Last checked at 
29 Jun 2020 16:43
LEGAL ENTITY IDENTIFIER: - 213800B9YWXL3X1VMZ69 29 June 2020
THE BANKERS INVESTMENT TRUST PLC
("the Company")
Unaudited results for the half-year ended 30 April 2020
This announcement contains regulated information
INVESTMENT OBJECTIVE
The Company aims over the long term to achieve capital growth in excess of the FTSE World Index and annual dividend growth greater than inflation, as defined by the UK Retail Prices Index ('RPI'), 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, value-based investment process to identify suitable opportunities and pays particular regard to cash generation and dividends. The Board regularly monitors the Company's investments and the Manager's investment activity.
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 2020 | 30 April 2019 |
Net asset value ('NAV') per share1 | 907.1p | 929.9p |
Share price3 | 904.0p | 906.0p |
Revenue return per share | 7.85p | 9.25p |
Discount | (0.3)% | (2.6)% |
Dividends paid or declared in respect of the period 4 | 10.70p | 10.20p |
Total Return Performance to 30 April 2020 (including dividends reinvested and excluding transaction costs)
| 6 months % | 1 year % | 3 years % | 5 years % | 10 years % |
NAV1 | -3.2 | -0.2 | 21.8 | 53.6 | 161.9 |
Index2 | -5.3 | -1.0 | 17.3 | 32.9 | 107.3 |
Share price3 | -1.4 | 2.0 | 26.4 | 60.7 | 208.4 |
1 Net asset value total return per share with income reinvested and with debt at par
2 Composite of FTSE All-Share Index for the period to 31 October 2017 and FTSE World Index from 1 November 2017 to 30 April 2020
3 Share price total return using mid-market closing price
4 First interim dividend for 2020 was paid on 29 May 2020, the second interim dividend has been declared and will be paid on 28 August 2020.
Sources: Morningstar for the AIC and Refinitiv Datastream
INTERIM MANAGEMENT REPORT
CHAIRMAN'S STATEMENT
I begin by acknowledging the devastating social and economic consequences of the COVID-19 pandemic. I very much hope that you, our shareholders, are staying safe and well in these difficult times.
Review
The six months ended 30 April 2020 was a period of two halves. Our returns were positive for the first half of the period under review and, in February, our net asset value ('NAV') and share price rose to all-time highs. However, everything changed from late February into March as the pandemic spread rapidly across the globe, major economies began to shut down and the social and economic implications started to become apparent. This brought the record-breaking bull market to an abrupt end, with global equity markets experiencing some of the largest and quickest falls in history. In an attempt to minimise the inevitable extensive economic damage caused by the pandemic, governments in many of the major developed economies responded quickly with the greatest monetary and fiscal stimulus since World War 2, leading to a rally, albeit volatile, in global equity markets.
Over the six months ended 30 April 2020, our NAV total return was -3.2% and our share price total return was -1.4%, both outperforming the FTSE World Index total return of -5.3%. All of our regional portfolios made positive contributions to our overall portfolio performance over the period on a relative basis, except for our Asia Pacific (ex Japan and China) portfolio which underperformed against its local benchmark index.
There was one change to our investment team during the period under review. Charlie Awdry, who managed our China portfolio since its inception in 2013, decided to take a career break. The Board thanks Charlie for his valuable contribution over the years and we wish him well for the future. We are pleased to welcome May Ling Wee, who has worked with Charlie since 2015 and has over 20 years of investment experience, as manager of our China portfolio. There will be no change to the investment process employed to select China stocks.
Since 30 April 2020, global equity markets have continued to recover and our NAV total return in the current financial year to 26 June 2020 was 8.5%, which compares with a total return of 8.3% by our benchmark.
Revenue returns
One of the consequences of the pandemic is that some companies, particularly in the UK and Europe, have sought to preserve their cash by cutting, postponing or cancelling their dividends (including, in some cases, dividends already declared). This will have a meaningful impact on our income (and ultimately our net revenue) for the current financial year, with most of the impact being felt in the second half of the year.
Our dividend income for the six months ended 30 April 2020 was £12.2 million compared to £13.6 million for the same period last year, a reduction of 10.2%. Our net revenue for the six months was £9.8 million (2019: £11.3 million), equivalent to 7.85p per share (2019: 9.25p).
Dividends
A first interim dividend of 5.35p (2019: 5.10p) per share was paid on 29 May 2020. The Board has declared a second interim dividend of 5.35p (2019: 5.10p) per share, which will be payable on 28 August 2020 to shareholders on the register on 24 July 2020.
The Company's investment trust structure enables us to hold back some income in years of strong corporate dividend growth to pay it out in leaner ones to support our dividend policy and to allow our Manager to focus on optimising total returns for our shareholders in accordance with our overall investment objective and policy. As indicated earlier, this year will be a leaner year in terms of income and we intend to draw on the revenue reserve to support the Company's dividend policy. I am pleased, therefore, to be able to reiterate, on behalf of the Board, our current intention to deliver dividend growth of approximately 3% for the current financial year, resulting in aggregate dividends for the year of at least 21.5p (2019: 20.9p) per share.
