REG-British & American Investment Trust Plc: Annual Financial Report
Wed 16:30
Annual Financial Report
British & American Investment Trust PLC
Annual Financial Report for the year ended 31 December 2024
Registered number: 00433137
Directors Registered office
David G Seligman (Chairman) Wessex House
Jonathan C Woolf (Managing Director) 1 Chesham Street
Alex Tamlyn (Non-executive) Telephone: 020 7201 3100
Julia Le Blan (Non-executive and Chair of the Audit Committee) Registered in England
No.00433137
30 April 2025
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 2024
2024 2023
Revenue Capital Total Revenue Capital Total
return return return return
£000 £000 £000 £000 £000 £000
Profit/(loss) before tax – realised 438 (690) (252) 797 (585) 212
Profit/(loss) before tax – unrealised – 2,270 2,270 – (2,196) (2,196)
__________ __________ __________ __________ __________ __________
Profit/(loss) before tax – total 438 1,580 2,018 797 (2,781) (1,984)
__________ __________ __________ __________ __________ __________
Earnings per £1 ordinary share – basic* 0.49p 6.32p 6.81p 1.86p (11.12)p (9.26)p
__________ __________ __________ __________ __________ __________
Earnings per £1 ordinary share – diluted* 0.49p 4.51p 5.87p 1.86p (11.12)p (9.26)p
__________ __________ __________ __________ __________ __________
Net assets 5,953 4,512
__________ __________
Net assets per ordinary share
– deducting preference shares 17p 13p
at fully diluted net asset value**
__________ __________
– diluted 17p 13p
__________ __________
Diluted net asset value per ordinary share at 25 April 2025 3p
__________
Dividends declared or proposed for the period:
per ordinary share
– interim paid 1.75p 1.75p
– final proposed 0.0p 0.0p
per preference share 1.75p 1.75p
*Calculated in accordance with International Accounting Standard 33
‘Earnings per Share’. The cumulative convertible non-redeemable preference
shares are anti-dilutive relating to the calculation of diluted EPS on the
revenue return (Note 3).
**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 2024.
Revenue
The return on the revenue account before tax amounted to £0.4 million (2023:
£0.8 million), a lower level than in the previous year due to a lower level
of dividends received from our subsidiary company. The bulk of this revenue
was accounted for by dividends received from our subsidiary company arising
from gains and income related to our US investments.
Gross revenues totalled £0.9 million (2023: £1.3 million). In addition, film
income of £112,000 (2023: £74,000) was received in our subsidiary company.
In accordance with IFRS10, this income stream is not included within the
revenue figures noted above because consolidated financial statements are not
prepared.
The total return before tax, comprising revenue and capital return, amounted
to a profit of £2.0 million (2023: £2.0 million loss), representing net
revenue of £0.4 million, a realised loss of £0.7 million and an unrealised
gain of £2.3 million. The revenue return per ordinary share was 0.5p (2023:
1.9p) on an undiluted basis.
Net Assets and Performance
Net assets at the year end were £6.0 million (2023: £4.5 million), an
increase of 31.9 percent after payment of £0.6 million in dividends to
shareholders during the year. This compares to an increase in the FTSE 100
index of 5.7 percent and to an increase in the UK All Share index of 5.6
percent over the period. On a total return basis, after adding back dividends
paid during the year, our net assets increased by 45.5 percent compared to
increases of 9.7 percent and 9.5 percent in the FTSE 100 and UK All Share
indices, respectively.
This substantial outperformance for the year as a whole more than reversed the
underperformance of the previous year despite falling from the exceptional
outperformance of over 100 percent registered at the half year. These results
were due almost entirely to the significant recovery of 70 percent in the
value of our largest investment, Geron Corporation, over the year as a
whole. As reported at the interim stage, this reflected the long-awaited
achievement by Geron of clearance by the US FDA of its haematological cancer
drug, Rytelo, its first such approval, on 7th June last year. Following which
Geron immediately commenced the marketing in the USA generating sales in line
with expectations in the third and fourth quarters of the year. This
represents a significant milestone in our long history of investment in this
company which has proved to be a long and often difficult road given the
elevated levels of volatility experienced in both the individual stock price
and biopharma market as a whole. A more detailed description of the
performance of Geron is given in the Managing Director's report below.
