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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| British & American Investment Trust Plc | LSE:BAF | London | Ordinary Share | GB0000653112 | ORD SHS #1 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 18.00 | 16.00 | 20.00 | 18.00 | 18.00 | 18.00 | 146 | 08:00:09 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Motion Pictures | 1.68M | 976k | 0.0390 | 4.62 | 4.5M |
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TIDMBAF
Interim Report for the 6 months ended 30th June 2023
BRITISH & AMERICAN INVESTMENT
TRUST PLC
FINANCIAL HIGHLIGHTS
For the six months ended 30
June 2023
Unaudited Unaudited Audited
6 monthsto 6 monthsto Year ended
30 June 30 June 31 December2022
2023 2022 £'000
£'000 £'000
Revenue
Return before tax 740 (193) 658
_________ _________ _________
Earnings/(loss) per £1 2.29p (0.74)p 1.30p
ordinary shares - basic (note
5)
_________ _________ _________
Earnings/(loss) per £1 2.14p (0.74)p 1.30p
ordinary shares - diluted
(note 5)
_________ _________ _________
Capital
Total equity 8,749 6,131 7,091
_________ _________ _________
Revenue reserve (note 9) 766 (227) 19
_________ _________ _________
Capital reserve (note 9) (27,017) (28,642) (27,928)
_________ _________ _________
Net assets per ordinary share
(note 6)
- Basic £0.25 £0.18 £0.20
_________ _________ _________
- Diluted £0.25 £0.18 £0.20
_________ _________ _________
Diluted net assets per £0.16
ordinary share at 27
September 2023
_________
Dividends*
Dividends per ordinary share 1.75p 0.0p 1.75p
(note 4)
_________ _________ _________
Dividends per preference 1.75p 0.0p 1.75p
share (note 4)
_________ _________ _________
Basic net assets per share are calculated using a value of fully diluted net
asset value for the preference shares.
Basic and diluted earnings per share calculated in accordance with International
Accounting Standard 33 `Earnings per Share'.
*Dividends declared for the period. Dividends shown in the accounts are, by
contrast, dividends paid or approved
in the period.
Copies of this report will be posted to shareholders and be available for
download at the company's website: www.baitgroup.co.uk.
INVESTMENT PORTFOLIO
As at 30 June 2023
Company Nature of Business Valuation Percentage
of
portfolio
£'000 %
Geron Corporation Biomedical 4,041 28.03
(USA)*
Dunedin Income Growth Investment Trust 1,160 8.05
Lineage Cell Biotechnology 632 4.38
Therapeutics (USA)**
abrdn Diversified Investment Trust 404 2.80
Income & Growth
AgeX (USA) Biotechnology 72 0.50
ADVFN Other financial 26 0.18
Audioboom Media 16 0.11
Vodafone Telecommunications 15 0.10
IQE Semiconductors 13 0.09
Relief Therapeutics Healthcare 11 0.07
________ ________
10 Largest investments 6,390 44.31
(excluding
subsidiaries)
Investment in 8,014 55.59
subsidiaries
Other investments 13 0.10
(number of holdings: 7)
________ ________
Total investments 14,417 100.00
________ ________
* Total value of investment including held by subsidiary
companies - £8,567,000
** Total value of investment including held by subsidiary companies - £2,508,000
Unaudited Interim Report
As at 30 June 2023
Registered number: 433137
Directors Registered office
David G Seligman (Chairman) Wessex House
Jonathan C Woolf (Managing 1 Chesham Street
Director)
Julia Le Blan (Non-executive and London SW1X 8ND
Chairman of the Audit Committee)
Alex Tamlyn (Non-executive) Telephone: 020 7201 3100
Website: www.baitgroup.co.uk
Chairman's Statement
I report our results for the six months to 30 June 2023.
Revenue
The profit on the revenue account before tax amounted to £0.7 million (30 June
2022: loss £0.2 million). This increase was the result of a higher level of
income receipts from our subsidiary companies compared to the same six month
period in 2022.
Gross revenues totalled £0.9 million (30 June 2022: £0.08 million) during the
period. In addition, film income of £24,000 (30 June 2022: £47,000) was received
in our subsidiary companies. In accordance with IFRS10, film income is not
included within the revenue figures noted above.
A gain of £1.2 million (30 June 2022: £0.5 million loss) was registered on the
capital account before capitalised expenses and foreign exchange gains/losses,
comprising a realised gain of £0.4 million (30 June 2022: £0.2 million loss) and
an unrealised gain of £0.8 million (30 June 2022: £0.3 million loss).
Revenue earnings per ordinary share were 2.14 pence on a fully diluted basis (30
June 2022: loss 0.74 pence).
Net Assets and performance
Company net assets were £8.7 million (£7.1 million, at 31 December 2022), an
increase of 23.4 percent. Over the same six month period, the FTSE 100 index
increased by 1.1 percent and the All Share index increased by 0.5 percent. As
no dividends were paid during the period, the total return on net assets is the
same and the total return for the FTSE 100 and All Share indices was an increase
of 3.2 percent and an increase of 2.6 percent, respectively. The net asset
value per £1 ordinary share was 25.0 pence on a fully diluted basis.
