The Bankers Investment Trust PLC (BNKR) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Good attendance and lots of familiar faces. I'd like to welcome you all to the 137th Annual General Meeting of your company. It's a pleasure to see shareholders both here in the room and online, and I'd like to thank you all very much for attending the meeting. As we explained in our AGM notice, the webinar format does not allow formal monitoring of live votes. So we've asked all shareholders to send in their votes by proxy, so we will show the votes received when the poll is being conducted. Please note that the meeting is being recorded. At least 2 shareholders are present, indeed a lot more, in person, which means we have a quorum, and I therefore declare the meeting open. Before we begin, please can I ask that you check your mobile phones and put them on silent or turn them off for the duration of this meeting. Thank you. And also in the event of a fire or other evacuation, Janus Henderson staff will guide you to the appropriate exit. With me at the top table are Hannah Philp, at the end, who's Chairman of the Marketing Committee; Richard West, who is the Senior Independent Director; Ankush Nandra, who's Chairman of the Risk and Audit Committee; Charlotte Valeur; and [ Samantha McDonald ], who's acting for the corporate sector. As last year, we're holding a less formal presentation in the form of a question-and-answer session with Alex Crooke, our Manager, which will be moderated by Jane Shoemaker (sic) [ Jane Shoemake ]. Is that the right pronunciation?

Shoemake.

Shoemake, sorry about that, who is a Client Portfolio Manager. It will last around 30 minutes. Over to you, Alex and Jane.

Well, a very warm welcome, everyone. Thank you very much for your time this afternoon. And Alex and I are going to talk a little bit just about what's happened last year and the outlook for 2025. So before we start talking about some of that, Alex, just really keen to understand what is the Trust aiming to deliver for the shareholders?

Yes. Just maybe I'll share a few slides. Thank you, Jane. Just to try and -- the button, there we go. Just a little bit -- I think trying to understand a little bit of what the philosophy, I suppose, behind what we're trying to do exist there. And I think firstly, really on this slide, to us, I think regional expertise is hugely important. The investment managers, myself included, sort of sit in the regions we manage money in. So Sat Duhra, who manages Asia, sitting in Singapore, so he can travel very easily to India and to China and Asia. And therefore, meets management a bit more regularly, can also go and literally kick the tires, as they say, in terms of the companies that we own. And I think that's very important for us, offers us unique insights really. Jeremiah Buckley sits in Denver. So Janus Henderson who I -- Jane and I work for, and this wonderful building, their headquarters is in Denver as well as here in London. So we have sort of some circa 30 analysts sitting there supporting the investment managers in Denver, and again, sits nicely within the U.S. to be most in reaching area. And then finally, we've got Junichi in Tokyo, again, sitting in the middle of the market he manages. So I think it gives us unique insights. In terms of what we're trying to do in the portfolio, we're really trying to concentrate to our best ideas and we might -- we'll touch on this in a minute, really focusing the portfolio and really is trying to put more of our capital, I think, into those best ideas. So you've seen over the last year, sort of reducing the number of holdings and trying to be a bit more punchy where we see an interesting opportunity, where we see a clear investment case of maybe putting more of our capital to work there. So we're not just investing in 1,800 stocks or something which is in our index, a huge amount of number of companies there, and many of our peers have a lot more. So again, I think trying not to over spread our money too widely is important to us. What also we're trying to do, did that jump? There we go. You've heard me, I'm sure I've met familiar faces, what we -- we've always believed in, I think, is trying to, I call it, follow the cash. I think what we're trying to do is generate here investments into companies that generate surplus amounts of cash. I always think that's the definition, ultimately of a well run company and one that's future-proofed to some extent. So this is really saying, right, after I've paid all my salaries, I've invested in the business, I paid interest, do I have a surplus here? And what can I do with that surplus? And that surplus should be there for growing the business for new investment ideas, maybe you do pay down some of that debt over time. And there's more for us as the equity holder relative to the debt holder. But importantly for us is also returning it to us as investors, so we can -- I can pay you dividends. And that's really where we get the 58 years of consecutive dividend growth is following companies that generate surplus cash to pay us as dividends, and we can recycle that into new investments and new opportunities. So that's incredibly important, I think, to the way we invest. And then finally, I'd call it a considered investment, we are trying to really ultimately limit the volatility here. Again, I think this is very important for you as investors. Equities inherently have some volatility. That's quoted every day. They go up and down with markets and with views on interest rates and all sorts of things. But I think for us, what we try and do is diversify. So we're not just investing in a very small. We do have 100 investments. We have investments in different markets, and they can swing about and go up and down in different cycles. And I think that's good actually that diversification. We're also very careful at how we invest in certain sectors, how much we put in certain sectors relative to others, which again limits volatility. And we actually have the lowest volatility. There is movement in that sense of up and down of all the global trust. And again, I think that's important as a largely retail investment.

