BRITISH & AMERICAN INVESTMENT TRUST PLC: Half-yearly Report

BRITISH & AMERICAN INVESTMENT TRUST PLC                                         


                                                                               
                                                                               


                                                                           
GROUP FINANCIAL HIGHLIGHTS                                                      
                                                                           
For the six months ended 30 June 2013                                           


                                                                               
                                                                               
                                                                               
                                                                      Audited  
                                                  Unaudited Unaudited Year     
                                                  6 months  6 months  ended    
                                                            to        31       
                                                  to 30               December 
                                                  June      30 June            
                                                  2013      2012      2012     
                                                  £'000     £'000     £'000  
                                                                                  
                                                                               


                                                                           
Revenue                                                                         


                                                                               
                                                                               


                                                                           
Return before tax                                 1,355     879       2,107     


                                                                               
                                                  _________ _________ _________


                                                                           
Earnings per £1 ordinary shares - basic (note                                   
4)                                                    4.72p     2.81p     7.02p 


                                                                               
                                                  _________ _________ _________


                                                                           
Earnings per £1 ordinary shares - diluted (note                                 
4)                                                    3.87p     2.51p     6.01p 


                                                                               
                                                  _________ _________ _________


                                                                           
Capital                                                                         


                                                                               
                                                                               


                                                                           
Total equity                                      24,152    23,297    23,345    


                                                                               
                                                  _________ _________ _________


                                                                           
Revenue reserve (note 7)                          1,200     870       1,245     


                                                                               
                                                  _________ _________ _________


                                                                           
Capital reserve (note 7)                          (12,048)  (12,573)  (12,900)  


                                                                               
                                                  _________ _________ _________


                                                                           
Net assets per ordinary share (note 5)                                          
                                                                           
- Basic                                               £0.57     £0.53     
£0.53 


                                                                               
                                                  _________ _________ _________


                                                                           
- Diluted                                         £0.69     £0.67     £0.67   


                                                                                  
                                                  _________ _________ _________
                                                                               


                                                                           
Diluted net assets per ordinary share at 23                                    
August 2013                                           £0.71                     


                                                                               
                                                  _________                    


                                                                           
Dividends*                                                                      


                                                                               
                                                                               


                                                                           
Dividends per ordinary share (note 3)             2.7p      2.7p      7.6p      


                                                                               
                                                  _________ _________ _________


                                                                           
Dividends per preference share (note 3)           1.75p     1.75p     3.5p      


                                                                               
                                                  _________ _________ _________
                                                                               


* Dividends declared for the period. Dividends shown in the accounts are, by
contrast, dividends paid or approved
in the period.

Copies of this report will be posted to shareholders and be available for
download at the company's website: www.baitgroup.co.uk.
    GROUP INVESTMENT PORTFOLIO                                                    


                                                                          
As at 30 June 2013                                                             


                                                                              
                                                                              


                                                                          
Company                               Nature of         Valuation Percentageof 


                                      Business          £'000     portfolio   
                                                                  %           
                                                                              
                                                                              


                                                                          
Geron Corporation                     Biomedical - USA      3,438       15.16* 
                                                                          
RIT Capital Partners                  Investment Trust      3,087        13.61 
                                                                          
Dunedin Income Growth                 Investment Trust      2,570        11.33 
                                                                          
British Assets Trust                  Investment Trust      1,913         8.43 
                                                                          
St. James's Place Global Equity       Unit Trust            1,722         7.59 


                                                                              
                                                         ________     ________


                                                                          
Prudential                            Life Assurance        1,700         7.50 
                                                                          
Scottish American Investment Company  Investment Trust        966         4.26 
                                                                          
Alliance Trust                        Investment Trust        748         3.30 
                                                                          
Invesco Income Growth Trust           Investment Trust        743         3.27 
                                                                          
BioTime Inc NPV                       Biotechnology           587         2.59 


                                                                              
                                                         ________     ________


                                                                          
F&C Asset Management - 6.75% FRN Sub. General Financial                       
Bonds 2026                                                    524         2.31 
                                                                          
