Final Results

British & American Investment Trust PLC British & American Investment Trust PLC Preliminary Announcement for the year ended 31 December 2003 Registered number: 433137 Directors Registered office Jonathan C Woolf (Chairman and Managing Director) Wessex House J Anthony V Townsend (Non-executive) 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 23 April 2004 Financial Highlights For the year ended 31 December 2003 2003 2002 Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000 Return before taxation 1,653 4,458 6,111 1,476 (9,719) (8,243) __________ __________ __________ __________ __________ __________ Earnings per £1 ordinary share ? basic 5.18p 17.83p 23.01p 3.54p (38.88)p (35.34)p __________ __________ __________ __________ __________ __________ Earnings per £1 ordinary share - diluted 4.70p 12.74p 17.44p 3.52p (27.76)p (24.24)p __________ _________ __________ __________ _________ __________ Net asset value 33,244 28,742 __________ __________ Net assets per ordinary share - deducting preference shares at par 93p 75p __________ __________ - diluted 95p 82p __________ __________ Diluted net asset value per 100p ordinary share at 20 April 2004 ? unaudited (net of recommended final ordinary dividend of 3p per share and preference dividend of 1.75p per share). __________ Chairman's Statement I report our results for the year ended 31 December 2003. The return on the revenue account before tax amounted to £1.7 million (2002: £1.5 million). Gross income amounted to £2.0 million (2002: £1.8 million), of which £1.8 million (2002: £1.5 million) represented income from investments and £0.2 million (2002: £0.3 million) film and other income. Total return before tax, including realised and unrealised capital appreciation, amounted to £6.1 million (2002: £8.2 million, loss). The return on the revenue account per ordinary share was 5.2p (2002: 3.5p) on an undiluted basis and 4.7p (2002: 3.5p) on a diluted basis. Group net assets were £33.2 million (2002: £28.8 million), an increase of 15.3 percent. This compares to an increase over the same period of 13.6 percent in the FT-SE 100 share index and 16.6 percent in the All Share index. The net asset value per ordinary share increased to 95p (2002: 82p) on a diluted basis. Deducting prior charges at par, the net asset value per ordinary share increased to 93p (2002: 75p). We are pleased to recommend a final dividend of 3.0p per ordinary share. Together with the interim dividend this makes a total payment for the year of 5.0p (2002: 4.9p) per Ordinary share, representing an increase of 2.0 percent over the previous year's dividend. A dividend of 1.75p will be paid to preference shareholders resulting in a total payment for the year of 3.5p per share. As reported at the interim stage, UK markets were flat in the first half of 2003, having declined sharply in the first quarter but having recovered in the second quarter. In the second half of 2003, UK and US markets strengthened considerably across all sectors as global political uncertainties receded, monetary policy remained loose and higher corporate earnings were posted, particularly in the USA. The US market advanced 16 percent in this period while the index of leading stocks in the UK advanced 11.6 percent. As a result, UK markets were able to finish the year with positive nominal advances for the first time in three years. This recovery in prices over the year was broadly based and this contributed to the out-performance over the year of the All Share index over the index of leading companies, as noted above. Our portfolio kept track with the rise in the UK market over the year, being positioned mid-way between the outcome for leading and All Share stocks. At the same time, we have been able to maintain our high level of income return to ordinary shareholders through dividend distribution. Dividends, excluding special dividends, have increased each year since 1995 and ordinary shareholders have consistently received distributions substantially in excess of general market yields over many years. It is heartening to see that the cycle of decline in equity prices was broken in 2003 and that our net asset value regained par; however, considerable further recovery is required before capital values return to the levels achieved prior to the commencement of this cycle. In the first quarter of 2004, sentiment has remained generally firm with earnings upgrades continuing to underpin the market, although the advances which