I mean you've talked about the structure of the Trust a bit. Can you highlight any changes to the portfolio or the team over the last years that you want to talk about?

Yes. So we've sort of largely slimmed down. Here's the team with myself there at the top there. And we wrote about this sort of last year and we wrote about it again in -- written about it again in the annual accounts. And really, I did a lot of work looking principally at the sleeves that we have, the regions we're investing in. So we've slimmed that down. Now the obvious one there was we had a dedicated China investment sleeve, which was in China onshore market, A-Shares they're called. And that was sort of separate to the Asian sleeve. And I think that goes back to 10 years, 15 years ago when we started that, it was sort of specialist knowledge. A lot of the Asian fund managers didn't really know the Chinese market so well in that sense, they invested in Hong Kong, but they didn't invest in local A-Shares. Over time, that's changed, and Sat, our Asia manager here, has a lot of experience nowadays of A-Shares. And as we've reduced that investment sort of post COVID, where China struggled to really recover very well, and we've reduced our exposure, it made sense to wrap that into one portfolio and give that to Sat. We also looked at U.K. and Europe, where sadly, we could be here debating this for a long time, but the U.K. market, it does keep getting smaller in size. And I thought, actually, it's probably a good time to sort of look at a pan-European. So trying not to pick the best stock in a small sector in the U.K. when we should be looking at a wider palette of stocks, I suppose. So we've decided to put the U.K. and the European sleeve together. So I call it a reverse Brexit as it were. And so we're managing that there. So we're now down to sort of 4 regions. That slims down the number of holdings inevitably, but we've gone a little bit further. And we've gone to sort of -- there's no magic number, but I think 100 sort of throws out portfolios of somewhere between 20 stocks in the smaller regions and sort of 30 stocks or so in North America. And this is, again, looking at the research, we did a lot of research and risk analysis of our portfolio. And it was telling me that once you got passed about 25 holdings or so, the tail was not wagging as it were. It wasn't producing as much performance as actually those bigger names, not in the sense of large companies, but the largest allocations to investments what we were making. They were good ideas. They were our best ideas, but let's put more of our capital into them. So I think that's where that concept of sort of best ideas comes about. So this is where we're sitting. And yes, these are the changes we've made over the year.

I mean we've had an incredibly strong 2023 in equity markets, and that carried on in 2024, particularly the old magnificent 7, the artificial intelligence-type stocks. And how do bankers perform in that environment?

Well, you've got lots of data in the accounts, I'm sure you've read and here are the headline numbers. So I suppose in absolute terms, a year of 20% or so performance would be termed a good year, but we were behind the benchmark, we've chosen in the FTSE World here, by about 5%. And the key reasons that we've laid them out in the cans are, it was all about the U.S. It was all about a small subset. We didn't own 2 key stocks, really NVIDIA and Tesla, which have produced a very strong performance in the year and an underweight position in the U.S., which we've largely corrected. We've been investing steadily in the U.S. through the year and then we've added a bit more around the election result as well as we felt that, that would be a positive move for reshape for the stock market but behind the benchmark. And I think one reason for that is how narrow markets are, if I show you this next slide. This looks at the amount of the percentage of stocks in the U.S. market that outperformed the benchmark, the median level. And many of you may have studied math. I'm sure you have, and you know about normal distributions and tails. Normally, about half the stocks outperform and half the stocks underperform [indiscernible]. But you can see here in the 2 areas I've circled the last couple of years and back in '98, '99, barely 1/3 of stocks, actually in the last couple of years, it's about 25% of stocks, so 1/4 of stocks are performing, 3/4 of the market underperformed. And it shows how narrow the market has been. These are both periods, I would argue, of almost the market in a bubble, where valuation doesn't matter. It's all about momentum and about sort of stocks that are fear of missing out, I suppose, of the key stocks in the market. We underperformed in '98, '99 in the bubble because again, we were trying to follow stocks that generated dividends and we've slightly struggled a bit behind the benchmark in this period. In 2000 to 2007 though, we produced 7 clean years of outperformance as the market, I would argue, normalized a bit and more stocks outperformed relative to the benchmark. So we'll see how we go, but it has been a challenging -- it's less been about the things you own, but the things you didn't own. And let's say, a couple of stocks really hurt us an awful lot in that period.

