BIT- Annual Financial Report

LEGAL ENTITY IDENTIFIER: 213800B9YWXL3X1VMZ69

THE BANKERS INVESTMENT TRUST PLC

Annual Financial Report for the year ended 31 October 2018

This announcement contains regulated information




















(1)
Share price is the midmarket 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 glossary in the
Annual Report

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






Performance Highlights 31 October 2018
31 October 2017
NAV per share at year end 865.8p
878.9p
Share price at year end
(1)
835.0p
852.0p
Dividend for year
(2)
19.72p
18.60p


31 October 2018

31 October 2017
Dividend yield
(3)
2.4%
2.2%
Dividend growth 6.0%
9.4%
Ongoing charge for year 0.50%
0.44%
Net gearing at year end
(4)

2.4%
2.3%
Discount at year end 3.6%
3.1%

CHAIRMAN’S STATEMENT

• Net asset value total return increase of 0.8%

• Dividend increase of 6% to 19.72p per share

• Forecast increase in 2019 dividend of 6%

Performance
The past year has been disappointing from a net asset value (‘NAV’) total return basis, with an increase of
just 0.8% leading to a flat share price total return over this period. The caution that I expressed in the
outlook paragraph of the Strategic Report last year was for the early part of the year misplaced. Yet by our
year-end the effects of rising US interest rates, stretched valuations of growth stocks, trade wars and UK
politics had all played their part in turning global market sentiment negative.

Volatility has been in evidence across global markets since early summer as the momentum behind the
tightening US interest rate cycle has begun to influence market sentiment and, in particular, highly-rated
growth stocks such as those in the technology sector. In addition, the growing number of macro concerns
(trade wars, UK politics, emerging market debt levels) have risen to prominence as the year
progressed. Against this backdrop, companies issuing profit warnings have been harshly treated by the
markets thus compounding the rising nervousness amongst investors.

During the year the asset allocation structure of the portfolio has continued the trend of the past three years,
namely a reduction in the UK equity element of the portfolio, a gradual increase in the US and a
maintaining of our allocation to Japanese and Continental European equities. Towards our end of the period
we allocated some more monies to our China exposure, following a near 20% decline in the market, thus
maintaining an overall stable allocation to the Asian region.

With the exception of North America and Japan, all global markets experienced negative returns during the
year. On a positive note our regional managers performed well with four (Europe, North America, Asia
Pacific and China) significantly outperforming their local benchmarks whilst the UK, Japan and Emerging
Market portfolios underperformed their local benchmarks. From a sectorial perspective, our overweight
position in consumer stocks, in particular in the UK, has negatively impacted performance, whilst our
technology exposure in the US has driven our outperformance in this market. Towards our year-end some
profits were realised from these elements of the portfolio.

Revenue and Dividends
Bankers has delivered a further solid increase in the revenue account, reflecting positive currency
movements, robust dividend growth and further special dividends. This performance has enabled the Board
to recommend a final quarterly dividend of 5p per share. If approved by shareholders, this will result in a
total dividend payment for the year of 19.72p, (2017: 18.60p), an increase of 6.0%. Delivering on my
forecast for the year. Our revenue earnings per share over the same period rose to 20.78p (2017: 20.49p),
an increase of 1.4%.

The outlook for the year ahead from a revenue account perspective remains positive. The recommended
final 2018 dividend payment, if approved, will still accommodate a healthy transfer to our revenue reserve
which, at the year-end, represented 1.2 times the cost of the 2018 annual dividend. This reserve gives the
Board confidence in its discussions regarding likely future dividend growth. The main concern when
forecasting growth for the current year remains the level of sterling. Sterling’s weakness has helped our
revenue account significantly during the past three years. A sudden increase in the value of sterling, albeit
not our expectation, will lead to pressure on the revenue account. However such is our level of revenue
reserves that I am pleased to be able to report, on behalf of the Board, a forecast of dividend growth of
approximately 6% for 2019.

Board Changes
As has previously been announced, I shall be retiring from the Board at the forthcoming Annual General
Meeting (‘AGM’). Sue Inglis will succeed as Chairman from the conclusion of the AGM. Sue joined the
Board in November 2012 and became Senior Independent director in February 2015. Sue is highly
experienced and knowledgeable within the Investment Trust sector and has for many years advised other
companies in her role as a lawyer and subsequently a corporate financier. Sue has a number of other
non-executive roles in the sector having stepped down as Managing Director - Corporate Finance at Cantor
Fitzgerald Europe last summer. I know that Sue will continue the ethos that has served shareholders in
Bankers so well over the longer term. Julian Chillingworth will succeed Sue as Senior Independent Director
at the same time.