Equity markets in the UK and USA performed firmly in 2024, as inflationary
pressures subsided in response to central bank interest rate policies which
had kept rates higher for longer than had been anticipated, particularly in
the USA. Inflation had proved to be more stubborn than expected in the USA
and this was in part due to the effects of the Biden administration’s albeit
very successful policy of stimulating growth and activity in infrastructure
and environmental investment. These higher levels of corporate activity also
resulted in the steady increase in the value of US equities over the year,
with the indices rising by 20 percent and surpassing their all time highs
throughout the year as they rose. In the UK, the equity market showed a
similar performance in the first half, rising by 10 percent, as growth
returned to the economy but remained flat thereafter. This followed the change
in government in July and its policy of talking down the UK’s economic
prospects to prepare the ground for a hard-hitting budget in the autumn. This
had the unfortunate effect of killing business and consumer confidence which
by the fourth quarter had translated into monthly declines in GDP. In my
interim statement, I described at length the likely damaging effects of the
labour government’s economic approach and policies and I will not repeat
these here. However, the introduction a record-breaking tax and spend budget
and other legislation since then which placed significant extra tax and
operational burdens on the corporate sector has only added to my previous
comments about the government’s much vaunted but misdirected promises and
policies to achieve economic growth. Unfortunately the inevitable outcome of
these policies is already beginning to be seen in the reversal of growth and
record levels of taxation, government spending and borrowing. A further blow
to UK and indeed world-wide growth prospects has occurred in the first quarter
of 2025 with the introduction of Trump’s international trade tariffs as more
fully described in recent events below.
Dividend
In 2024, dividends of 1.75 pence per ordinary share and 1.75 pence per
preference share were paid as an interim payment during the year. This was the
same level of dividend for ordinary and preference shareholders as in the
previous year and represented a yield of approximately 6 percent on the
ordinary share price averaged over a period of 12 months.
It is our intention to pay an interim dividend this year of no less amount
contingent on the profitable sales of investments during the year. The
position regarding these investments is set out in more detail in the Managing
Director’s report below.
Recent events and outlook
As explained in considerably more detail in the Managing director’s report
below, 2025 has to date brought a totally unexpected reversal in the advances
the portfolio experienced in 2024 due to an unexpected and significant fall in
the share price of Geron in the last two months which has negatively impacted
our portfolio value. We believe this reversal to be temporary and that the
portfolio will regain its value of the previous year for the reasons set out
in that report.
The perceived economic and business uncertainties going forward in the UK have
been discussed at length above and in our interim report. Since when,
however, a major new source of uncertainty has arisen with the election last
November of President Trump in the USA on the promise of a radical programme
of change and indeed disruption across almost all areas of domestic political,
economic, social and financial policy as well as globally in terms of trade,
defence and international relations.
The initial market reaction to his promises to reduce the costs of living and
inflation, cut taxes and promote business was positive and the equity market
and US dollar strengthened further in the last two months of 2024. However,
this reaction soon dissipated after the new administration took office in mid
January.
It had been expected that some of Trump’s more extreme plans - for example
to slash the costs of government administration, abolish entire government
departments and introduce penal international trade tariffs on goods - were
intended more as a negotiating tactic rather than firm strategy, given
Trump’s tendency to use extreme policy announcements as a crude lever and
then change course abruptly to achieve quick commercial gains. However, this
has not been the case and if anything has been doubled down upon as seen by
the mass and indiscriminate layoffs of government employees, the nonchalant
shedding of age-old alliances and earlier this month the imposition of a far
harsher than expected regime of international trade tariffs on goods imported
from all other countries.
The accumulation of all these disruptive and damaging policies, many of which
upend long-established economic, defence and trade arrangements which have
underpinned global prosperity and security as long as most people can
remember, has resulted in extreme levels of uncertainty since the beginning of
the year causing significant falls or re-alignments in all markets, be they
financial, investment, currency, commodity, employment or trade, whether in
the USA or worldwide.
It is too early to say how these unprecedented policy changes in the USA will
play out over time, save to say that in the short to medium term increases in
inflation, slower reductions in interest rates and lower levels of economic
growth and therefore investment markets can be expected. For these reasons
and the continuing high levels of uncertainty, the reaction of markets both in
the US and internationally has been extremely negative with very high levels
of volatility. US equity markets fell by up to 20 percent at one stage and
the US dollar has retreated by almost 10 percent from recent highs. Economic
indicators for consumer sentiment, business activity, employment and growth in
the USA have fallen to their pandemic low levels and these can expected to be
translated into hard data within months as actual out-turns confirm these
predictions.
Our investment policy has for some time relied on the capture of value from
our major investments in US biotechnology and this remains the case.
