Interim Results

Interim Report 30 June 2002 Registered number : 433137 Directors Jonathan C Woolf (Chairman and Managing Director) Dominic G Dreyfus (Non-executive) J Anthony V Townsend (Non-executive) Ronald G Paterson (Non-executive) Registered office Wessex House 1 Chesham Street London SW1X 8ND Telephone: 020 7201 3100 Chairman's Statemant I report our results for the 6 months to 30 June 2002. The return on revenue account before tax amounted to £0.8million (£1.3 million). This decline was due to a number of factors, but principally the lower rates of return achievable on financial investments generally over the period and specifically the reduction or suspension of dividends by some split capital investment trusts. In addition, it reflected the cumulative effect of the special dividends paid to shareholders over the last two years which has reduced our investment base. Total return before taxation, which includes both realised and unrealised capital appreciation, recorded a deficit of £2.9million (£2.0 million deficit), reflecting the decline in equity valuations over the period, noted below. The return on revenue account per ordinary share was 2.50 pence on an undiluted basis (4.26 pence) and 2.29 pence on a fully diluted basis (3.54 pence). Group net assets were £35.2 million (£38.8 million at 31 December 2001), a decrease of 9.2 percent. Compensating for the special dividend of £625,000 paid in January 2002, the decrease in group net assets would be reduced to 7.6 percent. This compares to a decrease over the same six month period of 10.8 percent in the FTSE 100 share index and a fall of 10.3 percent in the FTSE All Share index. The net asset value per £1 ordinary share (prior charges deducted at par) was 101 pence, equivalent to 101 pence on a fully diluted basis. We intend to pay an interim dividend of 1.9 pence per ordinary share on 14 November 2002 to shareholders on the register at 11 October 2002. This represents an increase of 3.0 percent from last year's interim dividend. A preference dividend of 1.75 pence will be paid to preference shareholders on the same date. The UK equity market declined significantly over the period and was unable to sustain the modest rally which occurred towards the end of 2001 after the shock events of 11th September 2001 had been digested. Valuations drifted lower in the first quarter, stabilising by the end of the quarter. However the second quarter brought further falls as it became clear that the anticipated recovery in economic growth in the US and subsequently elsewhere was unlikely to materialise or would be delayed to 2003. In addition, confidence in equities was undermined by the emergence of serious accounting irregularities in a number of high profile companies in the US which resulted in significant company failures. This lack of confidence was particularly evident in June when equity prices in the US and UK fell by 10 percent in one month. The pressure on prices was felt generally across all sectors, although led by a weakness in technology and other stocks operating in similar markets. Further dramatic falls in equity prices have been seen in the third quarter of 2002 as another price drop of 10 percent occurred in July, following the similar drop in June. By month end, leading indices had retreated to levels last seen in 1997 before the effects of the technology boom. Markets were firmer in August on low volumes but recovery was not sustained in September and a further substantial fall has occurred in the current month. Investors remain extremely cautious in the light of the continued severe downward pressure on prices which has resulted in absolute declines for the third year in a row, the very high levels of volatility and, in recent months, the growing political uncertainty. As at 24 September, group net assets, after deducting the interim dividend declared today, were £28.4 million, a decrease of 19.5 percent since 30 June. This compares with a decrease of 21.1 percent in the FTSE 100 index and 21.2 percent in the All Share index over the same period, and is equivalent to 73.4 pence per share (prior charges deducted at par) and 81.0 pence per share on a fully diluted basis. The Group's modest out-performance