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Half-year Report

Released 16:45 26-Jul-2018

Half-year Report

Chairman’s Statement

I am delighted to present my first report to you as Chairman of the Company, having succeeded John Reeve in May of this year.

It is pleasing to report that during the six months to 30 June 2018 Temple Bar generated a total return on net assets of 3.1%, outperforming the benchmark FTSE All-Share Index total return of 1.7%.

Dividend

A first quarterly dividend of 8.75p per share was paid on 29 June 2018 and the directors have declared a second interim dividend, also of 8.75p per share, again an increase of 5% on the equivalent dividend last year. This will be paid on 28 September 2018 to those shareholders on the register of members as at 7 September 2018. The ex-dividend date for this payment is 6 September 2018.

Board changes

As mentioned above, John Reeve retired as a director and chairman of the Company on 24 May 2018, having provided 26 years of outstanding service. We are extremely grateful to John for his leadership during this period which has contributed in no small measure to the Company’s successful development. I am greatly honoured to have been chosen by my fellow directors to succeed John as Chairman.

Outlook

The current macro-economic situation in the U.K. is exceptionally uncertain. Nevertheless, we believe that our managers have the necessary skills to negotiate these choppy waters and find cheap, out of favour stocks that will hopefully generate positive returns and further outperformance.

Arthur Copple

Chairman

26 July 2018

TWENTY LARGEST HOLDINGS AS AT 30 JUNE 2018

Company Industry Place of Primary Listing Valuation
£’000
% of Portfolio
UK Treasury 1.25% 2018 Fixed Interest UK  80,404 7.6%
Capita Industrials UK  76,418 7.2%
Royal Dutch Shell Oil & Gas UK  68,260 6.4%
GlaxoSmithKline Healthcare UK  64,141 6.1%
HSBC Holdings Financials UK  62,913 5.9%
BP Oil & Gas UK  58,196 5.5%
Lloyds Banking Group Financials UK  45,073 4.2%
Barclays Financials UK  43,378 4.1%
Royal Bank of Scotland Financials UK  42,244 4.0%
Grafton Group Industrials UK  41,957 4.0%
Top Ten Investments  582,984 55.0%
SIG Industrials UK  37,902 3.6%
Tesco Consumer Services UK  32,754 3.1%
Travis Perkins Industrials UK  30,987 2.9%
Marks & Spencer Consumer Services UK  24,996 2.4%
Wm Morrison Supermarkets Consumer Services UK  21,872 2.1%
Land Securities REIT Financials UK  20,760 2.0%
Centrica Utilities UK  20,042 1.9%
Citigroup Financials USA  19,683 1.8%
ETFS Physical Silver Physical Gold and Silver UK  19,206 1.8%
Next Consumer Services UK  18,187 1.7%
Top Twenty Investments  829,373 78.3%

STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2018 (unaudited)

30 June 2018
(unaudited)
30 June 2017
(unaudited)
31 December 2017
 (audited)

Revenue
£’000

Capital
£’000

Total
£’000

Revenue
£’000

Capital £’000

Total
£’000

Revenue
£’000

Capital
£’000

Total
£’000
Investment income 20,768 - 20,768 18,985 - 18,985 33,990 - 33,990
Other operating income 6 - 6 4 - 4 8 - 8

Total Income
20,774 20,774 18,989 - 18,989 33,998 - 33,998
Gains on investments
Gains on investments held at fair value through profit or loss assets - 13,321 13,321 - 17,767 17,767 - 62,251 62,251
20,774 13,321 34,095 18,989 17,767 36,756 33,998 62,251 96,249
Expenses
Management fees (712) (1,068) (1,780) (699) (1,048) (1,747) (1,532) (2,215) (3,747)
Other expenses including dealing costs (360) (901) (1,261) (353) (511) (864) (600) (969) (4,569)
Profit before finance costs and tax
19,702

11,352

31,054

17,937

16,208

34,145

31,866

59,067

90,933
Finance costs (967) (1,461)   (2,428) (1,308) (1,980) (3,288) (2,701) (4,078) (6,779)
Profit before tax 18,735 9,891 28,626 16,629 14,228 30,857 29,165 54,989 84,154
Tax (57) - (57) (108) - (108) (207) - (207)
Profit for the period 18,678 9,891 28,569 16,521 14,228 30,749 28,958 54,989 83,947

Earnings per share (basic and diluted)

27.93p

14.79p

42.72p

24.71p

21.28p

45.99p

43.30p

82.23p

125.53p

A first interim dividend of 8.75 pence per share in respect of the quarter ended 31 March 2018 was paid on 29 June 2018.

A second interim dividend of 8.75 pence per share in respect of the quarter ended 30 June 2018 was declared on 26 July 2018 and is payable on 28 September 2018. 

The total column of this statement represents the Statement of Comprehensive Income, prepared in accordance with IFRS. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies.

All items in the above statement derive from continuing operations.

STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2018 (unaudited)

Ordinary
share
Share premium
Capital

Retained

Total
capital account reserves earnings equity
£’000 £’000 £’000 £’000 £’000

BALANCE AT 1 JANUARY 2018

16,719

96,040

790,167

33,440

936,366
Profit for the period - - 9,891 18,678 28,569
Unclaimed dividends - - - 51 51
Dividends paid to equity shareholders
-
-
-
(17,541) (17,541)
BALANCE AT 30 JUNE 2018 16,719 96,040 800,058 34,628 947,445

STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2017 (unaudited)

Ordinary
share
Share premium
Capital

Retained

Total
capital account reserves earnings equity
£’000 £’000 £’000 £’000 £’000

BALANCE AT 1 JANUARY 2017

16,719

96,040

735,178

32,003

879,940
Profit for the period - - 14,228 16,521 30,749
Unclaimed dividends - - - 11 11
Dividends paid to equity shareholders
-
-
-
(16,390) (16,390)
BALANCE AT 30 JUNE 2017 16,719 96,040 749,406 32,145 894,310

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018 (unaudited)

30 June 2018
(unaudited) £’000
30 June 2017
 (unaudited)
£’000
31 December 2017
 (audited)
£’000
NON-CURRENT ASSETS
Investments held at fair value through profit or loss* 1,059,300 986,691 1,035,670
CURRENT ASSETS
Receivables 4,721 4,557 3,613
Cash and cash equivalents 9,834 18,108 12,161
14,555 22,665 15,774
TOTAL ASSETS 1,073,855 1,009,356 1,051,444
CURRENT LIABILITIES
Interest bearing borrowings - (25,000) -
Payables (12,508) (1,200) (1,159)
TOTAL ASSETS LESS CURRENT LIABILITIES 1,061,347 983,156 1,050,285
NON-CURRENT LIABILITIES
Interest bearing borrowings (113,902) (88,846) (113,919)
NET ASSETS 947,445 894,310 936,366
EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
Ordinary share capital 16,719 16,719 16,719
Share premium 96,040 96,040 96,040
Capital reserves  800,058 749,406 790,167
Retained earnings 34,628 32,145 33,440
TOTAL EQUITY 947,445 894,310 936,366
NET ASSET VALUE PER SHARE 1,416.79p 1,337.33p 1,400.22p

*Includes £80.4 million UK Treasury holding considered by the Board to be held in lieu of cash.

STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2018 (unaudited)

30 June 2018 30 June 2017 31 December 2017
(unaudited) (unaudited) (audited)
£000 £000 £000
 Cash flows from operating activities 
 Profit before tax 28,626 30,857 84,154
 Adjustments for:
 Gains on investments (13,321) (17,767) (62,251)
 Finance costs 2,428 3,288 6,779
 Purchases of investments 1 (292,616) (180,266) (437,327)
 Sales of investments 1 293,926 184,694 437,261
 Dividend income (20,502) (18,306) (32,410)
 Interest income (272) (683) (1,588)
 Dividends received 18,567 16,525 32,189
 Interest received 836 701 1,248
 (Increase)/decrease in receivables (6) 1,470 1,212
(Decrease)/increase in payables (1) 30 (10)
 Overseas withholding tax suffered (57) (108) (207)
(11,018) (10,422) (55,104)
 Net cash flows from operating activities  17,608  20,435 29,050
 Cash flows from financing activities
Repayment of 9.875% 2017 debenture - - (25,000)
Proceeds from issue of 2.99% Private Placement Loan - - 25,000
Issue costs relating to 2.99% Private Placement Loan - - (121)
 Unclaimed dividends 51 11 11
 Interest paid on borrowings  (2,445) (3,288) (6,587)
 Equity dividends paid (17,541) (16,390) (27,532)
 Net cash used in financing activities  (19,935) (19,667) (34,229)
 Net (decrease)/increase in cash and cash equivalents (2,327) 768  (5,179)
 Cash and cash equivalents at the start of the period 12,161 17,340 17,340
 Cash and cash equivalents at the end of the period  9,834 18,108 12,161

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

RESPONSIBILITY STATEMENT

The Directors confirm to the best of their knowledge that:

The half-yearly financial report was approved by the Board on 26 July 2018 and the above responsibility statement was signed on its behalf by:

Arthur Copple

Chairman

Notes

1.         Comparative figures

            The financial information contained in this half-year report does not constitute statutory accounts as defined in section 434-436 of the Companies Act 2006.  The financial information for the six months ended 30 June 2018 and 30 June 2017 has not been audited.

            The information for the year ended 31 December 2017 does not constitute statutory accounts, but has been extracted from the latest published audited accounts, which have been filed with the Registrar of Companies.  The report of the auditors on those accounts contained no qualification or statement under section 498(2) or (3) of the Companies Act 2006.

2.         Publication

            This half-year report is being sent to shareholders and copies will be made available to the public at the Company’s registered office and on its website.

For further information please contact:

Alastair Mundy

Investec Fund Managers Limited                        020 7597 2000


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Half-year Report - RNS