Royal & Sun Alliance Insurance Group  Insurance -                             
- Cum. irred. preference shares       Non-Life                465         2.05 
                                                                          
Merchants Trust                       Investment Trust        458         2.02 
                                                                          
Rothschilds Cont. Finance - Notes     Financial               444         1.96 
                                                                          
Shires Income                         Investment Trust        443         1.95 


                                                                              
                                                         ________     ________


                                                                          
Matrix Chatham EZT (unquoted)         Enterprise Zone         438         1.93 
                                  Trust                                    
                                                                          
Earthport                             Software and            338         1.49 
                                  computer services                        
                                                                          
Barclays - 9% PIB Capital Bonds       Bank retail             245         1.08 
                                                                          
Jupiter Income Trust                  Unit Trust              198         0.87 
                                                                          
Emblaze                               Software and            163         0.72 


                                      computer services                       
                                                                              
                                                         ________     ________


                                                                          
20 Largest investments                                     21,190        93.42 
                                                                          
Other investments (number of holdings                       1,491         6.58
: 25)                                                                          


                                                                              
                                                         ________     ________


                                                                          
Total investments                                          22,681       100.00 


                                                                              
                                                         ________     ________
                                                                              



*Geron Corporation. 6.53% held by the company and 8.63% held by subsidiaries. 
In addition the Group holds net purchases of £1,634,000 of put options in 
Geron
Corporation as part of its hedging strategy.


Unaudited Interim Report
30 June 2013 
Registered number : 433137 
Directors                                    Registered office                   
                                                                             
J Anthony V Townsend (Chairman)              Wessex House                        
                                                                             
Jonathan C Woolf (Managing Director)         1 Chesham Street                    
                                                                             
Dominic G Dreyfus (Non-executive)            London SW1X 8ND                     


                                                                                

Ronald G Paterson (Non-executive)            Telephone: 020 7201 3100           
                                                                                
                                             Website: www.baitgroup.co.uk       
                                                                                
    Chairman's Statement

I report our results for the 6 months to 30 June 2013.
 
Revenue
 
The profit on the revenue account before tax amounted to £1.4 million (30 June
2012: £0.9 million), an increase of 54 percent reflecting a higher level of
special dividends received in the period.


A gain of £0.9 million (30 June 2012: £0.3 million) was registered on the
capital account before capitalised expenses, incorporating a realised loss of 
£
1.0 million (30 June 2012: £0.6 million loss) and an unrealised gain of £1.9
million (30 June 2012: £1.0 million).

 
The revenue earnings per ordinary share were 4.7 pence on an undiluted basis
(30 June 2012: 2.8 pence) and 3.9 pence on a fully diluted basis (30 June 2012:
2.5 pence).
 
Net Assets and performance
 
Group net assets were £24.2 million (£23.3 million, at 31 December 2012), an
increase of 3.7 percent.  Over the same six month period, the FTSE 100 index
increased by 5.4 percent and the All Share index increased by 6.4 percent.   On
a total return basis, after adding back dividends paid during the period, group
net assets increased by 9.4 percent compared to a total return on the FTSE 100
index of approximately 7.0 percent.  The net asset value per £1 ordinary share
was 57 pence (prior charges deducted at par) and 69 pence on a fully diluted
basis.  