Based on aggregate dividends of 21.5p per share for the current financial year and the number of shares currently in issue, our revenue reserve at 30 April 2020, adjusted for the second interim dividend, represented one times the cost of the current annual dividend.
Share issuance and buy-backs
A total of 5,400,000 treasury and new shares were issued at a premium to net asset value in the six months ended 30 April 2020, raising gross proceeds of £53.8 million. These were our first issues for some three years. Since the period end, a further 601,000 new shares have been issued, raising gross proceeds of £5.8 million. The proceeds of the share issuances were invested into markets.
There have been no share buy-backs in the financial year to date.
Gearing
The Company began the current financial year with net cash of 3%. Having increased our investments in the US and Europe during the market sell-off in March, we ended the period under review with net gearing of zero.
The Board
As announced on 11 March 2020, Richard West joined the Board on 1 April 2020, bringing valuable investment experience from his extensive career in investment management, latterly at UBS Global Asset Management.
Outlook
COVID-19 has caused substantial disruption to individuals, companies, economies and financial markets and resulted in an immediate and severe economic contraction. As we are in the midst of a crisis that is without parallel, history is a poor guide as to what the future might look like and there is an extreme divergence among the forecasts of the longer term consequences of the pandemic. Some initial indicators show growth resuming as economies re-open. In our view, it is too early to make reliable predictions as to the timing and shape of the recovery. We do not anticipate, however, a return to a normalised situation and pre-crisis GDP levels any time soon. Furthermore, until a vaccine is found and globally accessible, there is a risk of new spikes in the virus requiring further localised lockdowns, which are likely to delay the return to normal and cause further economic disruption.
Inevitably, the current crisis has tended to be all-consuming in recent months. We remain mindful, however, that, there are other uncertainties that may cause additional disruption in the short term, including the re-escalation of US-China trade tensions, President Trump's battle for re-election later in the year and the possibility of a "hard" Brexit at the end of the year.
The rebound of global equity markets following the earlier sharp sell-off suggests a fragile belief that, whilst the impact of COVID-19 has been shocking, it is largely temporary. In our opinion, it is too soon to judge whether this belief is well founded and we expect, therefore, the recent elevated market volatility to persist for the foreseeable future and that markets may experience some periodic setbacks.
In these uncertain and volatile conditions, it is important to remember that, over its long history, the Company has navigated successfully its way through various financial and economic events, enabling it to deliver the superior returns that can be achieved over a long term horizon.
Sue Inglis
Chairman
FUND MANAGER'S REPORT
Market review
The COVID-19 pandemic has tested us all in so many ways in recent months. We have witnessed economic events rarely seen before as governments have shut down economies and cut links to the outside world. Governments have enabled businesses to furlough up to a quarter of the working population in some cases, by paying salaries through the shutdown to support these businesses and hopefully to allow them to survive and then recover quicker when industries are reopened.
The global economy was already stagnating in the early part of the period under review and activity slowed quickly after Christmas as China started to lockdown its population in response to a potentially deadly virus outbreak in Wuhan. This led to a supply shock across the globe given China's status as the dominant manufacturer in so many industries. As the virus spread and it became apparent that isolating those affected was not an adequate response, we saw a rapid demand shock as economies closed. There was no playbook from history for policymakers, so their response has been drawn from the Great Financial Crisis a decade ago, laying out a monetary response of massive proportions. Stock markets understandably fell very sharply in March but then rebounded as investors initially chased defensive and technology shares as medical and online spending patterns were positive for these companies.
In recent weeks cyclicals and energy stocks have led the way, fuelled by optimism of economic activity recovering quickly. Europe has experienced the most prolonged and strictest lockdown conditions which has disproportionally hit the local stock markets. The dominance of the leading technology companies in the US has helped support their equity market despite the US experiencing an economic downturn equivalent to that in Europe. Despite being at the epicentre of the outbreak the Asian markets have been most resilient, partly through clearly better forward planning, but also shorter lockdowns and therefore diminished demand shock.
Performance
The regional portfolio returns in the six-month period to 30 April 2020 have benefited from a bias towards quality factors, such as less leverage and higher returns on capital. The North American portfolio outperformed its index by 8.1% over the period, followed by 6.9% outperformance in Europe, 5.7% in Japan and 2.9% in the UK. The Pacific (ex Japan and China) was the only portfolio to underperform, lagging its index by 3.6%, reflecting the higher yielding and more cyclical nature of this portfolio.
We have struggled to find value in many markets during the previous year and therefore had raised net cash to 3% at the year end. The market fall through March gave us the opportunity to deploy some of this cash and we increased investment into Europe and the US resulting in a net gearing position of zero at the end of the period.
Outlook
Share prices have responded to the massive monetary response and there is a degree of optimism that, while the virus will linger, economies will open up and some degree of normality is ahead. We are wary that for some industries the world has changed for the foreseeable future and we are not chasing the possible recovery stocks in travel and hospitality industries although we have supported the new issuance by some existing holdings.
Whilst the UK market has seen a significant reduction in dividends, we expect many of these companies to start paying through the next year. We have many opportunities to seek dividends in overseas markets and also our very low allocation to energy and banks has protected us from the worst sectors for cutting dividends.
