BIT – Final Results

LEGAL ENTITY IDENTIFIER: 213800B9YWXL3X1VMZ69

THE BANKERS INVESTMENT TRUST PLC
Annual Financial Report for the year ended 31 October 2017

This announcement contains regulated information




















(1)
Share price is the mid market closing price.

(2)
This represents the four ordinary dividends recommended or paid for the year.

(3)
Based on the share price at the year end.
(4)
Net gearing is calculated in accordance with the gearing definition in the Alternative Performance Measures in the
Annual Report

Sources: Morningstar for the AIC, Janus Henderson, Datastream.





CHAIRMAN’S STATEMENT

• Net asset value increase of 16.3%
• Dividend increase of 9.4%
• Forecast increase in 2018 dividend of at least 6.0%


Performance
I am very pleased to report another excellent year for our shareholders, with a net asset value (‘NAV’)
increase of 16.3%. Also, the share price performance was enhanced as the discount to NAV narrowed, with
the share price recording a 23.5% increase.

Whilst UK market sentiment was influenced by Brexit negotiations, international markets continued to
perform strongly as evidence of strengthening economic activity and improving consumer confidence was
recorded in virtually every region. Currency movements were less pronounced than last year albeit sterling
weakened again against the Euro and US dollar. So, for the second year running our capital value was
helped by both strong markets in the UK and overseas and a weaker level of sterling. This ‘double’ impact
was particularly evident in our North American portfolio where a sterling total return of 24.3% was recorded
and in our Continental European portfolio with a total return of 21.5%. Total returns from Japan and Emerging
Markets were lower at 9.8% and 5.8% respectively whilst the UK portfolio had a total return of 12.7%. Indeed,
every international portfolio outperformed its local benchmark. Special mention must be made of our
mainland China equity exposure where we recorded a total return of 55.3% against a local benchmark of
15.1%. On behalf of the Board, I would like to thank all of our fund managers for this exceptional
performance.






Performance Highlights 31 October 2017

31 October 2016
NAV per share at year end 878.9p
755.9p
Share price at year end
(1)
852.0p
690.0p
Dividend for year
(2)
18.6p
17.0p


31 October 2017

31 October 2016
Dividend yield
(3)
2.2%
2.5%
Retail Prices Index increase over year 4.0%
2.0%
Ongoing charge for year 0.44%
0.52%
Net gearing at year end
(4)

2.3%
2.6%
Discount at year end 3.1%
8.7%

I have reported on several occasions that strategic asset allocation decisions have led to a considerable shift
in our equity exposure away from the UK and into other major markets, primarily North America during the
past five years. North America is now our single largest country exposure at approximately 28%, followed by
the UK at approximately 26%. Many market commentators have, over the years, tried to call the top of the
North American market based on stretched valuation levels. But, despite a backdrop of increasing interest
rates, multiples have continued to rise and in certain sectors appear to be significantly beyond any normal
valuation levels. With this in mind we are unlikely to increase our US asset allocation in the short to medium
term.

Elsewhere, primarily in Continental Europe and Japan, the economic growth story is gaining momentum and
has yet to be fully reflected in corporate earnings growth. Whilst many challenges remain in these two
geographic areas, they are likely to be the beneficiaries of any further asset allocation shifts away from the
UK which we may instigate in the year ahead.

Revenue and Dividends
Bankers has delivered a further solid increase in the revenue account, reflecting positive currency
movements, robust dividend growth and further substantial special dividends. This performance has enabled
the Board to recommend an increase in the final quarterly dividend to 4.80p per share. If approved by
shareholders this will result in a total dividend payment for the year of 18.6p (2016: 17.0p), an increase of
9.4%. This increase compares with my forecast of at least 6%. Our revenue earnings per share over the
same period rose to 20.49p (2016: 17.53p), an increase of 16.9%.

The outlook for the year ahead from a revenue perspective remains positive. The recommended final 2017
dividend payment, if approved, will still accommodate a healthy transfer to revenue reserve which, at the
year-end, represented 1.8 times the cost of the 2017 annual dividend. These reserves give the Board
confidence in its discussions over future dividend growth. So, I am pleased to be able to report, on behalf of
the Board, a forecast of dividend growth of at least 6.0% for 2018.

