British & American Investment Trust : Reporting Dpcument

BRITISH & AMERICAN INVESTMENT TRUST PLC
FINANCIAL HIGHLIGHTS
For the six months ended 30 June 2022
	Unaudited	Unaudited	Audited
	6 months	6 months	Year ended
	to 30 June	to 30 June	31 December
	2022	2021	2021
	£'000	£'000	£'000
Revenue
Return before tax	(193)	1,056	978
	_________	_________	_________
(Loss)/earnings per £1 ordinary shares - basic (note 5)	(0.74)p	3.58p	2.66p
	_________	_________	_________
(Loss)/earnings per £1 ordinary shares - diluted (note 5)	(0.74)p	3.06p	2.90p
	_________	_________	_________
Capital
Total equity	6,131	7,169	6,727
	_________	_________	_________
Revenue reserve (note 9)	(227)	388	(43)
	_________	_________	_________
Capital reserve (note 9)	(28,642)	(28,219)	(28,230)
	_________	_________	_________
Net assets per ordinary share (note 6)
- Basic	£0.18	£0.20	£0.19
	_________	_________	_________
- Diluted	£0.18	£0.20	£0.19
	_________	_________	_________
Diluted net assets per ordinary share at 27 September 2022	£0.24
	_________
Dividends*
Dividends per ordinary share (note 4)	0.0p	3.5p	3.5p
	_________	_________	_________
Dividends per preference share (note 4)	0.0p	3.5p	3.5p
	_________	_________	_________

Basic net assets and earnings per share are calculated using a value of fully diluted net asset value for the preference shares.

*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 2022

Company	Nature of Business	Valuation	Percentage
			£'000	of portfolio
					%
Lineage Cell Therapeutics (USA)*	Biotechnology	1,902	15.46
Geron Corporation (USA)**	Biomedical	1,342	10.91
Dunedin Income Growth	Investment Trust	1,235	10.04
Aberdeen Diversified Income & Growth	Investment Trust	485	3.94
ADVFN	Other financial	63	0.51
		________		________
Braemar Shipping Services	Transport	50	0.41
Relief Therapeutics (Switzerland)	Healthcare	49	0.40
AgeX (USA)	Biotechnology	48	0.39
NRX Pharmaceuticals (USA)	Healthcare	6		0.05
Proteome Sciences	Pharmaceuticals	4		0.03
		________		________
10 Largest investments (excluding subsidiaries)		5,184	42.14
Investment in subsidiaries		7,109	57.78
Other investments (number of holdings: 6)		10	0.08
		________		________
Total investments		12,303	100.00
			________			________

• Total value of investment including held by subsidiary companies - £2,959,000
• Total value of investment including held by subsidiary companies - £4,591,000

Unaudited Interim Report

As at 30 June 2022

Registered number: 433137

Directors	Registered office
David G Seligman (Chairman)	Wessex House
Jonathan C Woolf (Managing Director)	1 Chesham Street
Julia Le Blan (Non-executive and Chairman of the Audit Committee)	London SW1X 8ND
Alex Tamlyn (Non-executive)	Telephone: [phone]
	Website: www.baitgroup.co.uk
CHAIRMAN'S STATEMENT
I report our results for the six months to 30 June 2022.
Revenue

The loss on the revenue account before tax amounted to £0.2 million (30 June 2021: profit £1.1 million), a decrease of 118.0 percent. This decrease was the result of a lower level of income receipts from our subsidiary companies compared to the same 6 month period in 2021.

Gross revenues totalled £0.08 million (30 June 2021: £1.29 million) during the period. In addition, film income of

£47,000 (30 June 2021: £57,000) was received in our subsidiary companies. In accordance with IFRS10, film income is not included within the revenue figures noted above.

A loss of £0.5 million (30 June 2021: £0.3 million gain) was registered on the capital account before capitalised

expenses and foreign exchange gains/losses, comprising a realised loss of £0.2 million (30 June 2021: £0.5 million

loss) and an unrealised loss of £0.3 million (30 June 2021: £0.8 million gain).

Revenue loss per ordinary share was (0.74) pence on a fully diluted basis (30 June 2021: earnings 3.1 pence).

Net Assets and performance

Company net assets were £6.1 million (£6.7 million, at 31 December 2021), a decrease of 8.9 percent. Over the same six month period, the FTSE 100 index decreased by 2.9 percent and the All Share index decreased by 6.3 percent. As no dividends were paid during the period, the total return on net assets remains the same and the total return for the FTSE 100 and All Share indices was an increase of 0.6 percent and a decrease of 2.8 percent, respectively. The net asset value per £1 ordinary share was 17.5 pence on a fully diluted basis.

