TIDMBAF
British & American Investment Trust PLC
Annual Financial Report
for the year ended 31 December 2020
Registered number: 00433137
Directors Registered office
David G Seligman (Chairman) Wessex House
Jonathan C Woolf (Managing Director) 1 Chesham Street
Dominic G Dreyfus (Non-executive and Chairman of the Audit Telephone: 020 7201
Committee) 3100
Alex Tamlyn (Non-executive) Registered in
England
No.00433137
27 May 2021
This is the Annual Financial Report as required to be published under DTR 4 of
the UKLA Listing Rules.
Financial Highlights
For the year ended 31 December 2020
2020 2019
Revenue Capital Total Revenue Capital Total
return return return return
£000 £000 £000 £000 £000 £000
Profit/(loss) before tax - 879 (1,230) (351) 862 (1,461) (599)
realised
Profit before tax - - 1,388 1,388 - 1,657 1,657
unrealised
__________ __________ __________ __________ __________ __________
Profit before tax - total 879 158 1,037 862 196 1,058
__________ __________ __________ __________ __________ __________
Earnings per £1 ordinary
share - basic 2.23p 0.63p 2.86p 2.26p 0.78p 3.04p
__________ __________ __________ __________ __________ __________
Earnings per £1 ordinary
share - diluted 2.59p 0.45p 3.04p 2.61p 0.56p 3.17p
__________ _________ __________ __________ _________ __________
Net assets 6,720 6,504
__________ __________
Net assets per ordinary
share
- deducting preference
shares 19p 19p
at fully diluted net
asset value*
__________ __________
- diluted 19p 19p
__________ __________
Diluted net asset value per 21p
ordinary share at 21 May
2021
__________
Dividends declared or
proposed for the period:
per ordinary share
- interim paid 2.7p 2.7p
- final proposed 0.0p 0.0p
per preference share 1.75p 1.75p
Dividends declared after the
period:
per ordinary share - 1st 2.7p
interim
per preference share 1.75p
1st interim dividend declared for the year ended 31 December 2021 of 2.7 pence
per ordinary share payable on 24 June 2021 to shareholders on the register at
11 June 2021. A preference dividend of 1.75 pence will be paid to preference
shareholders on the same date.
*Basic net assets are calculated using a value of fully diluted net asset value
for the preference shares.
Chairman's Statement
I report our results for the year ended 31 December 2020. As announced on 22nd
April, we have delayed the release of these results by one month in accordance
with the current guidance of the Financial Conduct Authority (FCA) and the
Financial Reporting Council (FRC) concerning the reporting by listed companies
of their results in the context of the ongoing Covid-19 pandemic.
Our interim results to 30th June 2020 were reported on a delayed basis at the
end of October 2020 and at the time we explained in some detail the how the
Covid-19 pandemic was impacting our operations in various ways, including in
terms of the corporate reporting timetable, disruption to general business
activity, markets, investment valuations and dividends.
Revenue
The return on the revenue account before tax amounted to £0.9 million (2019: £
0.9 million), unchanged from 2019 but a significantly lower level from prior
years when higher levels of dividends from external investments were being
received. In 2020, dividend income was severely impacted by the Covid-19
pandemic as companies cut or skipped payments altogether; however, this impact
was partially reduced by dividends received from our subsidiary companies
during the year.
Gross revenues totalled £1.4 million (2019: £1.2 million). In addition, film
income of £84,000 (2019: £106,000) and property unit trust income of £14,000
(2019: £14,000) was received in our subsidiary companies. In accordance with
IFRS10, these income streams are not included within the revenue figures noted
above.
The total return before tax amounted to a profit of £1.0 million (2019: £1.1
million profit), which comprised net revenue of £0.9 million, a realised loss
of £1.2 million and an unrealised gain of £1.3 million. The revenue return per
ordinary share was 2.2p (2019: 2.3p) on an undiluted basis and 2.6p (2019:
2.6p) on a diluted basis.
Net Assets and Performance
Net assets at the year end were £6.7 million (2019: £6.5 million), an increase
of 3.3 percent, after payment of £0.9 million in dividends to shareholders
during the year. This compares to decreases in the FTSE 100 and All Share
indices of 14.3 percent and 12.5 percent, respectively, over the period. On a
total return basis, after adding back dividends paid during the year, our net
assets increased by 16.4 percent compared to decreases of 11.5 percent and 9.8
percent in the FTSE 100 and All Share indices, respectively.
