meeting.
If you are unable to attend in person, you can watch the meeting live on the
internet by visiting www.janushenderson.com/bnkr-agm. If you have any
questions about the Annual Report, the Company's performance over the year,
the investment portfolio or any other matter relevant to the Company, please
write to us via email at ITSecretariat@janushenderson.com
(mailto:ITSecretariat@janushenderson.com) in advance of the AGM.
The Board is proposing a number of changes to modernise the Company's articles
of association as summarised in the Notice of Meeting. These changes are based
on the provisions of the Listing Rules and ensure that best practice on
corporate governance is enshrined within the Company's articles.
Outlook
I have cautious optimism about the future. The prospect for further interest
rate cuts on the back of lower inflation gives credence to the view that this
year's performance will not be given up next year. The new administration in
the US appears focused on growth and reform, which will be welcomed by many
businesses there.
The large unknown next year will be the effect of rising tariffs on global
trade, initiated by the US. I expect the worst-case headline figures will be
negotiated downwards by many countries and a stronger US dollar will
ironically reduce the impact of absorbing price rises for non-US companies.
Provided the economic outlook prevails, Bankers is in strong position to take
advantage of a broadening out in markets.
Simon Miller
Chair
Fund Manager's Report
The year started with optimism that, despite higher interest rates, the world
would avoid an economic recession. The view that central banks had engineered
a soft landing carried equity markets to new highs through the first half of
the year. Once more, technology shares and anything related to Artificial
Intelligence ('AI') led the way although the broader market, especially the
financials, did participate. In the summer, new job creation slowed and
inflation stopped its descent causing a wobble in markets. This was amplified
by negative news coming out of Asia and Europe, as their economic growth
stalled. Investors sought new policies in markets like China and Germany to
stimulate growth but politicians offered little to support their equity
markets. Meanwhile in July the Japanese currency reached breaking point and
sharply corrected against the US dollar, disrupting the Yen carry trade.
However, it did not take long for renewed optimism to be established as
interest rates in Europe and then the US, finally started to be cut. Our
financial year ended the week before the US presidential election with markets
at all time highs, buoyed by the prospect of a Trump win.
The portfolio performed in line with the market until mid-year when Asia and
Japan both diverged in performance from the rest of the world. Then Europe
also faded against the US following the collapse of the French government.
Finally, the US market left all others behind in the run up to the
presidential election. Our broadly diversified portfolio has impacted returns,
in a year when the US market outperformed the rest of the world by over 10%.
Stock selection was also affected by stock picking in the consumer
discretionary sector and health care. Consumers were clearly struggling with
higher inflation and spending patterns have changed, impacting some past
winners like Nike, Burberry and Samsonite. Health care stocks suffered from a
sharp derating as investors switched from defensive health care franchises to
chase the AI story. The technology underweight in the portfolio was eliminated
but not holding Nvidia proved painful for relative performance. The company
has strong new order growth but the valuation is now assuming that doubling
sales growth and elevated margins carry on for a decade ahead. This would be
an unusual outcome in a historically cyclical sector. Competition is also
increasing from in-house AI chips developed by the large Technology companies,
such as Alphabet and Meta.
The portfolio turnover was exceptional this year and will settle back next
year. We have taken advantage of market conditions and large block trades to
reposition the portfolio cost effectively, as well as raising the US
allocation. The reduction in stocks towards 100 holdings was completed in
October and the portfolio is more concentrated into the investment team's best
ideas. The Chinese A share portfolio was significantly reduced as we failed to
see meaningful government policy to revive the economy, retaining just two
holdings making electrical equipment and appliances.
Income and gearing
The underlying level of dividend growth that each of the companies we hold
have declared has broadly held up, although it is apparent that the companies
listed in the US increasingly favour a share buyback over cash distributions
to shareholders. The US market now yields just over 1% and this trend towards
higher levels of capex and buying back stocks is likely to affect future
income growth from that market. The overall investment income fell 6.9% during
the year, which reflects a higher proportion of the portfolio invested in zero
yielding securities, a higher allocation to the US market and raising cash for
the Company's buybacks. The declining number of shares in issue meant that the
Company's earnings per share only fell 3.3% during the year. The outlook for
income essentially depends on future corporate profits rising, although
structurally there is a shift amongst the wider investment community towards
prioritising capital return over dividends.
The gearing at the year end was relatively low at 1.5% as we sold down some
positions in Asia and the UK late in the year. We have subsequently increased
gearing post the year end. We also allowed the £20m loan facility with SMBC
Bank International to expire as we did not anticipate utilising the facility
while short term interest rates remain high. For the moment we have sufficient
levels of long-term borrowings at a historically low average cost of 2.7%.