This out-performance in net assets over the period was the result of a
significant increase in the value of both our major US investments, Geron
Corporation Inc and Lineage Cell Therapeutics Inc, which increased by 32 and 20
percent respectively during the period and extends the outperformance of the
previous 12 month period. Over the past two 18 month reporting periods, our
portfolio has registered cumulative outperformance on a total return basis of
over 30 percent.
While the value of Lineage Cell Therapeutics has remained steady since the
period end, the value of our investment in Geron has inexplicably declined by 30
percent against general market movements and despite its announcement over the
summer of the excellent and long-awaited news of acceptance by the US Federal
Drugs Agency (FDA) of Geron's final submission requesting marketing
authorisation (NDA) for its ground-breaking hematologic oncology drug,
Imetelstat. Further comment on this surprising price movement is made in the
managing director's report below.
Leading equity markets in the UK and USA remained broadly stable over the first
half of 2023 with aggregate movements confined to no more than 6 to 8 percent
over the period. Some brief instances of turbulence within this range were seen
as unexpected solvency vulnerabilities of certain large banks, particularly in
the USA, were revealed arising out of interest rate pressures. This required
prompt action from regulators to avoid systemic risk by supporting or
restructuring those large banks previously considered to be well capitalised.
By contrast, the Nasdaq index of technology stocks registered a gain of 30
percent following its significant decline in the previous year as the large
capitalisation internet technology stocks (FAANGs) found favour again. The
weighting preponderance of these stocks in this index masked poorer performance
in the smaller capitalisation technology stocks, including biotech stocks whose
index declined 5 percent over the period. This highlights the company specific
outperformance of our two particular biotechnology investments as noted above
which has significantly benefited our NAV, despite the headwind of the 5 percent
fall in the US dollar versus the pound sterling over the period.
This general stability in equity markets over the period has been achieved
despite the background of continuing high interest rates and forecasts of
further increases as central banks have grappled with stubbornly high and
persistent levels of inflation over the last 18 months. The always difficult and
delicate balancing act of reducing inflation without causing a painful recession
has dictated to some extent movements in equity markets and the realisation
since early this year that the US economy might be able to achieve the desired
`soft landing' has supported equity prices over recent months. Similarly in the
UK, fears of recession which had predominated during the course of last year
were assuaged as the economy proved able to avoid the expected downturn in the
second half of 2022 and has managed to achieve positive albeit very small growth
since, thereby avoiding the declaration of a technical recession. The same has
not, however, been the case in Europe where the larger countries and
particularly Germany have seen repeated quarters of albeit minimally negative
growth this year.
Russia's invasion and war in Ukraine has continued further into its second year
with as yet no end in sight. The human, social and economic impacts of the war
continue to be felt locally and throughout the world. Russia's latest tactic,
in the face of strong resistance and now counter-offensive by Ukrainian forces,
has been to seek to destroy Ukraine's economic productive capacity, particularly
in the area of agricultural production and exports which represent over 10
percent of the country's output. In doing so, further economic and humanitarian
damage is caused by Russia not only to Ukraine but to poorer countries around
the world relying on Ukraine's grain exports, spreading further misery and cost
pressures to those least able to bear them.
Dividends
We intend to pay an interim dividend of 1.75 pence per ordinary share for the
year to 31st December 2023 on
7 December 2023. This is the same level of dividend as was paid in calendar
2022. A preference dividend of 1.75 pence per preference share will be paid on
the same date.
This dividend payment represents a yield of approximately 10 percent on the
ordinary share price averaged over the first six month period of the year.
Audit
We have been notified by our auditor, Hazlewoods, that they are unable to
continue to act as our auditor because as a firm they are withdrawing from the
audit of listed companies. We have therefore been engaged on a formal tender
process to identify and appoint a new auditor and I am pleased to announce that
following this process we have appointed MHA Bakertilly to act as our auditor.
This appointment is being separately announced today and MHA Bakertilly will
therefore carry out the audit for the year to December 2023. Hazelwoods has
confirmed that there are no matters connected with its ceasing to hold office
that need to be brought to the attention of shareholders or creditors for the
purposes of section 519 of the Companies Act 2006 and the board would like to
thank Hazlewoods for its professional and diligent service as auditor since
2017. In accordance with FCA Rule DTR 4.2.9, it is confirmed that there will be
no auditor review of this interim statement.
Outlook
With the many political, social, economic and indeed climatic uncertainties
facing the world today, both in the immediate future and in the longer-term, it
is difficult to be very positive about the investment climate going forward.
Inflationary pressures, while reduced, remain unconquered. Counter-inflationary
interest rate measures may not have peaked and, if shortly to do so, might last
longer than originally expected. The war in Ukraine, together with its effect
on world energy and food prices, is likely to enter a third year and this year
has brought numerous examples of disruptive and destructive weather patterns
world-wide which can only be expected to worsen over the coming years. While the
attempts to control the generationally high levels of inflation have so far
resulted in a generally softer landing than originally feared, much of the
higher than expected economic activity, particularly in the retail, hospitality
and travel sectors could be the result of pent up demand following the Covid
period and the drawdown of savings built up during this latter period which may
soon come to an end.