I am also pleased to report that Richard Huntingford joined the Board on 26 September 2018, subject to
shareholder approval at the AGM. Richard has been involved in the media and marketing sectors for more
than 30 years and has held a number of executive and non-executive roles in listed and private businesses.
Further details of his experience can be found in the Annual Report. I look forward to introducing Richard to
shareholders at the AGM.

Annual General Meeting (‘AGM’)
This year’s AGM will again be held at Trinity House, London, EC3N 4DH on 27 February 2019 at 12 noon.
Full details of the business to be conducted at the meeting are set out in the Notice of Meeting which has
been 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
In my view it is too early to become contrarian in regard to market sentiment but it is very tempting to begin to
look at markets more positively. The global economy, led by North America, remains solid, and inflationary
pressures, whilst higher than a year ago, are stabilising. The recent oil price decline has yet to feed through
into inflation numbers and, whilst wage inflation remains a concern, overall inflation could fall in 2019. If such
a scenario were to be in evidence then the current momentum in interest rate rises in the US could ease
giving markets a welcome boost. Valuations in certain sectors will continue to be a limiting factor, equally
investors will need a resolution of the current trade tariff dispute to commit substantial new money to the
market. The recent low levels of volatility in markets are a phenomenon that are now likely to be confined to
history and a product of quantitative easing used to stabilise markets through the financial crises. Therefore,
going forward investors will need to readjust to more historically normal high levels of volatility.

The uncertainty in the UK will remain and will be dominated by Brexit issues well beyond the end of March
2019. Consumer and business sentiment remain as critical indicators in the year ahead for the country and
for confidence to return to the UK from international investors in particular. The UK market therefore will likely
have another dull year. Yet the valuation argument is becoming more compelling especially for some
companies in more traditional defensive sectors with strong balance sheets and well covered dividends.
Currency markets may surprise in 2019 and, as highlighted earlier, a stronger sterling would impact our
revenue account and also have a negative translational impact on the NAV from the international holdings.

Thus I fear caution remains the key watch word for global equity markets, at least for the first half of 2019.
The direction of US interest rates, the outcome of Brexit with its range of economic implications and the wider
inflationary picture should all be clearer by this time. If corporate earnings growth remains positive then
valuations may become compelling, despite the late stage in the cycle in which we find ourselves.


R W Killingbeck
Chairman
15 January 2019

FUND MANAGER’S REVIEW
This past year has been one of the most challenging in my career, as factors beyond the financial world have
collided and created a very difficult environment for investors and companies alike. I have to look back to the
1960s to find a period when politics dominated financial markets as much as they have in 2018. The fear of
the unknown swamped equity markets in 2018 and created an environment where share prices outside the
US fell sharply towards the end of our financial year under review.
The year started in bright form, as against my own scepticism, tax reform in the US was enacted, leading to
investors’ exuberance about the future. Markets rallied to set new highs in January, with one of the strongest
rises in share prices of growth stocks on record. There were plenty of signs that the optimism would fade and
we did reduce the gearing into the rally selling some of the best performing stocks in the portfolio. The US
Federal Reserve clearly indicated at the start of 2018 that it would raise interest rates throughout the year and
the European Central Bank (‘ECB’) announced that it’s quantitative easing bond purchases would reduce
monthly and cease by the end of the year. These actions would progressively drain liquidity in markets and
reduce money supply. In previous tightening cycles, we have seen market volatility increase and equity prices
decline. I had expected a difficult summer but the sell-off didn’t start until October.
Our line up of fund managers has not changed this year but sadly Tim Stevenson, our European fund
manager, has decided to retire in early 2019 after a long career with Janus Henderson and nearly 20 years
helping Bankers. His replacement will be James Ross, who joined Janus Henderson in 2007 and has worked
closely with Tim in recent years.
Asset Allocation
In hindsight asset allocation was a simple decision of owning American equities and the US dollar to the
exclusion of all other global markets. Every other region declined with only Japan holding flat; Chinese
equities fell over 20%, in a bear market. US investors clearly repatriated assets, with investment flows moving
from international markets back into US dollars. Despite the expensive valuations we increased the
investment in the US, resisting the temptation to lock in gains. The portfolio’s underperformance relative to
the FTSE World Index is partly explained by the smaller exposure to the US relative to the benchmark, 31.6%
as compared to 60.6%. I believe that purchasing expensively valued companies will ultimately hurt returns
over time. The US is now a highly valued market that has outperformed other global markets for seven years
during the last decade and therefore an element of caution is warranted in terms of increasing exposure. Our
stock selection has offset the underweight, with the North American team producing a very impressive
performance by focusing on long-term secular trends such as paperless payment, disruption and health care.
The European and Pacific portfolios also delivered strong relative returns, with a focus on quality companies
with dominant market positions in their industries. It was not a year to bet against market trends reversing,
momentum remained strong for market leaders and value and income stocks underperformed.

