This week, we hosted Temple Bar’s Annual General Meeting (AGM) at Redwheel’s offices in Victoria, London. This was the first in-person AGM we’ve been able to hold since Redwheel took on portfolio management responsibilities in 2020. Shareholders in attendance were greeted by an introductory speech from Chairman, Arthur Copple, before proxy voting took place. All resolutions were passed and full details of the votes cast can be found here.
Time for value?
Portfolio managers Ian Lance and Nick Purves then gave a short presentation on their long-standing investment approach and the positive long-term outlook for the Temple Bar portfolio.
The presentation explained that the portfolio had made an encouraging start since Redwheel was appointed as Temple Bar’s investment manager in November 2020, but that there was much more to go for in a compelling long-term investment opportunity. The portfolio managers believe that the prolonged period of ultra-low interest rates and quantitative easing that has persisted since the global financial crisis has caused a substantial bubble in long-duration assets and growth stocks. The recent increase in inflation may be bringing that to an end. Financial markets are now anticipating much tighter monetary policy (in the form of higher interest rates) and this has already prompted a significant sell-off in technology stocks.
As a result, now may be an appropriate time to consider diversifying into value stocks, which tend to do well in periods of high inflation. The UK is one of the cheapest major stock markets and offers one of the highest dividend yields globally (source: Morgan Stanley as at 31 January 2022). The Temple Bar portfolio, which invests primarily in the UK and adopts a value-based investment approach, is therefore potentially well-positioned to benefit from reflation, and the portfolio managers are very confident in the long-term outlook for shareholders.
Shareholders approved a five-for-one share split at the AGM, which means that, as of today, shareholders will receive five new ordinary shares for each existing share previously held. This increases the number of shares in issue by a factor of five and investors should notice that the Temple Bar share price and net asset value per share, have immediately moved to become one-fifth of their prior values. Overall, therefore, the share split has not affected the value of your holding. The ticker for the new shares remains the same (TMPL), but they have a new ISIN (GB00BMV92D64) and SEDOL (BMV92D6).
Shortly after the AGM, the board of directors declared its first interim dividend for the current financial year of 10.25p per share. This was based on the number of shares in issue prior to the share split explained above. Taking into consideration the five-for-one share split, the first interim dividend will be 2.05p per share. This will be paid on 30 June 2022 to those shareholders registered at the close of business on 10 June 2022. The shares will go ex-dividend on 9 June 2022.
Temple Bar intends to pay four interim dividends totalling at least 8.2p per ordinary share (post share split) for the year ending 31 December 2022. This will represent growth of at least 3.8% on the equivalent dividends paid for the year ended 31 December 2021.
Past performance is not a guide to the future. The price of investments and the income from them may fall as well as rise and investors may not get back the full amount invested. The information shown above is for illustrative purposes only and is not intended to be, and should not be interpreted as, recommendations or advice. Forecasts and estimates are based upon subjective assumptions about circumstances and events that may not yet have taken place and may never do so.
This article has been prepared by Temple Bar Investment Trust PLC (the “Company”) for its shareholders (and is not addressed to or otherwise being sent by the Company to any other parties) and as such is not (by virtue of Article 43 of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005) a financial promotion for the purposes of the Financial Services and Markets Act 2000.
References herein to RWC Asset Management LLP or “RWC” are in respect of its capacity as the appointed portfolio manager to the Temple Bar Investment Trust Plc. RWC, is authorised and regulated by the UK Financial Conduct Authority and the US Securities and Exchange Commission. RWC may act as investment manager or adviser, or otherwise provide services, to more than one product pursuing a similar investment strategy or focus to the product detailed in this document.
This article is not intended to be an offer or solicitation of an offer to buy or sell securities in the Company. Furthermore, it does not constitute investment advice or an investment recommendation. Whilst reasonable care has been taken in the preparation of this letter, no responsibility or liability is accepted (by the Company or RWC) for the accuracy or completeness of the information contained in this article including the opinions expressed by the Company and/or RWC.
No investment strategy or risk management technique can guarantee returns to eliminate risks in any market environment. Please note that the value of investments and the income derived from them may fall and you may get back less than you originally invested. Past performance is not necessarily a guide to future performance and information contained in this document should not be viewed as indicative of future results. Before making any investment decision you are strongly advised to consult your own professional investment or other adviser.