Against the background of these uncertainties, and as the long period of
clinical drug development by our major US investment, Geron Corporation, reaches
its conclusion with the company's anticipated transformation into a commercially
operating biopharma business in hematologic oncology, we will continue to
maintain the current profile of our portfolio and aim to capture the market
independent gains which such investment should provide.
As at 27 September, company net assets were £5.7 million, a decrease of 34.5
percent since the period end, and equivalent to 16.3 pence per share on a fully
diluted basis. Over the same period, the FTSE 100 index increased by 0.8
percent, the All Share index increased by 0.5 percent.
David Seligman
28 September 2023
Managing Director's Report
In the first six months of 2023, our portfolio out-performed the benchmark
indices on a total return basis by over 20 percent, as noted in the chairman's
statement above.
It is additionally worth noting that in the five years since 2018, the portfolio
has also out-performed the benchmarks on a total return basis by a significant
margin, outperforming the FTSE 100 index by 10 percent and the FTSE All Share
index by 12 percent over the period. Thus, while the portfolio NAV might have
declined in value over that time, when dividends paid are taken into account,
shareholders have received value considerably in excess of returns offered by
leading UK listed companies.
Given that the above results have been achieved prior to the soon to be expected
graduation of our major investment, Geron Corporation, from clinical development
to commercial sales, as noted above, a further period of out-performance can be
envisaged once Geron's value is properly captured by the market.
When considered against the very uncertain global outlook for investment noted
above by the chairman, the prospect of continued portfolio out-performance which
is not necessarily dependent upon general market trends and conditions is to be
welcomed.
Geron Corporation
Since we last reported, Geron announced in June the filing of and in August the
acceptance by the US Federal Drugs Agency (FDA) of Geron's final submission
requesting marketing authorisation (NDA) for its ground-breaking hematologic
oncology drug, Imetelstat This penultimate stage in the drug development process
prior to commercialisation and marketing provides a strong degree of affirmation
for a new drug after many years of successful clinical development and is
normally the trigger for a significant increase in the developer's market
value.
The fact that the reverse has happened in this case and strongly against the
trend in the NASDAQ and US Biotech indices over the period which have remained
stable, together with the fact that the FDA also granted Geron permission to
supply Imetelstat to patients prior to marketing authorisation in cases of
compassionate need, defies reasonable explanation in our view and underlines the
concerns we have expressed for many years in this report surrounding the
constant failure of this stock to demonstrate a normal and transparent level of
price discovery in the market.
The reasons for this, as more specifically described in the previous edition of
this report, have been generally ascribed over many years to poor investor
communications by management and their implementation of suboptimal financing
strategies; the inherent imbalance within the market between professional equity
finance providers and the long lead times of the biotechnology drug development
process which requires multiple periodic fundraising, giving such providers the
ability to pressure management and scope to operate to their own financial
advantage through short selling and options operations; the significant
salaries, bonuses and options entitlements which senior (and in some cases only
part-time) management award themselves while shareholder value notably fails to
match the annual increases in such management compensation.
We are encouraged that the long-standing CFO responsible for financing strategy
has recently been replaced and it is to be strenuously hoped that one day, once
the conclusion of Geron's clinical development stage has occurred with its
transition to product commercialisation, these value detractive practices can be
made a thing of the past with a new big pharma owner or the replacement of the
current senior management with a younger and more dynamic management team.
Jonathan Woolf
28 September 2023
CONDENSED
INCOME
STATEMENT
Six months ended 30
June 2023
Unaudited
Unaudited Audited
6 months to
6 months to 30 Year ended 31
30 June
June 2022 December 2022
2023
Note Revenue CapitalReturn£'000 Total£'000
RevenueReturn£'000 CapitalReturn£'000 Total£'000 RevenueReturn£'000
CapitalReturn£'000 Total£'000
return£'000
Investment income 3 944 - 944
79 - 79 1,156 -
1,156
Holding - 747 747
- (333) (333) - 579
579
gains/(losse
s) on
investments
at fair
value
through
profit or
loss
Gains/(losses) on - 412 412
- (206) (206) - (294)
(294)
disposal of
investments at fair
value through
profit or loss
Foreign exchange 34 (113) (79)
(39) 253 214 (40) 277
237
gains/(losses)
Expenses (219) (124) (343)
(217) (124) (341) (424) (250)
(674)
_____ _____ _____
_____ _____ _____ _____ _____
_____
Profit/(loss) 759 922 1,681
(177) (410) (587) 692 312
1,004
before finance
costs and
tax
Finance costs (19) (11) (30)
(16) (2) (18) (34) (10)
(44)
_____ _____ _____
_____ _____ _____ _____ _____
_____
Profit/(loss) 740 911 1,651
(193) (412) (605) 658 302
960
before tax
Taxation 7 - 7
9 - 9 16 -
16
_____ _____ _____
_____ _____ _____ _____ _____
_____
Profit/(loss) for 747 911 1,658
(184) (412) (596) 674 302
976
the period
_____ _____ _____
_____ _____ _____ _____ _____
_____
Earnings/(loss) per 5
ordinary share
Basic 2.29p 3.64p 5.93p
(0.74)p (1.65)p (2.39)p 1.30p 1.21p
2.51p
Diluted* 2.14p 2.60p 4.74p
(0.74)p (1.65)p (2.39)p 1.30p 1.21p
2.51p
The company does not have any income or expense that is not included in profit
for the period and all items derive from continuing operations. Accordingly, the
`Profit/(loss) for the period' is also the `Total Comprehensive Income for the
period' as defined in IAS 1 (revised) and no separate Statement of Comprehensive
Income has been presented.