The UK remained mired in Brexit uncertainty which has made the UK stock market almost un-investable in
many international investors’ eyes. Sterling steadily declined against the US dollar, although it has held its
own against the Euro. The UK economy has seen little impact from Brexit, benefitting from the lower
exchange rate. However the strains have latterly become apparent with reduced inward investment flows and
tighter labour markets as immigration falls. The portfolio’s exposure to the UK was reduced further this year,
ending at 25.2%. The majority of the underperformance against the benchmark can be explained by the UK
exposure and the underperformance of the UK stocks we held. A narrow number of the largest stocks
performed well in the UK but the mid-cap stocks, which are more domestically exposed, did not perform for
us.
Outlook
As I look forward I suspect that the future will not turn out as bad as many predict. The world does not appear
on the verge of a sharp recession but clearly growth is slowing and share prices have begun to price this in.
There is an incentive on all sides to get trade discussions concluded and I expect a better picture to emerge
as the year develops. By the summer many of the uncertainties will have resolved themselves in one form or
another and we should have a clearer outlook. Valuations have fallen significantly in recent months and we
have an opportunity to invest cash at very favourable dividend yields. An element of caution still seems
sensible and we are looking to purchase only quality companies with strong balance sheets, rather than
recovery situations that require a higher level of economic growth. It looks like a year of two halves lies ahead
of us.
Alex Crooke
Fund Manager
15 January 2019

LARGEST INVESTMENTS at 31 October 2018

Ranking
2018
Ranking
2017



Company



Country
Valuation
2017
£’000
Purchases
£’000
Sales
proceeds
£’000
Appreciation/
(depreciation)
£’000
Valuation
2018
£’000
1
#
Microsoft
US
- 16,301 - 5,121
21,422
2 (2)
Apple
US
18,258 - (3,386) 6,413
21,285
3 (4)
American Express
US
16,404 1,718 - 2,052
20,174
4 (16)
Union Pacific
US
12,349 3,399 - 4,028
19,776
5 (1)
BP
UK
19,898 - (3,097) 2,015
18,816
6 (13)
Berkshire Hathaway
US
12,624 3,462 - 2,003
18,089
7 (21)
Estée Lauder
US
10,748 3,177 - 3,005
16,930
8 (60)
Alphabet
US
14,455 - - 1,431
15,886
9 (18)
Visa
US
11,471 - - 3,467
14,938
10 (9)
Royal Dutch Shell
UK
14,091 - - 835
14,926
11 (5)
American Tower
US
15,860 - (3,135) 1,687
14,412
12 (12)
Comcast
US
12,972 - - 1,300
14,272
13 (11)
FedEx
US
13,688 - - 188
13,876
14 (25)
MasterCard
US
9,949 - -
3,793
13,742
15 (20)
ICON
US 10,952 - -
2,264
13,216
16 (14)
Aptiv
US 12,603 3,311 (2,173) (840)
12,901
17 #
GlaxoSmithKline
UK
8,694 2,739
-
1,277
12,710
18 (24)
Diageo
UK
9,972 1,417
-
598
11,987
19 (3)
British American Tobacco
UK
17,057
- -
(5,174)
11,883
20 (15)
Taiwan Semiconductor
Manufacturing
Taiwan
12,524
- -
(809)
11,715
21
#
Intercontinental Exchange
US
-
11,151
- 38
11,189
22
(10)
Xylem
US
13,809
-
(3,129) 487
11,167
23 (19)
Cognizant Technology
Solutions
US
11,466
- - (597)
10,869
24 #
The Cooper Companies
US
9,679
- - 1,135
10,814
25 #
Booking
US
10,506
- - 203
10,709