However, as reported at the interim stage, it has also been our aim to rotate
some of our investments into other asset classes as conditions and performance
warrant and we have recently started to initiate this change. The recent
turmoil in equity markets has provided some early justification for this, but
we still await the achievement of target returns from our US biotechnology
investments to follow through with this on a sustained basis. Our largest
investment, Geron Corporation, had an excellent year in 2024, finally
completing its aim of obtaining FDA approval for its oncology drug in the USA
and swiftly commencing sales which in their first two quarters met
expectations. Having now successfully completed its transformation from a
clinical development company to a product sales company in an important area
of significant unmet medical need, we fully expect the substantial increase in
the company’s value seen in 2024 to continue and accelerate once the
unfortunate and unexpected price setbacks of the last few weeks referred to
above have been overcome and the current turmoil in financial markets has been
eliminated.
As at 25 April 2025, our net assets had decreased to £1.0 million, a decrease
of 83.6 percent since the beginning of the calendar year. This is equivalent
to 3.0 pence per share (prior charges deducted at fully diluted value) and 3.0
pence per share on a diluted basis. Over the same period the FTSE 100
increased 3.0 percent and the All Share Index increased 1.8 percent.
David Seligman
30 April 2025
Managing Director's report
2024
As noted in the Chairman’s statement above, our portfolio outperformed
substantially in 2024 as a result of increases in the value of our principal
investment, US biopharma company Geron Corporation. After many years of
investment in this company as it pursued its long and complicated path through
multiple stages of clinical development in the USA, the company finally
achieved its objective in 2024 of transitioning from a clinical drug
development company to a commercial income generating biopharma company,
having gained official FDA marketing approval in the USA in June for its
haematological oncology drug, Rytelo.
Geron’s share price rose to a 6 year high in June, representing an all time
high in terms of market capitalisation of US$ 3 billion. Assisted also by
strength in US equity markets and relative firmness of the US dollar, our
portfolio outperformed the comparative indices by 35 percent over the last
year on a total return basis and by 25 percent over 5 years. It also
similarly outperformed the relevant AIC investment trust sector indices for
these years on the same basis.
2025
2025 has to date brought a totally unexpected reversal in the advances the
portfolio experienced in 2024 due to an unexpected and significant fall in the
share price of Geron in the last two months. We believe this reversal to be
temporary and that the portfolio will regain its value of the previous year
for the reasons set out below.
Geron Corporation
On 26th February 2025, Geron announced its 4th quarter 2024 results describing
2024 as “a terrific year”. The major milestones which the company achieved
in 2024 were listed: obtaining FDA advisory committee clearance in March,
official FDA marketing approval in June, the commencement of sales in July,
the generation of increasing initial sales income in the second half of 2024
in line with projections and the completion of a US$375 million non-dilutive
financing in November.
Based on this excellent report, one could have expected further and
significant advances in Geron’s value. However, since then inexplicably
and very frustratingly the exact opposite has occurred.
Following a botched presentation by the CEO of these results the same day, a
major sell-off occurred in the company’s share price. This followed
remarks by the CEO to say that the company’s sales had been flat over the
Thanksgiving/Christmas period, which precipitated a fall of over 30 percent in
the share price by the end of the trading day. This was despite confirmation
in the Q&A after the presentation that the first year net revenue target
remained unchanged.
A statement of this nature by the CEO, without including the obvious caveat
that it might be linked to a reduced take-up of a new drug over the holiday
period given the many administrative and monitoring requirements connected
with new drug commencement and the obtaining of insurance cover (a fact
belatedly acknowledged in the subsequent Q&A session as being not un-common
for companies marketing new drugs) was always going to be a hostage to
fortune, and particularly given Geron’s long history as a target of short
selling and other negative market practices. And so it proved, with the
always ready short funds taking advantage of the opportunity to sell the stock
down aggressively and in high volume. And within 10 days of his presentation,
Geron’s long-time President and CEO had left the company.
This decline in price took the stock price down to levels 75 percent below the
high reached last June when it had received marketing approval and to
valuations of 6 years ago when the Phase 3 trials had not even commenced. As
will be seen from the analysis below, Geron stock should now be trading at
multiples of the current price based on standard market metrics and so it can
only be surmised that this recent and precipitous decline in price could very
well be attributable to the continued and indeed enhanced effect of the
untoward actions and market forces which have for so long time obscured the
true and fair market valuation of the company’s operational circumstances
and business potential.
That this drop was unjustified can be seen in the context of how biotech
company valuations typically progress after receiving new drug marketing
approvals and commencing sales. In the initial period following the
introduction to the market of an important new and ground-breaking drug
providing significant unmet medical need, such as Geron’s Rytelo, biotech
company sales will generally increase steadily and indeed exponentially as
patients start to take up the new drug in response to accelerating sales
efforts and word of mouth from doctors and patients about the effectiveness of
the drug. This was indeed the pattern starting to be seen in the first six
months of Geron’s commercial sales which commenced last July.