The total column of this statement is the company's Income Statement, prepared
in accordance with IFRS. The supplementary revenue return and capital return
columns are both prepared under guidelines published by the Association of
Investment Companies.
All profit and total comprehensive income is attributable to the equity holders
of the company.
*Calculated in accordance with International Accounting Standard 33 `Earnings
per Share'.
CONDENSED
STATEMENT
OF
CHANGES IN
EQUITY
Six months
ended 30
June
2023
Un
audited
Six months
ended 30
Ju
ne 2023
Sharecapital*£'000 CapitalReserve£'000 RetainedEarnings£'000
Total£'000
Balance at 35,000 (27,928) 19
7,091
31
December
2022
Profit for - 911 747
1,658
the
period
________ ________ ________
________
Balance at 35,000 (27,017) 766
8,749
30
June 2023
________ ________ ________
________
Un
audited
Six months
ended 30
Ju
ne 2022
Sharecapital*£'000 CapitalReserve£'000 RetainedEarnings£'000
Total£'000
Balance at 35,000 (28,230) (43)
6,727
31
December
2021
Loss for - (412) (184)
(596)
the
period
________ ________ ________
________
Balance at 35,000 (28,642) (227)
6,131
30
June 2022
________ ________ ________
________
Audited
Year
ended 31
Decemb
er 2022
Sharecapital*£'000 CapitalReserve£'000 RetainedEarnings£'000
Total£'000
Balance at 35,000 (28,230) (43)
6,727
31
December
2021
Profit for - 302 674
976
the
period
Ordinary - - (437)
(437)
dividend
paid
Preference - - (175)
(175)
dividend
paid
________ ________ ________
________
Balance at 35,000 (27,928) 19
7,091
31
December
2022
________ ________ ________
________
*The company's share capital comprises £35,000,000 (2022 - £35,000,000) being
25,000,000 ordinary shares of £1 (2022 - 25,000,000) and 10,000,000 non-voting
convertible preference shares of £1 each (2022 - 10,000,000).
CONDENSED BALANCE SHEET
As at 30 June 2023
Note Unaudited30 Unaudited30 Audited31
June2023 June2022 December2022
£'000 £'000 £'000
Non-current assets
Investments - fair value 6,403 5,194 5,600
through profit or loss (note
1)
Subsidiaries - fair value 8,014 7,109 7,712
through profit or loss
_________ _________ _________
14,417 12,303 13,312
Current assets
Receivables 374 487 442
Cash and cash equivalents 34 23 45
_________ _________ _________
408 510 487
_________ _________ _________
Total assets 14,825 12,813 13,799
_________ _________ _________
Current liabilities
Trade and other payables (1,092) (2,018) (1,794)
Bank credit facility (1,341) (814) (1,018)
_________ _________ _________
(2,433) (2,832) (2,812)
_________ _________ _________
Total assets less current 12,392 9,981 10,987
liabilities
_________ _________ _________
Non - current liabilities (3,643) (3,850) (3,896)
_________ _________ _________
Net assets 8,749 6,131 7,091
_________ _________ _________
Equity attributable to
equity holders
Ordinary share capital 25,000 25,000 25,000
Convertible preference share 10,000 10,000 10,000
capital
Capital reserve (27,017) (28,642) (27,928)
Retained revenue earnings 766 (227) 19
_________ _________ _________
Total equity 8,749 6,131 7,091
_________ _________ _________
Net assets per ordinary 6 £0.25 £0.18 £0.20
share - basic
_________ _________ _________
Net assets per ordinary 6 £0.25 £0.18 £0.20
share - diluted
_________ _________ _________
CONDENSED CASHFLOW
STATEMENT
Six months ended 30 June
2023
Unaudited6 Unaudited6 AuditedYear
months to30 months to30 ended31
June June2022 December2022
2023 £'000 £'000
£'000
Cash flow from operating
activities
Profit/(loss) before tax 1,651 (605) 960
Adjustment for:
(Gains)/losses on (1,159) 539 (285)
investments
Proceeds on disposal of
investments at fair
value
through profit or loss 136 313 548
Purchases of investments
at fair value
through profit or loss (450) (126) (441)
Interest (3) 18 44
________ ________ ________
Operating cash flows
before movements
in working capital 175 139 826
Decrease/(increase) in 108 (264) 109
receivables
(Decrease)/increase in (594) 49 (1,351)
payables
________ ________ ________
Net cash from operating
activities
before interest (311) (76) (416)
Interest paid (23) (4) (21)
________ ________ ________
Net cash flows from (334) (80) (437)
operating activities
________ ________ ________
Cash flows from
financing activities
Dividends paid on - - -
ordinary shares
Dividends paid on - (175) -
preference shares
________ ________ ________
Net cash used in - (175) -
financing activities
________ ________ ________
Net decrease in cash and (334) (255) (437)
cash equivalents
Cash and cash (973) (536) (536)
equivalents at beginning
of period
________ ________ ________
Cash and cash (1,307) (791) (973)
equivalents at end of
period
________ ________ ________
NOTES TO THE COMPANY'S CONDENSED FINANCIAL STATEMENT
1. Accounting policies
Basis of preparation and statement of compliance
This interim report is prepared in accordance with IAS 34 `Interim Financial
Reporting' an International Financial Reporting Standard adopted by the United
Kingdom and on the basis of the accounting policies set out in the company's
Annual Report and financial statements at 31 December 2022.