of the indices was despite the severe reduction in the value of our largest investment, Prudential plc, which together with the other leading life assurers, declined by 40% over the period. In addition, we have also incorporated a provision in relation to our holdings in Aberdeen Preferred Investment Trust plc which appointed receivers on 25 September 2002. Since the period end, the cash takeover of Esporta plc, our second largest investment, has been completed. We will retain the proceeds in cash and fixed interest investments until the currently very uncertain investment outlook has stabilised at which time we will consider the investment opportunities which are likely to arise in the aftermath of what has been a very unstable period for UK equities. Jonathan C Woolf 27 September 2002 6 months to 30 6 months to Year June 30 ended 31 2002 December June 2001 £'000 2001 £'000 £'000 Return before taxation 1,304 2,066 831 Earnings per £1 ordinary shares - basic 2.50p 4.26p 6.58p Earnings per £1 ordinary shares - fully diluted 2.29p 3.54p 5.70p Investments at valuation and 36,249 48,076 40,596 cash at bank Net assets per ordinary share - Basic £1.01 £1.47 £1.15 - Fully diluted £1.01 £1.33 £1.11 Fully diluted net assets per ordinary share at 24 September £0.81 2002 BRITISH & AMERICAN INVESTMENT TRUST PLC INDEPENDENT REVIEW REPORT Introduction We have been instructed by the company to review the financial information for the six months ended 30 June 2002 which comprises the consolidated statement of total return, group investment portfolio, the group balance sheet, the group cash flow statement and related notes 1 to 7. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which requires that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with the guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom auditing standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June 2002. Deloitte & Touche Chartered Accountants and Registered Auditors London 27 September 2002 6 months to 30 June 2002 6 months to 30 June 2001 Year ended 31 December 2001 Note Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Income 2 1,055 - 1,055 1,504 - 1,504 2,470 - 2,470 Realised gains on investments - 80 80 - 550 550 - 267 267 Increase in unrealised depreciation - (3,799) (3,799) - (3,893) (3,893) - (10,689) (10,689) Other expenses (215) - (215) (192) (192) (385) - (385) Net return before finance costs and 840 (3,719) (2,879) 1,312 (3,343) (2,031) 2,085 (10,422) (8,337) taxation Interest payable and similar (9) - (9) (8) - (8) (19) - (19) charges Return before taxation 831 (3,719) (2,888) 1,304 (3,343) (2,039) 2,066 (10,422) (8,356) Taxation (30) - (30) (63) - (63) (72) - (72) Return on ordinary activities after 801 (3,719) (2,918) 1,241 (3,343) (2,102) 1,994 (10,422) (8,428) tax Dividend and other appropriations in respect of preference shares (175) - (175) (175) - (175) (350) - (350) Return attributable to ordinary 626 (3,719) (3,093) 1,066 (3,343) (2,277) 1,644 (10,422) (8,778) shareholders Dividend in respect of ordinary 3 (475) - (475) (461) - (461) (1,836) - (1,836) shares Transfer to reserves after dividends paid and proposed 151 (3,719) (3,568) 605 (3,343) (2,738) (192) (10,422) (10,614) Return per ordinary share Basic (14.8)p (12.3)p (13.4)p (9.1)p (41.6)p (35.1)p 2.5p 4.3p 6.5p Fully diluted 4 (10.6)p (8.3)p (9.5)p (6.0)p (29.7)p (24.0)p 2.3p 3.5p 5.7p Company Nature of Business Percentage of Valuation portfolio £'000 % Prudential plc Life Assurance 4,482 12.48 Liberty International plc Property 4,011 11.17 Esporta plc Leisure 3,001 8.35 The Alliance Trust plc Investment Trust 2,198 6.12 Securities Trust of Scotland plc Investment Trust 2,152 5.99 Dunedin Income Growth Investment Investment Trust 1,940 5.40 Trust plc British Assets Trust plc Investment Trust 1,759 4.90 Electra Investment Trust plc Investment Trust 1,552 4.32 RIT Capital Partners plc Investment Trust 1,481 4.12 Matrix Chatham Maritime Trust Enterprise Zone Trust 1,250 3.48 St. James Place Capital - Unit Trust Unit Trust 909 2.53 Aberdeen Preferred Income Trust plc Investment Trust 765 2.13 - Loan Stock Murray International Trust plc Investment Trust 697 1.94 The Scottish American Investment Investment Trust 666 