This substantial outperformance in total return of 25 percent against the
benchmark indices was principally the result of gains of 12 percent in sterling
terms in the value of our largest US investment, Geron Corporation, and of 90
percent in our second largest US investment, Lineage Cell Therapeutics Inc (a
combination of two previously held regenerative medicine stem cell companies,
Biotime Inc and Asterias Biotherapeutics Inc). By contrast, our UK stock
investments declined in line with the widespread falls in the UK market due to
the unprecedented effects the Covid-19 pandemic felt throughout the year.
More generally, the economic shock of the Covid-19 pandemic completely
overshadowed all other considerations in 2020. In our last report in October,
we described in some detail the nature and extent of the damage which the
pandemic had caused globally to a vast array of activities worldwide. These
included corporate activity and profits, employment levels, working practices,
basic social interactions, GDP, government debt, economic stimulus measures and
interest rates.
At that time, the first wave of the pandemic had passed through most countries
and a second winter wave whose likely effect was not fully known was expected.
As reported, equity markets had begun to recover by the summer from the
precipitous declines of the first quarter and by the year end the US market had
regained its year-opening level, while in the UK almost half of the 35 percent
drop in March had been retraced.
The effect of the lockdowns in the first half on GDP was severe, with falls of
23 percent in the UK and 35 percent in the USA being recorded. As the economies
began to be opened up in the summer, these falls were reduced to 10 percent and
4 percent for the year as a whole, respectively. These are nevertheless
extremely large declines which have never before been experienced in peacetime
and in the UK not for 300 years. As a result, similarly unprecedented effects
were seen on other major economic metrics such as government borrowing and
levels of debt as governments introduced unprecedented measures to support
their citizenry and businesses. In the UK, total government borrowing jumped by
300 percent to £300 billion and debt rose to over £2 trillion, representing 100
percent of GDP, the highest level since the Second World War.
When it arrived at year-end, the winter wave of the pandemic, which was
augmented by more virulent variants of the virus, turned out to be even more
disruptive than the first wave with a series of lockdowns being imposed in most
developed countries. Numbers of infections and deaths spiked in the UK in the
first quarter of 2021 at levels considerably higher than in the first wave in
2020. Despite this, the periods of reopening in the second half of 2020, a
better understanding of how to manage the virus and the implementation of a
highly successful vaccination programme have allowed the UK economy to avoid
the damage of a double dip recession which supported equity markets through to
the New Year.
Dividend
Due to the unprecedented disruption caused to markets by the Covid-19 pandemic
in 2020 and the severe decline in dividends paid by companies last year, we do
not recommend the payment of a final dividend for the 2020 financial year.
We do, however, intend to pay a first interim dividend of 2.70 pence per
ordinary share for the year to 31st December 2021, payable on 24th June, which
is approximately the date on which a final dividend would have been paid. This
is to take account of the timing of income receipts this year into our
distributable reserves.
When added to the dividend of 2.70 pence paid in December 2020, this represents
a yield of approximately 18 percent on the ordinary share price averaged over a
period of 12 months.
Although we have regrettably not been able to continue for the time being the
policy of progressive dividend payments which we had followed for many years,
this level of yield has nevertheless sustained significant market interest in
our stock in recent months, with the shares trading at a significant premium to
NAV and higher than average daily volumes being seen.
As noted in last year's annual report, it is our intention to resume our normal
dividend payments as soon as possible, as and when circumstances permit. We
will also endeavour, through ad hoc interim payments not necessarily on our
normal dividend timetable, to catch up when and if possible on withheld or
reduced payments.
Recent events and outlook
Despite the severity of the winter phase of the pandemic during the first
quarter of 2021, equity markets in the USA and UK have risen steadily this
year, building on the positive momentum which followed the election of
President Biden in November, with the US market pulling steadily ahead of the
record high achieved in December 2020. For some time now, markets have been
looking forward to the economic recovery expected as the pandemic wanes and
lockdowns or restrictions are finally lifted or reduced. Company profits are
beginning to grow again and a very large retail savings balance has been built
up over the past year, ready to be spent when restrictions are lifted.