And so delving a little bit more into that, what went right and what were the sort of key challenges?

Yes. So again, not laboring this too much. These are the returns in percentage terms of last year, you can see the Mag 7, so this is for those that are maybe not so familiar, it's sort of the big U.S. technology names, sort of Apple, NVIDIA, et cetera, et cetera, there's sort of 7 stocks, including Tesla. And they produced just over 60% return. So very amazingly strong number. Actually, their earnings were up about 25%. So you can see how they revalued. Their valuations have stepped forward very strongly. And then you walk down and sadly, we keep apologizing for the U.K., but the U.K. was again lagged last year quite meaningfully. And again, hence why sort of took a more meaningful view of that market. When you look at our -- some of our regions, we struggled in that sense in North America. We produced, again, 20% return. We outproduced the high-yield indices, the dividend yield benchmarks in North America. So we did well investing in dividend paying stocks, but really the index was driven by a very narrow subset. So it's looking a lot better this year. Pan Asia was a little bit towards, again, it's in the accounts, but China had a very strong -- I mean, cut back China, which has been the right move, it did have a strong period around sort of view of opening the economy and incentivizing investment. I'm still very doubtful that's going to work is pushing on a string a bit. Elsewhere, we actually had some good numbers coming through in Japan. We're okay. The banks, in particular, Mitsubishi UFJ there performed very well for us. UniCredit performed very well in Europe. If I show you some of the names here, the biggest contributors, both to positive and negative performance, these are the holdings we own rather than those stocks that we don't own. But you can see a sort of very good reliance on -- certainly, financials were very strong last year, American Express, Morgan Stanley, American. UniCredit is an Italian bank. Hitachi was a great business. They make very heavy engineered products for national grids for electricity transmission in a really hot area, huge investment going in, connecting grids to renewable energy. And then on the right, some of the struggles. A lot around consumer stocks were a difficult area. The consumer is prioritizing their spending. You're seeing less on luxury, hence, Burberry there. Also struggling Nike as well with stock issues. So some good things and some bad things.

Just thinking a bit more about the structure of the Trust. Could you talk a little bit about share buybacks and the level of gearing?

Yes. So as you will see in the accounts, we've been consistently buying back. We've issued stock at a premium. Back in sort of 2018, '19, '21 we were issuing net stock as the premium -- as we were on a premium. And then in '22 or so, we sort of slipped away along with the market, almost all investment trusts swung to a discount and we did too and we started buying back in '23 and '24, and we're buying back currently. And again, I see it more as a period where there was other opportunities for investors. Cash certainly, gilts suddenly had quite a nice yield on them, cash yielded 5. So I think the retail market moved away there. And then in terms of wealth adviser market, which again is probably 40% or so of our investors, equally, they've been buying gilts and derisking for their investments, also taking gains. Many of you may have done that and worries about a labor change to labor tax rules, which didn't come about at the time, we'll see how it goes. But I think it's a challenging environment. So we are buying back. Discount today is about 8%. So it's off the lows. And I personally and the Board do feel it offers great value when the discount is that wide, and we will continue to buy back.