Outlook
The health of the US economy and the impact of the new Trump administration
dominates the outlook for global equities. Experience tells us that seismic
shifts in economic growth are very rare and that we should probably expect
Trump's key policies of tariffs, deregulation and deportation of immigrants to
have only a modest effect on markets in the long term. Of course, in the short
term, there will be hyperbole from commentators, both positive and negative,
on the outlook. Trump's policies appear to be inflationary in nature and so it
is likely that higher short and more importantly long-term rates than over the
last twenty years will curtail much of the optimism eventually. The long-term
challenge for the US market is the scale of the budget deficit and whether
investors will continue to fund the US government at current yields.
Unlike the highly indebted governments around the world, the companies we own
have rarely been in better health. They have generally locked in the low
financing rates a few years back and are benefiting from growing levels of
capex developing new products and innovation in AI . We expect corporate
profits to rise further next year while interest rate cuts in Europe and Asia
will ease the pressure on consumers. The falling return on cash and shorter
dated bonds, will mean equities remain attractive to investors despite the
increase in valuations we have seen this year. We expect a broadening out of
markets as the earnings growth from those companies outside the handful of
large technology companies catches up and their valuations look far more
appealing.
Alex Crooke
Fund Manager
15 January 2025
MANAGING RISKS
The Board, with the assistance of Janus Henderson, has carried out a robust
assessment of the principal risks and uncertainties facing the Company
(including emerging risks) that would threaten its business model, future
performance, solvency, liquidity or reputation.
The Board regularly considers the principal risks facing the Company and has
drawn up a register of these risks.
The Board has a schedule of investment limits and restrictions, appropriate to
the Company's investment objective and policy, in order to mitigate these
risks as far as practicable. The Board monitors the Manager, its other service
providers and the internal and external environments in which the Company
operates to identify new and emerging risks.
Any new or emerging risks that are identified and that are considered to be
of significance are included in the Company's risk register together with any
mitigating actions required.
The Board proactively monitors all of these factors and has a strong focus on
continuing to educate itself about any relevant issues. Details of how the
Board monitors the services provided by Janus Henderson and its other
suppliers, and the key elements designed to provide effective internal
control, are explained further in the internal controls section of the
Corporate Governance Statement in the Annual Report. Further details of the
Company's exposure to market risk (including market price risk, currency risk
and interest rate risk), liquidity risk and credit and counterparty risk and
how they are managed are contained in the Annual Report.
The Board's policy on risk management has not materially changed during the
course of the reporting period and up to the date of the Annual Report.
The principal risks which have been identified and the steps taken by the
Board to mitigate these are as follows:
Risk Trend Mitigation
Investment activity and performance risks
An inappropriate investment strategy (for example, in terms of asset ↑ The Board monitors investment performance at each Board meeting
allocation or the level of gearing) may result in underperformance against the
Company's benchmark index and the companies in its peer group. and regularly reviews the extent of the
Company's borrowings.
Investment performance, over an extended period of time, may be impacted by
either external (political, financial shock, pandemic, climate change) or
internal factors (poor stock selection), leading to shareholders voting to The Board receives regular updates on professional and retail investor
wind up the Company. activity from the Manager and its brokers to inform themselves of investor
sentiment and how the Company is perceived in the market.
Portfolio and market risks
Although the Company invests almost entirely in securities that are listed on ↑ The Fund Manager seeks to maintain a diversified portfolio to mitigate
recognised markets, share prices may move rapidly. The companies in which against this risk. The Board regularly reviews the portfolio, investment
investments are made may operate unsuccessfully or fail entirely. A fall in activity and
the market value of the Company's portfolio would have an adverse effect on
shareholders' funds. The risks associated with a global pandemic and other performance.
health emergencies are 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. This is likely to
impact share prices of investments in the portfolio, to the extent not already Resolutions requiring shareholder approval and the explanation of those
factored into current prices. resolutions are posted to shareholders and are also made available on the
Company's website. The Board encourages all shareholders to vote, as they do
themselves in respect of their own shareholdings.
Lack of voting by shareholders may result in a change in control of the
Company which is not in shareholders interests.
Tax, legal and regulatory risks
A breach of section 1158/9 of the Corporation Tax Act 2010 could lead to the ↔ Janus Henderson has been contracted to provide investment, company
loss of investment trust status, resulting in capital gains realised within secretarial, administration and accounting services through qualified
the portfolio being subject to corporation tax. professionals.
A breach of the FCA's Rules could result in suspension of the Company's The Board receives internal control reports produced by Janus Henderson on a
shares, while a breach of the Companies Act could lead to criminal quarterly basis, which confirm tax, legal and regulatory compliance both in
proceedings. All breaches could result in financial or reputational damage. the UK and New Zealand.
The Company must also ensure compliance with the Listing Rules of the New
Zealand Stock Exchange.
