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Annual Financial Report

Released 11:56 19-Feb-2013

Annual Financial Report

Temple Bar Investment Trust plc

Final Results Announcement for the year ended 31 December 2012

Chairman's Statement

The total return on the net assets of Temple Bar during 2012 was 18.0%, which
compares with a total return on the FTSE All-Share Index of 12.3%. The share
price total return was 21.6% reflecting an increase over the year in the
premium at which the shares trade. Temple Bar continues significantly to
outperform its benchmark over both five and ten year periods.

Revenue on the portfolio rose by 9.5%; however, virtually all of this increase
was due to how the revenue on some bonds held on the portfolio has been
recognized. The actual and anticipated early repayment of certain bonds
necessitates the profit between the buy price and maturity price to be
amortised over a significantly shorter period than previously forecast.
Excluding this one-off effect, revenue was in line with the manager's forecasts
a year earlier. Although most dividends across the portfolio rose, overall
income was affected by Avon Products cutting its dividend, lower revenue
generated from the fixed interest portfolio as some of the bonds reached
maturity and a greater amount of cash being held on the portfolio. Post-tax
earnings rose by 10.3%. Excluding the bond revenue recognition treatment
previously referred to, post-tax earnings rose by 0.6%.

The Board is recommending a final dividend of 22.0p, to produce a total
increase of 4.0% for the year. The dividend will be payable on 28 March 2013 to
shareholders on the register at 15 March 2013. The shares become ex-dividend on
13 March 2013. This is the 29th consecutive year in which the dividend has been

At the year-end, gearing (calculated net of cash and related liquid assets) was
2.0 %.

Equity markets performed well in 2012 and investors seemed reluctant to fight
the Federal Reserve and other central banks. Time will tell how deep is this
commitment to equities.

Investment Trust Tax Rules

New legislation was introduced last year which has resulted in the removal of
the prohibition on the distribution of capital profits by way of dividend.

The board is therefore seeking shareholder approval at the Annual General
Meeting to amend the Company's Articles of Association to permit the
distribution of realised capital gains by way of dividend. I would emphasise
that this does not in any way indicate that there will be a change in dividend
policy. There is, at present, no intention to utilise the ability to make
distributions from capital profits, but the directors believe that it is
prudent to provide the flexibility to do so in the event of unforeseen changes,
such as those to future taxation policies.

Investment Policies

The portfolio manager currently has the authority to invest up to 10% of the
Company's investment portfolio in listed international equities in developed
economies. The Board is requesting shareholder approval to increase this limit
to 20%, principally to reflect the increasingly international nature of
investment markets where the place of a company's listing often bears little
resemblance to the countries in which it is active and where its profits are

The Board is also seeking approval for a minor change to the Company's
principal investment objective of providing growth in income and capital to
achieve a long term total return greater than the benchmark FTSE All Share
Index, through investment in a broad spread of (primarily UK) securities with
typically the majority of the portfolio selected from the constituents of the
FTSE 100 index. It is proposed that the majority of the portfolio be selected
from the FTSE 350 index rather than just the FTSE 100 index, in order to
provide greater flexibility in portfolio construction. The ability for the
portfolio manager to select investments broadly from the companies within the
FTSE 350 Index will bring the portfolio more in line with the benchmark FTSE
All Share Index.

Resolutions will be proposed at the AGM to put the above changes into effect.

Industry Developments

There are a number of forthcoming changes which will impact the Company,
including two of particular significance. The first relates to the
implementation in the UK of the European Union's Alternative Investment Fund
Managers Directive which will result in the introduction of further regulatory
oversight for investment trusts, such as the requirement to appoint a
Depositary that is, in turn, required to accept fairly onerous
responsibilities. The changes are due to come into effect in 2014 and the Board
is already considering the full implications of this legislation.

The second event of significance is the introduction in January this year of
the Retail Distribution Review (`RDR') which, amongst other things, prevents
commission payments to advisers. In general RDR is viewed as a positive
development in the longer term for the investment trust industry, which has
historically not paid commissions, through the creation of a level playing
field in the provision of investment advice. The Board believes that the
Company is relatively well placed to benefit from this development given its
scale, performance, the liquidity of its shares and other attributes.

