British &
American Investment Trust PLC |
Annual Financial
Report
for the year ended 31 December 2015 |
Registered number:
00433137 |
Directors |
Registered
office |
J Anthony V Townsend
(Chairman) |
Wessex House |
Jonathan C Woolf
(Managing Director) |
1 Chesham Street |
Dominic G Dreyfus
(Non-executive) |
London SW1X 8ND |
Ronald G Paterson
(Non-executive) |
Telephone: 020 7201
3100 |
|
Registered in
England |
|
No.433137 |
|
29 April 2016 |
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
2015
|
2015
|
2014
|
|
Revenue
return |
Capital
return |
Total |
Revenue
return |
Capital
return |
Total |
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
Profit/(loss) before tax –
realised |
2,701 |
(1,219) |
1,482 |
2,416 |
(713) |
1,703 |
Profit/(loss) before tax –
unrealised |
– |
3,925 |
3,925 |
– |
(3,226) |
(3,226) |
|
__________ |
__________ |
__________ |
__________ |
__________ |
__________ |
Profit/(loss) before tax –
total |
2,701 |
2,706 |
5,407 |
2,416 |
(3,939) |
(1,523) |
|
__________ |
__________ |
__________ |
__________ |
__________ |
__________ |
Earnings per £1 ordinary share –
basic |
9.51p |
10.83p |
20.34p |
8.48p |
(15.76)p |
(7.28)p |
|
__________ |
__________ |
__________ |
__________ |
__________ |
__________ |
Earnings per £1 ordinary share –
diluted |
7.80p |
7.73p |
15.53p |
7.06p |
(11.25)p |
(4.19)p |
|
__________ |
_________ |
__________ |
__________ |
_________ |
__________ |
Net assets |
|
|
30,211 |
|
|
27,126 |
|
|
|
__________ |
|
|
__________ |
Net assets per ordinary share |
|
|
|
|
|
|
– deducting preference
shares at par |
|
|
81p |
|
|
69p |
|
|
|
__________ |
|
|
__________ |
– diluted |
|
|
86p |
|
|
78p |
|
|
|
__________ |
|
|
__________ |
Diluted net asset value per ordinary share at 25 April 2016 |
|
|
69p |
|
|
|
|
|
|
__________ |
|
|
|
Dividends declared or
proposed for the period |
|
|
|
|
|
|
per ordinary share |
|
|
|
|
|
|
– interim paid |
|
|
2.7p |
|
|
2.7p |
– final proposed |
|
|
5.5p |
|
|
5.3p |
per preference
share |
|
|
3.5p |
|
|
3.5p |
Basic net assets and earnings per share are calculated using a
value of par for the preference shares.
Consequently, when the net asset value attributed to ordinary
shares remains below par the diluted net asset value will show a
higher value than the basic net asset value. |
Chairman’s Statement
I report our results for the year ended 31 December 2015.
Revenue
The return on the revenue account before tax amounted to £2.7
million (2014: £2.4 million), an increase of 12 percent. This
year, and particularly in the second half, external dividends
received by the parent company were considerably higher than those
received via group subsidiaries, accounting for the reversal to the
decline in revenues reported at the interim stage.
Gross revenues totalled £3.2 million (2014: £2.9 million).
Film income of £88,000 (2014: £165,000) and property unit
trust income of £17,000 (2014: £24,000) was received in our
subsidiary companies. In accordance with FRS10, these income
streams are not included within the revenue figures noted
above.
The total return before tax amounted to a gain of £5.4 million
(2014: £1.5 million loss), which comprised net revenue of
£2.7 million, a realised loss of £0.9 million and an unrealised
gain of £3.9 million. The revenue return per ordinary share was
9.5p (2014: 8.5p) on an undiluted basis and 7.8p (2014:
7.1p) on a diluted basis.
Net Assets and Performance
Net assets at the year end were £30.2 million (2014: £27.1
million), an increase of 11.4 percent. This compares to decreases
in the FTSE 100 and All Share indices of 4.9 percent and 2.5
percent, respectively, over the period. On a total return basis,
after adding back dividends paid during the year, our net assets
increased by 20.0 percent compared to a 1.3 percent decrease and a
1.0 percent increase in the FTSE 100 and All Share indices,
respectively. This strong outperformance for the year built on the
gains already recorded for the first half and was due to a
continued recovery in the value of our largest US investment, Geron
Corporation, and a strengthening in the value of the US dollar by 5
percent. The reasons for the recovery in the value of our
investment in Geron were explained in detail in my last full year
and interim statements and followed an important partnership
agreement entered into with Johnson & Johnson at the end of
2014.