I mean we think about markets. So we just said we've had 2 extraordinarily strong years in global equity markets. So what do you think about the outlook? There's a lot of challenges out there globally. We've got the Ukrainian war. We've got all sorts of geopolitical issues, Trump, the new administration there, just intrigued the -- what you think 2025 is going to hold in the future?

I think I sort of remain optimistic, I think, but I am cautiously optimistic. So I think still when we look at the underlying -- how are companies doing and companies unlike governments are not particularly leveraged up with lots of debt, and they're not borrowing more. They're actually paying off debt. They're returning cash. If we look at Japan, since their financial year-end in sort of end of April, they have a sort of end of March financial year in Japan. And since then, so sort of 9 months, Japanese companies have returned 2% of the market cap of their value in share buybacks alone. The dividends are about 1%. The U.S. has returned about 1.3%. So there a market there where we're beginning to see companies really aggressively buy their stock back and return cash to us as investors to recycle. And we're seeing that elsewhere. Companies are generally in pretty good health. And we're seeing earnings growth picking up this year. Now there are lots of challenges. I think my biggest worry is tariffs. I worry a lot about it's an artificial barrier to trade. And we will have to see where that ends up. My personal view is will be a universal tariff of 10% or 15% on all goods coming into America because that raises money for Trump to do other things with. And that will be, I think, responded in kind as it were or in challenge as it were by Europe and other markets. So -- but we'll see where we end up with that. But it is an artificial barrier. It creates historical inflation, prices going up, and we'll have to see how that meets with Trump's aims to reduce inflation. It doesn't seem in my mind to all add up. But it is something we're looking at. We've gone through the portfolio. We looked at a lot of all our companies where they manufacture, their exposure to these sort of trade barriers as it were and really try to minimize a lot of exposure there, but there will be some. And some have products that, Hitachi is a great example, where nobody else makes them. So they're going to have to just take the price rise and maybe they get carve-outs and we'll see, we're hearing Apple getting a carve out maybe for its products to move across borders. So we'll see. But I remain optimistic. I think equities still look to me, there are pockets, certainly in America are very expensive equities, but I prophecy it's a good value. And elsewhere in the world, we see very earnings, I think, and growing and price-to-earnings ratios that look still very attractive.

So just carrying on from that, where do you think are the most attractive opportunities? You've talked about the concentration of markets and the fact these magnificent 7 stocks have really been so dominant, where is the attractive investment opportunities?

Yes. So we see some. Let me run you through maybe some just to sort of pick a theme rather than individual names. So electrification, I think, is still an area. So what I'm talking about here is really National Grid. So connecting renewable energy that you're generating often, generally, it's generated well away from where populations or manufacturing is. It might be offshore, it might be nuclear power plants away from populations. But that needs connecting and putting through to where it's used. And that's under-invested over the last 20 years and as renewable energy grows, there's a huge investment required. So these are forecasts on the left here of the U.S. market, where the U.S. demand for power has actually been flat for the last 20 years. And that's a growing population, but actually growing efficiency, electric, LED bulbs, et cetera, et cetera, have sort of netted it off. It's almost 9% growth over 20 years. But we're forecasting over the next sort of 10, 20 years, almost a 40%, a fourfold growth in that growth number. And that is demand for electric vehicles over time. I know Trump is growing back on some of those, but I think over time, electric vehicles will dominate the market as well renewables. And they just need connecting and these are big investments. And so when we look at what we own, we own the people that make the stuff that you connect. So wind power, this is a good example. Wind power is what's called alternating current. So as the wind goes around, it creates an alternative current. It's what we actually need to use in our plugs, but it's very inefficient to move electricity with an AC current. So what you end up is a wind farm with a massive piece of kit called a DC Rectifier, which turns it into DC, direct current, you can then move that very efficiently, and then you need to turn it back into AC. These are pieces of kit that are the size of almost a basketball court, huge amounts of Hitachi and Siemens are one of the only 2 or 3 companies in the world that make that stuff. And the order book apparently is a 10-year waiting list for some of these things. So they've definitely got pricing power. They've definitely got room to expand production with their such huge order books. And then we've got companies like National Grid, who many of you know in the U.K., PowerGrid is the equivalent in India. And these are the companies that are obviously going to spend that money, put the wires in place and move this power around. So I think it's a huge cycle here, a 10-, 15-year investment cycle, which has to get spent, and there are great opportunities for us to invest alongside that. One other area is what's called GLP-1 drugs, which many of you will more know about the obesity, Ozempic, and solving, I think, which is probably our biggest health issue, diabetes and obesity around the world. These drugs definitely work, and this is the projection of sales over the next sort of 6 -- 5, 6 years going from sort of GBP 20 billion of sales to GBP 80 billion and higher. So I think there's a huge growth opportunity here. It slowed down a bit in share prices. We have taken some profits. We own the 2 biggest players, Eli Lilly in the U.S. and Novo Nordisk in Danish in Europe. And we have taken some profits, particularly in Novo. I still think there's a very strong market. And these drugs have very clear benefits also to health of the heart and improving other areas as well that they improve productivity of economies. So I think there's lots of opportunity here. I think one other area I haven't got a slide on, I talk about the U.S. definitely some very expensive stocks. But actually, when I look at areas like finance, very interesting opportunities. One of Trump's big policies is going to be about deregulation of finance. So cutting red tape, more efficient use of balance sheet. So I think Europe has to match that or be uncompetitive. And so I think, again, there are opportunities to invest in financials. And so when I think of the U.S. stocks I like, I look at financials as being in particular due to the banking sector. And we own that in size in Europe as well as being a great opportunity. Yes, we might stop there. We've got the slide there. Just looking at where we are currently, this is -- you'll see this on the fact sheet. But you can see really these financials exposure of overweight and where we're currently positioned.