Geron is currently trading on a multiple of less than 3 times management’s
expected first year sales estimates whereas generally one would expect a
company marketing a new drug to be trading on around 10 times first year sales
(in anticipation of standard industry multiples of approximately 6 times sales
for a successful drug once sales have grown to reach stable levels of market
penetration). And this takes no account of potential future sales from
Rytelo’s second indication, Myelofibrosis (MF), which is nearing completion
of Phase 3 trials and which has a larger addressable market than MDS, its
already approved indication, or indeed prospective European sales following
Rytelo’s recent approval in Europe. Consequently, the market price of
Geron is currently trading up to three times below what one would normally
expect at this stage.
If one also takes into account the fact that Geron holds cash balances of US$
500 million, representing some 60 percent of its current market value, then on
a net of cash basis, the current share price is equivalent to 1.5 times sales
based on flat first year sales or just 1 times sales based on the company's
expected sales forecast. And at a normalised margin of say 50 percent, this
would represent an effective current year P/E multiple of 3 times, to say
nothing of a prospective the P/E multiple. Given that the US pharma industry
trades on an average multiple of 20 times, this obviously represents an
unreasonably large discount to the market and makes it clear by how much Geron
is being mispriced.
As noted above, within 10 days of this mismanaged presentation and its
unfortunate aftermath, the CEO’s summary departure after 15 years in the
position was announced. Given the long-term unhappiness of many of Geron’s
shareholders (ourselves included) in the CEO’s management of the company and
his repeated inability over many years to protect the interests of
shareholders in the face of negative market forces (as referred to many times
in our previous reports), we had expected some recovery in the share price
following his departure.
However, to date such recovery has not occurred and has to a considerable
extent been prevented by the extreme turbulence in financial markets which
occurred three weeks later on 2nd April with the announcement of Donald
Trump’s international trade tariff increases. The ensuing retaliatory
trade tariff war brought immediate and severe disruption to all equity markets
worldwide, and particularly in the USA, as discussed in more detail below,
which has made it even more difficult for Geron’s share price promptly to
recover to a level which attributes reasonable value to its current
circumstances and prospects.
We have had cause over the past many years to comment on the abnormal trading
patterns of this stock and the severe lack of price discovery which has
plagued its market movements. We have criticised management frequently for its
inability to protect the interests of shareholders in the face of this market
distortion.
It is believed that this repeated and unexplained pattern of adverse market
movements is indicative of the various powerful and opposing market forces at
work in relation to this stock. While it is only possible to speculate, it
could be surmised that the high level of short selling seen for years in this
stock (fed by the periodic but inevitable flow of dilutive secondary issues
applicable to all biotech stocks), the high level of institutional holdings
(with over 80 percent of the stock) willing to stock lend to generate ongoing
income by satisfying short-seller cover as they await the ultimate realisation
of capital profit on their holdings and, in the background, big pharma
companies waiting to acquire the company but minimise an eventual acquisition
cost, has conspired unhelpfully and damagingly to keep the stock price
artificially low. The stock has effectively become the plaything of these
groups until they are ready to commit and realise the gains or capitulate and
suffer the losses on their positions.
Illustrative of this has, for instance, been the immediate filing of a number
of class action suits by ambulance chasing lawyers following the recent severe
drop on Geron's share price. Daily reminders soliciting plaintiffs for these
class action suits are publicly posted which contribute to the artificially
low share price being sustained as they inevitably cause ongoing reputational
and investment damage to the company. This practice is a well known and cost
free ploy of market participants such as short funds or prospective pharma
acquirers seeking a lower share price for their own advantage. Typically these
suits prove to be baseless and are settled by the companies concerned to save
legal costs and reputation, with no admission of fault and any shareholder
compensation or litigation commissions are covered by the company's insurers.
This is now the third occurrence of such suits against Geron over the past 10
years, with no wrong-doing proved against the company and no fault admitted in
the first two cases settled.
The endgame of these market distortions is now at hand, as the company is no
longer a speculative play but rather a company with an approved product,
generating sales and capable of being valued on standard and well-established
financial metrics. With the stock trading at levels far below what such
metrics would reasonably dictate, it is starting to look like a false market
has developed in this stock as the influence of these opposing and powerful
institutional forces trading Geron stock has become even clearer.
The endgame for a post-approval biotech generating sales would normally be
acquisition by or partnership with a large pharma company. Very few biotech
companies remain independent or un-partnered by this stage of the process.
Furthermore, the recent abrupt departure of Geron’s long-time CEO leaves the
company vulnerable or indeed ready for strategic corporate action by
interested pharma companies and so should only enhance such an outcome.
Furthermore, the important announcement made shortly after the CEO’s
departure that Geron received marketing approval in Europe, a significant and
long-awaited milestone with the potential to double sales, can only have
strengthened this eventuality.