Financial risks
By its nature as an investment trust, the Company's business activities are ↔ The Company has a diversified portfolio which comprises mainly investments in
exposed to currency, interest rate, liquidity, credit and counterparty risk. large and medium-sized companies and mitigates the Company's exposure to
liquidity risk.
The Company minimises the credit risk of a counterparty failing to deliver
securities or cash by dealing through organisations that have undergone
rigorous due diligence by Janus Henderson. Further information on the
mitigation of financial risks is included in note 16 in the Annual Report.
Operational and cyber risks
Disruption to, or failure of, Janus Henderson's accounting, dealing or payment ↑ The Board monitors the services provided by Janus Henderson, the Depositary
systems or the Depositary's records could prevent the accurate reporting and and its other service providers and receives reports on the key elements in
monitoring of the Company's financial position. The Company is also exposed place, including cyber attacks and information security, to provide effective
to the operational and cyber risks that one or more of its service providers internal control.
may not provide the required level of service or that AI has been used to hack
into business systems.
Risks associated with climate change Please refer to Investment activity and performance risks above and the
Environmental, Social and Governance Matters section in the Annual Report for
Risk that investee companies within the Company's portfolio fail to respond to ↑ further details.
the pressures of the growing climate emergency and fail to limit their carbon
footprint to regulated targets, resulting in reduced investor demand for their
shares and falling market values.
↑ - Increase ↔ No change ↓ Decrease
THE COMPANY'S VIABILITY
The UK Corporate Governance Code requires the Board to assess the future
prospects for the Company, and to report on the assessment within the Annual
Report.
The Board considered that certain characteristics of the Company's business
model and strategy are relevant to this assessment:
· The Company's investment objective, strategy and policy, which are subject to
regular Board monitoring, mean that the Company is normally invested in
readily realisable, listed securities and that the level of borrowings is
restricted.
· The Company is a closed-end investment company and therefore does not suffer
from the liquidity issues arising from unexpected redemptions. Without
pressure to sell, the Fund Manager has been able to rebalance tactically the
portfolio to take advantage of recovering markets.
Also relevant were a number of aspects of the Company's operational
agreements:
· The Company retains title to all assets held by the Custodian under the terms
of formal agreements with the Custodian and Depositary.
· Long-term borrowing is in place, being the £50 million 3.68% loan notes 2035,
£37 million 2.28% loan notes 2045 and €44 million 1.67% loan notes 2041,
which are also subject to formal agreements, including financial covenants
with which the Company complied in full during the year. The value of
long-term borrowing is relatively small in comparison to the value of net
assets, being 8.6% (2023: 9.4%).
· Revenue and expenditure forecasts are reviewed by the Directors at each Board
meeting.
· The Company's ongoing charge is amongst the lowest of actively managed
equities funds.
· Cash is held with approved banks.
In addition, the Directors carried out a robust assessment of the principal
risks and uncertainties which could threaten the Company's business model,
including future performance, liquidity and solvency. These risks, including
their mitigations and processes for monitoring them, are set out in the Annual
Report.
The principal risks identified as relevant to the viability assessment were
those relating to investment portfolio performance and its effect on the net
asset value, share price and dividends, and threats to security over the
Company's assets. The Board took into account the liquidity of the Company's
portfolio, the existence of the long-term fixed rate borrowings, the effects
of any significant future falls in investment values and income receipts on
the ability to repay and re-negotiate borrowings, growing dividend payments,
the desire to retain investors and the potential need for share buybacks. The
Directors assess viability over five year rolling periods, taking account of
foreseeable severe but plausible scenarios, having reviewed a five-year
cash-flow forecast and sensitivity analysis, reflecting the potential impact
of the principal risks as a whole, to support its deliberations. The Directors
believe that a rolling five-year period best balances the Company's long-term
objective, its financial flexibility and scope with the difficulty in
forecasting economic conditions affecting the Company and its shareholders.
In coming to this conclusion, the Directors have considered the ongoing impact
of the wars in Ukraine and Israel and changes in the international political
landscape in particular the impact on income and the Company's ability to meet
its investment objective. The Board does not believe that these will have a
long-term impact on the viability of the Company and its ability to continue
in operation, notwithstanding the short-term uncertainty it has caused in the
markets.
Based on their assessment, and in the context of the Company's business model,
strategy and operational arrangements set out above, the Directors have a
reasonable expectation that the Company is able to continue in operation and
meet its liabilities as they fall due over the five-year period to 31 October
2029.
The Directors have also concluded that the Company has adequate resources to
continue in operational existence for at least 12 months from the date of
approval of these financial statements being 31 January 2026, and it is
therefore appropriate to prepare these financial statements on a going concern
basis.