Change to Investment Objectives and Policy Wording
You will note in the annual report that the Board has reviewed the wording of the investment objectives and
policy. This has been driven by the FCA’s thematic review on meeting customer expectations and ensuring
that investment objectives and policies are clear, accurate and not ambiguous. Shareholders should rest
assured that the existing twin key objectives of capital growth and dividend growth remain core to the
investment objectives of the Company. We have taken the opportunity to consider introducing a global
benchmark to judge capital growth over the long term. After consultation with our Manager and Corporate
Broker we have decided to adopt the FTSE World Index, an index of global companies. We intend to review
performance over a suitable medium to long term period, representing at least three years, as we do not wish
our fund managers to generate excessive trading to move the portfolio into line with the index in seeking to
generate short term relative performance.

Janus Henderson
We have followed the course of the merger between Henderson and Janus and the additional resources and
expertise that has been available to Alex Crooke, our Fund Manager. We continue to be optimistic that Janus
Henderson will be able to provide Alex with the support he will need to build on the performance of Bankers.
We are also delighted to record Alex’s promotion to Co-Head of Equities at Janus Henderson whilst
continuing to be lead Fund Manager of Bankers.

Board Changes
Both Matthew Thorne and David Wild will be retiring from the Board at the forthcoming Annual General
Meeting (‘AGM’). On behalf of all shareholders I thank both of them for their significant contribution to the
continuing success of the Company.

Matthew joined the Board in November 2008 and became Audit Committee Chairman in 2010. During this
period Matthew has been a strong independent non-executive director who has demonstrated on many
occasions his responsibilities to shareholders. Having served a full nine year term Matthew will retire at the
AGM.

David joined the Board in February 2014 and is not seeking re-appointment at the AGM. David’s executive
role at Domino’s Pizza has expanded as that company has developed and, as such, David felt unable to
commit to the continuing time demands placed upon the non-executive directors of your Company.

I am pleased to report that Isobel Sharp joined the Board on 1 November 2017, and will stand for
appointment by shareholders at the forthcoming AGM. Isobel has had a distinguished career in the
accountancy profession, most recently as the senior technical partner at Deloitte LLP. Further details of her
experience can be found in the Annual Report. Isobel will take on the Audit Committee Chair upon Matthew’s
retirement. I look forward to introducing Isobel to shareholders at the AGM.

Annual General Meeting (‘AGM’)
This year’s AGM will again be held at Trinity House, London, EC3N 4DH on 21 February 2018 at 12 noon.
Full details of the business to be conducted at the meeting are set out in the Notice of Meeting which will be
sent to shareholders with the Annual Report. Directions and a map showing the location of the AGM can also
be found in the Notice of Meeting. At the AGM, Alex Crooke and his investment team will present their
investment views and how these are reflected in the portfolio. Following the formal business of the meeting
light refreshments will be served. The Board looks forward to seeing many of you at the AGM.

Outlook
Rising inflation and the reaction of central banks is likely to be one of the bigger macro issues affecting global
markets in the year ahead. Increasing globalisation of the world economy has manifested itself in many ways
with one key aspect being the downward pressure on labour costs across major economies. The recent
increase in broader inflation measures has not yet resulted in a significant increase in labour costs but the
time may be getting closer when labour cost pressures will be more evident. Central banks in the US and UK
are beginning to withdraw the monetary support to their economies by raising interest rates. How aggressive
this removal of monetary support will be, especially with most markets at all-time highs, will be one of the key
determinants of market direction in 2018.

On a more positive note, global economic growth remains positive and corporate earnings growth in most
major markets is accelerating. Whether this growth is already reflected in market valuations is another critical
aspect in trying to forecast returns for next year. One thing about which I am certain, however, is to be
cautious in extrapolating the returns of the past two years into next year. Global stock markets and currencies
may not be as positively aligned in our favour as they have been during the past two years.

Richard Killingbeck
Chairman

FUND MANAGER’S REVIEW
Stock markets have continued to dance to the tune being played by central banks. Easy money and low
interest rates provided a supportive back drop for assets of all types to appreciate, effectively debasing the
value of cash by comparison. While certain politicians in the US and Europe have been distracting the
attention of commentators and news services, their relevance to economic growth has been limited. The
unexpected outturn was the US Federal Reserve increasing interest rates at a lower rate than expected
maintaining the goldilocks era that has persisted for a few years. Investors were said to be exhibiting rational
exuberance by market strategists, although in recent months this seems to be swinging to a less rational form
of speculation in cryptocurrencies such as Bitcoin. Our strategy has changed little through the year, preferring
to stay invested and concentrate on businesses that produce strong cash generation which can support a
return of profits through dividends. This has resulted in another solid year of relative performance, particularly
at the stock picking level with every region, bar the UK, outperforming their regional indices. The stand-out
performers were the US and once again the mainland China portfolio of A shares.