----------- ----------- ----------- -----------
-----------
300,029 46,675 (14,920) 35,920
367,704
====== ====== ====== ======
======

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
2017
£’000
Purchases
£’000
Sales
proceeds
£’000
Appreciation/
(depreciation)
£’000
Valuation
2018
£’000
United Kingdom 291,399
51,806 (47,851) (21,821) 273,533
Europe (ex UK) 163,534
62,917 (57,390) (6,980) 162,081
North America 305,266
64,264 (70,309) 43,835 343,056
Japan 128,314
62,549 (58,416) (4,872) 127,575
Pacific (ex Japan, China) 118,822
25,405 (44,304) (4,802) 95,121
China 67,645
64,030 (57,624) (15,629) 58,422
Emerging Markets 26,836
4,483 (1,864) (2,210) 27,245
--------------
----------- ------------ ------------ --------------

1,101,816
335,454 (337,758) (12,479) 1,087,033
========
====== ======= ======= ========

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 UK’s negotiations 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. Macro matters (such
as trade wars, the conclusion of the UK’s
negotiations to leave the European Union and the
global economic outlook) are expected to lead to
continued volatility in the markets. This is likely to
impact share prices of investments in the portfolio,
to the extent not already factored into current prices.
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 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 the Annual Report.

Operational and Cyber 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 and cyber risks 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, the Depositary 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 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, materialising 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.

RELATED PARTY TRANSACTIONS
The Company’s transactions with related parties in the year were with its Directors and Janus
Henderson. There were no material transactions between the Company and its Directors during the year
other than the amounts paid to them in respect of Directors’ remuneration for which there were no
outstanding amounts payable at the year end. In relation to the provision of services by the Manager,
other than fees payable by the Company in the ordinary course of business and the provision of sales
and marketing services, there were no transactions with the Manager affecting the financial position of
the Company during the year under review. More details on transactions with the Manager, including
amounts outstanding at the year end as shown in the Annual Report.

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
15 January 2019

STATEMENT OF COMPREHENSIVE INCOME


Year ended 31 October 2018
Year ended 31 October 2017


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


- (12,611) (12,611) - 152,388 152,388
Investment income 2
30,321 - 30,321 29,445 - 29,445
Other operating income 3
226 - 226 189 - 189
--------- --------- --------- --------- --------- ---------
Total income 30,547 (12,611) 17,936 29,634 152,388 182,022

--------- --------- --------- --------- --------- ---------
Expenses
Management fees 4
(1,344) (3,136) (4,480) (1,012) (2,362) (3,374)
Other expenses
(990) - (990) (963) - (963)

--------- --------- --------- --------- --------- ---------
Profit/(loss) before
finance costs and
taxation

28,213 (15,747) 12,466 27,659 150,026 177,685

--------- ---------- --------- --------- --------- ---------
Finance costs
(917) (2,141) (3,058) (916) (2,137) (3,053)

--------- ---------- --------- --------- --------- ---------
Profit/(loss) before
taxation

27,296 (17,888) 9,408 26,743 147,889 174,632


Taxation 5
(1,823) – (1,823) (1,624) – (1,624)

--------- --------- --------- --------- --------- ---------
Profit/(loss) for the year
and total comprehensive
income

25,473 (17,888) 7,585 25,119 147,889 173,008
===== ====== ====== ===== ====== ======
Earnings per ordinary
share – basic and diluted 6 20.78p (14.59p) 6.19p 20.49p 120.62p 141.11p






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 2018
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 2017 30,986 78,541 12,489 915,206 40,341 1,077,563
Total comprehensive income:
(Loss)/profit for the year - - - (17,888) 25,473 7,585
Ordinary dividends paid - - - - (23,565) (23,565)
---------- ---------- ---------- ---------- ---------- -------------
Total equity at 31 October 2018 30,986 78,541 12,489 897,318 42,249 1,061,583
====== ====== ====== ====== ====== =======