RELATED PARTY TRANSACTIONS
The Company's transactions with related parties in the year were with its
Directors and Janus Henderson. There were no material transactions between the
Company and its Directors during the year other than the amounts paid to them
in respect of Directors' remuneration for which there were no outstanding
amounts payable at the year end. In relation to the provision of services by
the Manager, other than fees payable by the Company in the ordinary course of
business and the provision of marketing services, there were no transactions
with the Manager affecting the financial position of the Company during the
year. More details on transactions with the Manager, including amounts
outstanding at the year end, are given in note 23 in the Annual Report.
STATEMENT OF DIRECTORS' RESPONSIBILITIES UNDER DISCLOSURE GUIDANCE AND
TRANSPARENCY RULE 4.1.12
Each of the Directors, who are listed in the Annual Report, confirms that, to
the best of his or her knowledge:
· the financial statements, which have been prepared in accordance with
UK-adopted International Accounting Standards on a going concern basis, give a
true and fair view of the assets, liabilities, financial position and profit
of the Company; and
· the Strategic Report in the Annual Report and financial statements include a
fair review of the development and performance of the business and the
position of the Company, together with a description of the principal risks
and uncertainties that it faces.
For and on behalf of the Board
Richard West
Senior Independent Director
15 January 2025
Also relevant were a number of aspects of the Company's operational
agreements:
· The Company retains title to all assets held by the Custodian under the terms
of formal agreements with the Custodian and Depositary.
· Long-term borrowing is in place, being the £50 million 3.68% loan notes 2035,
£37 million 2.28% loan notes 2045 and €44 million 1.67% loan notes 2041,
which are also subject to formal agreements, including financial covenants
with which the Company complied in full during the year. The value of
long-term borrowing is relatively small in comparison to the value of net
assets, being 8.6% (2023: 9.4%).
· Revenue and expenditure forecasts are reviewed by the Directors at each Board
meeting.
· The Company's ongoing charge is amongst the lowest of actively managed
equities funds.
· Cash is held with approved banks.
In addition, the Directors carried out a robust assessment of the principal
risks and uncertainties which could threaten the Company's business model,
including future performance, liquidity and solvency. These risks, including
their mitigations and processes for monitoring them, are set out in the Annual
Report.
The principal risks identified as relevant to the viability assessment were
those relating to investment portfolio performance and its effect on the net
asset value, share price and dividends, and threats to security over the
Company's assets. The Board took into account the liquidity of the Company's
portfolio, the existence of the long-term fixed rate borrowings, the effects
of any significant future falls in investment values and income receipts on
the ability to repay and re-negotiate borrowings, growing dividend payments,
the desire to retain investors and the potential need for share buybacks. The
Directors assess viability over five year rolling periods, taking account of
foreseeable severe but plausible scenarios, having reviewed a five-year
cash-flow forecast and sensitivity analysis, reflecting the potential impact
of the principal risks as a whole, to support its deliberations. The Directors
believe that a rolling five-year period best balances the Company's long-term
objective, its financial flexibility and scope with the difficulty in
forecasting economic conditions affecting the Company and its shareholders.
In coming to this conclusion, the Directors have considered the ongoing impact
of the wars in Ukraine and Israel and changes in the international political
landscape in particular the impact on income and the Company's ability to meet
its investment objective. The Board does not believe that these will have a
long-term impact on the viability of the Company and its ability to continue
in operation, notwithstanding the short-term uncertainty it has caused in the
markets.
Based on their assessment, and in the context of the Company's business model,
strategy and operational arrangements set out above, the Directors have a
reasonable expectation that the Company is able to continue in operation and
meet its liabilities as they fall due over the five-year period to 31 October
2029.
The Directors have also concluded that the Company has adequate resources to
continue in operational existence for at least 12 months from the date of
approval of these financial statements being 31 January 2026, and it is
therefore appropriate to prepare these financial statements on a going concern
basis.
RELATED PARTY TRANSACTIONS
The Company's transactions with related parties in the year were with its
Directors and Janus Henderson. There were no material transactions between the
Company and its Directors during the year other than the amounts paid to them
in respect of Directors' remuneration for which there were no outstanding
amounts payable at the year end. In relation to the provision of services by
the Manager, other than fees payable by the Company in the ordinary course of
business and the provision of marketing services, there were no transactions
with the Manager affecting the financial position of the Company during the
year. More details on transactions with the Manager, including amounts
outstanding at the year end, are given in note 23 in the Annual Report.
STATEMENT OF DIRECTORS' RESPONSIBILITIES UNDER DISCLOSURE GUIDANCE AND
TRANSPARENCY RULE 4.1.12
Each of the Directors, who are listed in the Annual Report, confirms that, to
the best of his or her knowledge:
·
the financial statements, which have been prepared in accordance with
UK-adopted International Accounting Standards on a going concern basis, give a
true and fair view of the assets, liabilities, financial position and profit
of the Company; and
·
the Strategic Report in the Annual Report and financial statements include a
fair review of the development and performance of the business and the
position of the Company, together with a description of the principal risks
and uncertainties that it faces.