The US portfolio has been the largest contributor to overall performance in recent years, rising to over 30% of
the portfolio value earlier this year, at which point we decided to take some profits. Valuations in the US are
at an elevated level, justifiable to some extent by better growth, but as economic activity improved in other
parts of the world we felt better value could be obtained elsewhere. These reductions proved to be well timed.
The proceeds from US sales were reinvested into Europe and China, and later in the year, Japan. At a stock
level, we are beginning to find that better levels of growth globally and the slow normalisation of interest rates
is benefitting cyclicals: those stocks that are more attuned to economic growth such as financials and
industrials. We have benefitted from the share price appreciation of US technology shares but, towards the
middle of the year, started to rotate these holdings into more diversified areas, reducing the potential impact
should they start to underperform. Our managers have not had it all their way; smaller companies have
performed far better than large and this dynamic impacted performance in the UK and to some extent Europe
where we have limited exposure to small companies.

Europe and Asia, including China, have delivered the best absolute level of returns during the year. We
continue to believe that these markets can make further progress but the exposure to China, through both
mainland and Hong Kong, is getting towards the maximum level that we are able to tolerate. The region can
be susceptible to higher levels of volatility and central government control, which means we should not be
overly exposed. The deployment of gearing within the Company has been conservative all year and ended
the period at 2%. We felt more comfortable retaining cash to take advantage of a market setback, as there
have been troubling political and macro events that could easily have resulted in investors withdrawing from
markets. In the end, no meaningful fall occurred but we continue to cautiously recycle investments from
stocks we feel are expensive into those which offer better value.

We have made a change to the manager line-up with David Smith taking over the management of the UK
portfolio from me. David and I have worked together for the last five years on another UK portfolio and I feel
his clear focus on companies listed in the UK will deliver returns as the future ramifications of Brexit become
clearer. The roster of fund managers working for Bankers features the best talent within Janus Henderson
and the merger over the summer with Janus has created more resources.

The significant fall in the value of sterling following the 2016 European referendum had a greater impact in
the translation of overseas dividends during this reported year than the previous year. The Company’s
earnings rose 17% year-on-year but, as the year progressed, sterling started to strengthen against the US
dollar and next year we could see the positive effect on earnings reverse. A key focus of stock selection in all
regions is dividend growth from our investments and this been most noticeable in the lower yielding regions
such as the US and Japan. Dividend growth is gently accelerating in both regions and could surprise
positively next year helped by tax reforms in the US and a move to higher pay outs in Japan.

There are plenty of future trends like Brexit, fading Chinese growth and shrinking liquidity that may make
investors cautious. A negative outturn from any one could result in a sharp fall in stock markets. However, the
seeds of a global recession or prolonged market collapse are not yet obvious and so share prices may
continue to rise. Seeking out fundamental or intrinsic value has long been a sound investment strategy but, in
recent years, they have been forgotten in favour of growth and momentum. It seems clear to us that
inflationary pressures exist in labour markets and higher wage growth will favour a market shift towards more
careful analysis of value and the price paid for growth. These trends should favour our portfolio.

Alex Crooke
Fund Manager

LARGEST INVESTMENTS at 31 October 2017



Rank
2017

Rank
2016



Company
Valuation
2016
£’000

Purchases
£’000
Sales
proceeds
£’000

Appreciation/
(depreciation)
£’000
Valuation
2017
£’000
1 (1) BP 23,603 - (4,448) 743 19,898
2 (4) Apple 13,340 - - 4,918 18,258
3 (2) British American Tobacco 16,428 - - 629 17,057
4 (17) American Express 9,290 3,478 - 3,636 16,404
5 (3) American Tower 14,081 - - 1,779 15,860
6 (7) Alphabet 12,198 - - 2,257 14,455
7 (22) Facebook 8,493 2,844 - 3,035 14,372
8 # Samsung 7,439 1,517 - 5,371 14,327
9 (6) Royal Dutch Shell 12,307 - - 1,784 14,091
10 # Xylem - 11,146 - 2,663 13,809
11 (19) FedEx 9,135 2,586 - 1,967 13,688
12 (8) Comcast 12,103 - - 869 12,972
13 # Berkshire Hathaway - 11,825 - 799 12,624
14 (5) Delphi Automotive 12,746 - (4,153) 4,010 12,603
15 (14) Taiwan Semiconductor Manufacturing 10,008 - - 2,516 12,524
16 # Union Pacific - 11,931 - 418 12,349
17 (12) Fidelity National Information Services 10,275 - - 1,574 11,849
18 (16) Visa 9,363 - - 2,108 11,471
19 # Cognizant Technology Solutions 3,034 6,403 - 2,029 11,466
20 # ICON - 11,142 (4,075) 3,885 10,952
21 # Estée Lauder - 9,274 - 1,474 10,748
22 # Priceline 7,838 1,172 - 1,496 10,506
23 # Hangzhou Hikvision Digital Technology 3,891 1,597 (371) 4,953 10,070
24 # Diageo 6,083 2,491 - 1,398 9,972
25 # MasterCard 7,785 - - 2,164 9,949