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

STATEMENT OF FINANCIAL POSITION










At 31 October
2018
£'000

At 31 October
2017
£'000


Non-current assets

Investments held at fair value through profit or loss
1,087,033
1,101,816

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


Current assets

Investments held at fair value through profit or loss
18,005
23,252
Other receivables
4,667
2,660
Cash and cash equivalents
20,075
24,102

--------------
-------------
42,747
50,014

--------------
--------------
Total assets 1,129,780
1,151,830

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

Other payables
(3,370)
(9,451)

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

(3,370)
(9,451)

-------------
-----------
Total assets less current liabilities 1,126,410
1,142,379

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

Debenture stock
(15,000) (15,000)
Unsecured loan notes
(49,827) (49,816)

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

(64,827) (64,816)

--------------
-----------
Net assets 1,061,583
1,077,563
========
=======



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
897,318
915,206
Revenue reserve
42,249
40,341

-------------
-------------
Total equity 1,061,583
1,077,563
=======
========
Net asset value per ordinary share 865.8p
878.9p
=======
=======

CASH FLOW STATEMENT



Reconciliation of profit before taxation to
net cash flow from operating activities
Year ended 31
October
2018
£’000
Year ended 31
October
2017
£'000
Operating activities

Profit before taxation
9,408
174,632
Add back interest payable (‘finance costs’)
3,047
3,043
Amortisation of loan notes issue costs
11
10
Add: losses/(gains) on investments held at fair value through profit or loss
12,611
(152,388)
Decrease in accrued income
113
79
(Increase)/decrease in other receivables
(12)
42
Increase/(decrease) in other payables
82
(66)
Purchases of investments
(335,454)
(305,170)
Sales of investments
337,755
306,581
Purchases of current asset investments
(46,003)
(52,453)
Sales of current asset investments
51,250
50,555
(Increase)/decrease in securities sold for future settlement
(1,834)
5,235
Decrease in securities purchased for future settlement
(6,163)
(2,601)

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


Net cash inflow from operating activities before interest and taxation
1
24,811
27,499
Interest paid
(3,058)
(3,042)
Taxation on investment income
(2,083)
(1,832)

--------------
--------------
Net cash inflow from operating activities 19,670
22,625



Financing activities

Equity dividends paid (net of refund of unclaimed distributions)
(23,565)
(22,183)
Drawdown of bank loan
2,005
-
Repayment of bank loan
(2,005)
-
Cash received from the liquidation of Henderson Global Trust plc
-
9

-------------
-------------
Net cash outflow from financing activities (23,565)
(22,174)

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



(Decrease)/ increase in cash
(3,895)
451
Cash and cash equivalents at start of the year
24,102
23,271
Exchange movements
(132)
380

-----------
-----------
Cash and cash equivalents at end of the year
20,075
24,102
=======
=======

1
In accordance with IAS 7.31 cash inflow from dividends was £30,398,000 (2017: £29,372,000) and cash
inflow from interest was £62,000 (2017: £191,000).

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 2018 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 out in the Annual Report. These policies have been applied consistently throughout the
year. Where presentational guidance set out in the Statement of Recommended Practice (the ‘SORP’) for
investment companies issued by the Association of Investment Companies (the ‘AIC’) in November 2014 and
updated in February 2018 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.



2018
2017
3.
Other operating income £’000
£’000
Bank interest
64
23
Underwriting income
24
54
Stock lending revenue
135
108
Other income
3
4

-----
-----

226
189

===
===

At 31 October 2018 the total value of securities on loan by the Company for stock lending purposes was
£42,093,000 (2017: £28,166,000). The maximum aggregate value of securities on loan at any one time during the
year ended 31 October 2018 was £159,687,000 (2017: £64,544,000). The Company’s agent held collateral at 31
October 2018 with a value of £44,402,000 (2017: £31,366,000) in respect of securities on loan. The value which is
reviewed on a daily basis comprises Corporate and Government Bonds with a minimum market value of 105%
(2017: 105%) of the market value of any securities on loan.


2018
2017
2.
Investment income £’000
£’000
UK dividend income - listed
10,718
10,847
UK dividend income - special dividends
329
580
Overseas dividend income - listed
18,930
17,195
Overseas dividend income - special dividends
205
502
Property income distributions
139
321


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

30,321
29,445

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


UK
11,641
12,743
Europe (ex UK)
5,215
5,220
North America
3,077
2,639
Japan
2,825
2,183
China
1,413
1,454
Pacific (ex Japan, China)
5,183
4,343
Emerging Markets
967
863

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

30,321
29,445

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

2018
2017


4.