As noted above, the UK stock market finished modestly ahead at the half year;
however, it had risen strongly during the period to register a gain of 11
percent by the end of May which was then mostly lost in June as markets
worldwide reversed following anxieties that the sustained monetary stimulus
measures in the USA would shortly be withdrawn.  Markets then steadied somewhat
in July and August as the US Federal Reserve attempted to play down these fears
through its submissions to US Congress.  The economic and investment themes of
the period are set out in more detail in the Managing Director's report below. 
As at 23 August, group net assets were £25.0 million, an increase of 3.4
percent since 30 June.  This compares with an increase of 4.5 percent in the
FTSE 100 index and an increase of 5.1 percent in the All Share index over the
same period, and is equivalent to 60 pence per share (prior charges deducted at
par) and 71 pence per share on a fully diluted basis. 
Dividend 
We intend to pay an interim dividend of 2.7 pence per ordinary share on 7
November 2013 to shareholders on the register at 11 October 2013. This
represents an unchanged dividend from last year's interim dividend. A
preference dividend of 1.75 pence will be paid to preference shareholders on
the same date. 
Outlook 
As I reported in April, equity markets had enjoyed firm and substantial growth
in the early months of 2013 as global recessionary concerns abated and were
close to regaining their all time highs before sentiment changed in June as
fears emerged that the liquidity programme provided by the Federal Reserve
could be withdrawn somewhat earlier than expected.  Since then, all of the fall
experienced in June has been reversed and the UK equity market is now ahead 11
percent since the beginning of the year.  This also reflects the growing
evidence that the UK economy is finally growing again, albeit weakly, after
several years of stagnation. 
While in the USA markets have been guided to expect a gradual reduction in
monetary stimulus in the foreseeable future, in the UK the Bank of England has
recently introduced a new and revolutionary policy of issuing medium term
interest rate guidance under its new Governor which, unlike in the USA,
indicates no change in the historically low sterling interest rates for a
number of years ahead.  As noted in the Managing Director's report below, we
believe that this unprecedented period of certainty in UK interest rates
provides us with an opportunity to capture value and income in the portfolio by
entering into a modest amount of gearing over the coming period. 
Against this background, therefore, we intend to pursue a modest programme of
additional investment through gearing as opportunities present themselves to
enhance returns on our growth and income holdings. 
Anthony Townsend 
29 August 2013 
Managing Director's Report 
UK equity market performance in the first half of 2013 repeated for a third
year that of the two previous years, with a strong rise in early months (11
percent)  followed by a significant reversal, eliminating most of the gains by
the end of  the second quarter (to 3 percent).   As noted above, the portfolio
outperformed the benchmark index by approximately 2.5 percent on a total return
basis over the period. 
As reported in April, the strength in equity valuations in the first four
months of the year derived from a confluence of factors, including the
realisation that various economic disaster scenarios in the USA and Eurozone
were less likely to occur and a consequent rotation from bond investment into
equities, a change in focus of economic policy from austerity to growth and
some actual signs of growth appearing in 2013 in the USA and latterly the in
UK. 
Despite this general shift in sentiment, a number of substantial concerns
remain in global markets as the volatility of the first six months
demonstrates.  These concerns include the weakness in the recovery and length
of time required to recapture lost levels of GDP, the withdrawal of emergency
liquidity measures in the USA (so-called 'tapering') and its possible effects
on financial investment, continuing worries about sovereign debt sustainability
in the Eurozone and evidence of lower levels of economic growth in China. 
In the UK, the most significant events of the past few months have been
increasing evidence of an albeit weak return to growth, including revisions to
official statistics which in fact eliminated the second leg of the recession in
2012 (so called 'double-dip') and the fear of a 'triple dip', increased
corporate earnings, despite continued low levels of corporate lending from
banks as they face increasing capital requirements, and an increase in consumer
spending.  In addition, the housing market has finally begun to show growth
throughout the UK with sales increasing significantly over the summer,
supported by increased levels of mortgage lending following a series of bank
lending incentivisation programmes introduced by the government this year.   
The other significant event was the introduction by the Bank of England for the
first time in August of a medium term projection of UK interest rates.  After
an unprecedented period of historically low sterling interest rates, there were
concerns, as in the USA, that expectations of rate increases in the short term
as the economy began to show signs of recovery would undermine the recovery,
which was judged to be frail following the effects of the global banking
crisis.  A medium term projection for interest rates was designed to allay
these fears and inject a level of stability to promote financial investment and
sustain the recovery. 
The medium term interest rate projection announced in August by the new Bank of
England Governor indicated a longer period than expected of continued low
interest rates  (to at least 2016) using a new target of unemployment (of 7
percent), in addition to the previous inflation target.  Although various
caveats remain related to inflation and market instability, it is generally
expected that a further period of ultra-low interest rate will be sustained
over the next few years.  As noted above, this is designed to promote financial
investment, and as such also provides us with opportunities to add investments
to our currently fully invested portfolio using modest levels of gearing to
achieve higher returns in both the growth and income elements of our
portfolio.  We will therefore be pursuing this strategy over the coming period
while expectations of relatively low inflationary growth in the economy
persist. 
Jonathan C Woolf 