Thank you very much. Now this is an opportunity for you to ask questions. Those of you who are online, you can go into Q&A function, type your name in, and we'll read this out after we've taken questions from the floor. [Operator Instructions] So are there any questions for Alex at this stage? There's a gentleman there.

Yes. Good morning, good afternoon I suppose.

Could I have your name, please?

Yes. Sorry, [ Henry Langley ]. I noticed from -- if you look at Pages 20, 21 of the Annual Report, which lists the sort of holdings and elsewhere, it says you've reduced the number of U.K. companies from 32 to 6. But I note of those 6, 3 are actually new holdings. Now you've covered National Grid. Can you give the reasons for purchasing NatWest Group, which has had a pretty torrid year in closing branches and the Chief Executive had to go because of what happened with regard to Nigel Farage's bank account, I understand, and Informa? So could you perhaps sort of tell us the reasons for doing new investments in those? And are there any of the companies that you've removed from the portfolio that you sort of now regret, "Well, perhaps we went too far," and it might be worth considering reinvesting in some of those?

Can I also make a sort of general point, Mr. Chairman, that we all haven't got a copy of the 2025 Notice of Meeting. So could someone actually distribute those before we vote, please?

Yes.

So yes, let's talk about those names. And so the 2 new names, as you said were NatWest, National Grid. And it wasn't the -- I think they're both very interesting. We used to own Lloyds. So I think when we were looking at what we were doing, consolidating, we had a good hard look at the banking sector and Lloyds in particular. And what worried us greatly with Lloyds was it had a big market share in mortgages, but was losing market share, which is never a good thing when you're the dominant player. And more importantly, they got dragged into the scandal of basically lending, car loan lending, which had an open-ended, to our mind, very open-ended bill, which could be huge and is still running through courts and still could be huge. What we liked about NatWest, so we were worried about that stock. And I think it would have gone irrespective of us consolidating. It wasn't part of the consolidation. We actually year-on-year, yes, it looks like it was sort of thrown out with that consolidation. But actually, we switched it into NatWest. We still like the banking sector because what these banks tend to do as they hedge their interest rate exposure. So rates went up. We didn't see the full benefit of rates, higher rates on deposits come through because they've hedged it. It will come through as those hedges roll over. And so we think, particularly NatWest has a very much stronger hedging position. So you should see the benefit for longer in their balance sheet. So we really like that. So net interest margins will be going up. They're not sucked into that big scandal. They weren't big lenders into the car industry, so we shouldn't see them dragged in. And it was still on a very low multiple of price to book, that's how I tend to look at banks. We bought it still below price to book of 1, which again is pretty good. You're buying it for less than the assets on the balance sheet. And it's up 40% in the year. So despite losing the Chief Executive, who -- we won't discuss that, has been a phenomenally good share for us. The other new one was National Grid, which again was -- to us, we bought it around the rights issue. So they had a big rights issue, as you may remember, to fund investments in the National Grid, so GBP 7 billion worth. When you get big fundraising like that, a lot of smaller investors tend to sell because they don't want to put more money in. So you see extra selling pressure divorced from the realities of what the company is doing. And we use that, as the share price fell away to really say, well, actually, this is a great news, this rights issue, it means they can raise their regulated asset base. They're making a very good return. We can see how this business can earn 10% to 15% earnings growth over the next 6 years. Again, big dividend yield, good price, and we use that rights issue really to buy a new holding in that company. So those are the 2 new ones. And Informa is another one, yes, sorry, yes, we did. That one, again, is an interesting one. Sorry, Chair, -- all right. Yes.