This strong result for the full year allowed us to maintain the
outperformance reported at the interim stage against our investment
trust sector on price and total return over all periods up to 10
years.
More generally in 2015, the UK and leading equity markets had
traded well ahead in the first half by as much as 8 percent but by
June had reversed to being flat as the Greek sovereign debt crisis
in the Eurozone came to a head and then in August markets suffered
an abrupt and significant decline of over 10 percent. This sudden
retreat was seen in global markets throughout as fears surfaced
about significant economic weakness in China indicated by weak oil and commodity
prices as well as the expectation of the first US dollar interest
rate rise for almost 10 years in September. In the event the
rate increase did not occur as anticipated because of the weakness
in global markets but was finally implemented in December.
Following the disruption in August, equity markets stabilised in
the final quarter but never regained the highs seen in the first
half and finished the year flat or slightly down.
The net asset value per ordinary share increased to 86p
(2014: 78p) on a diluted basis. Deducting prior charges at
par, the net asset value per ordinary share increased to 81p (2014:
69p).
Dividend
We are pleased to recommend an increased final dividend of 5.5p
per ordinary share, which together with the interim dividend makes
a total payment for the year of 8.2p (2014: 8.0p) per
ordinary share. This represents an increase of 2.5 percent over the
previous year's total dividend and a yield of 8.6 percent based on
the share price of 95p at the end of the year. The final dividend
will be payable on 23 June 2016 to
shareholders on the register at 20 May
2016. A dividend of 1.75p will be paid to preference
shareholders resulting in a total payment for the year of 3.5p per
share.
Outlook
Global equity markets opened the year in significant retreat,
falling by over 10 percent in two months. This was again the result
of growth fears in China in the
context of extremely low oil prices which had fallen by over 50
percent in less than a year to 12 year lows, exacerbating flows out
of equity markets as Chinese and oil producing sovereign investors
disinvested, as well as the aftermath of the albeit small and
measured rise in US $ interest rates in December. Investors
sensed a significant change in sentiment towards global growth
prospects and developing economy markets suffered particularly with
risk appetite falling away. By March, however, markets had
stabilised and regained their opening levels following a modest
recovery in the level of oil prices. Nevertheless, there
remains much nervousness and particularly in the UK in the run up
to the referendum in June on continued membership of the European
Union. With opinion polls predicting a close result and much
financial well-being hanging on the outcome, a high level of
volatility in investment and currency markets as well as disruption
to economic investment are expected in the short term until the
votes are cast. Given the high degree of uncertainty
surrounding the EU referendum, we will await the outcome before
taking any major new investment decisions.
As at 25 April 2016, our net
assets had decreased to £24.0 million, a decrease of 20.5 percent
since the beginning of the calendar year. This decrease reflects a
drop in the value of our US investments. This is equivalent to
56 pence per share (prior charges
deducted at par) and 69 pence per
share on a diluted basis. Over the same period the FTSE 100
increased 0.3 percent and the All Share Index decreased 0.2
percent.
Anthony Townsend
29 April 2016
Managing Director's report
In 2015, UK and US equity markets followed a familiar trend of
recent years by rising for most of the first half only to fall back
by June to end the period flat. The UK market had risen by 7
percent by May only to lose the gain completely by the end of
June. As in previous years, markets were generally supported
by the huge volumes of liquidity still being provided by all the
developed economy central banks but with one eye always on the
prospect of the first rise in interest rates in the USA. This
had had been expected for some time, given the steady but
relatively modest recovery in economic growth in the USA since 2010 and indeed in the UK. But
the decision to increase was postponed on many occasions over the
last two years in both countries until finally in December the
Federal Reserve increased rates by 0.25 percent to 0.5 percent.
As noted above, in August 2015
global equity markets experienced a sharp reversal by over 10
percent as fears over continued levels of growth in China forced a reassessment of global growth
expectations. The long awaited increase in US interest rates
also weighed on the market at this time, with September being
generally considered the likely month for the rate increase to be
announced.