The company's condensed financial statements should be read in conjunction with
the annual financial statements for the year ended 31 December 2022 which are
prepared in accordance with UK adopted International Financial Reporting
Standards (IFRS) and the Companies Act 2006.
The financial statements have not been audited or reviewed by the Auditor
pursuant to the Auditing Practices Board Guidance on 'Review of Interim
Financial Information'. The Financial Statements for the six months to 30 June
2023 have been prepared on the basis of the same accounting policies as set out
in the Company's Annual Report and Financial Statements at 31 December 2022.
In accordance with IFRS 10, the group does not consolidate its subsidiaries and
therefore instead of preparing group accounts it prepares separate financial
statements for the parent entity only.
The financial statements have been prepared on the historical cost basis except
for the measurement at fair value of investments, derivative financial
instruments and subsidiaries. The same accounting policies as those published in
the statutory accounts for 31 December 2022 have been applied.
Significant accounting policies
In order to better reflect the activities of an investment trust company and in
accordance with guidance issued by the Association of Investment Companies
(AIC), supplementary information which analyses the income statement between
items of a revenue and capital nature has been presented alongside the income
statement.
As the entity's business is investing in financial assets with a view to
profiting from their total return in the form of interest, dividends or
increases in fair value, listed equities and fixed income securities are
designated as fair value through profit or loss on initial recognition. The
company manages and evaluates the performance of these investments on a fair
value basis in accordance with its investment strategy, and information about
the group is provided internally on this basis to the entity's key management
personnel.
Investments held at fair value through profit or loss, including derivatives
held for trading, are initially recognised at fair value.
All purchases and sales of investments are recognised on the trade date.
After initial recognition, investments, which are designated as at fair value
through profit or loss, are measured at fair value. Gains or losses on
investments designated at fair value through profit or loss are included in
profit or loss as a capital item, and material transaction costs on acquisition
and disposal of investments are expensed and included in the capital column of
the income statement. For investments that are actively traded in organised
financial markets, fair value is determined by reference to Stock Exchange
quoted market closing prices or last traded prices, depending upon the
convention of the exchange on which the investment is quoted at the close of
business on the balance sheet date. Investments in units of unit trusts or
shares in OEICs are valued at the closing price released by the relevant
investment manager.
In respect of unquoted investments, or where the market for a financial
instrument is not active, fair value is established by using an appropriate
valuation technique.
Investments of the company in subsidiary companies are held at the fair value of
their underlying assets and liabilities.
This includes the valuation of film rights in British & American Films Limited
and thus the fair value of its immediate parent BritAm Investments Limited. In
determining the fair value of the film rights, estimates are made. These include
future film revenues which are estimated by the management. Estimations made
have taken into account historical results, current trends and other relevant
factors.
Where a subsidiary has negative net assets it is included in investments at £nil
value and a provision for liabilities is made on the balance sheet equal to the
value of the net liabilities of the subsidiary company where the ultimate parent
company has entered into a guarantee to pay the liabilities as they fall
due.
Dividend income from investments is recognised as income when the shareholders'
rights to receive payment has been established, normally the ex-dividend
date.
Interest income on fixed interest securities is recognised on a time
apportionment basis so as to reflect the effective interest rate of the
security.
When special dividends are received, the underlying circumstances are reviewed
on a case by case basis in determining whether the amount is capital or income
in nature. Amounts recognised as income will form part of the company's
distribution. Any tax thereon will follow the accounting treatment of the
principal amount.
All expenses are accounted for on an accruals basis. Expenses are charged as
revenue items in the income statement except as follows:
- transaction costs which are incurred on the purchase or sale of an investment
designated as fair value through profit or loss are expensed and included in the
capital column of the income statement;
- expenses are split and presented partly as capital items where a connection
with the maintenance or enhancement of the value of the investments held can be
demonstrated, and accordingly investment management and related costs have been
allocated 50% (2022 - 50%) to revenue and 50% (2022 - 50%) to capital, in order
to reflect the directors' long-term view of the nature of the expected
investment returns of the company.