Annual General Meeting

Our AGM this year will be held at Woolgate Exchange, 25 Basinghall Street,
London EC2V 5HA on 25 March 2013 at 11.00am. The Board encourages as many
shareholders as possible to attend this meeting. In addition to the formal
business of the meeting the portfolio manager, Alastair Mundy, will make a
presentation reviewing the past year and commenting on the outlook. He will
also be available to answer any questions alongside the directors.


This is an environment where new investment opportunities are few and far
between. The portfolio manager prefers to wait for better times before acting.

John Reeve

19 February 2013

Twenty Largest Investments

as at 31 December 2012

Company                  Super Sector            Place of   Valuation      % of
                                                  listing             portfolio
                                                          31 December          
HSBC                     Financials                    UK      51,242      8.08
Royal Dutch Shell        Oil & Gas                     UK      48,563      7.65
Signet Jewelers          Consumer Services         UK/USA      48,438      7.63
Unilever                 Consumer Goods                UK      41,491      6.54
GlaxoSmithKline          Health Care                   UK      38,462      6.06
Travis Perkins           Industrials                   UK      27,119      4.27
Vodafone                 Telecommunications            UK      26,687      4.21
UK Treasury 4.5% 2013    Fixed Interest                UK      25,892      4.08
BT                       Telecommunications            UK      25,776      4.06
Grafton Group            Industrials                  UK/      24,922      3.93
AstraZeneca              Health Care                   UK      23,626      3.72
QinetiQ                  Industrials                   UK      19,888      3.13
Royal Bank of Scotland   Financials                    UK      19,211      3.03
SIG                      Industrials                   UK      16,166      2.55
BP                       Oil & Gas                     UK      15,392      2.43
Centrica                 Utilities                     UK      14,636      2.31
British American Tobacco Consumer Goods                UK      14,368      2.26
Avon Products            Consumer Goods               USA      12,651      1.99
Games Workshop           Consumer Goods                UK      10,483      1.65
CRH                      Industrials                  UK/       9,744      1.54
                                                              514,757     81.12

Statement of Comprehensive Income

for the year ended 31 December 2012

                   2012                          2011                          
                     Revenue   Capital             Revenue  Capital            
                      return    return     Total    Return   return     Total  
                       £'000     £'000     £'000     £'000    £'000     £'000  
Investment            28,164         -    28,164    25,640        -    25,640  
Other operating            3         -         3        79        -        79  
                      28,167         -    28,167    25,719        -    25,719  
on investments                                                                 
Gains/(losses)             -    72,438    72,438         - (19,776)  (19,776)  
on investments                                                                 
held at fair                                                                   
value through                                                                  
profit or loss                                                                 
Total income/         28,167    72,438   100,605    25,719 (19,776)     5,943  
Management fees        (890)   (1,334)   (2,224)     (816)  (1,224)   (2,040)  
Other expenses         (580)     (448)   (1,028)     (527)    (569)   (1,096)  
Profit before         26,697    70,656    97,353    24,376 (21,569)     2,807  
finance costs                                                                  
and tax                                                                        
Finance costs        (1,824)   (2,753)   (4,577)   (1,824)  (2,753)   (4,577)  
Profit/(loss)         24,873    67,903    92,776    22,552 (24,322)   (1,770)  
before tax                                                                     
Tax                        -         -         -         -        -         -  
Profit/(loss)         24,873    67,903    92,776    22,552 (24,322)   (1,770)  
for the year                                                                   
Earnings/(loss)       41.39p   113.00p   154.39p    38.08p (41.07)p   (2.99)p  
per share                                                                      
(basic &                                                                       

The total column of this statement represents the Statement of Comprehensive
Income prepared in accordance with IFRS. The supplementary revenue return and
capital return columns are both prepared under guidance issued by the
Association of Investment Companies. All items in the above statement derive
from continuing operations. No operations were acquired or discontinued during
the year.

There are no minority interests.