The fears relating to China
developed out of a sharp drop in the crude oil price which has
lately become highly correlated to equity market movements. Oil
prices had fallen from the previously sustained levels of around
US$130 per barrel prior to 2015 to
US$70 per barrel in the first half of
2015 and then fell lower to US$50 in
August, a fall of over 60 percent in less than a year. Commodities
prices also fell and were seen as a further indicator of China’s
slowing economic activity. It was also judged to be
symptomatic of the economic strategy being promoted by the Chinese
authorities away from manufacturing to service and consumer based
activities. This change was seen as a potential drag on growth for
other economies over time as global trade and exports would be
likely to be adversely affected.
With the postponement again in September of any interest rate
rise in the USA, the equity
markets stabilised in the final quarter but ended the year in
negative territory, with the US and UK indices down 2 percent and 5
percent, respectively.
Our portfolio significantly outperformed the benchmark at both
the half year and full year, as reported above. This was due to a
recovery in the share price of our principal US investment Geron
Corporation which rose by 49 percent. This increase was also
assisted by a strengthening in the US dollar by 5 percent over the
year. Geron’s recovery followed the completion of a landmark
development and sales agreement with Johnson & Johnson
previously reported on for its proprietary cancer drug platform,
Imetelstat, at the end of 2014 and reflected the market’s gradual
appreciation of the prospects for the drug as clinical trials
progressed and results began to be published.
As noted above, our performance in 2015 showed outperformance
against our AIC sector for all periods up to 10 years in terms of
price and total return and, when taking our dividends into account,
has thus given shareholders positive and superior returns over
these periods.
Outlook
Since the beginning of 2016, equity market volatility has
increased substantially. The correlation of markets to the oil
price has continued and with oil prices falling to below
US$30 per barrel in January, equity
markets fell sharply in January and February by over 10 percent.
While some stability returned in March allowing markets to regain
their year opening levels, further falls have been seen in
April.
This instability is expected to continue, with the vast number
of significant political and related economic events currently in
play. These include unpredictable and so far unconventional US
presidential elections, continued instability in the Middle East with allied terrorist events in
Europe, the refugee crisis in
Europe, the unresolved sovereign
credit situation in Greece, the EU
referendum in the UK and a generally perceived deterioration in
prospects for world growth.
Against this very uncertain background in the short to medium
term, we will await further developments before taking any major
investment decisions.
Jonathan Woolf
29 April 2016
Income statement
For the year ended 31 December
2015
|
2015
|
2014
|
|
Revenue
return |
Capital
return |
Total |
Revenue
return |
Capital
return |
Total |
|
£ 000 |
£ 000 |
£ 000 |
£ 000 |
£ 000 |
£ 000 |
Investment income
(note 2) |
3,206 |
- |
3,206 |
2,871 |
- |
2,871 |
Holding gains/(losses)
on investments at fair value through profit or loss |
- |
3,925 |
3,925 |
- |
(3,226) |
(3,226) |
Losses on disposal of
investments at fair value through profit or loss |
- |
(927) |
(927) |
- |
(313) |
(313) |
Foreign exchange
losses |
(53) |
(47) |
(100) |
- |
(147) |
(147) |
Expenses |
(417) |
(231) |
(648) |
(398) |
(225) |
(623) |
|
________ |
________ |
________ |
________ |
________ |
________ |
Profit/(loss) before finance
costs and tax |
2,736 |
2,720 |
5,456 |
2,473 |
(3,911) |
(1,438) |
Finance costs |
(35) |
(14) |
(49) |
(57) |
(28) |
(85) |
|
________ |
________ |
________ |
________ |
________ |
________ |
Profit/(loss) before tax |
2,701 |
2,706 |
5,407 |
2,416 |
(3,939) |
(1,523) |
Tax |
28 |
- |
28 |
54 |
- |
54 |
|
________ |
________ |
________ |
________ |
________ |
________ |
Profit/(loss) for the
period |
2,729 |
2,706 |
5,435 |
2,470 |
(3,939) |
(1,469) |
|
________ |
________ |
________ |
________ |
________ |
________ |
Earnings per share |
|
|
|
|
|
|
Basic – ordinary shares |
9.51p |
10.83p |
20.34p |
8.48p |
(15.76)p |
(7.28)p |
|
________ |
________ |
________ |
________ |
________ |
________ |
Diluted – ordinary shares |
7.80p |
7.73p |
15.53p |
7.06p |
(11.25)p |
(4.19)p |
|
________ |
________ |
________ |
________ |
________ |
________ |
The company does not have any income or expense that is not
included in the profit/(loss) for the period. 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 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.