Whether it was pressure from institutional shareholders or the board which
engineered the CEO’s sudden departure, investors have every right to be
angry about the way management has failed to protect their interests over many
years and particularly now. Management may be aligned to some extent with
investors given the heavy and consistent award to them of bonus and incentive
equity over many years, but they have shown little sign of protecting
shareholder interests. Perhaps with the recent departure of the CEO and with
their equity now well underwater they might now start to do so.
We believe it is now incumbent on Geron’s board to take urgent steps to
normalise its stock price to a range which properly reflects its current
circumstances and prospects and is not just the victim of powerful market
participants with their own agendas. Given the lack of confidence the market
has shown over a number of years in the ability of management to protect
shareholder interests from these forces and even now after the successes of
2024, these steps should include without delay negotiating a sale or
partnering of the company with a suitable large pharma company at a price
which properly recognises its current and potential value and offers
shareholders a proper return on their investment.
Given all of the above, we see this unfortunate reversal in Geron’s share
price of the past two months to be temporary and fully expect it to regain its
value of the previous year to reflect its current circumstances and future
prospects, irrespective of the current very volatile general market
conditions. A presentation of the company’s first quarter results is due
to be made by the interim management on 7th May when they will hopefully be
able to report that sales have resumed their previously rising track after the
Christmas lull and the first year sales estimates can be re-confirmed.
Notwithstanding that, however, we sincerely hope that the interim management
now proceeds to take the steps noted above to free the company from trading at
the whim of competitively self-serving market forces at prices unconnected
with the company’s underlying financial fundamentals and prospects and
provides shareholders, be they institutions, retail or employees, with the
return they – and we - deserve for holding this stock.
US trade tariffs and other new policy initiatives
The avalanche of over 120 executive orders issued by Donald Trump across all
areas of government policy since his inauguration on 20th January, and
particularly the announcement of wide-ranging and punitive trade tariffs on
2nd April, has completely changed the landscape, rules and financial order of
the Western and indeed the wider developed world which had been in place and
enjoyed since World War II.
This fundamental and isolationist shift in US domestic and international
policy has in just a few short months resulted in shock and damage to
practically every measure of US strength and international relevance,
including its financial markets - both equity and bonds, the US dollar, US
treasury yields, international trade, its long-term strategic alliances,
defence arrangements and 'soft' power. All things which have for the past
many decades made the US the exceptional power with a pre-eminent economy
which we all recognise.
Further adverse effects of these new policies are expected to reveal
themselves in the USA in the months to come in terms of higher inflation,
tighter interest rate policy, lower economic growth, increased unemployment,
lower consumer spending and even social unrest as the measures are challenged
for being unconstitutional or ‘un-American’ and highly damaging.
The numerous mis-steps of the new US administration surrounding the changes
themselves and their subsequent chaotic implementation has caused high levels
of uncertainty not only in the USA but also around the world given the
inter-connectedness between the USA and most other countries in the globalised
economy.
This has damaged markets worldwide and presented the greatest shock to markets
since the financial crisis of 2008. The highly turbulent market in the USA
has also provided a difficult background for our own portfolio, given its
preponderance of US investments, and has impeded recovery in the value of our
largest investment to prior levels after the price decline of the last two
months. Further such headwinds can also be expected from the recent
substantial fall in the US dollar by almost 10 percent and the threatened
tariffs on pharma imports into the USA with possible ongoing implications for
valuations in the pharma industry as a whole.
The basic incoherence behind these recently introduced, suspended, reduced and
then re-instated tariffs and the bogus nature of their calculation has already
caused substantial real world damage to markets (whether equity, bond,
currency, or commodity), to international trade, to the US dollar and to
America’s international and financial reputation over the last few weeks, as
is evident for all to see.
For example, within days of the announcement of these trade tariffs on 2nd
April (so called ‘Liberation Day’), the US NASDAQ and Biotech indices fell
precipitously and entered bear market territory. The Dow suffered almost the
same fate, retreating 18 percent from its high in January. Although these
indices have recovered marginally since, they are all still firmly in
correction territory being 18.5 percent, 20 percent and 13 percent,
respectively, below their all time highs at the end of last year. In the case
of the Dow, its precipitous decline of 9 percent in the first three weeks of
April, has been the largest such April decline since 1932, at the time of the
Great Depression.
The fatuous notion espoused by Trump that a trade deficit in goods represents
theft by the exporting country and must be punished is based on an entirely
false premise when those goods are supplied at costs and in quantities unable
to be supplied by the importing country. This is compounded by the fact that
if the export of US services is taken into account, the US runs a huge overall
trade surplus with the world in the other direction. And this situation exists
precisely because over time the US economy and its workforce has developed,
grown and sophisticated, providing better, new economy and more highly paid
jobs to its citizens, which has in turn resulted in the massive outperformance
and wealth creation the USA has enjoyed as a whole over the last many decades.