1.85 Company plc Shires Income plc Investment Trust 659 1.83 Invesco Convertible Trust plc Investment Trust 510 1.42 Georgica plc Leisure 502 1.40 Rothschilds Continuation Finance - Financial 462 1.29 Notes The Rank Group Plc - Preference Leisure 447 1.24 The Throgmorton Trust plc Investment Trust 417 1.16 20 Largest investments 29,860 83.12 Other investments 6,062 16.88 Total investments 35,922 100.00 30 30 31 June December 2002 June 2001 £'000 2001 £'000 £'000 FIXED ASSETS Investments 35,922 47,127 39,921 CURRENT ASSETS Debtors 324 358 267 Cash at bank and in hand 327 949 675 651 1,307 942 CREDITORS: amounts falling due within one year (1,339) (1,756) (2,061) NET CURRENT LIABILITIES (688) (449) (1,119) CREDITORS: Amounts falling due after more than one year - - - Net assets 35,234 46,678 38,802 35,234 46,678 38,802 CAPITAL AND RESERVES Called up share capital - ordinary 25,000 25,000 25,000 - preference 10,000 10,000 10,000 Capital reserve - realised 12,842 12,677 12,724 Capital reserve - unrealised (14,872) (3,909) (11,035) Profit and loss account 2,264 2,910 2,113 35,234 46,678 38,802 6 months 6 months Year to 30 to 30 ended 31 June December 2002 June 2001 £'000 2001 £'000 £'000 Net cash inflow from operating 726 1,882 2,117 activities Servicing of finance - interest paid (9) (6) (18) - preference dividends paid (175) (175) (350) Taxation recovered 34 64 23 Investment purchases (316) (3,168) (3,739) Investment sales 767 1,763 2,154 Equity dividends paid (1,375) (1,375) (1,836) Financing - - - Decrease in cash (348) (1,015) (1,649) 1. ACCOUNTING POLICIES The results are based on unaudited Group consolidated accounts prepared under the historical cost convention as modified by the revaluation of investments. The results have been prepared in accordance with applicable Accounting Standards and with the Statement of Recommended Practice, 'Financial Statements of Investment Trust Companies'. 2. TOTAL INCOME 6 months 6 months Year to 30 to 30 ended 31 June December 2002 June 2001 £'000 2001 £'000 £'000 Turnover - film revenue 140 127 248 Income from investments 859 1,311 2,095 Interest receivable 5 28 41 Other income 51 38 86 1,055 1,504 2,470 3. DIVIDENDS 6 months to 30 June 6 months to 30 June 2002 2001 Pence per Pence per share share £ £ Ordinary shares - interim 1.9 475,000 1.845 461,250 Preference shares - fixed 1.75 175,000 1.75 175,000 650,000 636,250 The dividends on ordinary shares are based on 25,000,000 ordinary £1 shares. Dividends on preference shares are based on 10,000,000 non-voting 3.5% convertible preference shares of £1. The holders of the 3.5% convertible preference shares will be paid a dividend of £175,000 being 1.75p per share. The payment will be made on the same date as the dividend to the ordinary shareholders. 4. RETURN PER ORDINARY SHARE 6 months 6 months Year to 30 to 30 ended 31 June December 2002 June 2001 £'000 2001 £'000 £'000 Standard earnings per share Calculated on the basis of: Return after taxation and preference 626 1,066 1,644 dividends Ordinary shares in issue 25,000 25,000 25,000 Fully diluted earnings per share Calculated on the basis of: Return after taxation 801 1,241 1,994 Ordinary and preference shares in issue 35,000 35,000 35,000 5. NET ASSET VALUE ATTRIBUTABLE TO EACH SHARE Basic net asset value attributable to each share has been calculated by reference to 25,000,000 ordinary shares, and group net assets attributable to shareholders as follows: 30 30 31 June December 2002 June 2001 £'000 2001 £'000 £'000 Total net assets 35,234 46,678 38,802 Less preference shares (10,000) (10,000) (10,000) Net assets attributable to ordinary 25,234 36,678 28,802 shareholders In both cases the effective net assets of the group have been calculated taking investments at their market value. 6. The financial information set out above is unaudited and does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 December 2001, which received an unqualified auditors' report, have been filed with the Registrar of Companies. 7. A copy of this statement has been sent today to the company's shareholders, and members of the public may obtain a copy on application to the company's registered office.

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