For I'm aware that others wish to ask questions.

Yes, no, Chair, I won't go too long. I mean, again, Informa is a U.K. business, it's been a bit unloved, I think. And so it's again a bit more value situation. But again, as we see companies post COVID, we are seeing people returning to face-to-face meetings. We're seeing more confidence in going on. We think, again, the business should have steady growth. It's a nice U.K.

Are there any other questions? Gentleman over there.

My name is [ Phil Clark ], I'm a very long-term shareholder. I'm a little concerned that the Trust has become a bit muddled as to what it's trying to do and it seems to be suffering from the albatross of the dividend, in being a dividend hero. I was struck by what you wrote in the Chairman's report where you said, the dominance of the low-yielding U.S. stocks over global markets has meant our income mandates has put the company at some disadvantage. What strikes me is it's a bit of an own goal that disadvantage. You look at this Trust and it's kind of underperformed against its peers in global equity. But you look at -- despite that, the dividend is very modest. It's 2-and-a-bit percent. And I'm always struck by JPMorgan Global Growth, which delivers a yield of 4% and has significantly outperformed. And the difference is how they look at their profits and how they look at how they declare the dividend because JPMorgan are indifferent as to whether they generate profits through capital growth or revenue. And Alex has to find revenue to pay the dividend, which we're keen on growing because no Chairman ever wants to stop being a dividend hero. And I just wonder if the time has come to just stop and think, especially as we're now 61% in North America, where -- which -- that's not going to generate a ton of income. So generating the income to pay the dividend is going to be a bit of a struggle out of the rest of it. So I wonder if the time has come to think a bit more like JPMorgan and just think out of the box and pay the dividend differently and not pose restrictions on Alex as to what he does and how he does it.

I will give a brief answer to that, then I'll ask Alex if he wants to comment. So the question of dividend is very important to an awful lot of shareholders. It's not important to every shareholder. This is the fact of life with a big shareholder base. So we've got no intention of not increasing dividends annually, but we have the intention of when we don't have sufficient income of taking it out of reserves, which is a bit like JPMorgan will do and other JPMorgan Trust will do. So that goes in part answers your question, I hope, because it's indifferent whether really you receive your dividend from income or from capital reserves. And I think that may be part of the question you're asking. So Alex has taken the decision to invest slightly differently in North America so to have less yield from his North American portfolio and where there's a shortage to dip into reserves. Would that be a fair assumption?

Yes, I think we've built up reserves, the reserves there out of the good years and I think the change in mentality is we should be a bit more aggressive in being prepared to run those down. And in the old days, you always wanted -- clients wanted every year or 2 years a dividend. I think that's because you can distribute capital. That's no longer the case. So maybe we wind those down a bit harder and as you say, prioritize a total return. I have worries about when you get to distributing a lot of capital because that is capital leaving the fund and you don't make it up unless the returns turn up. And so I believe in my heart, there's a point at which the dividend is 2, 3, 4, 5, you see -- is that too much capital leaving when you're only earning 1%, your assets are producing a yield of 0.5 or 1, which some of these U.S. techs don't pay anything. That's a lot of capital leaving every year, and you've got to replace that somehow by performance. And so I think there's an element of balance somewhere in the middle of all that. But yes, we have indicated we'll use reserves.