Trade tariffs between countries have always existed and in many cases are used
as a tool both to protect importing countries from the malign trade practices
of others such as predatory pricing and dumping contrary to the rules of the
WTO, and also as a means of raising revenue for the importing country. There
can also be an effective policy element embedded in trade tariffs designed to
encourage domestic production via import substitution and the protection of
vital or security relevant industries.
The latter is the more rational impetus behind Trump’s imposition of higher
tariffs, given his perceived notion that the USA needs to rebuild its
manufacturing base after many decades of de-industrialisation by bringing
production back onshore thereby becoming less reliant on other countries, and
particularly geopolitical adversaries, not only (and mistakenly) for old
economy products such as coal, internal combustion vehicles and steel but even
new economy and advanced products such as personal technology, renewable
energy products, EV and industrial energy batteries and high end consumer
goods.
However, for such tariffs to be effective in any meaningful way and not have
the counter-productive effect in the meantime of destroying domestic demand
and economic confidence due to the imposition of high prices and disruption to
global supply chains (and thus investors’ appetite to shoulder the many
years of work and investment needed to create alternative and viable domestic
production), they have to be implemented seriously, cautiously, carefully and
gradually which is very far from the case at the moment. On the contrary,
these tariffs have been poorly designed, poorly planned and poorly executed as
has become obvious from the wild and value destroying swings in financial and
trade markets which have occurred since their imposition. Encouraging the
creation of new centres and means of domestic production is a delicate and
incentive-laden task which will not necessarily be furthered through the stick
of imposing of heavy financial penalties on trade.
In sum, Trump’s hope that his trade and re-industrialisation policies would
represent a ‘back to the future’ moment for the USA could very well have
the result that the US economy finds itself stuck destructively in the past.
Jonathan Woolf
30 April 2025
Income statement
For the year ended 31 December 2024
2024 2023
Revenue Capital Total Revenue Capital Total
return return return return
£ 000 £ 000 £ 000 £ 000 £ 000 £ 000
Investment income (note 2) 939 - 939 1,264 - 1,264
Holding gains/(losses) on investments at fair value through profit or loss - 2,270 2,270 - (2,196) (2,196)
(Losses)/gains on disposal of investments at fair value through profit or loss - (198) (198) - 45 45
Losses on provision for liabilities and charges - (254) (254) - (220) (220)
Foreign exchange gains/(losses) (7) 41 34 36 (119) (83)
Expenses (436) (246) (682) (453) (255) (708)
________ ________ ________ ________ ________ ________
Profit/(loss) before finance costs and tax 496 1,613 2,109 847 (2,745) (1,898)
Finance costs (58) (33) (91) (50) (36) (86)
________ ________ ________ ________ ________ ________
Profit/(loss) before tax 438 1,580 2,018 797 (2,781) (1,984)
Tax 35 - 35 17 - 17
________ ________ ________ ________ ________ ________
Profit/(loss) for the year 473 1,580 2,053 814 (2,781) (1,967)
________ ________ ________ ________ ________ ________
Earnings per share
Basic - ordinary shares* 0.49p 6.32p 6.81p 1.86p (11.12)p (9.26)p
________ ________ ________ ________ ________ ________
Diluted - ordinary shares* 0.49p 4.51p 5.87p 1.86p (11.12)p (9.26)p
________ ________ ________ ________ ________ ________
The company does not have any income or expense that is not included in the
profit(loss) for the year. Accordingly, the ‘Profit/(loss) 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.
*Calculated in accordance with International Accounting Standard 33
‘Earnings per Share’. The cumulative convertible non-redeemable preference
shares are anti-dilutive relating to the calculation of diluted EPS on the
revenue return.