The very sharp recovery in markets has made it difficult to deploy fully our cash and we remain on the lookout for opportunities in the coming months should markets retrench. Our intention remains to seek long term growth at reasonable prices and maintain discipline in selecting holdings.
Alex Crooke
Fund Manager
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
Information on these risks and uncertainties and how they are managed are given in the Annual Report for the year ended 31 October 2019. In the view of the Board 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. In reviewing the risk register, the Board has expanded Portfolio and Market Risks to cover more clearly global emergencies such as the COVID-19 pandemic and the uncertainties that this can create in global markets, both economically and politically, as set out in the Chairman's Statement. The alternative investment fund manager and the Company's other third-party service providers remain fully operational and have implemented appropriate business continuity plans to ensure that there has been no change in service while the majority of staff are working from home.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that, to the best of their knowledge: | |
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(a) | the condensed set of financial statements has been prepared in accordance with IAS 34; |
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(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 |
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(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 and changes therein). |
For and on behalf of the Board of the Company
Sue Inglis
Chairman
29 June 2020
For further information contact:
Alex Crooke Fund Manager The Bankers Investment Trust PLC Telephone: 020 7818 4447
| Sue Inglis Chairman The Bankers Investment Trust PLC Telephone: 020 7818 4233 |
James de Sausmarez Director and Head of Investment Trusts Janus Henderson Investors Telephone: 020 7818 3349 | Laura Thomas PR Manager Janus Henderson Investors Telephone: 020 7818 2636
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CONDENSED STATEMENT OF COMPREHENSIVE INCOME
| (Unaudited) Half-year ended 30 April 2020 | (Unaudited) Half-year ended 30 April 2019 | (Audited) Year ended 31 October 2019 | ||||||
| Revenue return £'000 | Capital return £'000 |
Total £'000 | Revenue return £'000 | Capital return £'000 |
Total £'000 | Revenue return £'000 | Capital return £'000 |
Total £'000 |
(Losses)/gains from investments held at fair value through profit or loss | - | (49,481) | (49,481) | - | 82,146 | 82,146 | - | 105,376 | 105,376 |
Investment income | 12,203 | - | 12,203 | 13,649 | - | 13,649 | 31,483 | - | 31,483 |
Other operating income | 144 | - | 144 | 108 | - | 108 | 269 | - | 269 |
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- |
Gross revenue and capital gains/ (losses) | 12,347 | (49,481) | (37,134) | 13,757 | 82,146 | 95,903 | 31,752 | 105,376 | 137,128 |
| ---------- | --------- | --------- | ---------- | --------- | --------- | --------- | --------- | --------- |
Expenses |
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Management fees (note 2) | (767) | (1,788) | (2,555) | (691) | (1,612) | (2,303) | (1,437) | (3,352) | (4,789) |
Other expenses | (511) | - | (511) | (539) |
| (539) | (1,009) | - | (1,009) |
| --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- |
Profit/(loss) before finance costs and taxation | 11,069 | (51,269) | (40,200) | 12,527 | 80,534 | 93,061 | 29,306 | 102,024 | 131,330 |
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Finance costs | (454) | (1,061) | (1,515) | (450) | (1,050) | (1,500) | (911) | (2,126) | (3,037) |
| --------- | ---------- | --------- | --------- | ---------- | --------- | --------- | ---------- | --------- |
Profit/(loss) before taxation | 10,615 | (52,330) | (41,715) | 12,077 | 79,484 | 91,561 | 28,395 | 99,898 | 128,293 |
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Taxation | (775) | - | (775) | (734) | - | (734) | (1,898) | (3) | (1,901) |
| --------- | ----------- | --------- | --------- | ---------- | --------- | --------- | --------- | --------- |
Net profit/(loss) for the period | 9,840 | (52,330) | (42,490) | 11,343 | 79,484 | 90,827 | 26,497 | 99,895 | 126,392 |
| ===== | ======= | ===== | ===== | ===== | ===== | ===== | ====== | ====== |
Earnings/(loss) per ordinary share (note 3) | 7.85p | (41.76p) | (33.91p) | 9.25p | 64.83p | 74.08p | 21.61p | 81.48p | 103.09p |
The total columns of this statement represent the Statement of Comprehensive Income, prepared in accordance with IFRS as adopted by the European Union. 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
Half-year ended 30 April 2020 (Unaudited) | Called up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Other capital reserves £'000 |
Revenue reserve £'000 |
Total £'000 |
Total equity at 1 November 2019 | 30,986 | 78,541 | 12,489 | 997,213 | 43,980 | 1,163,209 |
Total comprehensive income: |
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(Loss)/profit for the period | - | - | - | (52,330) | 9,840 | (42,490) |