----------- ----------- ----------- ----------- -----------
209,440 77,406 (13,047) 58,475 332,274
====== ====== ====== ====== ======

All securities are equity investments
# Not in the top 25 last year
Convertibles and all classes of equity in any one company being treated as one investment


CHANGES IN INVESTMENTS at 31 October

Valuation
2016
£’000

Purchases
£’000
Sales
proceeds
£’000

Appreciation
£’000
Valuation
2017
£’000
United Kingdom
276,070
62,911 (71,704) 24,122 291,399
Europe (ex UK)
136,261
44,138 (41,672) 24,807 163,534
North America
263,721
82,009 (100,020) 59,556 305,266
Japan
108,972
59,251 (48,495) 8,586 128,314
China
40,472
36,485 (29,443) 20,131 67,645
Pacific (ex Japan, China)
101,896
15,671 (13,030) 14,285 118,822
Emerging Markets
23,827
4,705 (2,217) 521 26,836

-----------
------------- ------------ ------------- -------------

951,219
305,170 (306,581) 152,008 1,101,816

======
======= ======= ======= =======

PRINCIPAL RISKS AND UNCERTAINTIES
The Board, with the assistance of Janus Henderson, has carried out a robust assessment of the
principal risks facing the Company including those that would threaten its business model, future
performance, solvency or liquidity. In carrying out this assessment, the Board has considered the market
uncertainty arising from the result of the UK referendum to leave the European Union. The Board has
drawn up a matrix of risks facing the Company and has put in place a schedule of investment limits and
restrictions, appropriate to the Company’s investment objectives and policy, in order to mitigate these
risks as far as practicable. The principal risks which have been identified, and the steps taken by the
Board to mitigate these as far as practicable, and whether the Board considers the impact of such risks
has changed over the past year, are as follows:

Risk Controls and Mitigation
Investment Activity and Performance Risks
An inappropriate investment strategy (for
example, in terms of asset allocation or the level
of gearing) may result in underperformance
against the Company’s various indices and the
companies in its peer group.

The Board monitors investment performance at
each Board meeting and regularly reviews the
extent of the Company’s borrowings.
Portfolio and Market Risks
Although the Company invests almost entirely in
securities that are listed on recognised markets,
share prices may move rapidly. The companies in
which investments are made may operate
unsuccessfully, or fail entirely. A fall in the market
value of the Company’s portfolio would have an
adverse effect on shareholders’ funds.

The Fund Manager seeks to maintain a
diversified portfolio to mitigate against this risk.
The Board regularly reviews the portfolio,
investment activity and performance.
Tax, Legal and Regulatory Risks
A breach of Section 1158 Corporation Tax 2010
could lead to a loss of investment trust status,
resulting in capital gains realised within the
portfolio being subject to corporation tax. A
breach of the UK Listing Authority’s Rules could
result in suspension of the Company’s shares,
while a breach of the Companies Act could lead
to criminal proceedings. All breaches could result
in financial or reputational damage. The Company
must also ensure compliance with the Listing
Rules of the New Zealand Stock Exchange.

Janus Henderson has been contracted to provide
investment, company secretarial, administration
and accounting services through qualified
professionals. The Board receives internal control
reports produced by Janus Henderson on a
quarterly basis, which confirm tax, legal and
regulatory compliance both in the UK and New
Zealand.
Financial Risks
By its nature as an investment trust, the
Company’s business activities are exposed to
market risk (including market price risk, currency
risk and interest rate risk), liquidity risk and credit
and counterparty risk.

The Company has a diversified portfolio which
comprises mainly investments in large and
medium-sized companies and mitigates the
Company’s exposure to liquidity risk. The
Company minimises the 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 Risks
Disruption to, or failure of, Janus Henderson’s
accounting, dealing or payment systems or the
Depositary’s records could prevent the accurate
reporting and monitoring of the Company’s
financial position. The Company is also exposed
to the operational risk that one or more of its
service providers may not provide the required
level of service.