    29 August 2013



CONSOLIDATED INCOME STATEMENT                                                   
         
                                                                                


     
Six months ended 30                                                              
     
June 2013                                                                        


         
                                                                                
         
                                                                                
         
                                                                                
         


                        Unaudited             Unaudited               
Audited         
                   6 months to 30 June   6 months to 30 June  Year ended 31 
December  


                              2013                  2012                   2012 
         
                                                                                
         


             Note Revenue Capital       Revenue Capital       Revenue 
Capital         
                  return  return  Total return  return  Total return  
return  Total   
                  £'000   £'000   £'000 £'000   £'000   £'000 £'000  
 £'000   £'000   


                                                                                
         
                                                                                
         
                                                                                


     
Investment        2                                                              
     
income                  1,554       - 1,554   1,062       - 1,062   2,486       
-   2,486 
                                                                             
     
Holding gains on                                                                 
     
investments at                                                                   
     
fair value                                                                       
     
through profit                                                                   
     
or loss                     -   1,908 1,908       -   1,047 1,047       -   
1,446   1,446 
                                                                             
     
Losses on                                                                        
     
disposal of                                                                      
     
investments at                                                                   
     
fair value                                                                       
     
through profit                                                                   
     
or loss                     -   (959) (959)       -   (613) (613)       - 
(1,237) (1,237) 
                                                                             
     
Expenses                (199)    (97) (296)   (183)    (96) (279)   (379)   
(198)   (577) 


                                                                                
         


                    _____   _____ _____   _____   _____ _____   _____   
_____   _____ 


                                                                                
         
                                                                                


     
Profit before                                                                    
     
tax                     1,355     852 2,207     879     338 1,217   2,107      
11   2,118 
                                                                             
     
Taxation                    -       -     -       -       -     -     (3)       
-     (3) 


                                                                                
         


                    _____   _____ _____   _____   _____ _____   _____   
_____   _____ 
                                                                             
     
Profit for the                                                                   
     
period                  1,355     852 2,207     879     338 1,217   2,104      
11   2,115 


                                                                                
         


                    _____   _____ _____   _____   _____ _____   _____   
_____   _____ 
                                                                             
     
Earnings per      4                                                              
     
ordinary share                                                                   


         
                                                                                


     
Basic                   4.72p   3.41p 8.13p   2.81p   1.35p 4.16p   7.02p   
0.04p   7.06p 
                                                                             
     
Diluted                 3.87p   2.44p 6.31p   2.51p   0.97p 3.48p   6.01p   
0.03p   6.04p 
                                                                             
      
The group does not have any income or expense that is not included in the
profit for the period and all items derive from continuing operations. 
Accordingly, the 'Profit for the period' is also the 'Total Comprehensive
Income for the period' as defined in IAS 1(revised) and no separate Statement
of Comprehensive Income has been presented. 
The total column of this statement is the Group's Income Statement, prepared in
accordance with IFRS.  The supplementary revenue return and capital return
columns are both prepared under guidelines published by the Association of
Investment Companies. 
All profit and total comprehensive income is attributable to the equity holders
of the parent company. There are no minority interests. 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY                                     
                                                                           
Six months ended 30 June 2013                                                   


                                                                               
                                                                               
                                                                               
                                                          Unaudited            
                                                Six months ended 30 June 2013  
                                                                               
                                                                               
                                     Share     Capital  Retained    Total      
                                     capital   reserve  earnings               
                                     £'000     £'000    £'000       £'000   
                                                                                   
                                                                               