Transactions with owners, recorded directly to equity: |
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Share issue proceeds | 1,015 | 44,556 |
| 8,205 | - | 53,776 |
Share issue costs | - | (108) |
| - | - | (108) |
Payment of third interim dividend (5.35p) in respect of the year ended 31 October 2019 | - | - | - | - | (6,560) | (6,560) |
Payment of the final dividend (5.35p) in respect of the year ended 31 October 2019 | - | - | - | - | (6,685) | (6,685) |
| ---------- | ---------- | ---------- | ---------- | ---------- | -------------- |
Total equity at 30 April 2020 | 32,001 | 122,989 | 12,489 | 953,088 | 40,575 | 1,161,142 |
| ====== | ====== | ====== | ====== | ====== | ======== |
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Half-year ended 30 April 2019 (Unaudited) | Called up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Other capital reserves £'000 |
Revenue reserve £'000 |
Total £'000 |
Total equity at 1 November 2018 | 30,986 | 78,541 | 12,489 | 897,318 | 42,249 | 1,061,583 |
Total comprehensive income: |
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profit for the period | - | - | - | 79,484 | 11,343 | 90,827 |
Transactions with owners, recorded directly to equity: |
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Payment of third interim dividend (5.00p) in respect of the year ended 31 October 2018 | - | - | - | - | (6,130) | (6,130) |
Payment of the final dividend (5.00p) in respect of the year ended 31 October 2018 | - | - | - | - | (6,130) | (6,130) |
| ---------- | ---------- | ---------- | ---------- | ---------- | -------------- |
Total equity at 30 April 2019 | 30,986 | 78,541 | 12,489 | 976,802 | 41,332 | 1,140,150 |
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Year ended 31 October 2019 (Audited) | Called up share capital £'000 | Share premium account £'000 | Capital redemption reserve £'000 | Other capital reserves £'000 |
Revenue reserve £'000 |
Total £'000 |
Total equity at 1 November 2018 | 30,986 | 78,541 | 12,489 | 897,318 | 42,249 | 1,061,583 |
Total comprehensive income: |
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Profit for the year | - | - | - | 99,895 | 26,497 | 126,392 |
Ordinary dividends paid | - | - | - | - | (24,766) | (24,766) |
| ----------- | ----------- | ----------- | ------------ | ----------- | ------------- |
Total equity at 31 October 2019 | 30,986 | 78,541 | 12,489 | 997,213 | 43,980 | 1,163,209 |
| ====== | ====== | ====== | ====== | ====== | ======= |
The accompanying condensed notes are an integral part of the financial statements.
CONDENSED STATEMENT OF FINANCIAL POSITION
| (Unaudited) As at 30 April 2020 £'000 | (Unaudited) As at 30 April 2019 £'000 | (Audited) As at 31 October 2019 £'000 |
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Non-current assets |
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Investments held at fair value through profit or loss | 1,158,547 | 1,129,419 | 1,128,519 |
| ------------- | ------------- | ------------- |
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Current assets |
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Investments held at fair value through profit or loss (note 4) | 22,052 | 29,607 | 44,993 |
Other receivables | 14,465 | 5,385 | 4,134 |
Cash and cash equivalents | 38,774 | 42,027 | 54,944 |
| ------------ | ------------ | ------------- |
| 75,291 | 77,019 | 104,071 |
| ------------- | ------------- | -------------- |
Total assets | 1,233,838 | 1,206,438 | 1,232,590 |
| ------------- | ------------- | -------------- |
Current liabilities |
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Other payables | (7,869) | (1,469) | (4,558) |
Bank loans | - | - | - |
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| (7,869) | (1,469) | (4,558) |
| ------------- | ------------- | ------------- |
Total assets less current liabilities | 1,225,969 | 1,204,969 | 1,228,032 |
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Non-current liabilities |
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Debenture stock | (15,000) | (15,000) | (15,000) |
Unsecured loan notes | (49,827) | (49,819) | (49,823) |
| ------------- | ------------- | -------------- |
Net assets | 1,161,142 | 1,140,150 | 1,163,209 |
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Equity attributable to equity shareholders |
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Share capital (note 5) | 32,001 | 30,986 | 30,986 |
Share premium account | 122,989 | 78,541 | 78,541 |
Capital redemption reserve | 12,489 | 12,489 | 12,489 |
Retained earnings: |
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Other capital reserves | 953,088 | 976,802 | 997,213 |
Revenue reserve | 40,575 | 41,332 | 43,980 |
| ------------ | ------------ | ------------- |
Total equity | 1,161,142 | 1,140,150 | 1,163,209 |
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Net asset value per ordinary share (note 6) | 907.1p | 929.9p | 948.7p |
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The accompanying condensed notes are an integral part of the financial statements.