For and on behalf of the Board
Richard West
Senior Independent Director
15 January 2025
STATEMENT OF COMPREHENSIVE INCOME
Year ended Year ended
31 October 2024 31 October 2023
(Audited) (Audited)
Revenue Capital Total Revenue Capital Total
return return return return return return
£'000 £'000 £'000 £'000 £'000 £'000
Gains on investments held at fair value through profit or loss - 205,394 205,394 - 37,376 37,376
Investment income (note 2) 37,652 - 37,652 40,439 - 40,439
Other operating income 1,003 - 1,003 1,326 - 1,326
(note 3)
----------- ------------ ------------ --------- ------------ --------------
Total income 38,655 205,394 244,049 41,765 37,376 79,141
----------- ------------ ------------ --------- ------------ --------------
Expenses
Management fees (note 4) (1,856) (4,334) (6,190) (1,790) (4,176) (5,966)
Other expenses (1,329) - (1,329) (970) - (970)
(note 5)
--------- --------- --------- --------- --------- ---------
Profit before finance costs and taxation 35,470 201,060 236,530 39,005 33,200 72,205
Finance costs (note 6) (998) (2,329) (3,327) (1,346) (3,211) (4,587)
--------- ------------ ------------ --------- ------------ ------------
Profit before taxation 34,472 198,731 233,203 37,629 29,989 67,618
--------- ---------- ----------- --------- ---------- ----------
Taxation (note 7) (3,194) (59) (3,253) (3,061) - (3,061)
--------- ---------- ----------- --------- ---------- ----------
Profit for the year and total comprehensive income 31,278 198,672 229,950 34,568 29,989 64,557
====== ======= ======= ====== ======= =======
Earnings per ordinary share - basic and diluted (note 8) 2.63p 16.70p 19.33p 2.72p 2.35p 5.07p
====== ======= ======= ====== ======= =======
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. The Company has no recognised gains or losses other than
those disclosed in the Statement of Comprehensive Income.
Statement of CHANGES IN EQUITY
Year ended 31 October 2024
Called-up Share premium Capital redemption Other capital Revenue reserve Total
share capital account reserve reserves £'000 £'000
£'000 £'000 £'000 £'000
Total equity at 1 November 2023 32,878 159,797 12,489 1,084,848 43,511 1,333,523
Total comprehensive income:
- Profit for the year - - - 198,672 31,278 229,950
Transactions with owners, recorded directly to equity:
- Buyback of shares to treasury - - - (97,331) - (97,331)
(note 9)
Ordinary dividends paid (note 11) - - - - (31,996) (31,996)
---------- ---------- ----------- ------------- ---------- -------------
Total equity at 31 October 2024 32,878 159,797 12,489 1,186,189 42,793 1,434,146
====== ====== ====== ======== ====== ========
Year ended 31 October 2023
Called-up Share premium Capital redemption Other capital Revenue reserve Total
share capital account reserve reserves £'000 £'000
£'000 £'000 £'000 £'000
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 year - - - 29,989 34,568 64,557
Transactions with owners, recorded directly to equity:
- Buyback of shares to treasury (note 9) - - - (60,484) - (60,484)
Ordinary dividends paid (note 11) - - - - (31,216) (31,216)
---------- ---------- ----------- ------------- ----------- --------------
Total equity at 31 October 2023 32,878 159,797 12,489 1,084,848 43,511 1,333,523
====== ====== ====== ======== ====== ========
STATEMENT OF FINANCIAL POSITION
At 31 October 2024 At 31 October 2023
£'000 £'000
Non-current assets
Investments held at fair value through profit or loss 1,455,333 1,428,787
-------------- --------------
Current assets
Investments held at fair value through profit or loss 33,549 13,116
Other receivables 4,646 19,001
Cash and cash equivalents 66,689 14,525
-------------- --------------
104,884 46,642
-------------- --------------
Total assets 1,560,217 1,475,429
-------------- --------------
Current liabilities
Other payables (2,315) (17,006)
-------------- --------------
(2,315) (17,006)
-------------- --------------
Total assets less current liabilities 1,557,902 1,458,423
-------------- --------------
Non-current liabilities
Unsecured loan notes (123,756) (124,900)
-------------- ------------
(123,756) (124,900)
-------------- -------------
Net assets 1,434,146 1,333,523
======== ========
Equity attributable to equity shareholders
Share capital (note 9) 32,878 32,878
Share premium account 159,797 159,797
Capital redemption reserve 12,489 12,489
Retained earnings:
Other capital reserves 1,186,189 1,084,848
Revenue reserve 42,793 43,511
-------------- --------------
Total equity 1,434,146 1,333,523
======== ========
Net asset value per ordinary share (note 10) 125.2p 108.0p
======== ========
The financial statements in the Annual Report were approved by the Board of
Directors on 15 January 2025.