had been seen in the second half of 2003 were not carried through into the new year. Renewed political uncertainties in the world and concerns over the growing imbalances in the US economy have served to dampen enthusiasm despite the continuing strength in the corporate sector and its outlook. Against this background, we will continue to pursue our generalist investment policy remaining invested in leading stocks with good yield. As at 20 April 2004, group net assets had increased to £35.0 million (net of the recommended final ordinary dividend, equivalent to 3p per ordinary share, and preference dividend, payable in June), an increase of 5.1 percent since the beginning of the calendar year. This is equivalent to 100 pence per share (prior charges deducted at par) and 100 pence per share on a diluted basis. Over the same period the FTSE 100 increased 2.1 percent and the All Share Index increased 3.2 percent Jonathan C. Woolf Consolidated statement of total return (incorporating the revenue account) For the year ended 31 December 2003 2003 2002 Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000 Income Dividends 1,648 - 1,648 1,345 - 1,345 Interest 122 - 122 128 - 128 Film revenues 154 - 154 243 - 243 Property units 102 - 102 103 - 103 Other income (13) - (13) - - - Realised gains on investments - 508 508 - 726 726 Increase/(decrease) in unrealised - (10,445) (10,445) appreciation - 3,950 3,950 ________ ________ ________ ________ ________ ________ 2,013 4,458 6,471 1,819 (9,719) (7,900) Administrative expenses (330) - (330) (331) - (331) ________ ________ ________ ________ ________ ________ Net return before finance costs and 1,683 4,458 6,141 1,488 (9,719) (8,231) taxation Interest payable and similar charges (30) - (30) (12) - (12) ________ ________ ________ ________ ________ ________ Return on ordinary activities before tax for the financial year 1,653 4,458 6,111 1,476 (9,719) (8,243) Tax on ordinary activities (9) - (9) (242) - (242) ________ ________ ________ ________ ________ ________ Return on ordinary activities after tax for the financial year 1,644 4,458 6,102 1,234 (9,719) (8,485) Dividends and other appropriations in respect of preference shares (350) - (350) (350) - (350) ________ ________ ________ ________ ________ ________ Return attributable to ordinary shareholders 1,294 4,458 5,752 884 (9,719) (8,835) Dividends in respect of ordinary shares (1,250) - (1,250) (1,225) - (1,225) ________ ________ ________ ________ ________ ________ Transfer to/(from) reserves 44 4,458 4,502 (341) (9,719) (10,060) ________ ________ ________ ________ ________ ________ Return per ordinary share Basic 5.18p 17.83p 23.01p 3.54p (38.88)p (35.34)p ________ ________ ________ ________ ________ ________ Diluted 4.70p 12.74p 17.44p 3.52p (27.76)p (24.24)p ________ ________ ________ ________ ________ ________ The revenue column of this statement is the consolidated profit and loss account of the group. All revenue and capital items in the above statement for the year ended 31 December 2003 and the year ended 31 December 2002 derive from continuing operations. No operations were acquired in the year. Consolidated Balance Sheet For the year ended 31 December 2003 Group 2003 2002 £000 £000 Fixed assets Investments 32,482 28,404 Current assets Debtors 162 323 Cash at bank and in hand 1,581 1,794 __________ __________ 1,743 2,117 Creditors: amounts falling due within one year (981) (1,779) __________ __________ Net current assets 762 338 __________ __________ Total assets less current liabilities 33,244 28,742 __________ __________ Net assets 33,244 28,742 __________ __________ Capital and reserves Called-up share capital 35,000 35,000 Other reserves - Capital reserve ? realised 14,824 14,309 - Capital reserve ? unrealised (18,396) (22,339) Revenue reserve 1,816 1,772 __________ __________ Total shareholders' funds 33,244 28,742 __________ __________ Total shareholders' funds attributable to: Equity shareholders 23,244 18,742 Preference shareholders 10,000 10,000 __________ __________ Net asset value per ordinary share: - Basic 93p 75p - Diluted 95p 82p Consolidated cash flow statement For the year ended 31 December 2003 2003 2003 2002 2002 £000 £000 £000 £000 Net cash inflow from operating activities 1,726 1,444 Servicing of finance Interest paid (30) (13) Preference dividends paid (350) (350) __________ __________ Net cash outflow from servicing of finance (380) (363) Taxation UK tax (paid)/recovered (267) 21 Financial investment Purchases