CONDENSED CASH FLOW STATEMENT
Reconciliation of profit before taxation to net cash flow from operating activities. | (Unaudited) Half-year ended 30 April 2020 £'000 | (Unaudited) Half-year ended 30 April 2019 £'000 | (Audited) Year ended 31 October 2019 £'000 |
Operating activities |
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Net (loss)/profit before taxation | (41,715) | 91,561 | 128,293 |
Add: interest payable ('finance costs') | 1,515 | 1,500 | 3,037 |
Add/(less): Losses / (gains) on investments held at fair value through profit or loss | 49,481 | (82,146) | (105,376) |
Increase in accrued income | (1,600) | (1,868) | (42) |
(Increase) / decrease in other receivables | (2,291) | 24 | (46) |
(Decrease) / increase in other payables | (168) | 43 | 253 |
Purchase of investments | (250,793) | (145,370) | (281,334) |
Sales of investments | 171,312 | 185,118 | 345,724 |
Purchases of current asset investments | (33,635) | (33,452) | (66,609) |
Sales of current asset investments | 56,576 | 21,850 | 39,621 |
(Increase)/decrease in securities sold for future settlement | (6,497) | 1,257 | 854 |
Increase/(decrease) in securities purchased for future settlement | 3,486 | (1,931) | 935 |
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Net cash (outflow)/inflow from operating activities before interest and taxation | (54,329) |
36,586 | 65,310 |
Interest paid | (1,515) | (1,521) | (3,037) |
Taxation on investment income | (716) | (866) | (2,138) |
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Net cash (outflow)/inflow from operating activities | (56,560) | 34,199 | 60,135 |
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Financing activities |
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Equity dividends paid (net of refund of unclaimed distributions) | (13,245) | (12,260) | (24,766) |
Share issue proceeds | 53,776 | - | - |
Share issue costs | (108) | - | - |
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Net cash inflow/(outflow) from financing activities | 40,423 | (12,260) | (24,766) |
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(Decrease)/increase in cash | (16,137) | 21,939 | 35,369 |
Cash and cash equivalents at start of period | 54,944 | 20,075 | 20,075 |
Exchange movements | (33) | 13 | (500) |
| ----------- | ----------- | ------------ |
Cash and cash equivalents at end of period | 38,774 | 42,027 | 54,944 |
| ======= | ======= | ======= |
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 2020. They have been prepared on a going concern basis and in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and with the Statement of Recommended Practice for Investment Trusts ('SORP') issued by the Association of Investment Companies dated October 2019, where the SORP is consistent with the requirements of IFRS.
For the period under review, the Company's accounting policies have not varied from those described in the annual report for the year ended 31 October 2019.
These financial statements have not been either audited or reviewed by the Company's Auditor.
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2. | Management fees | |||||||||
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| (Unaudited) | (Unaudited) | (Audited) | ||||||
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| Half-year ended 30 April 2020 | Half-year ended 30 April 2019 | Year ended 31 October 2019 | ||||||
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| Revenue return £'000 | Capital return £'000 | Total £'000 | Revenue return £'000 | Capital return £'000 | Total £'000 | Revenue return £'000 | Capital return £'000 | Total £'000 |
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| Investment management | 767 | 1,788 | 2,555 | 691 | 1,612 | 2,303 | 1,437 | 3,352 | 4,789 |
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The management fee is calculated on a quarterly basis as the aggregate of 0.45% per annum of the first £750 million and 0.40% per annum on the excess over £750 million of the value of the net assets on the last day of the quarter immediately preceding the quarter in respect of which the calculation is made.
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3. | Earnings per ordinary share | |||||||||
| The earnings per ordinary share figure is based on the net loss for the half-year of £42,490,000 (30 April 2019: profit £90,827,000; 31 October 2019: profit £126,392,000) and on 125,305,959 (30 April 2019: 122,606,783; 31 October 2019: 122,606,783) 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. | |||||||||
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| (Unaudited) Half-year ended 30 April 2020 £'000 | (Unaudited) Half-year ended 30 April 2019 £'000 | (Audited) Year ended 31 October 2019 £'000 | ||||||
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| Revenue profit | 9,840 | 11,343 | 26,497 | ||||||
| Capital (loss)/profit | (52,330) | 79,484 | 99,895 | ||||||
|
| ------------ | ------------ | ------------ | ||||||
| Total (loss)/profit | (42,490) | 90,827 | 126,392 | ||||||
|
| ======= | ======= | ======= | ||||||
| Weighted average number of ordinary shares in issue during each period excluding treasury shares | 125,305,959 | 122,606,783 | 122,606,783 | ||||||
|
|
|
|
| ||||||
| Revenue earnings per ordinary share | 7.85p | 9.25p | 21.61p | ||||||
| Capital (loss)/earnings per ordinary share | (41.76p) | 64.83p | 81.48p | ||||||
|
| ------------ | ------------ | ------------ | ||||||
| Total (loss)/earnings per ordinary share | (33.91p) | 74.08p | 103.09p | ||||||
|
| ======= | ======= | ======= | ||||||
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 2020 this holding had a value of £22,052,000 (30 April 2019: £29,607,000; 31 October 2019: £44,993,000).
|
|
5. | Share capital |
|
| At 30 April 2020 there were 128,006,783 ordinary shares of 25p each in issue (30 April 2019: 123,945,292; 31 October 2019: 123,945,292). During the half-year ended 30 April 2020 1,338,509 shares were sold out of treasury and 4,061,491 new shares were issued for a total consideration of £53,776,000 (30 April 2019 and 31 October 2019: no shares were issued or bought back). Shares held in treasury do not have any voting rights. At 30 April 2020 no shares were held in treasury (30 April 2019 and 31 October 2019: 1,338,509).
