British & American

BRITISH & AMERICAN INVESTMENT TRUST PLC - COVID-19 Update Announcement of Results and Dividend



1. Announcement of Results

On 26th March, the Financial Conduct Authority (FCA) extended the deadline for the announcement of listed company results from four months to six months after year end, in response to the government's work-from-home and social distancing guidelines to combat the Coronavirus pandemic.  This deadline extension is designed to assist companies to put in place measures to reduce as much as possible employee exposure to the virus and to minimise onward transmission as the peak of the epidemic approaches over the coming weeks, placing maximum pressure on hospitals and the NHS.

As a small company based in London with auditors based in Cheltenham, we welcome the FCA's deadline extension which will allow us to reduce employee travel/office attendance and professional adviser contact/workload over the coming weeks. 

Accordingly, we will postpone the announcement of our 2019 financial year results from end April to end June.  This later date will also enable us to report to shareholders in a fuller and more informed way when more is known about the progression and effects of the epidemic and the longevity of  the government's social and financial response to the epidemic. By that time, markets generally could be expected to have stabilised from their currently dislocated state and the longer term impact of the epidemic on our portfolio and prospects should be clearer .

As a corollary, the date of our AGM will also be delayed. The FCA is currently considering changes to the rules surrounding the timing and method of holding AGMs in these exceptional circumstances and we understand that further information on this will be made available in due course.

2. Dividend

In response to government pressure, major banks and insurance companies have cancelled already announced 2019 dividend payments and  suspended planned 2020 payments.  This is to conserve resources to assist in the government's emergency funding programmes to support companies and individuals through the Coronavirus crisis.  In addition, many other leading companies have similarly cancelled or suspended their dividend payments to conserve resources, particularly in those industries with operations or receipts badly disrupted by the epidemic's effects, including transport, leisure, hospitality, manufacturing and utilities.

This systemic reduction in dividend payments will have a significant, if hopefully short-term, effect on those savings institutions relying on investment income generation for their operations, including pension funds, assurance and other investment vehicles, such as ourselves.

Accordingly, we intend not to recommend the payment of a final dividend for the 2019 financial year and we propose to review 2020 dividends as the year progresses. 

As previously announced in our 2019 interim statement and 2018 annual report, the continuation of our progressive dividend policy, which had been in place for over twenty years, would depend on a return in the share price of our major investment, Geron Corporation, to levels closer to those seen in 2018 to enable us to generate distributable income internally within our group.  To date this has not occurred and now, in addition, the generation of reliable dividend income from external sources has been placed in doubt for the foreseeable future for the reasons noted above.

In 2019, we paid a half-year interim dividend on our ordinary shares of 2.70 pence, representing a yield of approximately 5.6 percent on the ordinary share price at the time of announcement and of approximately 6.5 percent averaged over the year as a whole.

It is our intention to resume our dividend payments as soon as possible, as and when circumstances permit, potentially through ad hoc interim payments not necessarily on our normal dividend timetable, and eventually to catch up when and if possible on witheld or reduced payments.