Statement Re: Dividend Payment & Investment Policy

RNS Number : 4449J

Intl. Biotechnology Trust PLC

09 September 2016

 

This announcement contains inside information.

International Biotechnology Trust proposals to introduce dividend payments and a more flexible investment policy

Following strong long term performance, the Board of International Biotechnology Trust plc ("International Biotechnology Trust" or the "Company") today announces two proposals which it believes will be of benefit to shareholders and potential investors. These include the introduction of dividend payments and amendments to International Biotechnology Trust's investment policy to allow it to invest in unquoted funds. Both proposals will be subject to shareholder approval at a general meeting to be held on 29 September 2016 at the offices of BNP Paribas Securities Services S.C.A, 10 Harewood Avenue, London NW1 6AA (the "General Meeting").  

Dividend Payments

The Board announces the introduction of an annual dividend, equivalent to 4 per cent. of International Biotechnology Trust's Net Asset Value as at the last day of the preceding financial year (31 August), to be payable through two equal distributions in January and August of each year which it is expected will be paid out of capital reserves. Shareholder approval for the introduction of dividend payments will be sought at the General Meeting and at each annual general meeting of the Company beginning with the annual general meeting to be held in 2017. Subject to shareholder approval, the first dividend is expected to be declared in December 2016 and paid in January 2017. The dividend payments should help to further align shareholder interests with portfolio performance.

Although some of the large cap biotech companies in which International Biotechnology Trust invests have begun to pay dividends, the sector remains predominantly an area of capital growth, having delivered an annualised return of 12 per cent. (USD) over the past 20 years.

Changes to Investment Policy

International Biotechnology Trust offers investors exposure to the unquoted section of the biotechnology industry and has a number of direct investments in unquoted companies within the sector. The Board is proposing that International Biotechnology Trust will now also be able to invest in unquoted funds which themselves invest in unquoted biotechnology companies which the Board believes will:

(i)         help diversify the Company's investment opportunities to gain a broader exposure to a range of investments offering capital appreciation and producing income;

(ii)        give the investment manager, SV Life Sciences Managers LLP, more choice and access to unquoted companies, particularly where competition for access to unquoted companies is high; and

(iii)       likely increase the liquidity of the Company's portfolio of investments due to the existence of a broader market for secondary sales of unquoted fund interests as compared to direct holdings in unquoted companies.

The Company's current guideline range for its unquoted portfolio of 10 to 15 per cent. of total investments will apply to investment into unquoted companies and unquoted funds.

Under the proposal, International Biotechnology Trust will be able to invest into unquoted funds managed by SV Life Sciences Managers LLP or third party managers. An opportunity has arisen to make a commitment to invest in SV Life Sciences Fund VI, which will invest using SV Life Sciences Managers LLP's diversified approach covering Biotechnology, Medical Devices and Healthcare Services & IT. Subject to shareholder approval of the amendments to the investment policy, the Board has agreed to make a commitment of USD30 million  into SV Life Sciences Fund VI, which should enable the Company to achieve the benefits of diversification, access to a wider range of unquoted companies and increased liquidity as outlined above. There will be no double charging of investment management fees in relation to this commitment.

In addition to this proposed change to the investment policy, the Company has also taken this opportunity to make some further housekeeping changes to the investment policy. The changes to the investment policy have been approved by the Financial Conduct Authority and will be put forward for shareholder approval at the General Meeting.

Performance Update

SV Life Sciences Managers LLP has been International Biotechnology Trust's Investment Manager since 1 January 2005. The quoted portfolio has been managed by Carl Harald Janson, Lead Investment Manager, and his team for the last three years and the unquoted portfolio has continued to be managed by Kate Bingham and her colleagues over the same period. International Biotechnology Trust has outperformed its benchmark and its closest peers in both rising and falling markets over the three years to 31 August 2016. During that period the Net Asset Value of International Biotechnology Trust increased by 83.7 per cent. compared to rises in the FTSE 250 and the Company's benchmark, the NASDAQ Biotechnology Index of 31.1 per cent. and 72.6 per cent. (sterling adjusted) respectively.  International Biotechnology Trust also out performed in its latest financial year.

Discount Management

The Company will continue to monitor the level of share price to Net Asset Value and continue its policy of strategic share buybacks.

In relation to these proposals, Carl Harald Janson, Lead Investment Manager, International Biotechnology Trust said "There are some very exciting opportunities in the biotechnology sector and we believe the ability to invest in the unquoted part of the market through a fund will give us greater flexibility. We expect these proposals will be well received by our investors."

In relation to these proposals, Alan Clifton, Chairman of International Biotechnology Trust said "Sustainable, predictable yield is important to investors in the current economic and low yield environment so we are delighted to be offering a dividend to all shareholders whilst maintaining a focus on capital growth. We believe the team at SV Life Sciences will continue to find new and interesting opportunities both in the quoted and unquoted sectors for the long term benefit of shareholders. The Board all intend to vote in favour of the proposals at the upcoming General Meeting."

General Meeting

The Company will shortly be posting a circular and notice of General Meeting to shareholders. This will include the full text of the new investment policy. The circular will be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM and on the Company's website www.ibtplc.com.

For further information please contact:

SV Life Sciences Managers LLP

Lucy Costa Duarte            Tel: [phone]

Carl Harald Janson           Tel: [phone]

Cenkos Securities plc

Sapna Shah                         Tel: [phone]

Tom Scrivens                     Tel: [phone]

International Biotechnology Trust plc

Alan Clifton                        Tel: [phone]

9 SEPTEMBER 2016

 

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