Since 30 April 2020 and up to 26 June 2020 a further 601,000 new shares were issued for a consideration of £5.8 million.
|
|
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 £1,161,142,000 (30 April 2019: £1,140,150,000; 31 October 2019: £1,163,209,000) and on 128,006,783 (30 April 2019: 122,606,783; 31 October 2019: 122,606,783) ordinary shares, being the number of ordinary shares in issue excluding treasury shares at the period end.
|
|
7. | Bank loan |
|
| At 30 April 2020, the Company had drawn down £nil (30 April 2019 and 31 October 2019: £nil) of its £20 million multi-currency loan facility with Sumitomo Mitsui Banking Corporation Europe Limited (prior to that it was with RBS Limited).
|
|
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 2020 was £18,312,000 (30 April 2019: £18,731,000; 31 October 2019: £18,713,000). The fair values are calculated using prices quoted on the exchange on which the instruments trade and are categorised as Level 1 as described below. In order to comply with fair value accounting disclosures only, the fair value of the loan note at 30 April 2020 has been estimated to be £63,938,000 (30 April 2019: £56,661,000; 31 October 2019: £60,895,000) 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 it is not traded and the Directors expect it 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 2020 (Unaudited) | Level 1 £,000 | Level 2 £,000 | Level 3 £,000 | Total £,000 |
| Investments including derivatives: |
|
|
|
|
| - Equity investments | 1,158,544 | - | - | 1,158,544 |
| - Fixed interest investments | - | - | 3 | 3 |
| - Current asset investments | 22,052 | - | - | 22,052 |
|
| ------------- | --------- | --------- | ------------- |
| Total financial assets carried at fair value | 1,180,596 | - | 3 | 1,180,599 |
|
| ========= | ====== | ====== | ======= |
|
|
|
|
|
|
| Financial assets at fair value through profit or loss at 30 April 2019 (Unaudited) | Level 1 £,000 | Level 2 £,000 | Level 3 £,000 | Total £,000 |
| Investments including derivatives: |
|
|
|
|
| - Equity investments | 1,129,414 | - | - | 1,129,414 |
| - Fixed interest investments | - | - | 5 | 5 |
| - Current asset investments | 29,607 | - | - | 29,607 |
|
| ------------- | --------- | --------- | ------------- |
| Total financial assets carried at fair value | 1,159,021 | - | 5 | 1,159,026 |
|
| ======== | ====== | ====== | ======= |
|
|
|
|
|
|
| Financial assets at fair value through profit or loss at 31 October 2019 (Audited) | Level 1 £,000 | Level 2 £,000 | Level 3 £,000 | Total £,000 |
| Investments including derivatives: |
|
|
|
|
| - Equity investments | 1,128,515 | - | - | 1,128,515 |
| - Fixed interest investments | - | - | 4 | 4 |
| - Current asset investments | 44,993 | - | - | 44,993 |
|
| ------------- | ---------- | --------- | ------------- |
| Total financial assets carried at fair value | 1,173,508 | - | 4 | 1,173,512 |
|
| ======== | ====== | ====== | ======= |
|
|
|
|
| |
|
| (Unaudited) Half-year ended | (Unaudited) Half-year ended | (Audited) Year ended | |
| Level 3 investments at fair value through profit or loss | 30 April 2020 £'000 | 30 April 2019 £'000 | 31 October 2019 £'000 | |
| Opening balance | 4 | 7 | 7 | |
| Transferred into Level 3 | - | - | - | |
| Disposal proceeds | - | (1) | (3) | |
| Total losses included in the Statement of Comprehensive Income on assets held at year end | (1) | (1) | - | |
|
| ------- | ------- | ---------- | |
| Closing balance | 3 | 5 | 4 | |
|
| ==== | ==== | ===== | |
10. |
Reconciliation of liabilities arising from financing activities | ||||||
|
| Non-cash changes | |||||
|
| At 1 November 2019 £'000 | Cash flows £'000 | Amortisation of issue costs £'000 | Foreign exchange £'000 | Other non-cash movements* £'000 | At 30 April 2020 £'000 |
|
|
|
|
|
|
|
|
| Financing activities |
|
|
|
|
|
|
| Financing liabilities | 64,823 | - | 4 | - | - | 64,827 |
|
| ---------- | -------- | -------- | --------- | ---------- | ------------ |
| Closing liabilities from financing activities | 64,823 | - | 4 | - | - | 64,827 |
|
| ===== | ==== | ==== | ===== | ===== | ===== |
|
|
|
|
|
|
|
|
|
| Non-cash changes | |||||
|
| At 1 November 2018 £'000 | Cash flows £'000 | Amortisation of issue costs £'000 | Foreign exchange £'000 | Other non-cash movements £'000 | At 30 April 2019 £'000 |
|
|
|
|
|
|
|
|
| Financing activities |
|
|
|
|
|
|
| Financing liabilities | 64,827 | - | (8) | - | - | 64,819 |
|
| ---------- | -------- | -------- | --------- | ---------- | ------------ |
| Closing liabilities from financing activities | 64,827 | - | (8) | - | - | 64,819 |
|
| ===== | ==== | ==== | ===== | ===== | ===== |
|
| Non-cash changes | |||||
|
| At 1 November 2018 £'000 | Cash flows £'000 | Amortisation of issue costs £'000 | Foreign exchange £'000 | Other non-cash movements £'000 | At 1 October 2019 £'000 |
|
|
|
|
|
|
|
|
| Financing activities |
|
|
|
|
|
|
| Financing liabilities | 64,827 | - | (4) | - | - | 64,823 |
|
| ---------- | -------- | -------- | --------- | ---------- | ------------ |
| Closing liabilities from financing activities | 64,827 | - | (4) | - | - | 64,823 |
|
| ===== | ==== | ==== | ===== | ===== | ===== |
| * The other movements column represents the proceeds from the issue of ordinary shares.