Cash Flow STATEMENT
Reconciliation of profit before taxation to net cash flow from operating Year ended Year ended
activities
31 October 31 October
2024 2023
£'000 £'000
Operating activities
Profit before taxation 233,203 67,618
Gain on investments held at fair value through profit or loss (205,394) (37,376)
Purchases of investments (1,013,738) (830,071)
Sales of investments 1,191,430 872,865
Purchases of current asset investments (117,393) (80,700)
Sales of current asset investments 96,959 67,585
(Decrease)/increase in securities purchased for future settlement (13,721) 12,119
Decrease/(increase) in other receivables 32 (58)
Decrease in other payables (94) (169)
Decrease/(increase) in accrued income 502 (14,217)
Add back interest payable ('finance costs') 3,327 4,587
----------- -----------
Net cash inflow from operating activities before interest and taxation(1) 175,113 62,183
----------- -----------
Interest paid (4,506) (4,525)
Taxation on investment income (2,932) (3,290)
----------- -----------
Net cash inflow from operating activities 167,675 54,368
----------- -----------
Financing activities
Equity dividends paid (net of refund of unclaimed distributions) (31,996) (31,216)
Redemption of debenture - (15,000)
Share buybacks (98,207) (59,579)
------------- -------------
Net cash (outflow)/inflow from financing activities (130,203) (105,795)
------------- -------------
Increase/(decrease) in cash 37,472 (51,427)
Cash and cash equivalents at the start of the year 14,525 65,871
Exchange movements (14) 81
------------- -------------
Cash and cash equivalents at the end of the year 51,983 14,525
======= =======
(1) Cash inflow from dividends was £33,624,000 (2023: £36,225,000) and cash
inflows from interest was £1,767,000 (2023: £1,349,000).
NOTES TO THE FINANCIAL STATEMENTS
1a. Accounting policies
The Bankers Investment Trust PLC is a company incorporated and domiciled in
the United Kingdom under the Companies Act 2006. The financial statements of
the Company for the year ended 31 October 2024 have been prepared in
accordance with UK-adopted International Accounting Standards.
The financial statements have been prepared on a going concern basis. The
principal accounting policies adopted are set out in the Annual Report. These
policies have been applied consistently throughout the year. Where
presentational guidance set out in the Statement of Recommended Practice ('the
SORP') for investment companies issued by the Association of Investment
Companies ('the AIC') amended in July 2022 is consistent with the requirements
of UK-adopted International Accounting Standards, the Directors have sought to
prepare the financial statements on a basis consistent with the
recommendations of the SORP.
Going concern
In reviewing viability (see Annual Report) and 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 and the impact of the wars in
Ukraine and Israel and changes in the international political landscape. 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 to 31
January 2026. Accordingly, the Directors continue to adopt the going concern
basis in preparing the financial statements.
2. Investment income 2024 2023
£'000 £'000
UK dividend income - listed 8,341 9,308
Overseas dividend income - listed 28,241 30,205
Overseas dividend income - special dividends 829 702
Property income distributions 241 224
----------- -----------
37,652 40,439
====== ======
Analysis of investment income by geographical region:
Europe and UK(1) now Pan Europe 15,443 16,695
North America 10,478 10,866
Japan 4,073 4,275
Pacific (ex Japan)(1) now Pan Asia 7,658 8,603
----------- -----------
37,652 40,439
====== ======
( )
(1) 2023 figures have been reclassified as UK has combined with Europe and
China has combined with Pacific
(ex Japan)
( )
3. Other operating income 2024 2023
£'000 £'000
Bank interest 990 1,311
Other income 13 15
-------- --------
1,003 1,326
===== =====
2024 2023
4. Management fees Revenue Capital Total Revenue Capital Total
return return return return return return
£'000 £'000 £'000 £'000 £'000 £'000
Investment Management 1,856 4,334 6,190 1,790 4,176 5,966
-------- -------- -------- ------- -------- --------
1,856 4,334 6,190 1,790 4,176 5,966
===== ===== ===== ==== ===== =====
A summary of the terms of the management agreement is given in the Business
Model in the Annual Report.
5. Other expenses 2024 2023
£'000 £'000
Directors' fees and expenses (see Annual Report) 213 206
Auditors' remuneration - for audit services 55 52
Expenses payable to Janus Henderson relating to marketing services 182 68
Bank/custody charges 259 259
Depositary fees 60 53
Registrar fees 78 64
Broker fees 70 -
AIC subscriptions 21 21
Printing expenses 30 60
Legal fees 15 (175)
Listing fees 142 109
Irrecoverable VAT 15 14
Loan arrangement & non-utilisation fees(1) 25 80
Other expenses 164 159
----------- -----------
1,329 970
====== ======
1 The Company's multi-currency facility with SMBC Bank International plc
expired on 26 February 2024 and has not been renewed.