While the near term prospects for markets and businesses appear favourable,
therefore, this may only be temporary until the longer term damage caused by
the pandemic in terms of permanently lost GDP and jobs becomes evident. While a
strong bounce in GDP is still forecast for 2021 despite the considerably longer
than expected duration of the pandemic, economic activity is unlikely to return
to its pre-2020 levels until 2022 and will not account for the lost production
in the meantime. Also, long term damage to jobs which for the time being has
been disguised by governments' emergency support schemes is likely to become
evident later in the year as these schemes are withdrawn.
For these reasons and their resulting effects on other important economic
indicators such as government deficits, borrowing levels, interest rates and
inflation, the medium term outlook for markets and investment looks very
uncertain.
Having trimmed some of our general sterling based investments over the last two
years which we do not expect to replace in the foreseeable future, our
portfolio has become more focused on our US biopharma investments which do not
tend to track general market movements and which we believe hold significant
investment promise as they progress steadily towards commercialisation of their
ground-breaking and valuable technologies.
As at 21 May 2021, our net assets had increased to £7.4 million, an increase of
9.6 percent since the beginning of the calendar year. This is equivalent to
21.0 pence per share (prior charges deducted at fully diluted value) and 21.0
pence per share on a diluted basis. Over the same period the FTSE 100 increased
8.6 percent and the All Share Index increased 9.0 percent.
David Seligman
27 May 2021
Managing Director's report
As reported above, equity markets in the USA and UK rebounded strongly by the
end of 2020 following precipitous drops at the end of the first quarter as
economies were shut down to combat the Covid-19 pandemic. In the USA, the
market rose 65 percent from its lows in March, regaining its year opening level
by September and reaching an all time high by year end, returning the market to
its 12 year bull run since the financial crisis of 2008/9.
US equity prices have continued to push forward strongly into 2021 following
the election of President Biden and the passing in Congress of his
multi-trillion dollar "American Rescue" and "American Family" plans to support
businesses and citizens out of the economic crisis caused by the pandemic.
Continued substantial and long-term monetary support from the Federal Reserve
through ultra-low interest rates and quantitative easing programmes have also
underpinned equities. Added to which, the rapid acceleration of the highly
successful vaccine programme in the first quarter has paved the way for a
re-opening of the economy with a major boost to corporate investment and retail
spending.
Consequently, equities look set to benefit for some time from a return to
normal activity, with the only major cloud on the horizon being the risk of
growing inflation indications leading to an earlier than expected end to the
highly accommodative monetary policy of recent years, which had been extended
over the past year by the pandemic. Recent comments from the new Secretary of
Finance, Janet Yellen, who used to be Federal Reserve Chairman did in fact
refer to just such an eventuality. As has been seen many times, long-term bull
markets based on monetary stimulus can react quite suddenly and violently to
even the discussion of such pivot points in interest rate trends, as was
notably the case in 2013 with the 'taper tantrum' in the bond markets when US
treasury yields surged abruptly. In recent months, yields in the US bond market
have also risen out of concern at the enormous government spending commitments
of the recovery plans and usually such movements eventually result in equity
market weakness as bond and equity yields rebalance, particularly so given the
continuing lower levels of dividends being paid by companies. This result may
take longer than usual to appear under current circumstances as the pent up
post-pandemic demand in the economy is released and the stimulus of the
administration's 'Build Back Better' infrastructure investment programme washes
through the economy. However, higher levels of equity market volatility in
recent weeks could presage the beginning of this process.
In the UK, the equity market followed a similar pattern in 2020, although it
did not enjoy a similar level of rebound from the March lows, regaining only 50
percent of its 35 percent drop by the third quarter and ending the year down by
14 percent. The market had drifted down during the second half as discussions
with the EU on a post Brexit trade agreement remained unresolved and then the
prospect of a second winter lockdown loomed as post-summer Covid-19 infection
rates began to rise considerably. It was not until November that this steady
decline reversed, rallying by 15 percent following the election of President
Biden and the strongly positive response shown by the US equities.
Since the year end, the UK market has risen a further 10 percent, an increase
of 35 percent since its 2020 low and now just 6 percent below its 2020 high.