Statement of changes in equity
For the year ended 31 December
2015
|
|
|
Share
capital |
Capital
reserve
|
Retained
earnings |
Total
|
|
|
|
£ 000 |
£ 000 |
£ 000 |
£ 000 |
Balance at 31 December 2013 |
|
|
35,000 |
(6,355) |
2,250 |
30,895 |
Changes in equity
for 2014 |
|
|
|
|
|
|
(Loss)/profit for the
period |
|
|
- |
(3,939) |
2,470 |
(1,469) |
Ordinary dividend paid
(note 4) |
|
|
- |
- |
(1,950) |
(1,950) |
Preference dividend paid (note
4) |
|
|
- |
- |
(350) |
(350) |
|
|
|
________ |
________ |
________ |
________ |
Balance at 31
December 2014 |
|
|
35,000 |
(10,294) |
2,420 |
27,126 |
Changes in equity for
2015 |
|
|
|
|
|
|
Profit for the period |
|
|
- |
2,706 |
2,729 |
5,435 |
Ordinary dividend paid (note 4) |
|
|
- |
- |
(2,000) |
(2,000) |
Preference dividend paid (note
4) |
|
|
- |
- |
(350) |
(350) |
|
|
|
________ |
________ |
________ |
________ |
Balance at 31 December
2015 |
|
|
35,000 |
(7,588) |
2,799 |
30,211 |
|
|
|
________ |
________ |
________ |
________ |
Registered number: 00433137
Balance Sheet
For the year ended 31 December
2015
|
|
2015 |
2014 |
|
|
|
|
|
|
£ 000 |
£ 000 |
Non-current assets |
|
|
|
Investments - fair value through
profit or loss |
|
37,497 |
27,334 |
Subsidiaries - fair value through
profit or loss |
|
6,789 |
6,499 |
|
|
__________ |
__________ |
Current assets |
|
44,286 |
33,833 |
Receivables |
|
1,587 |
1,406 |
Derivatives - fair value through
profit or loss |
|
- |
87 |
Cash and cash
equivalents |
|
344 |
250 |
|
|
__________ |
__________ |
|
|
1,931 |
1,743 |
|
|
__________ |
__________ |
Total assets |
|
46,217 |
35,576 |
|
|
__________ |
__________ |
Current liabilities |
|
|
|
Trade and other payables |
|
9,124 |
1,414 |
Bank loan |
|
2,339 |
2,743 |
|
|
__________ |
__________ |
|
|
(11,463) |
(4,157) |
|
|
__________ |
__________ |
|
|
|
|
Total assets less current
liabilities |
|
34,754 |
31,419 |
|
|
__________ |
__________ |
|
|
|
|
Non - current
liabilities |
|
(4,543) |
(4,293) |
|
|
|
|
Net assets |
|
30,211 |
27,126 |
|
|
__________ |
__________ |
Equity attributable to equity
holders |
|
|
|
Ordinary share capital |
|
25,000 |
25,000 |
Convertible preference share
capital |
|
10,000 |
10,000 |
Capital reserve |
|
(7,588) |
(10,294) |
Retained revenue earnings |
|
2,799 |
2,420 |
|
|
__________ |
__________ |
Total equity |
|
30,211 |
27,126 |
|
|
__________ |
__________ |
Approved: 29 April 2016
Cash flow statement
For the year ended 31 December
2015
|
|
|
Year
ended 2015 |
Year
ended 2014 |
|
|
|
£ 000 |
£ 000 |
CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
|
|
Profit/(loss) before tax |
|
|
5,407 |
(1,523) |
Adjustments for: |
|
|
|
|
(Profits)/losses on investments |
|
|
(2,998) |
3,539 |
Scrip dividends |
|
|
(397) |
(25) |
Proceeds on disposal of investments
at fair value through profit and loss |
|
|
14,596 |
5,866 |
Purchases of investments at fair
value through profit and loss |
|
|
(13,349) |
(4,170) |
Interest paid |
|
|
49 |
85 |
|
|
|
__________ |
__________ |
Operating cash flows before
movements in working capital |
|
|
3,308 |
3,772 |
Increase in receivables |
|
|
(181) |
(784) |
Decrease in payables |
|
|
(258) |
(2,277) |
|
|
|
__________ |
__________ |
NET CASH FROM OPERATING ACTIVITIES
BEFORE INTEREST |
|
|
2,869 |
711 |
Interest paid |
|
|
(49) |
(85) |
|
|
|
__________ |
__________ |
NET CASH FROM OPERATING ACTIVITIES
AFTER INTEREST BEFORE TAXATION |
|
|
2,820 |
626 |
Taxation |
|
|
28 |
54 |
|