Statement of Changes in Equity

for the year ended 31 December 2012

                     Ordinary      Share                                 
                        share    premium    Capital   Retained      Total
                      capital    account   reserves   earnings     equity
                        £'000      £'000      £'000      £'000      £'000
Balance at 1           14,740      8,507    486,832     29,943    540,022
January 2011                                                             
Loss for the year           -          -   (24,322)     22,552    (1,770)
Issue of share            185      5,935          -          -      6,120
Dividends paid to           -          -          -   (22,332)   (22,332)
Balance at 31          14,925     14,442    462,510     30,163    522,040
December 2011                                                            
Profit for the              -          -     67,903     24,873     92,776
Issue of share            213      7,663          -          -      7,876
Dividends paid to           -          -          -   (21,501)   (21,501)
Balance at 31          15,138     22,105    530,413     33,535    601,191
December 2012                                                            

Statement of Financial Position

as at 31 December 2012

                                  31 December 2012    31 December 2011
                                  £'000      £'000     £'000     £'000
Non-current assets                         634,503             578,048
Investments held at fair value                                        
through profit or loss                                                
                                           634,503             578,048
Current assets                                                        
Other receivables                 2,826                4,634          
Cash and cash equivalents        28,063                3,883          
                                            30,889               8,517
Total assets                               665,392             586,565
Current liabilities                                                   
Other payables                               (744)             (1,085)
Total assets less current                  664,648             585,480
Non-current liabilities                                               
Interest bearing borrowings               (63,457)            (63,440)
Net assets                                 601,191             522,040
Equity attributable to equity                                         
Ordinary share capital           15,138               14,925          
Share premium                    22,105               14,442          
Capital reserves                530,413              462,510          
Retained earnings                33,535               30,163          
                                           601,191             522,040
Total equity                               601,191             522,040
Net asset value per share                  992.86p             874.42p

Statement of Cash Flows

for the year ended 31 December 2012

                                     2012               2011       
                                     £'000 £'000         £000 £'000
Cash flows from operating                                          
Profit/(Loss) before tax                 92,776            (1,770) 
Adjustments for:                                                   
Purchases of investments¹     (120,275)          (162,877)         
Sales of investments¹           136,258            163,921         
                                          15,983              1,044
(Gains)/Loss on investments             (72,438)             19,776
Financing costs                            4,577              4,577
Operating cash flows before               40,898             23,627
movements in working capital                                       
Increase in accrued income                   (1)                (4)
Decrease/(increase) in                     1,327            (1,428)
Increase in payables                         140                485
Net cash flows from operating             42,364             22,680
activities before and after                                        
income tax                                                         
Cash flows from financing                                          
Proceeds from issue of new                 7,876              6,120
                                         (4,559)            (4,559)
Interest paid on borrowings                                        
Equity dividends paid                   (21,501)           (22,332)
Net cash used in financing              (18,184)           (20,771)
Net increase in cash and cash             24,180              1,909
Cash and cash equivalents at               3,883              1,974
the start of the year                                              
Cash and cash equivalents at              28,063              3,883
the end of the year                                                

¹ Purchases and sales of investments are considered to be operating activities
of the Company, given its purpose, rather than investing activities.


 i. The figures set out above are prepared on the same basis as set out in the
    previous year's annual accounts and are derived from the audited accounts
    of Temple Bar Investment Trust Plc for the year ended 31 December 2011 and
    31 December 2012. The 2012 accounts will be sent to shareholders shortly.
ii. The financial information contained in this announcement does not
    constitute full accounts within the meaning of Section 434 of the Companies
    Act 2006. The 2012 accounts, on which the report of the auditors is
    unqualified, will be filed with the Registrar of Companies in due course.
    The audited accounts for the year ended 31 December 2011 on which the
    report of the auditors was unqualified and did not contain a statement
    under Section 498 of the Companies Act 2006, have been filed with the
    Registrar of Companies.
19 February 2013

Contact: Alastair Mundy
Telephone 020 7597 2000
Investec Asset Management Limited


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Annual Financial Report - RNS