Statement of changes in equity
For the year ended 31 December 2024
Share Capital Retained Total
capital reserve earnings
£ 000 £ 000 £ 000 £ 000
Balance at 31 December 2022 35,000 (27,928) 19 7,091
Changes in equity for 2023
(Loss)/profit for the period - (2,781) 814 (1,967)
Ordinary dividend paid (note 4) - - (437) (437)
Preference dividend paid (note 4) - - (175) (175)
________ ________ ________ ________
Balance at 31 December 2023 35,000 (30,709) 221 4,512
Changes in equity for 2024
Profit for the period - 1,580 473 2,053
Ordinary dividend paid (note 4) - - (437) (437)
Preference dividend paid (note 4) - - (175) (175)
________ ________ ________ ________
Balance at 31 December 2024 35,000 (29,129) 82 5,953
________ ________ ________ ________
Registered number: 00433137
Balance Sheet
At 31 December 2024
2024 2023
£ 000 £ 000
Non-current assets
Investments - at fair value through profit or loss 5,678 4,895
Investment in subsidiaries - at fair value through profit or loss 7,359 6,665
__________ __________
13,037 11,560
Current assets
Receivables 20 362
Derivatives - at fair value through profit or loss 11 -
Cash and cash equivalents 249 39
__________ __________
280 401
__________ __________
Total assets 13,317 11,961
__________ __________
Current liabilities
Trade and other payables 1,884 2,008
Bank credit facility 942 1,235
__________ __________
(2,826) (3,243)
__________ __________
Total assets less current liabilities 10,491 8,718
__________ __________
Non - current liabilities (4,538) (4,206)
__________ __________
Net assets 5,953 4,512
__________ __________
Equity attributable to equity holders
Ordinary share capital 25,000 25,000
Convertible preference share capital 10,000 10,000
Capital reserve (29,129) (30,709)
Retained revenue earnings 82 221
__________ __________
Total equity 5,953 4,512
__________ __________
Approved: 30 April 2025
Cash flow statement
For the year ended 31 December 2024
Year ended 2024 Year ended 2023
£ 000 £ 000
Cash flows from operating activities
Profit/(loss) before tax 2,018 (1,984)
Adjustments for:
(Gains)/losses on investments (1,818) 2,371
Proceeds on disposal of investments at fair value through profit and loss 832 136
Purchases of investments at fair value through profit and loss (236) (536)
Interest (received)/expensed (5) 22
__________ __________
Operating cash flows before movements in working capital 791 60
Decrease in receivables 331 161
Decrease in payables (172) (140)
__________ __________
Net cash from operating activities before interest 950 30
Interest paid (67) (73)
__________ __________
Net cash from operating activities 883 (43)
Cash flows from financing activities
Dividends paid on ordinary shares (300) (180)
Dividends paid on preference shares (80) -
__________ __________
Net cash used in financing activities (380) (180)
__________ __________
Net increase/(decrease) in cash and cash equivalents 503 (223)
Cash and cash equivalents at beginning of year (1,196) (973)
__________ __________
Cash and cash equivalents at end of year (693) (1,196)
__________ __________
Cash and cash equivalents 249 39
Bank credit facility (942) (1,235)
__________ __________
Cash and cash equivalents at end of year (693) (1,196)
__________ __________
Purchases and sales of investments are considered to be operating activities
of the company, given its purpose, rather than investing activities. Cash and
cash equivalents at year end shows net movement on the bank facility.
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 2024. The company has prepared its
financial statements in accordance with UK-adopted international accounting
standards and with the requirements of the Companies Act 2006 as applicable to
companies reporting under those standards. The financial statements have also
been prepared as far as applicable and relevant to the company in accordance
with the Statement of Recommended Practice: Financial Statements of Investment
Trust Companies and Venture Capital Trusts (SORP), reissued in July 2022 by
the Association of Investment Companies (AIC).
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 2024 is an extract from the
statutory accounts to that date. Statutory company accounts for 2023, which
were prepared in accordance with UK-adopted international accounting
standards, have been delivered to the registrar of companies and company
statutory accounts for 2024, prepared under IFRS as adopted by the UK, will be
delivered in due course.
The auditors have reported on the 31 December 2024 year end accounts and their
report was 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
2024 2023
£ 000 £ 000
Income from investments
UK dividends 263 94
Dividend from subsidiary 578 867
_________ _________
841 961
Other income 98 303
_________ __________
Total income 939 1,264
_________ __________
Total income comprises:
Dividends 841 961
Other interest 96 64
Other income - settlement of US class action suit 2 239
_________ _________
939 1,264
_________ __________
Dividends from investments
Listed investments 263 94
Unlisted investments 578 867
_________ _________
841 961
_________ __________
During the year the company received a dividend of £578,000 (2023 -
£867,000) 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 in the value of the
investment in the subsidiary company.
During the year the company recognised £48,000 of a foreign exchange gain
(2023 – £154,000 loss) on the loan of $3,526,000 to a subsidiary. As a
result of this gain, the corresponding movement was recognised in the value of
the investment in the subsidiary company.