|
|
__________ |
__________ |
NET CASH FROM OPERATING
ACTIVITIES |
|
|
2,848 |
680 |
CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
|
|
Dividends paid on ordinary
shares |
|
|
(2,000) |
(1,950) |
Dividends paid on preference
shares |
|
|
(350) |
- |
Bank loan |
|
|
(404) |
1,295 |
|
|
|
__________ |
__________ |
NET CASH USED IN FINANCING
ACTIVITIES |
|
|
(2,754) |
(655) |
|
|
|
__________ |
__________ |
NET INCREASE IN CASH AND CASH
EQUIVALENTS |
|
|
94 |
25 |
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR |
|
|
250 |
225 |
|
|
|
__________ |
__________ |
CASH AND CASH EQUIVALENTS AT END OF
YEAR |
|
|
344 |
250 |
|
|
|
__________ |
__________ |
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 2015. 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 2015 is an extract from the statutory accounts to
that date. Statutory company accounts for 2014, which were prepared
under IFRS as adopted by the EU, have been delivered to the
registrar of companies and company statutory accounts for 2015,
prepared under IFRS as adopted by the EU, will be delivered in due
course.
The auditors have reported on the 31
December 2015 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
|
|
|
2015 |
2014 |
|
|
|
£ 000 |
£ 000 |
Income from
investments |
|
|
|
|
|
|
|
|
|
UK dividends |
|
|
1,725 |
528 |
Overseas dividends |
|
|
348 |
42 |
Scrip and in specie
dividends |
|
|
397 |
25 |
Dividend from
subsidiary |
|
|
580 |
2,151 |
Interest on fixed income
securities |
|
|
134 |
103 |
|
|
|
__________ |
__________ |
|
|
|
3,184 |
2,849 |
|
|
|
|
|
__________ |
__________ |
|
|
|
|
|
Other income |
|
|
22 |
22 |
|
|
|
|
|
__________ |
__________ |
Total income |
|
|
3,206 |
2,871 |
|
|
|
|
|
__________ |
__________ |
|
|
|
|
|
Total income
comprises: |
|
|
|
|
|
|
|
|
|
Dividends |
|
|
3,050 |
2,746 |
Interest |
|
|
134 |
103 |
Other interest |
|
|
22 |
22 |
|
|
|
__________ |
__________ |
|
|
|
3,206 |
2,871 |
|
|
|
|
|
__________ |
__________ |
Dividends from
investments |
|
|
|
|
|
|
|
|
|
Listed investments |
|
|
2,470 |
595 |
Unlisted
investments |
|
|
580 |
2,151 |
|
|
|
__________ |
__________ |
|
|
|
3,050 |
2,746 |
|
|
|
|
|
__________ |
__________ |
Of the £3,050,000 (2014 – £2,746,000) dividends received in the
company accounts, £1,586,000 (2014 – £nil) related to special and
other dividends received from investee companies that were bought
after the dividend announcement. There was a corresponding capital
loss of £869,000 (2014 – £nil), 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
£88,000 (2014 – £165,000) received by the subsidiary British and
American Films Limited and property unit trust income of £17,000
(2014 – £24,000) 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:
|
2015
|
2014
|
|
Revenue
return
|
Capital
return |
Total |
Revenue
return
|
Capital
return |
Total |
|
£ 000 |
£ 000 |
£ 000 |
£ 000 |
£ 000 |
£ 000 |
Earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
2,379 |
2,706 |
5,085 |
2,120 |
(3,939) |
(1,819) |
Preference dividend |
350 |
- |
350 |
350 |
- |
350 |
|
__________ |
__________ |
__________ |
__________ |
__________ |
__________ |
Diluted |
2,729 |
2,706 |
5,435 |
2,470 |
(3,939) |
(1,469) |
|
__________ |
__________ |
__________ |
__________ |
__________ |
__________ |
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 (2014: 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 (2014: 35 million) ordinary and preference shares in
issue.