The highly effective and world-beating vaccine rollout of the last few months,
resulting in substantially lower levels of Covid-19 infections,
hospitalisations and deaths has significantly boosted confidence of a gradual
return to normality and equity markets have reacted accordingly. Businesses,
particularly in the travel and retail sectors, are also preparing for
substantially higher levels of activity in the months to come as the high
levels of savings built up over the past year are expected to be drawn down in
a retail spending boom.
Comments made above in relation to the medium term prospects for equities in
the USA are likely to apply also to the UK. The question for the medium term,
assuming the virus is kept under control through vaccinations, is how the
various balances in returning the economy and business to normal will play out
over the coming years. The sizeable pent up demand and relief will boost
business activity significantly in the short term and UK GDP is now thought
likely to return to pre-pandemic levels somewhat earlier than expected.
However, pressure will be put on prices, as is already beginning to be seen in
the USA, presaging a return to more normal levels of interest rates which would
be negative for equities.
At the same time, however, as the government removes its emergency support and
stimulus measures later in the year, the true extent of the damage wreaked by
the pandemic over the last year on businesses and employment is likely to be
revealed, placing downward pressure on the economy and sentiment. Further such
pressure is also likely to arrive in the form of additional taxes yet to be
announced to repair the historically high levels of deficit and debt run up by
the government to combat the pandemic. As in the USA, however, the UK
government has a long term programme of infrastructure renewal and investment,
in the UK's case its 'Levelling up' programme, which should add substantial
stimulus to the economy as a whole. This may be sufficient over the medium
term to counterbalance the permanently lost growth of the past 18 months due to
the pandemic. Thus, an overall picture of short-term strength in equity markets
followed by a period of retrenchment and weakness can realistically be
envisaged.
As noted above, our portfolio strongly outperformed the benchmarks in 2020,
primarily due to our long term investments in US biotech stocks, despite a
headwind presented by a weaker US dollar over the year.
In the case of Geron, the ongoing recovery in Geron's share price reflected the
company's efforts to demonstrate that its clinical oncology drug programme
remains on track with ever improving results. During 2020, a number of positive
developments occurred, including the announcement of FDA agreement for a second
Phase 3 trial in Myelofibrosis (MF), which has now commenced enrolment, to add
to its continuing Phase 3 trial in Myelodysplastic Syndrome (MDS) and the
completion of a $140 million equity fundraising in which leading biotech sector
investment funds took large positions. In addition, over the past year, further
high level technical personnel hires have been made from leading pharma
companies, including from previous partner Johnson & Johnson, accompanied by
the award of substantial new employee inducement shares, which are an
indication of the confidence such new employees have in Geron's future
prospects.
In the case of Lineage Cell Therapeutics Inc, our second largest US
biotechnology investment, its share price has now risen by over 200 percent
since the beginning of 2020, recovering to its pre-2019 levels when it combined
with our previously third largest biotechnology investment, Asterias
Biotherapeutics Inc, both being stem cell based regenerative medicine
companies. At the same time, it spun off a third smaller company, Agex
Therapeutics Inc, in which we remain invested. The market has re-rated this
stock following the re-organisation and favourable Phase 2 clinical trial
results which have improved the prospects for its two principal stem cell
programmes. The first in spinal cord injury repair which was acquired with
Asterias Biotherapeutics and the second, its own trial in Dry AMD, a widespread
degenerative condition of the retina causing blindness with no currently
approved or effective treatment.
