30th Apr 2019 14:28
LONDON (Alliance News) - British & American Investment Trust PLC on Tuesday reported a sharp annual drop in net asset value, due to hit to the shares of its largest US bet.
At December 31, the investment trust's diluted NAV per share stood at 23.0 pence compared to 44.0p a year before.
British & American Investment Trust's net assets decreased halved to GBP7.9 million from GBP15.5 million the year before.
In 2018, the trust declared 8.7p in dividends in 2018 compared to the 8.6p distributed in 2017.
"This very poor end-of-year result followed the strong and market out-performing advance in net asset value which we were able to report at the half-year stage of 12.8% and was the result of an unexpected setback in late September in the value of our largest US investment, Geron Corp," Chair David Seligman said.
"Although the value of this investment had risen by 95% in the first 6 months of 2018 and by 260% towards the end of the third quarter, the very unexpected decision by Johnson & Johnson in September to discontinue its clinical trial collaboration with Geron resulted in a collapse of over 80% in Geron's stock price over the fourth quarter, and a fall of 44% for the year as a whole."
"More generally in 2018, equity markets in the USA and UK made little or no progress overall," added Seligman.
The investment trust said it remains invested in its US biotechnology stocks, as it waits to "capture the gains expected as their programmes advance and reach maturity". The company does not expect to add to other long-term investments at this point.
At April 26, the company's net asset value had increased to GBP11.8 million, up 49% from December 31. The investment trust said the increase was due to Geron's stock price recovering by 91%.
Shares in British & American Investment Trust were untraded Tuesday but last closed at 48.50 pence each.
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