The 3.5% cumulative convertible non-redeemable preference shares issued by the
company are classified as equity instruments in accordance with IAS 32
`Financial Instruments - Presentation' as the company has no contractual
obligation to redeem the preference shares for cash or pay preference dividends
unless similar dividends are declared to ordinary shareholders.
Going Concern
The directors have assessed the ability of the company to continue as a going
concern for a period of at least twelve months after the date of approval of
these financial statements. The directors are satisfied that a given the assets
of the company consist mainly of securities that are readily realisable and has
available a credit facility with Credit Suisse, it will have sufficient
resources to enable it to continue as a going concern.
2. Segmental reporting
The directors are of the opinion that the company is engaged in a single segment
of business, that is investment business, and therefore no segmental information
is provided.
3. Income
Unaudited Unaudited Audited
6 months 6 months Year ended
to 30 June to 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Income from investments 912 47 1,090
Other income 32 32 66
_________ _________ _________
944 79 1,156
_______ _______ _______
During the period the company received a dividend of £867,000 (30 June 2022 -
£nil, 31 December 2022 - £1,101,000) from a subsidiary which was generated from
gains made on the realisation of investments held by that company. As a result
of the receipt of this dividend, a corresponding reduction was recognised on the
value of the investment in the subsidiary company.
During the period the company recognised a foreign exchange loss of £147,000 (30
June 2022 - £291,000 gain, 31 December 2022 - £317,000 gain) on the loan of
$3,526,000 to a subsidiary. As a result of this loss, the corresponding movement
was recognised in the value of the investment in the subsidiary company.
Under IFRS 10 the income analysis above includes the parent company only rather
than that of the group. In addition to the income above film revenues of £24,000
(30 June 2022 - £47,000, 31 December 2022 - £107,000) received by the
subsidiary British & American Films Limited and property unit trust income of
£nil (30 June 2022 - £nil, 31 December 2022 - £1,000) was received by the
subsidiary BritAm Investments Limited and forms part of the net profit of those
companies available for distribution to the parent company.
4. Dividends
Unaudited6 Unaudited6 AuditedYear
months to months to ended 31
30 June 30 June December
2023 2022 2022
Interim Interim Final
Pence per £'000 Pence per £'000 Pence per £'000
share share share
Ordinary - - - - 1.75 437
shares - paid
Ordinary 1.75 437 - - - -
shares -
proposed
Preference - - - - 1.75 175
shares -paid
Preference 1.75 175 - - - -
shares
-proposed
________ ________ ________
612 - 612
________ ________ ________
The dividends on ordinary shares are based on 25,000,000 ordinary £1 shares.
Dividends on preference shares are based on 10,000,000 non-voting 3.5%
convertible preference shares of £1.
The non-payment in December 2019, in December 2020 and in June 2022 of the
dividend of 1.75 pence per share on the 3.5% cumulative convertible preference
shares, consequent upon the non-payment of a final dividend on the Ordinary
shares for the year ended 31 December 2019, for the year ended 31 December 2020
and for the period ended 30 June 2022, has resulted in arrears of £525,000 on
the 3.5% cumulative convertible preference shares. These arrears will become
payable in the event that the ordinary shares receive, in any financial year, a
dividend on par value in excess of 3.5%.
Amounts recognised as distributions in respect of dividends paid in each period:
Unaudited6 Unaudited6 AuditedYear
months months ended31
to30 June to30 June December
2023 2022 2022
Pence per £'000 Pence per £'000 Pence per £'000
share share share
Ordinary - - - - - -
shares
-Final
Ordinary - - - - 1.75 437
shares
-Interim
Preference - - - - 1.75 175
shares
-Fixed
_________ _________ _________
- - 612
_______ _______ _______
5. Earnings/(loss) per ordinary share
Unaudited Unaudited Audited
6 months 6 months Year ended
to 30 June to 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Basic earnings/(loss) per
share
Calculated on the basis
of:
Net revenue profit/(loss) 572 (184) 324
after preference dividends
Net capital gain/(loss) 911 (412) 302
_________ _________ _________
Net total earnings/(loss) 1,483 (596) 626
after preference dividends
_______ _______ _______
Number'000 Number'000 Number'000
Ordinary shares in issue 25,000 25,000 25,000
_______ _______ _______
Diluted earnings/(loss)
per share
Calculated on the basis £'000 £'000 £'000
of:
Net revenue profit/(loss) 747 (184) 324
Net capital gain/(loss) 911 (412) 302
_________ _________ _________
Profit/(loss) after 1,658 (596) 626
taxation
_______ _______ _______
Number'000 Number'000 Number'000
Ordinary and preference 35,000 35,000 35,000
shares in issue
_______ _______ _______
Diluted earnings per share is calculated taking into account the preference
shares which are convertible to ordinary shares on a one for one basis, under
certain conditions, at any time during the period 1 January 2006 to 31 December
2025 (both dates inclusive).