| ||||||
11. | Going concern | ||||||
| The assets of the Company consist of securities that are readily realisable and, accordingly, the Board believes that the Company has adequate resources to continue in operational existence for at least twelve months from the date of approval of the financial statements. Having assessed these factors and the principal risks, as well as considering in particular the impact of COVID-19 thereon and on the viability of the Company, the Board has determined that it is appropriate for the financial statements to be prepared on a going concern basis.
| ||||||
12. | Dividends | ||||||
| A first interim dividend of 5.35p (2019: 5.10p) per ordinary share was paid on 29 May 2020 to shareholders registered on 24 April 2020. The shares were quoted ex-dividend on 23 April 2020. Based on the number of ordinary shares in issue at 23 April 2020 of 127,756,783 the cost of this dividend was £6,835,000. The dividend was paid from the Company's revenue account.
The Directors have declared a second interim dividend of 5.35p (2019: 5.10p) and is payable to shareholders on 28 August 2020 to shareholders on the register on 24 July 2020. The shares will be quoted ex-dividend on 23 July 2020. Based on the number of shares in issue at 27 June 2020 of 128,607,780 the cost of this dividend will be £6,881,000. The dividend will be paid from the Company's revenue account.
| ||||||
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 2020 and 2019 has not been audited or reviewed by the Auditor.
The figures and financial information for the year ended 31 October 2019 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 2019.
|
14. | Half-year report |
| The half-year report will shortly be 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 July 2020.
|
15. | General information |
| Company Status The Company is a UK domiciled investment trust company. London Stock Exchange Daily Official List (SEDOL): 0076700 / ISIN number is GB0000767003 London Stock Exchange (TIDM) Code: BNKR Global Intermediary Identification Number (GIIN): L5YVFP.99999.SL.826 Legal Entity Identifier (LEI): 213800B9YWXL3X1VMZ69
Registered Office UK: 201 Bishopsgate, London EC2M 3AE.
Company Registration Number UK: 00026351 NZ: 645360
Directors The Directors of the Company are Susan Inglis (Chairman), Julian Chillingworth (Senior Independent Director), Isobel Sharp (Audit Committee Chairman), Richard Huntingford and Richard West.
Corporate Secretary Henderson Secretarial Services 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.
|
50 Largest Investments
At 30 April 2020
Rank 30 April 2020 | Rank 31 Oct 2019 | Company | Country | Valuation31 Oct 2019 £,000 | Purchases £'000 | Sales proceeds £'000 | Appreciation/(depreciation) £'000 | Valuation30 April 2020 £'000 |
1 | 1 | Microsoft | US | 26,291 | - | (2,264) | 7,219 | 31,246 |
2 | 2 | Estée Lauder |
US | 25,056 | - | - | (727) | 24,329 |
3 | 31 | Amazon |
US | 9,008 | 8,000 | - | 6,015 | 23,023 |
4 | 5 | Visa |
US | 19,145 | 3,498 | (963) | 891 | 22,571 |
5 | 4 | American Tower |
US | 19,922 | - | (823) | 2,287 | 21,386 |
6 | 8 | Alphabet |
US | 18,279 | - | - | 1,782 | 20,061 |
7 | 6 | MasterCard |
US | 19,008 | - | - | 360 | 19,368 |
8 | 23 | Apple |
US | 10,599 | 4,898 | - | 2,337 | 17,834 |
9 | 13 | Intercontinental Exchange |
US | 13,520 | 4,556 | - | (466) | 17,610 |
10 | 14 | Adobe Systems |
US | 13,175 | - | - | 4,007 | 17,182 |
11 | # |
US | - | 17,439 | - | (315) | 17,124 | |
12 | 7 | Berkshire Hathaway |
US | 18,501 | - | - | (1,773) | 16,728 |
13 | 10 | GlaxoSmithKline |
UK | 16,891 | - | - | (1,028) | 15,863 |
14 | # | Moodys |
US | - | 13,727 | - | 1,546 | 15,273 |
15 | 3 | American Express |
US | 22,757 | - | (3,911) | (3,733) | 15,113 |
16 | 26 | Netflix |
US | 9,632 | - | - | 4,802 | 14,434 |
17 | 18 | ICON |
US | 12,719 | - | - | 1,543 | 14,262 |
18 | 27 | British American Tobacco |
UK | 9,461 | 2,675 | - | 1,360 | 13,496 |
19 | 15 | Union Pacific |