The Board monitors the services provided by
Janus Henderson and its other suppliers and
receives reports on the key elements in place to
provide effective internal control.

The Board considers these risks to have remained unchanged throughout the year under review.

VIABILITY STATEMENT
The Directors have assessed the viability of the Company over a three year period, taking account of the
Company’s current position and the potential impact of the principal risks and uncertainties documented
in the Annual Report.

The Directors conducted the assessment based on a period of three years because they consider this to
be an appropriate period over which they do not expect there to be any significant change in the current
principal risks and adequacy of the mitigating controls in place. Also the Directors do not envisage any
change in strategy or objectives or any events that would prevent the Company from continuing to
operate over that period as the Company’s assets are liquid, its commitments are limited and the
Company intends to continue to operate as an investment trust.

The assessment has considered the impact of the likelihood of the principal risks and uncertainties
facing the Company, in particular Investment Activity and Performance, Portfolio and Market and
Financial risks, in severe but plausible scenarios, and the effectiveness of any mitigating controls in
place.

The Directors also took into account the liquidity of the portfolio, the gearing and the income stream
from the portfolio in considering the viability of the Company over the next three years and its ability to
meet liabilities as they fall due. This included, consideration of the duration of the Company’s long term
borrowings, how a breach of the gearing covenants could impact on the Company’s net asset value and
share price and how the forecast income stream, expenditure and levels of reserves could impact on the
Company’s ability to pay dividends to shareholders over that period in line with its current dividend
policy. Whilst detailed forecasts are only made over a shorter time frame, the nature of the Company’s
business as an investment trust means that such forecasts are equally valid to be considered over the
longer three year period as a means of assessing whether the Company can continue in operation.

Based on their assessment, the Directors have a reasonable expectation that the Company will be able
to continue in operation and meet its liabilities as they fall due over the next three year period. Only a
substantial financial crisis affecting the global economy could have an impact on this assessment.

RELATED PARTY TRANSACTIONS
The Company’s transactions with related parties in the year were with its Directors and Janus
Henderson. There have been 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 sales
and marketing services, there have been no transactions with the Manager affecting the financial
position of the Company during the year under review.

STATEMENT OF DIRECTORS’ RESPONSIBILITIES UNDER DISCLOSURE GUIDANCE AND
TRANSPARECY RULE 4.1.12
Each of the Directors confirms that, to the best of his or her knowledge:

• the Company’s financial statements, which have been prepared in accordance with IFRSs as adopted
by the EU, 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 includes 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 Killingbeck
Chairman

STATEMENT OF COMPREHENSIVE INCOME


Year ended 31 October 2017
Year ended 31 October 2016


Notes
Revenue
return
£'000
Capital
return
£'000
Total
return
£'000
Revenue
return
£'000
Capital
return
£'000
Total
return
£'000
Gains on investments held at
fair value through profit or loss

- 152,388 152,388 - 156,527 156,527
Investment income 2
29,445 - 29,445 24,661 - 24,661
Other operating income 3
189 - 189 255 - 255
--------- --------- --------- --------- --------- ---------
Total income 29,634 152,388 182,022 24,916 156,527 181,443

--------- --------- --------- --------- --------- ---------
Expenses
Management fees 4
(1,012) (2,362) (3,374) (959) (2,237) (3,196)
Other expenses
(963) - (963) (811) (3) (814)

--------- --------- --------- --------- --------- ---------
Profit before finance costs
and taxation

27,659 150,026 177,685 23,146 154,287 177,433

--------- --------- --------- --------- --------- ---------
Finance costs
(916) (2,137) (3,053) (1,227) (2,863) (4,090)

--------- --------- --------- --------- --------- ---------
Profit before taxation 26,743 147,889 174,632 21,919 151,424 173,343


Taxation 5
(1,624) – (1,624) (1,090) – (1,090)

--------- --------- --------- --------- --------- ---------
Profit for the year and total
comprehensive income

25,119 147,889 173,008 20,829 151,424 172,253
===== ====== ====== ===== ====== ======
Earnings per ordinary share
– basic and diluted 6 20.49p 120.62p 141.11p 17.53p 127.45p 144.98p






The total columns of this statement represent the Statement of Comprehensive Income, prepared in
accordance with IFRSs 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.