Jonathan Woolf
27 May 2021
Income statement
For the year ended 31 December 2020
2020 2019
Revenue Capital Total Revenue Capital Total
return return return return
£ 000 £ 000 £ 000 £ 000 £ 000 £ 000
Investment income (note 2) 1,372 - 1,372 1,243 - 1,243
Holding gains on investments 1,388 1,388 1,657 1,657
at fair value through profit - -
or loss
Losses on disposal of
investments at fair value - (960) (960) - (1,113) (1,113)
through profit or loss*
Foreign exchange (losses)/ (44) (13) (57) 53 (57) (4)
gains
Expenses (400) (242) (642) (381) (242) (623)
________ ________ ________ ________ ________ ________
Profit before finance costs 928 173 1,101 915 245 1,160
and tax
Finance costs (49) (15) (64) (53) (49) (102)
________ ________ ________ ________ ________ ________
Profit before tax 879 158 1,037 862 196 1,058
Tax 29 - 29 52 - 52
________ ________ ________ ________ ________ ________
Profit for the year 908 158 1,066 914 196 1,110
________ ________ ________ ________ ________ ________
Earnings per share
Basic - ordinary shares 2.23p 0.63p 2.86p 2.26p 0.78p 3.04p
________ ________ ________ ________ ________ ________
Diluted - ordinary shares 2.59p 0.45p 3.04p 2.61p 0.56p 3.17p
________ ________ ________ ________ ________ ________
The company does not have any income or expense that is not included in the
profit for the year. Accordingly, the 'Profit for the year' is also the 'Total
Comprehensive Income for the year' as defined in IAS 1 (revised) and no
separate Statement of Comprehensive Income has been presented.
The total column of this statement represents the Income Statement, prepared in
accordance with IFRS. The supplementary revenue return and capital return
columns are both prepared under guidance published by the Association of
Investment Companies. All items in the above statement derive from continuing
operations.
All profit and total comprehensive income is attributable to the equity holders
of the company.
*Losses on disposal of investments at fair value through profit or loss include
Losses on sales of £613,000 (2019 - £1,274,000 losses) and Losses on provision
for liabilities and charges of £347,000 (2019 - £161,000 gains).
Statement of changes in equity
For the year ended 31 December 2020
Share Capital Retained Total
capital reserve earnings
£ 000 £ 000 £ 000 £ 000
Balance at 31 December 2018 35,000 (28,802) 1,721 7,919
Changes in equity for 2019
Profit for the period - 196 914 1,110
Ordinary dividend paid (note 4) - - (2,175) (2,175)
Preference dividend paid (note 4) - - (350) (350)
________ ________ ________ ________
Balance at 31 December 2019 35,000 (28,606) 110 6,504
Changes in equity for 2020
Profit for the period - 158 908 1,066
Ordinary dividend paid (note 4) - - (675) (675)
Preference dividend paid (note 4) - - (175) (175)
________ ________ ________ ________
Balance at 31 December 2020 35,000 (28,448) 168 6,720
________ ________ ________ ________
Registered number: 00433137
Balance Sheet
At 31 December 2020
2020 2019
£ 000 £ 000
Non-current assets
Investments - fair value through 6,436 6,704
profit or loss
Subsidiaries - fair value through 5,719 5,335
profit or loss
__________ __________
12,155 12,039
Current assets
Receivables 1,605 1,588
Cash and cash equivalents 394 2,504
__________ __________
1,999 4,092
__________ __________
Total assets 14,154 16,131
__________ __________
Current liabilities
Trade and other payables 3,003 3,617
Bank loan 687 2,635
__________ __________
(3,690) (6,252)
__________ __________
Total assets less current liabilities 10,464 9,879
__________ __________
Non - current liabilities (3,744) (3,375)
__________ __________
Net assets 6,720 6,504
__________ __________
Equity attributable to equity holders
Ordinary share capital 25,000 25,000
Convertible preference share capital 10,000 10,000
Capital reserve (28,448) (28,606)
Retained revenue earnings 168 110
__________ __________
Total equity 6,720 6,504
__________ __________
Approved: 27 May 2021
Cash flow statement
For the year ended 31 December 2020
Year ended Year ended
2020 2019
£ 000 £ 000
Cash flows from operating activities
Profit before tax 1,037 1,058
Adjustments for:
Gains on investments (428) (544)
Proceeds on disposal of investments at fair 2,619 16,316
value through profit and loss
Purchases of investments at fair value through (2,415) (14,521)
profit and loss
Finance costs 64 102
__________ __________
Operating cash flows before movements in working 877 2,411
capital
Decrease in receivables 34 2,417
Decrease in payables (192) (363)
__________ __________
Net cash from operating activities before 719 4,465
interest
Interest paid (31) (97)
__________ __________
Net cash from operating activities 688 4,368
Cash flows from financing activities
Dividends paid on ordinary shares (675) (1,778)
Dividends paid on preference shares (175) (175)
Bank loan (1,948) (155)
__________ __________
Net cash used in financing activities (2,798) (2,108)
__________ __________
Net (decrease)/increase in cash and cash (2,110) 2,260
equivalents
Cash and cash equivalents at beginning of year
2,504 244
__________ __________
Cash and cash equivalents at end of year
394 2,504
__________ __________
Purchases and sales of investments are considered to be operating activities of
the company, given its purpose, rather than investing activities.