US | 12,956 | - | - | (133) | 12,823 |
20 | 20 | Intuit |
US | 11,903 | - | - | 893 | 12,796 |
21 | 33 | DSM |
Netherlands | 8,716 | 3,047 | - | 760 | 12,523 |
22 | 12 | Diageo |
UK | 14,005 | - | - | (1,835) | 12,170 |
23 | 19 | The Cooper Companies |
US | 12,028 | - | - | 142 | 12,170 |
24 | 25 | Reckitt Benckiser |
UK | 9,687 | 1,023 | - | 1,227 | 11,937 |
25 | 22 | Taiwan Semiconductor Manufacturing |
Taiwan | 10,809 | - | - | 606 | 11,415 |
Rank 30 April 2020 | Rank 31 Oct 2019 | Company | Country | Valuation31 Oct 2019 £,000 | Purchases £'000 | Sales proceeds £'000 | Appreciation/(depreciation) £'000 | Valuation30 April 2020 £'000 |
26 | 24 | Roper Technologies |
US | 9,765 | - | - | 372 | 10,137 |
27 | 38 | Nestlé |
Switzerland | 8,419 | 2,481 | (1,074) | 227 | 10,053 |
28 | 35 | Novo-Nordisk |
Denmark | 8,672 | 1,928 | (2,715) | 1,993 | 9,878 |
29 | 9 | Comcast |
US | 18,082 | 3,277 | (9,677) | (1,901) | 9,781 |
30 | 32 | Roche |
Switzerland | 8,999 | 1,235 | (2,396) | 1,784 | 9,622 |
31 | 29 | Sony |
Japan | 9,181 | - | (444) | 811 | 9,548 |
32 | 43 | PayPal |
US | 7,729 | - | - | 1,638 | 9,367 |
33 | 36 | RELX |
UK | 8,533 | 760 | - | (297) | 8,996 |
34 | 11 | Aptiv |
US | 14,862 | - | (3,689) | (2,223) | 8,950 |
35 | 34 | Samsung Electronics |
South Korea | 8,685 | - | - | 82 | 8,767 |
36 | 46 | Thermo Fisher Scientific |
US | 7,617 | - | - | 1,032 | 8,649 |
37 | # | Prosus |
Netherlands | 3,006 | 4,680 | - | 896 | 8,582 |
38 | 30 | National Grid |
UK | 9,083 | - | (886) | 329 | 8,526 |
39 | 39 | SAP |
Germany | 8,144 | 1,063 | - | (773) | 8,434 |
40 | # | Vivendi |
France | 6,527 | 4,490 | (1,022) | (1,909) | 8,086 |
41 | # | Telecom Italia |
Italy | - | 10,232 | - | (2,374) | 7,858 |
42 | # | Cellnex Telecom |
Spain | 4,558 | 1,723 | - | 1,456 | 7,737 |
43 | # | Hengan International |
China | - | 6,315 | - | 1,391 | 7,706 |
44 | # | Taiwan Cement |
Taiwan | 6,756 | - | - | 821 | 7,577 |
45 | 16 | Royal Dutch Shell |
UK | 12,906 | - | - | (5,420) | 7,486 |
46 | # | Midea |
China | 6,812 | 683 | - | (45) | 7,450 |
47 | # | SIG Combibloc |
Switzerland | 2,995 | 3,323 | - | 1,094 | 7,412 |
48 | # | Daiichi Sankyo |
Japan | 6,816 | - | - | 483 | 7,299 |
49 | # | Bayer |
Germany | 4,168 | 3,888 | - | (936) | 7,120 |
50 | # | Rio Tinto |
UK | 6,117 | 1,381 | - | (449) | 7,049 |
|
|
|
| ------------ | ------------- | ------------ | --------------- | ------------ |
|
|
|
| 532,500 | 106,322 | (29,864) | 25,849 | 634,807 |
|
|
|
| ------------ | ------------- | ------------ | --------------- | ------------ |
All securities are equity investments
# Not in top 50 at 31 October 2019
Convertibles and all classes of equity in any one company being treated as one investment
GEOGRAPHICAL DISTRIBUTION
|
| |
| 30 April 2020 % | 31 October 2019 % |
UK | 21.7 | 25.6 |
Europe (ex UK) | 16.4 | 13.7 |
North America | 34.5 | 33.0 |
Japan | 11.7 | 12.0 |
Pacific (ex Japan and China) | 9.1 | 10.2 |
China | 6.6 | 5.5 |
| --------- | --------- |
| 100.0 | 100.0 |
| ===== | ===== |
Source: Janus Henderson
REVENUE GENERATED |
| |
| 30 April 2020 £ million | 31 October 2019 £ million |
UK | 5.4 | 12.9 |
Europe (ex UK) | 2.4 | 5.0 |
North America | 1.5 | 3.1 |
Japan | 1.7 | 3.1 |
Pacific (ex Japan and China) | 1.2 | 5.1 |
China | - | 1.7 |
Emerging Markets* | - | 0.6 |
| --------- 12.2 --------- | --------- 31.5 --------- |
*the Emerging Markets portfolio was closed during the year ended 31 October 2019.
Source: Janus Henderson
SECTOR ANALYSIS As a percentage of the investment portfolio excluding cash
| 30 April 2020 % | 31 October 2019 % |
Financials | 23.1 | 25.0 |
Consumer Goods | 18.6 | 19.1 |
Technology | 15.9 | 11.7 |
Industrials | 12.4 | 14.3 |
Consumer Services | 10.0 | 9.8 |
Health Care | 9.5 | 8.1 |
Telecommunications | 4.1 | 4.1 |
Basic Materials | 3.3 | 3.5 |
Utilities | 1.6 | 1.2 |
Oil & Gas | 1.5 | 3.2 |
| --------- | --------- |
| 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.