                                                                           
Balance at 31 December 2012             35,000 (12,900)       1,245      23,345 
                                                                           
Profit for the period                        -      852       1,355       2,207 
                                                                           
Ordinary dividend paid                       -        -     (1,225)     (1,225) 
                                                                           
Preference dividend paid                     -        -       (175)       (175) 


                                                                               
                                      ________ ________    ________    ________


                                                                           
Balance at 30 June 2013                 35,000 (12,048)       1,200      24,152 


                                                                               
                                      ________ ________    ________    ________
                                                                               
                                                                               
                                                                               
                                                          Unaudited            
                                                Six months ended 30 June 2012  
                                                                               
                                                                               
                                     Share     Capital  Retained    Total      
                                     capital   reserve  earnings               
                                     £'000     £'000    £'000       £'000   
                                                                                   
                                                                               


                                                                           
Balance at 31 December 2011             35,000 (12,911)       1,341      23,430 
                                                                           
Profit for the period                        -      338         879       1,217 
                                                                           
Ordinary dividend paid                       -        -     (1,175)     (1,175) 
                                                                           
Preference dividend paid                     -        -       (175)       (175) 


                                                                               
                                      ________ ________    ________    ________


                                                                           
Balance at 30 June 2012                 35,000 (12,573)         870      23,297 


                                                                               
                                      ________ ________    ________    ________
                                                                               
                                                                               
                                                                               
                                                           Audited             
                                                 Year ended 31 December 2012   
                                                                               
                                                                               
                                     Share     Capital  Retained    Total      
                                     capital   reserve  earnings               
                                     £'000     £'000    £'000       £'000   
                                                                                   
                                                                               


                                                                           
Balance at 31 December 2011             35,000 (12,911)       1,341      23,430 
                                                                           
Profit for the period                        -       11       2,104       2,115 
                                                                           
Ordinary dividend paid                       -        -     (1,850)     (1,850) 
                                                                           
Preference dividend paid                     -        -       (350)       (350) 


                                                                               
                                      ________ ________    ________    ________


                                                                           
Balance at 31 December 2012             35,000 (12,900)       1,245      23,345 


                                                                               
                                      ________ ________    ________    ________
                                                                               
     


CONSOLIDATED BALANCE SHEET                                                     


                                                                           
As at 30 June 2013                                                              


                                                                               
                                                                               
                                                                               
                                                                      Audited  
                                                  Unaudited Unaudited 31       
                                                  30 June   30 June   December 
                                                  2013      2012      2012     
                                                  £'000     £'000     £'000  
                                                                                  
                                                                               


                                                                           
Non-current assets                                                              
                                                                           
Investments - fair value through profit or                                     
loss (note 1)                                        22,681    21,604    21,137 


                                                                               
                                                  _________ _________ _________
                                                                               
                                                                               
                                                                               
                                                                               


                                                                           
Current assets                                                                  
                                                                           
Receivables                                           1,684       202     1,190 
                                                                           
Derivatives - fair value through profit or                                     
loss                                                  3,249     2,832     3,204 
                                                                           
Cash and cash equivalents                               691     1,286       740 


                                                                               
                                                  _________ _________ _________
                                                                               
                                                      5,624     4,320     5,134
                                                                               
                                                                               
                                                                               
                                                  _________ _________ _________


                                                                           
Total assets                                         28,305    25,924    26,271 


                                                                               
                                                  _________ _________ _________
                                                                               
                                                                               


                                                                           
Current liabilities                                                             
                                                                           
Other current liabilities                           (2,538)   (1,313)   (1,307) 
                                                                           
Derivatives - fair value through profit or                                     
loss                                                (1,615)   (1,314)   (1,619) 


                                                                               
                                                  _________ _________ _________
                                                                               
                                                    (4,153)   (2,627)   (2,926)
                                                                               
                                                                               
                                                                               
                                                  _________ _________ _________
                                                                               
                                                                               