of investments (4,605) (2,438) Sales of investments 4,563 4,665 __________ __________ Net cash (outflow)/inflow from capital (42) 2,227 expenditure and financial investment Equity dividends paid (1,250) (1,850) __________ __________ Cash (outflow)/inflow before management of liquid resources and financing (213) 1,479 Financing - - __________ __________ (Decrease)/increase in cash (213) 1,479 __________ __________ Reconciliation of net cash flow to movement in net funds (Decrease)/increase in cash (213) 1,479 __________ __________ Change in net funds (213) 1,479 Net funds at 1 January 1,794 315 __________ __________ Net funds at 31 December 1,581 1,794 __________ __________ 1 Accounting policies All figures stated are based on the financial statements prepared under the historical cost convention as modified by the revaluation of investments and in accordance with applicable United Kingdom law and accounting standards. The accounting policies adopted are consistent with those in the most recently published set of annual financial statements. 2 Return per ordinary share 2003 2002 Revenue Capital Total Revenue Capital Total Group: Basic 5.18p 17.83p 23.01p 3.54p (38.88)p (35.34)p __________ __________ __________ __________ __________ __________ Diluted 4.70p 12.74p 17.44p 3.52p (27.76)p (24.24)p __________ __________ __________ __________ __________ __________ Basic revenue return per ordinary share is based on the net revenue on ordinary activities after taxation and after deduction of dividends in respect of preference shares of £1,294,000 (2002 - £884,000) and on 25 million (2002: 25 million) ordinary shares in issue. The diluted revenue return is based on the net revenue on ordinary activities after taxation of £1,644,000 (2002 - £1,234,000) and on 35 million (2002 ? 35 million) shares in issue. Basic capital return per ordinary share is based on capital gains/(losses), both realised and unrealised, for the financial year of £4,458,000 (2002: capital losses - £(9,719,000)) and on 25 million (2002: 25 million) ordinary shares in issue. The diluted capital return per share is based on the same aggregate return but on 35 million (2002 - 35 million) shares in issue. 3 Dividends 2003 2002 £000 £000 Dividends on ordinary shares: Interim paid of 2.0p per £1 share (2002: 1.9p per share) 500 475 Final proposed of 3.0p per £1 share (2002: 3.0p per share) 750 750 __________ __________ 1,250 1,225 __________ __________ Dividends on 3.5% cumulative convertible preference shares: 1.75p paid 175 175 1.75p payable ? proposed 175 175 __________ __________ 350 350 __________ __________ The dividends on ordinary shares are based on 25 million (2002 - 25 million) ordinary £1 shares in the year to 31 December 2003. Dividends on preference shares are based on 10 million (2002 - 10 million) non-voting 3.5% cumulative convertible preference shares of £1 in the year to 31 December 2003. The holders of the 3.5% cumulative 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 Diluted net asset value per ordinary £1 share The diluted net asset value per £1 ordinary share is based on net assets of £33,244,000 (2002 - £28,742,000) and 35 million shares in issue. 5 Reconciliation of operating revenue to net cash inflow from operating activities Group 2003 2002 £000 £000 Net revenue before finance costs and taxation 1,683 1,488 Scrip dividends (3) (3) Decrease in other creditors (25) (13) Decrease/(increase) in debtors 74 (19) Tax on unfranked investment income - - Tax on film revenue (3) (9) __________ __________ Net cash inflow from operating activities 1,726 1,444 __________ __________ 6 Analysis of net funds Balance Balance 1 January 31 December 2003 Cash flow 2003 £000 £000 £000 Cash at bank 1,794 (955) 839 Liquid resources ? cash at brokers - 742 742 ________ __________ ________ 1,794 (213) 1,581 __________ __________ __________ Announcement based on draft accounts The financial information set out in the announcement does not constitute the company's statutory accounts for the year ended 31 December 2003 or 2002. The financial information for the year ended 31 December 2002 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified and did not contain any statement under section 237(2) or (3) Companies Act 1985. The statutory accounts for the year ended 31 December 2003 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's annual general meeting. BRITISH & AMERICAN INVESTMENT TRUST PLC

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