Management fees
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Investment management
1,344 3,136 4,480
1,012 2,362 3,374

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

1,344 3,136 4,480
1,012 2,362 3,374

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


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


2018
2017


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
2,121 - 2,121
1,986 - 1,986
Overseas tax reclaimable
(295) - (295)
(362) - (362)
Income tax recovered
(3) - (3)
- - -
------- ------- ------- ------- ------- -------

Total tax charge for the year 1,823 - 1,823
1,624 - 1,624
==== ==== ==== ==== ==== ====

b) Factors affecting the tax charge for the year
The differences are explained below:
2018
2017
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Revenue
return
£’000
Capital
return
£’000
Total
return
£’000
Profit/(loss) before taxation
27,296 (17,888) 9,408
26,743 147,889 174,362
Corporation tax for the year at
19.00% (2017: 19.42%)
5,186 (3,400) 1,786
5,193 28,720 33,913
Non taxable UK dividends
(2,112) - (2,112)
(2,229) - (2,229)
Overseas income and non
taxable scrip dividends
(3,493) - (3,493)
(3,239) - (3,239)
Overseas withholding tax
suffered
1,826 - 1,826
1,624 - 1,624
Income tax recovered
(3) - (3)
- - -
Realised gains on non-
reporting offshore funds
- - -
- 555 555
Excess management
expenses and loan
relationships
371 897 1,268
275 319 594
Interest capping restriction
48 106 154
- - -
Capital losses/(gains) not
subject to tax
- 2,397 2,397
- (29,594) (29,594)

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

1,823 - 1,823
1,624 - 1,624

===== ====== =====
===== ====== =====
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 £8,263,000 (2017: £7,201,000) based on a
prospective corporation tax rate of 17.0% (2017: 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 £7,585,000
(2017: £173,008,000) and on 122,606,783 ordinary shares (2017: 122,606,783), being the weighted average
number of shares in issue during the year.

The total earnings can be further analysed as follows:

2018
2017

£’000
£’000
Revenue profit
25,473
25,119
Capital (loss)/profit
(17,888)
147,889

----------------
----------------
Profit for the year
7,585
173,008

----------------
----------------
Weighted average number of ordinary shares
122,606,783
122,606,783

-----------------
-----------------
Revenue earnings per ordinary share
20.78p
20.49p
Capital earnings per ordinary share
(14.59p)
120.62p

-------------
-------------
Earnings per ordinary share
6.19p
141.11p

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



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



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 2017 122,606,783 123,945,292 30,986

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

At 31 October 2018 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 2016 122,606,783 123,945,292 30,986
----------------- ----------------- -----------
At 31 October 2017 122,606,783 123,945,292 30,986
----------------- ---------------- -----------


During the year, no ordinary shares were issued or purchased. In the year ended 31 October 2017, no ordinary
shares were issued or purchased.

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

8.
Net asset value per ordinary share
The net asset value per ordinary share is based on net assets attributable to ordinary shares of £1,061,583,000
(2017: £1,077,563,000) and on 122,606,783 ordinary shares in issue at 31 October 2018 (2017: 122,606,783). The
Company has no securities in issue that could dilute the net asset value per ordinary share.

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

2018
2017

£’000
£’000
Net assets attributable to ordinary shares at start of year
1,077,563
926,738
Total net profit on ordinary activities after taxation
7,585
173,008
Dividends paid
(23,565)
(22,183)

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

Net assets attributable to ordinary shares at end of year 1,061,583
1,077,563



=======
======
9.
Dividend

A final dividend of 5.00p per share, if approved by shareholders at the Annual General Meeting, will be paid on 28
February 2019 to shareholders on the register on 25 January 2019. The shares go ex-dividend on 24 January
2018. This final dividend, together with the three interim dividends already paid brings the total dividend for the year
to 19.72p.


10.
2018 Financial Information
The figures and financial information for the year ended 31 October 2018 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 2018 have been audited but have not yet been delivered to the Registrar of
Companies. The Auditor’s report on the 2018 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.
2017 Financial Information

The figures and financial information for the year ended 31 October 2017 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 2019 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 27 February 2019 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
Laura Thomas
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.