                                                                           
Total assets less current liabilities                24,152    23,297    23,345 


                                                                               
                                                  _________ _________ _________


                                                                           
Net assets                                           24,152    23,297    23,345 


                                                                               
                                                  _________ _________ _________


                                                                           
Equity attributable to equity holders                                           
                                                                           
Ordinary share capital                               25,000    25,000    25,000 
                                                                           
Convertible preference share capital                 10,000    10,000    10,000 
                                                                           
Capital reserve                                    (12,048)  (12,573)  (12,900) 
                                                                           
Retained revenue earnings                             1,200       870     1,245 


                                                                               
                                                  _________ _________ _________


                                                                           
Total equity                                         24,152    23,297    23,345 


                                                                               
                                                  _________ _________ _________


                                                                           
Net assets per ordinary share - basic                 £0.57     £0.53     
£0.53 


                                                                               
                                                  _________ _________ _________


                                                                           
Net assets per ordinary share - diluted               £0.69     £0.67     
£0.67 


                                                                               
                                                  _________ _________ _________
                                                                               
     

CONSOLIDATED CASHFLOW STATEMENT                                                 
                                                                                

Six months ended 30 June 2013                                                   
                                                                                
                                                                                
                                                                                
                                                Unaudited  Unaudited  Audited   


                                            6 months   6 months   Year 
ended 


                                                to         to         31        
                                                30 June    30 June    December  
                                                2013       2012       2012      
                                                £'000      £'000      £'000  
                                                                                    
                                                                                
                                                                                

Cash flow from operating activities                                             
                                                                                
                                                                                
                                                                                

Profit before tax                                    2,207      1,217      
2,118
                                                                                
                                                                                
                                                                                

Adjustment for:                                                                 
                                                                                

Profits on investments                               (949)      (434)      
(209)
                                                                                

Scrip dividends                                        (3)        (3)        
(8)
                                                                                

Film income tax deducted at source                       -          -        
(3)
                                                                                

Proceeds on disposal of investments at fair                                     

value                                                                           
                                                                                

through profit or loss                              14,696      7,786     
16,255
                                                                                

Purchases of investments at fair value                                          
                                                                                

through profit or loss                            (13,008)    (5,862)   
(14,111)
                                                                                


                                              ________   ________   
________ 
                                                                             
Operating cash flows before movements                                            
                                                                             
in working capital                                   2,943      2,704      
4,042 
                                                                             
Increase in receivables                            (3,518)    (3,118)    
(3,372) 


                                                                                

Increase in payables                                 1,751      2,753      
1,798
                                                                                


                                              ________   ________   
________ 
                                                                             
Net cash from operating activities                                               


                                                                                

before income taxes                                  1,176      2,339      
2,468
                                                                                


                                              ________   ________   
________ 


                                                                                
                                                                                
                                                                                

Net cash flows from operating activities             1,176      2,339      
2,468
                                                                                


                                              ________   ________   
________ 


                                                                                
                                                                                
                                                                                

Cash flow from financing activities                                             
                                                                                

Dividends paid on ordinary shares                  (1,225)    (1,175)    
(1,850)
                                                                                


                                              ________   ________   
________ 


                                                                                
                                                                                
                                                                                

Net cash used in financing activities              (1,225)    (1,175)    
(1,850)
                                                                                


                                              ________   ________   
________ 


                                                                                
                                                                                
                                                                                
                                                                                
                                                                                

Net (decrease)/increase in cash and cash                                        
                                                                                

equivalents                                           (49)      1,164        
618
                                                                                
                                                                                
                                                                                

Cash and cash equivalents at beginning of                                       

period                                                 740        122        
122
                                                                                


                                              ________   ________   
________ 


                                                                                

Cash and cash equivalents at end of period             691      1,286        
740
                                                                                