STATEMENT OF CHANGES IN EQUITY





Year ended
31 October 2017
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 2016 30,986 78,541 12,489 767,317 37,405 926,738
Total comprehensive income:
Profit for the year - - - 147,889 25,119 173,008
Ordinary dividends paid - - - - (22,183) (22,183)
---------- ---------- ---------- ---------- ---------- ------------
Total equity at 31 October 2017 30,986 78,541 12,489 915,206 40,341 1,077,563
====== ====== ====== ====== ====== =======




Year ended
31 October 2016
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 2015 28,271 12,722 12,489 624,099 35,052 712,633
Total comprehensive income:
Profit for the year - - - 151,424 20,829 172,253
Transactions with owners, recorded
directly to equity:

Issue of 10,863,453 ordinary shares 2,715 65,819 - - - 68,534
Buy–back of 1,338,509 ordinary
shares into treasury
- - - (8,206) - (8,206)
Ordinary dividends paid - - - - (18,476) (18,476)
---------- ---------- ---------- ---------- ---------- ----------
Total equity at 31 October 2016 30,986 78,541 12,489 767,317 37,405 926,738
====== ====== ====== ====== ====== ======

STATEMENT OF FINANCIAL POSITION













At 31 October
2017
£'000

At 31 October
2016
£'000


Non-current assets

Investments held at fair value through profit or loss
1,101,816
951,219

-------------
------------


Current assets

Investments held at fair value through profit or loss
23,252
21,354
Other receivables
2,660
7,817
Cash and cash equivalents
24,102
23,271

-------------
-------------
50,014
52,442

-------------
-------------
Total assets 1,151,830
1,003,661

-------------
-------------
Current liabilities

Other payables
(9,451)
(12,117)

------------
------------

(9,451)
(12,117)

-------------
-----------
Total assets less current liabilities 1,142,379
991,544

--------------
------------
Non-current liabilities

Debenture stock
(15,000) (15,000)
Unsecured loan notes
(49,816) (49,806)

--------------
------------

(64,816) (64,806)

--------------
-----------
Net assets 1,077,563
926,738
========
=======



Equity attributable to equity shareholders

Share capital
30,986
30,986
Share premium account
78,541
78,541
Capital redemption reserve
12,489
12,489
Retained earnings:


Other capital reserves
915,206
767,317
Revenue reserve
40,341
37,405

-------------
-----------
Total equity 1,077,563
926,738
=======
=======
Net asset value per ordinary share 878.9p
755.9p
=======
=======

CASH FLOW STATEMENT



Reconciliation of profit before taxation to
net cash flow from operating activities
Year ended
31 October
2017
£’000
Year ended
31 October
2016
£'000
Operating activities

Profit before taxation
174,632
173,343
Add back interest payable (‘finance costs’)
3,043
4,090
Amortisation of loan note issue costs
10
11
Less gains on investments held at fair value through profit or loss
(152,388)
(156,527)
Decrease/(increase) in accrued income
79
(454)
Decrease/(increase) in other receivables
42
(28)
(Decrease)/increase in other payables
(66)
113
Purchases of investments
(305,170)
(215,420)
Sales of investments
306,581
199,472
Purchases of current asset investments
(52,453)
(45,156)
Sales of current asset investments
50,555
52,125
Decrease/(increase) in securities sold for future settlement
5,235
(4,754)
(Decrease)/increase in securities purchased for future settlement
(2,601)
10,168

--------------
--------------


Net cash inflow from operating activities before interest and
taxation
1
27,499 16,983
Interest paid
(3,042)
(4,102)
Taxation on investment income
(1,832)
(1,302)

--------------
--------------
Net cash inflow /(outflow) from operating activities 22,625
11,579



Financing activities

Equity dividends paid (net of refund of unclaimed distributions)
(22,183)
(18,476)
Share issues
-
9,007
Buy-back of own shares
-
(8,206)
Repayment of debenture stock
-
(10,000)
Cash received from the liquidation of Henderson Global Trust plc
9
7,160

-------------
-------------
Net cash outflow from financing activities (22,174)
(20,515)

-------------
-------------



Increase/(decrease) in cash
451
(8,936)
Cash and cash equivalents at start of the year
23,271
31,762
Exchange movements
380
445

-----------
-----------
Cash and cash equivalents at end of the year
24,102
23,271
=======
=======

1
In accordance with IAS 7.31 cash inflow from dividends was £29,372,000 (2016: £22,932,000) and
cash inflows from interest was £191,000 (2016: £226,000).