Good question, philosophical debate. Any other questions? Gentleman here. Please state your name.

Good afternoon, all. My name is Robert, I'm a shareholder through a platform. I was just wondering when -- because of the context of being a dividend hero for about 58 years, I wondered if we had eyes or cast eyes or views on the holding share that might have been around for -- in the portfolio for about 58 years as well because I know it's some family trust hold shares for longer than that. And also do you look at shares as being around -- been growing for on the whole for 58 years at all as still part of your investment strategy?

There's virtually nothing that sort of held a dividend record that long, used to be Shell was the great one that never cut their dividend since the war, and then Shell cut their dividend. There's stocks like Cranswick that's been in there and has kept growing every year, never had a rights issue. So there's a few stocks in there that have very long-term dividend records. I couldn't -- but I bet there isn't one that's done 58 years. But then that's the joy of a collective fund, a fund with lots of interesting investments in it, such that we're aggregating them all. And therefore, every time, you can substitute things where the oil sector is a great one. At times, it's very profitable and it generates a lot of dividends, but it's cyclical and the price of oil goes up and down as we've seen a lot, and then there are times they have to cut dividends. But what we can do is we're not held in by capital gains. So we're not -- within the trust, we can sell things and not realize any tax issues. So as sectors get more attractive, we'll say financials are quite like at the moment, might be a time when interest rates go back lower again and we don't want financials. We want that materials at the bottom and then we can move around. So I think that's the joy and the benefit of a fund like this. But no, nothing else matches those 58 years of holdings that we've got.

Are there any questions online? One question online.

And [ Mark Norris ] asks, there have recently been some changes in the European team at the fund manager. What steps have been taken to minimize the impact of these changes? And will these changes impact the style approach to the European sleeve?

Yes. Well, that's -- so sadly, the missing face on the team there was Jamie Ross, who you will have seen before, present to you, he's been manager with us since 2017 on the European sleeve, replacing Tim Stevenson before him and our Deputy PM. Now unfortunately, 2 weeks ago, he resigned to go to work in a different firm, much smaller firm. So I'm foreseeing that in that sense. But I think the benefit, again, of a big firm like ourselves is there's a lot of resource in this space. So we've still got a very strong team covering Europe. And more importantly, it's a market I know very well. I've been working very closely with Jamie on trawling through those U.K. names, how do we get from 30 to 6 and also covering those European names as well. So we worked very closely for the last 18 months together, looking at what we own, why we own it, and I've been sort of sitting there and managing it alongside him. So I think it's very easy for me to sit in there, and I'll be running that Pan-European sleeve for the foreseeable future. And again, a lot of these stocks covered very well here at the firm. We've got global analysts on financials, we've got global analysts on health care. We run big investment tools in there. So we've got a lot of resource sitting behind me that I can go to specialist knowledge. So there won't be a change in style. We will run that Pan-European sleeve in exactly the same way, the way he ran it, the way I would like to run it are very much aligned.

I'm now going to move on and turn to the various resolutions. We will now proceed with the formal business of the meeting. There will be an opportunity to ask questions, but we go through the formal business first. Notice of Annual General Meeting is set out on Pages 1 and 2 of the relevant document which you see here. Following -- sorry. Yes, yes, if you don't have them, would you like them? All right, everybody got what they need? Following very recent discussions with shareholders and given that market circumstances have changed, the Board has decided to withdraw Resolution 15, which relates to the adoption of amended Articles of Association on the business of this meeting today. The withdrawal of Resolution 15 does not affect the validity of the notice of the AGM, the proxy form or any proxy votes already submitted in respect of the remaining resolutions being proposed and all other resolutions remain unchanged. There are, therefore, 14 items of business to be considered. Resolutions 1 to 11 are ordinary resolutions and Resolutions 12 to 14 are special resolutions. In connection specifically with Resolution 1, I have to inform shareholders that there are errors isolated to the presentation of the cash flow statement on Page 72 of your annual report and accounts. And for this, I apologize. This has no impact on the income statement, the balance sheet or the reserves position and consequently does not affect the ability of the company to declare a dividend. There is no bearing on prior periods. And for the avoidance of doubt, this has no impact on the Resolution 1 being proposed and approved. These errors will be reviewed with our auditors, Ernst & Young, to determine the materiality. Subject to this review, we may reissue the financial statements page, hopefully, and lay the updated version of the next general meeting for the company. To be clear, it's a presentational error only and not reflective of any incorrect accounting judgments or cash balances as per the balance sheet. I'm now going to turn to the various resolutions. Are there firstly, any questions on the annual report and statements or the resolutions? Sir, if you can wait for the microphone.