6. Net asset value attributable to each share
Basic net asset value attributable to each share has been calculated by
reference to 25,000,000 ordinary shares, and company net assets attributable to
shareholders as follows:
Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Total net assets 8,749 6,131 7,091
Less convertible preference (2,500) (1,752) (2,026)
shares at fully diluted
value
__________ __________ __________
Net assets attributable to 6,249 4,379 5,065
ordinary shareholders
________ ________ ________
Diluted net asset value is calculated on the total net assets in the table above
and on 35,000,000 shares, taking into account the preference shares which are
convertible to ordinary shares on a one for one basis, under certain conditions,
at any time during the period 1 January 2006 to 31 December 2025 (both dates
inclusive).
Basic net assets per share is calculated using a value of fully diluted net
asset value for the preference shares.
7. Non - current liabilities
Guarantee of subsidiary liability Unaudited Unaudited Audited
30 June 30 June 31 December
2023 2022 2022
£'000 £'000 £'000
Opening provision 3,896 3,974 3,974
(Decrease)/increase in period (367) 198 303
Transfer to allowance for doubtful debt 114 (322) (381)
__________ __________ __________
Closing provision 3,643 3,850 3,896
________ ________ ________
The provision relates to a guarantee made by the company in respect of amounts
owed by Second BritAm Investments Limited to BritAm Investments Limited and
British & American Films Limited. There is no current intention for these
liabilities to be called for immediate payment by the subsidiary companies.
During the year ended 31 December 2019 as part of a transaction to hedge the
company against exchange effects of the foreign currency loan, an amount
corresponding to the $USD value was loaned by British & American Investment
Trust PLC to Second BritAm Investments Limited. As a result of this, and other
related intercompany transactions, £2,860,000 of amounts previously guaranteed
became an asset of the company and the provision brought forward against this
has been transferred to become an allowance against doubtful debt. During the
period to 30 June 2022, an allowance against doubtful debt has decreased by
£114,000 (30 June 2022 - increased by £322,000 and 31 December 2022 - increased
by £381,000).
8. Related party transactions
Romulus Films Limited and Remus Films Limited have significant shareholdings in
the company: 6,902,812 (27.6%) ordinary shares held by Romulus Films Limited and
7,868,750 (31.5%) ordinary shares held by Remus Films Limited). Romulus Films
Limited also holds 10,000,000 cumulative convertible preference shares.
The company rents its offices from Romulus Films Limited, and is also charged
for its office overheads. During the period the company paid £14,000 (30 June
2022 - £14,000 and 31 December 2022 - £28,000) in respect of those services.
The salaries and pensions of the company's employees, except for the three non
-executive directors and one employee, are paid by Remus Films Limited and
Romulus Films Limited and are recharged to the company. Amounts charged by these
companies in the period to 30 June 2023 were £194,000 (30 June 2022 - £197,000
and 31 December 2022 - £397,000) in respect of salary costs and £24,000 (30 June
2022 - £22,000 and 31 December 2022 - £42,000) in respect of pensions.
At the period end an amount of £179,000 (30 June 2022 - £nil and 31 December
2022 - £nil) was due to Romulus Films Limited and the amount of £nil was due
from Romulus Films Limited (30 June 2023 - £26,000 and 31 December 2022 -
£69,000) and £276,000 (30 June 2022 - £436,000 and 31 December 2022 - £313,000)
was due to Remus Films Limited. At the period end Other payables included
amounts of £nil (30 June 2022 - £nil and 31 December 2022 - £294,705) due to
Romulus Films Limited and £nil (30 June 2022 - £nil and 31 December 2022 -
£137,703) due to Remus Films Limited.
During the period subsidiary BritAm Investments Limited paid dividends of
£867,000 (30 June 2022 - £nil and 31 December 2022 - £1,001,000) to the parent
company, British & American Investment Trust PLC.
British & American Investment Trust PLC has guaranteed the liabilities of
£5,670,000 (30 June 2022 - £4,417,000 and 31 December 2022 - £5,519,000) due
from Second BritAm Investments Limited to its fellow subsidiaries if they should
fall due.
During the period the company paid interest of £7,000 (30 June 2022 - £15,000
and 31 December 2022 - £23,000) on the loan due to BritAm Investments Limited.
During the period the company received interest of £nil (30 June 2022 - £1,000
and 31 December 2022 - £2,000) from British & American Films Limited and £32,000
(30 June 2022 - £31,000 and 31 December 2022 - £64,000) from Second BritAm
Investments Limited.
During the period the company entered into an investment transaction to sell
stock for £890,000 to British & American Films Limited (30 June 2022 - £nil and
31 December 2022 - £nil).
During the period the company entered into investment transaction to purchase
stock for £890,000 from British & American Films Limited (30 June 2022 - £nil
and 31 December 2022 - £nil).
At 30 June 2023 £4,170,000 (30 June 2022 - £4,132,000 and 31 December 2022 -
£4,132,000) was owed by British & American Films Limited to Romulus Films
Limited and £44,000 (30 June 2022 - £40,000 and 31 December 2022 - £42,000) to
Remus Films Limited. Interest was paid to Romulus Films Limited of £80,000 (30
June 2022 - £45,000 and 31 December 2022 - £121,000) at the rate of 2.5% per
annum starting on 1 April 2023 (30 June 2022 - 1.5% over the UK Bank Rate per
annum and 31 December 2022 - 1.5% over the UK Bank Rate per annum). The loan is
repayable at not less than one year's notice.