NOTES:

1.
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 2017 have been prepared in accordance with International Financial
Reporting Standards (‘IFRSs’) as adopted by the European Union and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRSs. These comprise
standards and interpretations approved by the International Accounting Standards Board
(‘IASB’), together with interpretations of the International Accounting Standards and Standing
Interpretations Committee approved by the IFRS Interpretations Committee (‘IFRS IC’) that
remain in effect, to the extent that IFRSs have been adopted by the European Union.

The financial statements have been prepared on a going concern basis and on the historical
cost basis, except for the revaluation of certain financial instruments held at fair value through
profit or loss. The principal accounting policies adopted are set 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 trusts issued
by the Association of Investment Companies (the ‘AIC’) in November 2014 and updated in
January 2017 with consequential amendments is consistent with the requirements of IFRSs,
the Directors have sought to prepare the financial statements on a basis consistent with the
recommendations of the SORP.

The assets of the Company consist mainly of securities that are listed and readily realisable
and, accordingly, the Directors believe that the Company has adequate financial resources to
continue in operational existence for at least twelve months from the date of approval of the
financial statements. Having assessed these factors, the principal risks and other matters
discussed in connection with the Viability Statement, the Directors have decided that it is
appropriate for the financial statements to be prepared on a going concern basis.









2017
2016
2.
Investment income £’000
£’000
UK dividend income - listed
10,847
9,696
UK dividend income - special dividends
580
693
Overseas dividend income - listed
17,195
13,419
Overseas dividend income - special dividends
502
682
Property income distributions
321
171


----------- -----------

29,445
24,661

======
======
Analysis of investment income by geographical region:


UK
12,743
11,853
Europe (ex UK)
5,220
3,268
North America
2,639
2,883
Japan
2,183
2,209
China
1,454
1,171
Pacific (ex Japan, China)
4,343
2,599
Emerging Markets
863
678

-----------
-----------

29,445
24,661

======
======

2017
2016
3.
Other operating income £’000
£’000
Bank interest
23
86
Underwriting income
54
77
Stock lending revenue
108
83
Treasury bill interest
-
3
Other income
4
6

-----
-----

189
255

===
===

At 31 October 2017 the total value of securities on loan by the Company for stock lending
purposes was £28,166,000 (2016: £30,184,000). The maximum aggregate value of securities
on loan at any one time during the year ended 31 October 2017 was £64,544,000 (2016:
£66,536,000). The Company’s agent held collateral at 31 October 2017 with a value of
£31,366,000 (2016: £32,154,000) in respect of securities on loan. The value of securities held
on loan, comprising Corporate and Government Bonds with a minimum market value of 105%
(2016: 105%) of the market value of any securities on loan is reviewed on a daily basis.


2017
2016


4.


Management fees
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Investment management
1,012 2,362 3,374
959 2,237 3,196

------- ------- -------
------- ------- -------

1,012 2,362 3,374
959 2,237 3,196

==== ==== ====
==== ==== ====

A summary of the terms of the management agreement is given in the Annual Report.


2017
2016


5.


Taxation
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000

a) Analysis of the charge for
the year





Overseas tax suffered
1,986 - 1,986
1,373 - 1,373
Overseas tax reclaimable
(362) - (362)
(283) - (283)
------- ------- ------- ------- ------- -------

Total tax charge for the year 1,624 - 1,624
1,090 - 1,090
==== ==== ==== ==== ==== ====

b) Factors affecting the tax charge for the year
The differences are explained below:

2017
2016
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Profit before taxation
26,743 147,889 174,632
21,919 151,424 174,343
Corporation tax for the
year at an effective rate of
19.42% (2016: 20.00%)
5,193 28,720 33,913
4,384 30,285 34,669
Non taxable UK dividends
(2,229) - (2,229)
(2,046) - (2,046)
Overseas income and non
taxable scrip dividends
(3,239) - (3,239)
(2,617) - (2,617)
Overseas withholding tax
suffered
1,624 - 1,624
1,090 - 1,090
Realised gains on non-
reporting offshore funds
- 555 555
- - -
Excess management
expenses and loan
relationships
275 319 594
279 1,021 1,300
Capital gains not subject
to tax
- (29,594)
(29,594
)
- (31,306) (31,306)

-------- ----------- -----------
-------- ----------- -----------

1,624 - 1,624
1,090 - 1,090

===== ====== =====
===== ====== =====


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 has not recognised a deferred tax asset totalling £7,201,000 (2016: £6,257,000)
based on a prospective corporation tax rate of 17.0% (2016: 17.0%). The deferred tax asset arises
as a result of having unutilised management expenses and unutilised non-trade loan relationship
deficits. These expenses will only be utilised, to any material extent, if the Company has profits
chargeable to corporation tax in the future because changes are made either to the tax treatment
of the capital gains made by investment trusts or to the Company’s investment profile which
require them to be used.