[ William Beckham ], shareholder. Can I ask how much money we spent on producing the changes to the Articles of Association before we threw them away?

Not in the context of business a monumental amount. It's something we review...

Chairman, can the Company Secretary actually produce a figure and put it on the website?

Is that something we would normally do? Yes. We don't know the cost yet, but I don't think it will be monumental. Thank you for asking the question. Are there any -- shall I take the gentleman who's still putting his hand up first. And then -- all right. I thought you might be asking as a shareholder.

My name is [ Burke ] and I'm asking not only as a shareholder, but also as a financial journalist. And I would like to know why and when Mr. Miller and Ms. Philp decided to call themselves Chair instead of Chairman?

Well, that's a very good...

My Oxford English Dictionary from 1972, which is as good as any, describes Chairman as being based on man, meaning human. Chair actually is something you sit on or else it is a post at university.

Yes. Excellent. And may I say that's an excellent question. I'm not going to answer on behalf of Hannah, but I'll answer on behalf of myself. I was appointed Chair. And I said, I'm normally Chairman, and I was told, well, in this company, you're Chair. So I haven't tried to choose the description of my job which I received 3 years ago. But I sympathize with your question. So that's the answer. Is there another question? Any other questions? Are there any questions online? Thank you very much indeed. We will -- we now go into the process of voting and polling, which some of you will be familiar with. Those of us who are older found it all rather strange. But we would be conducting the voting on the poll today and the poll will be certified by [ Stewart Millar ] of Equiniti, the company's registrar acting as scrutineer. May I remind you that only shareholders directly on the register of members, their proxies or the corporate representatives of any corporate shareholder are entitled to vote. If you've already returned a formal proxy, your votes will be automatically included in the voting. So unless you wish to change the way you voted, you need not complete the poll card. If you still wish to vote, you may do so, your poll card will override any previous voting instructions. Poll cards were issued at the registration desk to those who are entitled to vote. The poll card should be completed by printing clearly the full name of the shareholder, including any joint shareholders, and if applicable, the full name of the proxy or the corporate representative. As you get to the resolutions, please place across in the appropriate box to vote for or against the resolution or to withhold your vote. If you wish to split your vote, then please obtain a second poll card from Equiniti and ensure that you indicate the number of shares you wish to be voted on each resolution. A vote withheld is not a vote in law and will not be counted in the calculation of the proportion of these votes or against a resolution. Is there anybody here who thinks they should have a poll card, but does not, please raise a hand and someone from Equiniti will look after you. All present and correct. Well done. As it will take some time to complete the poll process, the final results of the voting will be announced to the stock exchange and published on our website as soon as possible after the meeting. However, the provisional proxy figures received so far will be shown on the screen behind me after the poll has closed. I now declare the poll open. Please complete your poll cards, which I don't think anybody wishes to do so. And we will wait for a little bit while the results go up on the screen. You've got a poll card.

I voted already online. [Technical Difficulty]. [Voting]

Poll cards have been gathered. We are waiting with bated breath. I think it's going to go up in the screen. Right. So the provisional proxy figures, which were launched before the meeting are now visible on the screen behind me. The final results of the poll taking into account these last votes will be available on the company's website today. Ladies and gentlemen, thank you very much for attending this meeting. This concludes the formal business and you're most welcome to join us for some light refreshments next door -- at the back of the room, sorry. Thank you, again.