All transactions with subsidiaries were made on an arm's length basis.
9. Retained earnings
The table below shows the movement in the retained earnings analysed between
revenue and capital items.
Capital Retained
reserve earnings£'000
£'000
1 January 2023 (27,928) 19
Allocation of profit for the period 911 747
_________ _________
At 30 June 2023 (27,017) 766
_______ _______
The capital reserve includes £218,000 of investment holding gains (30 June 2022
- £2,999,000 loss, 31 December 2022 - £1,854,000 loss).
10. Financial instruments
Financial instruments carried at fair value
All investments are carried at fair value. Other financial assets and
liabilities of the company are held at amounts that approximate to fair value.
The book value of cash at bank and bank loans included in these financial
statements approximate to fair value because of their short-term maturity.
Fair value hierarchy
The table below analyses recurring fair value measurements for financial assets
and financial liabilities.
These fair value measurements are categorised into different levels in the fair
value hierarchy based on the inputs to valuation techniques used. The different
levels are defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or
liabilities that the company can access at the measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly or indirectly:
1. Prices of recent transactions for identical instruments.
2. Valuation techniques using observable market data.
Level 3: Unobservable inputs for the asset or liability.
Financial assets and Level Level Level Total£'000
financial liabilities 1£'000 2£'000 3£'000
at
fair value through
profit or loss at 30
June
2023
Investments:
Investments held at 6,402 - 1 6,403
fair value through
profit
or loss
Subsidiary held at fair - - 8,014 8,014
value through profit or
loss
Total financial assets 6,402 - 8,015 14,417
and liabilities carried
at fair value
With the exception of the Sarossa Capital, BritAm Investments Limited (unquoted
subsidiary) and Second BritAm Investments Limited (unquoted subsidiary), which
are categorised as Level 3, all other investments are categorised as Level 1.
Fair Value Assets in Level 3
The following table shows the reconciliation from the opening balances to the
closing balances for fair value measurement in Level 3 of the fair value
hierarchy.
Level 3
£'000
Opening fair value at 1 January 2023 7,713
Investment holding gains 302
Closing fair value at 30 June 2023 8,015
Subsidiaries
The fair value of the subsidiaries is determined to be equal to the net asset
values of the subsidiaries at period end plus the uplift in the revaluation of
film rights in British & American Films Limited, a subsidiary of BritAm
Investments Limited.
The directors of British & American Films Limited have determined a conservative
valuation of £2 million for the five feature films in the library. This
valuation has been arrived at from a combination of discounting expected cash
flows over the full period of copyright at current long term interest rates and
a recently received independent third party professional valuation.
There have been no transfers between levels of the fair value hierarchy during
the period. Transfers between levels of fair value hierarchy are deemed to have
occurred at the date of the event or change in circumstances that caused the
transfer.
11. Financial information
The financial information contained in this report does not constitute statutory
accounts as defined in Section 435 of the Companies Act 2006. The financial
information for the period ended 30 June 2023 and 30 June 2022 have not been
audited by the Company's Auditor pursuant to the Auditing Practices Board
guidance. The information for the year to 31 December 2022 has been extracted
from the latest published Annual Report and Financial Statements, which have
been lodged with the Registrar of Companies, contained an unqualified auditors'
report and did not contain a statement required under Section 498(2) or (3) of
the Companies Act 2006.
DIRECTORS' STATEMENT
Principal risks and uncertainties
The principal risks and uncertainties faced by the company continue to be as
described in the previous annual accounts. Further information on each of these
areas, together with the risks associated with the company's financial
instruments are shown in the Directors' Report and notes to the financial
statements within the Annual Report and Accounts for the year ended 31 December
2022.
The Chairman's Statement and Managing Director's report include commentary on
the main factors affecting the investment portfolio during the period and the
outlook for the remainder of the year.
Directors' Responsibilities Statement
The Directors are responsible for preparing the half-yearly report in accordance
with applicable law and regulations. The Directors confirm that to the best of
their knowledge the interim financial statements, within the half-yearly report,
have been prepared in accordance with IAS 34 'Interim Financial Reporting'. The
Directors are required to prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the company will continue in
business. The Directors further confirm that the Chairman's Statement and
Managing Director's Report includes a fair review of the information required by
4.2.7R and 4.2.8R of the FCA's Disclosure and Transparency Rules.
The Directors of the company are listed in the section preceding the Chairman's
Statement.
The half-yearly report was approved by the Board on 28 September 2023 and the
above responsibility statement was signed on its behalf by:
Jonathan C Woolf
Managing Director
This information was brought to you by Cision http://news.cision.com
https://news.cision.com/british---american-investment-trust-plc/r/half-year-report,c3844853
END
(END) Dow Jones Newswires
September 29, 2023 04:56 ET (08:56 GMT)
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