The Bankers Investment trust has announced results covering the 12 months ended 31 October 2022. Over that period, the NAV total return was -11.3% underperforming the World Index by 8.5%. A widening discount meant that the share price total return was -13.4%. The wider discount emerged even though 18.2m shares (1.5% of the company) were bought back over the period.
Revenue earnings per share were 2.34p, up from 2.17p for the prior year. This gave the board confidence to increase Banker’s dividend by 7% to 2.328p. This will be the company’s 56th successive year of annual dividend growth. For the current financial year, the board expects to recommend dividend growth of at least 5%, which would equate to a full year dividend of 2.44p per share.
Within the management team, Jeremiah Buckley has succeeded Gordon Mackay as the regional portfolio manager for the US portfolio.
Extracts from the manager’s report
This year has been one of the most challenging against the benchmark index, given that over two thirds of the index is US listed, benefitting from the strength of the US dollar. The underperformance of the portfolio by 8.5% was principally down to the underweight exposure to the US market compared to the benchmark. But if the portfolio were rebalanced, it would be challenging to deliver the required level of dividends from the portfolio given the low level of yield and high valuations of the US stocks. The US economy was better shielded from rising energy costs compared to Europe and Asia as energies are priced in US dollars and the US is largely self-sufficient in both oil and food supply. Other contributory factors behind the disappointing year were the overweight exposure to Asia, and China in particular, combined with the low exposure to oil stocks in the portfolio.
Underperformance in the UK was exclusively down to a lack of exposure to oil companies BP and Shell in the energy sector, while China struggled from continuing strict Covid lockdowns impacting the consumer related stocks in the portfolio. Only Asia Pacific (ex Japan and China) outperformed its benchmark, as exposure to Australian resource stocks and financials helped the portfolio be more resilient. However, all the portfolios fell in value over the year as fears of a recession, created by rapidly rising interest rates, dampened investor sentiment.
BNKR : Bankers lags benchmark but maintains dividend record