The compensation payable to key management personnel in respect of short term
employment benefits was £210,000 (2023: £206,000) which relates wholly to
the fees and expenses payable to the Directors in respect of the year.
2024 2023
6. Finance Costs Revenue Capital Total Revenue return Capital Total return
return return return £'000 return £'000
£'000 £'000 £'000 £'000
Interest on bank overdrafts - 1 1 - 1 1
Interest on debenture repayable:
- less than one year(1) - - - 360 840 1,200
Interest on unsecured loan notes repayable:
- after five years(2) 998 2,328 3,326 1,016 2,370 3,386
--------- --------- --------- --------- --------- ---------
998 2,329 3,327 1,376 3,211 4,587
===== ===== ===== ===== ===== =====
1 Repayment of Debenture on 31 October 2023
2 Includes amortisation of issue costs and will therefore vary from year to
year.
7. Taxation
a) Analysis of the tax charge for the year
2024 2023
Revenue return Capital Total Revenue return Capital Total
£'000 return return £'000 return return
£'000 £'000 £'000 £'000
Overseas tax suffered 3,857 - 3,857 3,322 - 3,322
Indian capital gains tax charge on sales - 59 59 - - -
Overseas tax reclaimable (663) - (663) (261) - (261)
-------- -------- -------- -------- -------- --------
Total tax charge for the year 3,194 59 3,253 3,061 - 3,061
===== ===== ===== ===== ===== =====
b) Factors affecting the tax charge for the year
The differences are explained below:
2024 2023
Revenue return Capital Total return Revenue return Capital Total
£'000 return £'000 £'000 return return
£'000 £'000 £'000
Profit before taxation 34,472 198,731 233,203 37,629 29,989 67,618
Corporation tax for the year at 25.00% (2023: 22.50%(1)) 8,618 49,683 58,301 8,467 6,747 15,214
Non-taxable UK dividends (1,823) - (1,823) (1,972) - (1,972)
Overseas income and non-taxable scrip dividends (7,197) - (7,197) (6,717) - (6,717)
Overseas withholding tax suffered 3,194 - 3,194 3,061 - 3,061
Indian capital gains tax charge on sales - 59 59 - - -
Excess management expenses and loan relationships 402 1,665 2,067 182 1,572 1,754
Interest capping restriction - - - 40 90 130
Capital gains not subject to tax - (51,348) (51,348) - (8,409) (8,409)
-------- ----------- --------- -------- --------- ---------
3,194 59 3,253 3,061 - 3,061
===== ======= ====== ===== ===== =====
( )
( )1 The 2023 rate comprised seven months at the rate of 25% and five months
at the previous rate of 19%
c) Provision for deferred taxation
No provision for deferred taxation has been made in the current year or in the
prior year.
The Company has not provided for deferred tax on capital gains or losses
arising on the revaluation or disposal of investments as it is exempt from tax
on these items because of its status as an investment trust, which it intends
to maintain for the foreseeable future.
d) Factors that may affect future tax charges
The Company can offset management fees, other administrative expenses and
interest costs against taxable income to eliminate any tax charge on such
income. The tax legislation refers to these as management expenses (management
fees and other administrative expenses) and non-trade loan relationship
deficits (interest costs) and these are captured together under the heading
'Excess management expenses and loan relationships' in the table above. Where
these are not fully utilised, they can be carried forward to future years. As
the Company is unlikely to generate future taxable profits to utilise these
amounts, the Company cannot recognise an asset to reflect them, but must still
disclose the deferred tax amount carried forward arising from any unutilised
amounts.
Consequently, the Company has not recognised a deferred tax asset totalling
£23,763,000 (2023: £21,687,000) arising as a result of having unutilised
management expenses and unutilised non-trade loan relationship deficits
totalling £95,053,000 (2023: £86,749,000) and based on the prospective tax
rate of 25% (2023: 25%).
8. Earnings per ordinary share
The total earnings per ordinary share is based on the net profit attributable
to the ordinary shares of £229,950,000 (2023: profit of £64,557,000) and on
1,189,599,929 ordinary shares (2023: 1,272,116,196), being the weighted
average number of shares in issue, excluding shares held in treasury, during
the year.
The total earnings can be further analysed as follows:
2024 2023
£'000 £'000
Revenue profit 31,278 34,568
Capital profit 198,672 29,989
------------------- -------------------
Profit for the year 229,950 64,557
------------------- -------------------
Weighted average number of ordinary shares 1,189,599,929 1,272,116,196
Revenue earnings per ordinary share 2.63p 2.72p
Capital earnings per ordinary share 16.70p 2.35p
------------------ ------------------
Earnings per ordinary share 19.33p 5.07p
========== ==========
The Company does not have any dilutive securities therefore basic and diluted
earnings are the same.