6.
Earnings per ordinary share
The total earnings per ordinary share is based on the net profit attributable to the ordinary shares
of £173,008,000 (2016: £172,253,000) and on 122,606,783 ordinary shares (2016: 118,813,485),
being the weighted average number of shares in issue during the year.

The total earnings can be further analysed as follows:


2017
2016

£’000
£’000
Revenue profit
25,119
20,829
Capital profit
147,889
151,424

----------------
----------------
Profit for the year
173,008
172,253

----------------
----------------
Weighted average number of ordinary shares
122,606,783
118,813,485

-----------------
-----------------
Revenue earnings per ordinary share
20.49p
17.53p
Capital earnings per ordinary share
120.62p
127.45p

-------------
-------------
Earnings per ordinary share
141.11p
144.98p

=======
=======



The Company does not have any dilutive securities, therefore basic and diluted earnings are the
same.


8.
Net asset value per ordinary share
The net asset value per ordinary share is based on net assets attributable to ordinary shares of
£1,077,563,000 (2016: £926,738,000) and on 122,606,783 ordinary shares in issue at 31 October
2017 (2016: 122,606,783). The Company has no securities in issue that could dilute the net asset
value per ordinary share.


7.

Called up share capital
Number of
shares
entitled
to dividend
Total n
Total
number
of shares

Nominal value
of shares
£’000

Ordinary shares of 25p each

At 1 November 2016 122,606,783 123,945,292 30,986

----------------- ----------------- -----------

At 31 October 2017 122,606,783 123,945,292 30,986

----------------- ---------------- -----------


Number of
shares
entitled
to dividend
Total n
Total
number
of shares

Nominal value
of shares
£’000
Ordinary shares of 25p each
At 1 November 2015 113,081,839 113,081,839 28,271
New shares issued 10,863,453 10,863,453 2,715
Shares bought back in the year (1,338,509) - -
----------------- ----------------- -----------
At 31 October 2016 122,606,783 123,945,292 30,986
----------------- ---------------- -----------


During the year, no ordinary shares were issued or purchased. In the year ended 31 October 2016,
10,863,453 shares were issued for net proceeds of £68,534,000 and 1,338,509 shares were
purchased for holding in treasury at a cost of £8,206,000.

Since the year end, the Company has not issued any ordinary shares or purchased shares for
cancellation or to be held in treasury.

The movements during the year in net assets attributable to the ordinary shares were as follows:

2017
2016

£’000
£’000
Net assets attributable to ordinary shares at start of year
926,738
712,633
Total net profit on ordinary activities after taxation
173,008
172,253
Dividends paid
(22,183)
(18,476)
Issue of ordinary shares
-
68,534
Purchase of ordinary shares
-
(8,206)

-------------
-----------

Net assets attributable to ordinary shares at end of year 1,077,563
926,738

=======
======

9.
Dividend
A final dividend of 4.80p per share, if approved by shareholders at the Annual General Meeting, will
be paid on 28 February 2018 to shareholders on the register on 26 January 2018. The shares go
ex-dividend on 25 January 2018. This final dividend, together with the three interim dividends
already paid, brings the total dividend for the year to 18.6p.

10.
2017 Financial Information
The figures and financial information for the year ended 31 October 2017 are extracted from the
Company’s annual financial statements for that period and do not constitute statutory accounts.
The Company’s annual financial statements for the year to 31 October 2017 have been audited but
have not yet been delivered to the Registrar of Companies. The Auditor’s report on the 2017
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.


11.
2016 Financial Information
The figures and financial information for the year ended 31 October 2016 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.

12.
Annual Report
Copies of the Annual Report will be posted to shareholders by the end of January 2018 and will be
available on the Company’s website (www.bankersinvestmenttrust.com) or in hard copy format
from the Registered Office, 201 Bishopsgate, London EC2M 3AE.

13.
Annual General Meeting
The Annual General Meeting will be held on Wednesday 21 February 2018 at 12 noon at Trinity House,
London, EC3N 4DH.

For further information contact:

Alex Crooke
Fund Manager
The Bankers Investment Trust PLC
Telephone: 020 7818 4447

Richard Killingbeck
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
Sarah Gibbons-Cook
Investor Relations and PR Manager
Janus Henderson Investors
Telephone: 020 7818 3198

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) is incorporated into, or forms part of,
this announcement.
******