This underperformance in net assets over the period was the result of a significant fall in the value of one of our large US dollar investments, Lineage Cell Therapeutics Inc, which declined by over 35 percent during the period, a fall which was not fully offset by the increase of 27 percent in value of our other large US dollar investment, Geron Corporation Inc.

Since the period end, the value of our investment in Geron has further increased substantially to register a gain of 48 percent from the beginning of the year, as discussed in more detail in the Managing Director's report below. This movement, when coupled with the strong 20 percent gain in the value of the US dollar over the year to date, has

resulted in our portfolio achieving significant outperformance of 31 percent over the leading UK equity indices since the beginning of the year.

Over the first six months of the year, as the effects of the Covid pandemic diminished, equity markets in the USA and UK reacted primarily to two major influences, the invasion of Ukraine by Russia in late February and a growing expectation that inflation levels were likely to be significantly higher than previously expected, leading to higher levels of interest rates as a result.

After opening relatively flat at the beginning of the year, the indices fell by almost 10 percent after the invasion, only to recover quickly by the end of the first quarter. However, a further drop of around 10 percent occurred at the beginning of the second quarter as the inflationary and disruptive effects of the war, particularly in the context of the unprecedented financial, trade and energy-related sanctions placed on Russia began to take effect. A more pronounced and steady decline in the US equity indices was in fact seen in the second quarter with the US Federal Reserve being the first central bank to indicate and implement a programme of significantly steeper interest rate rises.

Dividends

With the recovery in value of one of our largest investments noted above, we intend to pay an interim dividend of

1. pence per ordinary share for the year to 31st December 2022 on 8th December 2022. A preference dividend of

1. pence per preference share will be paid on the same date.

This dividend payment represents a yield of approximately 7 percent on the ordinary share price averaged over the first six month period of the year.

Recent events

Since I last reported some five months ago, two major and unexpected events have occurred in the UK with the departure of a sitting Prime Minister and the election of his replacement and the sad death this month of Her Majesty Queen Elizabeth II.

These events, if nothing else, have shown the resilience, stability and substance of both the institutions and constitutional underpinnings of our nation and of the British people themselves.

The Board and I join with the rest of the British people, the Commonwealth and indeed many around the world in thanking Her Majesty for her steadfastness, wisdom and the great sense of duty which she brought to her reign of 70 years.

We send our sincere condolences to the new King Charles III and the royal family and wish him well as he embarks on his reign and a new chapter for the British people.

Outlook

The first major war of aggression on the continent of Europe since World War II has continued to rage since the beginning of the year and is expected to do so for some considerable time to come. This, together with the many reactions to it including the imposition of unprecedented sanctions on the aggressor, the cutting off of energy supplies to Europe, and the displacement of people and the re-calibration of trade flows around the World has inevitably resulted in substantial and long term economic and financial disruption globally.

This war has prevented the re-establishment of the patterns of growth and development which had persisted for many years prior to the intervention of the Covid pandemic in 2020 as the pandemic started to eased towards the end

of last year. While businesses generally have been able to recover or adapt to the new realities of working and social interaction post-the pandemic, the outlook for business and economies remains very uncertain as significant levels of inflation and consequentially higher interest rates return after many years of exceptionally low levels. This is quite apart from the uncertainties presented by an ongoing war in which one of the combatants is a major nuclear power and the challenges represented by the ongoing re-alignment of global alliances into two separately operating and antagonistic blocks.

Against this background, the strong and continuing recovery in the value of our major US investment, Geron Corporation, which we believe reflects the increasing proximity of its important clinical trial results due to be published in January next year and the anticipated subsequent approval and commercialisation of its new oncology drug should serve us well to offset the investment uncertainties noted above. This and our other US biopharma investments which we believe hold significant investment promise as they progress steadily towards commercialisation of their ground-breaking and valuable technologies provide our portfolio with a path to growth independent of general market movements.

As at 27 September, company net assets were £8.4 million, an increase of 38.0 percent since the period end and equivalent to 24.1 pence per share on a fully diluted basis. Over the same period, the FTSE 100 index decreased by 2.6 percent, the All Share index decreased by 3.3 percent and the NASDAQ decreased by 1.8 percent.

David Seligman

30 September 2022