Under IFRS 10 the income analysis is for the parent company only rather than
that of the consolidated group. Thus, film revenues of £112,000 (2023 –
£74,000) received by the subsidiary British & American Films 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:
2024 2023
Revenue Capital Total Revenue Capital Total
return return return return
£ 000 £ 000 £ 000 £ 000 £ 000 £ 000
Earnings:
Profit after tax 473 1,580 2,053 814 (2,781) (1,967)
Cumulative convertible non-redeemablepreference shares dividend (350) - (350) (350) - (350)
________ _________ _________ _________ _________ _________
Adjusted profit after tax 123 1,580 1,703 464 (2,781) (2,317)
________ _________ _________ _________ _________ _________
Weighted average number of ordinary shares Weighted average number of ordinary shares
‘000 ‘000 ‘000 ‘000 ‘000 ‘000
Basic 25,000 25,000 25,000 25,000 25,000 25,000
Diluted 35,000 35,000 35,000 35,000 35,000 35,000
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 (2023: 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 (2023: 35
million) ordinary and preference shares in issue.
*Calculated in accordance with International Accounting Standard 33
‘Earnings per Share’. The cumulative convertible non-redeemable preference
shares are anti-dilutive relating to the calculation of diluted EPS on the
revenue return.
4 Dividends
2024 2023
£ 000 £ 000
Amounts recognised as distributions to equity holders in the period
Dividends on ordinary shares:
Final dividend for the year ended 31 December 2023 of 0.0p (2022: 0.0p) per share - -
Interim dividend for the year ended 31 December 2024 of 1.75p 437 437
(2023: 1.75p) per share
__________ __________
437 437
__________ __________
Proposed final dividend for the year ended 31 December 2024 of 0.0p (2023: 0.0p) per share - -
__________ __________
Dividends on 3.5% cumulative convertible preference shares:
Preference dividend for the 6 months ended 31 December 2023 of 0.00p (2022: 0.00p) per share - -
Preference dividend for the 6 months ended 30 June 2024 of 1.75p (2023: 1.75p) per share 175 175
Preference dividend for the 6 months ended 31 December 2024 of 0.00p (2023: 0.00p) per share - -
__________ __________
175 175
__________ __________
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
2024 2023
£ 000 £ 000
Dividends on ordinary shares:
Interim dividend for the year ended 31 December 2024 of 1.75p (2023: 1.75p) per share 437 437
Proposed final dividend for the year ended 31 December 2024 of 0.0p (2023: 0.0p) per share - -
__________ __________
437 437
__________ __________
Dividends on 3.5% cumulative convertible preference shares:
Preference dividend for the 6 months ended 30 June 2024 of 1.75p (2023: 1.75p) per share 175 175
Preference dividend for the 6 months ended 31 December 2024 of 0.00p (2023: 0.00p) per share - -
__________ __________
175 175
__________ __________
The non-payment in December 2019, December 2020, June 2022, December 2023 and
December 2024 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, for the period ended 30 June 2022, for the year
ended 31 December 2023 and for the year ended 31 December 2024, has resulted
in arrears of £875,000 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%.
An interim dividend declared for the year ended 31 December 2024 of 1.75 pence
per ordinary share was paid on 5 December 2024 to shareholders on the
register at 14 November 2024. A preference dividend of 1.75 pence was paid to
preference shareholders on the same date.
5 Net asset values
Net asset
value per share
2024 2023
Ordinary shares £ £
Diluted 0.17 0.13
Undiluted 0.17 0.13
Net assets attributable
2024 2023
£ 000 £ 000
Total net assets 5,953 4,512
Less convertible preference shares at fully diluted value (1,701) (1,289)
__________ __________
Net assets attributable to ordinary shareholders 4,252 3,223
__________ __________
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 2024 Annual Report and Accounts, but remain
unchanged from those published in the 2023 Annual Report and Accounts.
Post balance sheet event
In February 2025 the portfolio experienced a significant reversal due to an
unexpected and large fall in the share price of Geron which has negatively
impacted our portfolio value. Our net assets decreased to £1.0 million, a
decrease of 83.6 percent since the beginning of the calendar year. We believe
this reversal to be temporary and that the portfolio will regain its value of
the previous year for the reasons set out in the Managing director’s report.
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
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 did not enter into any investment transactions to
sell stock to British & American Films Limited (2023 – £890,000) or to
purchase stock from British & American Films Limited (2023 – £890,000).
At 31 December 2024 £4,983,221 (2023 – £4,370,163) was owed by British &
American Films Limited to Romulus Films Limited under an existing loan
agreement (general purpose facility agreement).
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 (2023 – £35,000,000) being
25,000,000 ordinary shares of £1 (2023 – 25,000,000) and 10,000,000
non-voting convertible preference shares of £1 each (2023 – 10,000,000).
The rights attaching to the shares will be explained in more detail in the
notes to the 2024 Annual Report and Accounts, but remain unchanged from those
published in the 2023 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 FCA’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 Thursday 26 June
2025 at 12.15pm at Wessex House, 1 Chesham Street, London SW1X 8ND.
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