1 Basis of preparation and going concern
The financial information set out above contains the financial information of
the company for the year ended 31 December 2020. The company has prepared its
financial statements under IFRS. The financial statements have been prepared on
a going concern basis adopting the historical cost convention except for the
measurement at fair value of investments, derivative financial instruments and
subsidiaries.
The information for the year ended 31 December 2020 is an extract from the
statutory accounts to that date. Statutory company accounts for 2019, which
were prepared under IFRS as adopted by the EU, have been delivered to the
registrar of companies and company statutory accounts for 2020, prepared under
IFRS as adopted by the EU, will be delivered in due course.
The auditors have reported on the 31 December 2020 year end accounts and their
reports were unqualified and did not include references to any matters to which
the auditors drew attention by way of emphasis without qualifying their reports
and did not contain statements under section 498(2) or (3) of the Companies Act
2006.
The directors, having made enquiries, consider that the company has adequate
financial resources to enable it to continue in operational existence for the
foreseeable future. Accordingly, the directors believe that it is appropriate
to continue to adopt the going concern basis in preparing the company's
accounts.
2 Income
2020 2019
£ 000 £ 000
Income from investments
UK dividends 221 938
Overseas dividends - 173
Dividend from subsidiary 1,066 74
_________ __________
1,287 1,185
Other income 85 58
_________ __________
Total income 1,372 1,243
_________ __________
Total income comprises:
Dividends 1,287 1,185
Other interest 85 58
_________ __________
1,372 1,243
_________ __________
Dividends from investments
Listed investments 221 1,111
Unlisted investments 1,066 74
_________ __________
1,287 1,185
_________ __________
Of the £1,287,000 (2019 - £1,185,000) dividends received, £90,000 (2019 - £
879,000) related to special and other dividends received from investee
companies that were bought after the dividend announcement. There was a
corresponding capital loss of £324,000 (2019 - £1,027,000), on these
investments.
Under IFRS 10 the income analysis is for the parent company only rather than
that of the consolidated group. Thus film revenues of £84,000 (2019 - £106,000)
received by the subsidiary British & American Films Limited and property unit
trust income of £14,000 (2019 - £14,000) received by the subsidiary BritAm
Investments Limited are shown separately in this paragraph.
3 Earnings per ordinary share
The calculation of the basic (after deduction of preference dividend) and
diluted earnings per share is based on the following data:
2020 2019
Revenue Capital Total Revenue Capital Total
return return return return
£ 000 £ 000 £ 000 £ 000 £ 000 £ 000
Earnings:
Basic 558 158 716 564 196 760
Preference
dividend 350 - 350 350 - 350
__________ __________ __________ __________ __________ __________
Diluted 908 158 1,066 914 196 1,110
__________ __________ __________ __________ __________ __________
Basic revenue, capital and total return per ordinary share is based on the net
revenue, capital and total return for the period after tax and after deduction
of dividends in respect of preference shares and on 25 million (2019: 25
million) ordinary shares in issue.
The diluted revenue, capital and total return is based on the net revenue,
capital and total return for the period after tax and on 35 million (2019: 35
million) ordinary and preference shares in issue.
4 Dividends
2020 2019
£ 000 £ 000
Amounts recognised as distributions to equity
holders in the period
Dividends on ordinary shares:
Final dividend for the year ended 31 December 2019
of 0.0p - 1,500
(2018: 6.0p) per share
Interim dividend for the year ended 31 December
2020 of 2.7p 675 675
(2019: 2.7p) per share
__________ __________
675 2,175
__________ __________
Proposed final dividend for the year ended 31
December 2020 of 0.0p (2019: 0.0p) per share - -
__________ __________
Dividends on 3.5% cumulative convertible
preference shares:
Preference dividend for the 6 months ended 31
December 2019 of 0.00p (2018: 1.75p) per share - 175
Preference dividend for the 6 months ended 30 June
2020 of 1.75p (2019: 1.75p) per share 175 175
__________ __________
175 350
__________ __________
Proposed preference dividend for the 6 months
ended 31 December 2020 of 0.00p (2019: 0.00p) per - -
share
__________ __________
We have set out below the total dividend payable in respect of the financial
year, which is the basis on which the retention requirements of Section 1158 of
the Corporation Tax Act 2010 are considered.