9. Called up share capital
Number of Number of Total number Nominal value
shares held in treasury shares entitled of shares of shares
to dividend in issue
£'000
Ordinary shares
At 1 November 2023 80,870,553 1,234,232,277 1,315,102,830 32,878
Buyback of ordinary shares 88,341,407 (88,341,407) - -
---------------- ------------------- ------------------- -----------
At 31 October 2024 169,211,960 1,145,890,870 1,315,102,830 32,878
========= =========== =========== ======
During the year no new shares were issued and 88,341,407 shares were bought
back into treasury for a net payment of £97,331,000.
Number of Number of Total number Nominal value
shares held in treasury shares entitled of shares of shares in issue
to dividend £'000
Ordinary shares
At 1 November 2022 20,251,624 1,294,851,206 1,315,102,830 32,878
Buyback of ordinary shares at 31 October 2023 60,618,929 (60,618,929) - (-)
----------------- -------------------- ------------------- -----------
80,870,553 1,234,232,277 1,315,102,830 32,878
----------------- -------------------- ------------------- -----------
In the year ended 31 October 2023, no new shares were issued and 60,618,929
shares were bought back into treasury for a net payment of £60,484,000.
10. Net asset value per ordinary share
The net asset value per ordinary share is based on net assets attributable to
ordinary shares of £1,434,146,000 (2023: £1,333,523,000) and on
1,145,890,870 ordinary shares in issue at 31 October 2024 (2023:
1,234,232,277), excluding shares held in treasury. The Company has no
securities in issue that could dilute the net asset value per ordinary share.
The movements during the year in net assets attributable to the ordinary
shares were as follows:
2024 2023
£'000 £'000
Net assets attributable to ordinary shares at start of year 1,333,523 1,360,666
Total net profit on ordinary activities after taxation 229,950 64,557
Buyback of ordinary shares (97,331) (60,484)
Dividends paid (31,996) (31,216)
------------- -------------
Net assets attributable to ordinary shares at end of year 1,434,146 1,333,523
======== ========
11. Dividend
A final dividend of 0.672p per share (2023: 0.66p), if approved by
shareholders at the Annual General Meeting, will be paid on 28 February 2025
to shareholders on the register on 24 January 2025. The shares go ex-dividend
on 23 January 2025. This final dividend, together with the three interim
dividends already paid brings the total dividend for the year to 2.688p (2023:
2.56p) per share.
12. 2024 Financial Information
The figures and financial information for the year ended 31 October 2024 are
extracted from the Company's annual financial statements for that year and do
not constitute statutory accounts. The Company's annual financial statements
for the year to 31 October 2024 have been audited but have not yet been
delivered to the Registrar of Companies. The Auditor's report on the 2024
annual financial statements was unqualified, did not include a reference to
any matter to which the Auditor drew attention without qualifying the report,
and did not contain any statements under Section 498 of the Companies Act
2006.
13. 2023 Financial Information
The figures and financial information for the year ended 31 October 2023 are
compiled from an extract of the published accounts for that year and do not
constitute statutory accounts. Those accounts 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 Sections 498(2) or 498(3) of
the Companies Act 2006.
14. Annual Report
The Annual Report will be posted to shareholders in January 2025 and will be
available at www.bankersinvestmenttrust.com
(http://www.bankersinvestmenttrust.com) or in hard copy from the Corporate
Secretary at the Company's registered office, 201 Bishopsgate, London, EC2M
3AE.
15. Annual General Meeting ('AGM')
The AGM will be held at 12 noon on Tuesday, 25 February 2025 at the Company's
registered office, 201 Bishopsgate, London, EC2M 3AE. The Notice of Meeting
will be sent to shareholders with the Annual Report.
16. General information
Company Status
The Company is a UK domiciled investment trust company with registered number
00026351.
SEDOL/ISIN number: BN4NDR3/GB00BN4NDR39
London Stock Exchange (TIDM) Code: BNKR
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), Richard West (Senior
Independent Director), Ankush Nandra (Audit and Risk Assurance Committee
Chair), Charlotte Valeur and Hannah Philp (Marketing Committee Chair).
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) .
For further information please contact:
Alex Crooke Simon Miller
Fund Manager Chair
Janus Henderson Investors The Bankers Investment Trust PLC
Telephone: 020 7818 4447 Telephone: 020 7818 4233
Dan Howe Harriet Hall
Head of Investment Trusts Investment Trust PR Director
Janus Henderson Investors Janus Henderson Investors
Telephone: 020 7818 4458 Telephone: 020 7818 2919
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 form part of, this announcement.
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