4 Dividends
|
2015 |
2014 |
|
£ 000 |
£ 000 |
Amounts recognised as distributions
to equity holders in the period: |
|
|
Dividends on ordinary shares: |
|
|
Final dividend for the year ended 31
December 2014 of 5.3p (2013:5.1) per share |
1,325 |
1,275 |
Interim dividend for the year ended
31 December 2015 of 2.7p
(2014:2.7p) per share |
675 |
675 |
|
|
|
|
__________ |
__________ |
|
2,000 |
1,950 |
|
__________ |
__________ |
Proposed final dividend for the year
ended 31 December 2015 of 5.5p (2014:5.3p) per share |
1,375 |
1,325 |
|
__________ |
__________ |
|
|
|
Dividends on 3.5% cumulative
convertible preference shares: |
|
|
Preference dividend for the 6 months
ended 31 December 2014 of 1.75p (2013:1.75p) per share |
175 |
175 |
Preference dividend for the 6 months
ended 30 June 2015 of 1.75p (2014:1.75p) per share |
175 |
175 |
|
__________ |
__________ |
|
350 |
350 |
|
__________ |
__________ |
Proposed preference dividend for the
6 months ended 31 December 2015 of 1.75p (2014:1.75p) per
share |
175 |
175 |
|
__________ |
__________ |
|
|
|
The preference dividend for the 6 months ended 30 June 2014 was paid as dividend in specie.
The proposed final dividend is subject to approval by
shareholders at the Annual General Meeting and has not been
included as a liability in these financial statements in accordance
with IFRS.
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 |
|
|
|
2015 |
2014 |
|
£ 000 |
£ 000 |
Dividends on ordinary shares: |
|
|
Interim dividend for the year ended
31 December 2015 of 2.7p (2014:2.7p) per share |
675 |
675 |
|
|
|
Proposed final dividend for the year
ended 31 December 2015 of 5.5p (2014:5.3p) per share |
1,375 |
1,325 |
|
__________ |
__________ |
|
2,050 |
2,000 |
|
__________ |
__________ |
Dividends on 3.5% cumulative
convertible preference shares: |
|
|
Preference dividend for the year
ended 31 December 2015 of 1.75p (2014:1.75p) per share |
175 |
175 |
Proposed preference dividend for the
year ended 31 December 2015 of 1.75p (2014:1.75p) per share |
175 |
175 |
|
__________ |
__________ |
|
350 |
350 |
|
__________ |
__________ |
5 Net asset values
|
|
|
Net
asset
value per share |
|
|
Net
assets
attributable |
|
|
2015 |
2014 |
|
2015 |
2014 |
|
|
£ |
£ |
|
£ 000 |
£ 000 |
Ordinary shares |
|
|
|
|
|
|
Undiluted |
|
0.81 |
0.69 |
|
20,211 |
17,126 |
Diluted |
|
0.86 |
0.78 |
|
30,211 |
27,126 |
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.
The undiluted net asset value per convertible £1 preference
share is the par value of £1. The diluted net asset value per
ordinary share assumes the conversion of the preference shares to
ordinary shares.
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 2015 Annual Report and Accounts, but remain unchanged
from those published in the 2014 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, are paid by Remus Films Limited
and Romulus Films Limited and are recharged to the company.
During the year the company entered into an investment
transaction to sell stock for US dollars
98,498 to British and American Films Limited. During the
year the company entered into an investment transaction to buy
stock from Second BritAm Investments Limited for £2,407.
During the year the company entered into a number of investment
transactions with Geminion Investments Limited. The purpose
of these transactions, which were all conducted through a London
Stock Exchange broker, was for the company to purchase cum dividend
stocks and sell these stocks ex dividend so as to capture the
associated dividends as disclosed in Note 2 of the financial
statements.
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 (2014 – £35,000,000)
being 25,000,000 ordinary shares of £1 (2014 – 25,000,000) and
10,000,000 non-voting convertible preference shares of £1 each
(2014 – 10,000,000). The rights attaching to the shares will be
explained in more detail in the notes to the 2015 Annual Report and
Accounts, but remain unchanged from those published in the 2014
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 profit/(loss) 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 Friday
17 June 2016 at 12.15pm at Wessex House, 1 Chesham Street,
London SW1X 8ND.