Dividends proposed for the period
2020 2019
£ 000 £ 000
Dividends on ordinary shares:
Interim dividend for the year ended 31 December
2020 of 2.7p 675 675
(2019: 2.7p) per share
Proposed final dividend for the year ended 31
December 2020 of 0.0p (2019: 0.0p) per share - -
__________ __________
675 675
__________ __________
Dividends on 3.5% cumulative convertible
preference shares:
Preference dividend for the year ended 31 December
2020 of 1.75p (2019: 1.75p) per share 175 175
Proposed preference dividend for the year ended 31
December 2020 of 0.00p (2019: 0.00p) per share - -
__________ __________
175 175
__________ __________
The non-payment in December 2019 and in December 2020 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 and for the year ended 31 December 2020, has
resulted in arrears of £350,000 on the 3.5% cumulative convertible preference
shares.
1st interim dividend declared for the year ended 31 December 2021 of 2.7 pence
per ordinary share payable on 24 June 2021 to shareholders on the register at
11 June 2021. A preference dividend of 1.75 pence will be paid to preference
shareholders on the same date.
5 Net asset values
Net asset
value per share
2020 2019
£ £
Ordinary shares
Diluted 0.19 0.19
Undiluted 0.19 0.19
Net asset
attributable
2020 2019
£ 000 £ 000
Total net assets 6,720 6,504
Less convertible preference shares at (1,920) (1,858)
fully diluted value
__________ __________
Net assets attributable to ordinary 4,800 4,646
shareholders
__________ __________
The undiluted and diluted net asset values per £1 ordinary share are based on
net assets at the year end and 25 million (undiluted) ordinary and 35 million
(diluted) ordinary and preference shares in issue.
Principal risks and uncertainties
The principal risks facing the company relate to its investment activities and
include market risk (other price risk, interest rate risk and currency risk),
liquidity risk and credit risk. The other principal risks to the company are
loss of investment trust status and operational risk. These will be explained
in more detail in the notes to the 2020 Annual Report and Accounts, but remain
unchanged from those published in the 2019 Annual Report and Accounts.
Related party transactions
The company rents its offices from Romulus Films Limited, and is also charged
for its office overheads.
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.
During the year the company entered into the investment transactions to sell
stock for £nil (2019 - £540,141) to British & American Films Limited and for £
455,000 (2019 - £ nil) to BritAm Investments Limited.
There have been no other related party transactions during the period, which
have materially affected the financial position or performance of the company.
Capital Structure
The company's capital comprises £35,000,000 (2019 - £35,000,000) being
25,000,000 ordinary shares of £1 (2019 - 25,000,000) and 10,000,000 non-voting
convertible preference shares of £1 each (2019 - 10,000,000). The rights
attaching to the shares will be explained in more detail in the notes to the
2020 Annual Report and Accounts, but remain unchanged from those published in
the 2019 Annual Report and Accounts.
Directors' responsibility statement
The directors are responsible for preparing the financial statements in
accordance with applicable law and regulations. The directors confirm that to
the best of their knowledge the financial statements prepared in accordance
with the applicable set of accounting standards, give a true and fair view of
the assets, liabilities, financial position and the (loss)/profit of the
company and that the Chairman's Statement, Managing Director's Report and the
Directors' report include a fair review of the information required by rules
4.1.8R to 4.2.11R of the FSA's Disclosure and Transparency Rules, together with
a description of the principal risks and uncertainties that the company faces.
Annual General Meeting
This year's Annual General Meeting has been convened for Tuesday 29 June 2021
at 12.15pm at Wessex House, 1 Chesham Street, London SW1X 8ND.
END
(END) Dow Jones Newswires
May 27, 2021 06:09 ET (10:09 GMT)
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