                                              ________   ________   
________ 
                                                                             
NOTES TO THE gROUP RESULTS 
Accounting policies 
Basis of preparation 
This interim report is prepared in accordance with IAS 34 and on the basis of
the accounting policies set out in the group's annual Report and Accounts at 31
December 2012. 
Basis of consolidation 
These consolidated condensed financial statements incorporate the financial
statements of the company and its subsidiary undertakings made up to 30 June.
Control is achieved where the company has the power to govern the financial and
operating policies of an investee entity so as to obtain benefits from its
activities. All intra-group transactions, balances, income and expenses are
eliminated on consolidation. 
Significant accounting policies 
In order better to reflect the activities of an investment trust company and in
accordance with guidance issued by the Association of Investment Companies
(AIC), supplementary information which analyses the income statement between
items of a revenue and capital nature has been presented alongside the income
statement. 
As the entity's business is investing in financial assets with a view to
profiting from their total return in the form of interest, dividends or
increases in fair value, listed equities and fixed income securities are
designated as fair value through profit or loss on initial recognition. The
group manages and evaluates the performance of these investments on a fair
value basis in accordance with its investment strategy, and information about
the group is provided internally on this basis to the entity's key management
personnel. 
Investments held at fair value through profit or loss, including derivatives
held for trading, are initially recognised at fair value. 


    All purchases and sales of investments are recognised on the trade date.


After initial recognition, investments, which are designated as at fair value
through profit or loss, are measured at fair value. Gains or losses on
investments designated as at fair value through profit or loss are included in
net profit or loss as a capital item, and material transaction costs on
acquisition and disposal of investments are expensed and included in the
capital column of the income statement. For investments that are actively
traded in organised financial markets, fair value is determined by reference to
Stock Exchange quoted market bid prices or last traded prices, depending upon
the convention of the exchange on which the investment is quoted at the close
of business on the balance sheet date. Investments in units of unit trusts or
shares in OEICs are valued at the closing price released by the relevant
investment manager.

In respect of unquoted investments, or where the market for a financial
instrument is not active, fair value is established by using an appropriate
valuation technique.
Investments in subsidiary companies are held at the fair value of their
underlying assets and liabilities, calculated in accordance with the above
policy. Where a subsidiary has negative net assets it is included in
investments at nil value and a provision made against it on the balance sheet.


Dividend income from investments is recognised as income when the shareholders'
rights to receive payment has been established, normally the ex-dividend date.

Interest income on fixed interest securities is recognised on a time
apportionment basis so as to reflect the effective interest rate of the
security.

Property EZT income is recognised on the date the distribution is receivable.
Film royalty income is recognised on receipt of royalty statements covering
periods ending in the financial year.

When special dividends are received, the underlying circumstances are reviewed
on a case by case basis in determining whether the amount is capital or income
in nature. Amounts recognised as income will form part of the company's
distribution. Any tax thereon will follow the accounting treatment of the
principal amount.

All expenses are accounted for on an accruals basis. Expenses are charged as
revenue items in the income statement except as follows:

- transaction costs which are incurred on the purchase or sale of an investment
designated as fair value through profit or loss are expensed and included in
the capital column of the income statement;

- expenses are split and presented partly as capital items where a connection
with the maintenance or enhancement of the value of the investments held can be
demonstrated, and accordingly investment management and related costs have been
allocated 50% (2012 - 50%) to revenue and 50% (2012 -50%) to capital, in order
to reflect the directors' long-term view of the nature of the expected
investment returns of the company.

The 3.5% cumulative convertible non-redeemable preference shares issued by the
company are classified as equity instruments in accordance with IAS 32
'Financial Instruments - Disclosure and Presentation' and FRS 25 as the company
has no contractual obligation to redeem the preference shares for cash or pay
preference dividends unless similar dividends are declared to ordinary
shareholders.

Segmental reporting

The directors are of the opinion that the Group is engaged in a single segment
of business, that is investment business, and therefore no segmental reporting
is provided.

2. Investment income
                                   Unaudited      Unaudited      Audited       
                                   6 months       6 months       Year ended    
                                   to 30 June     to 30 June     31 December   
                                   2013           2012           2012          
                                   £'000          £'000          £'000       
                                                                                  
                                                                               


                                                                           
Income from investments                     1,546          1,063          2,491 
                                                                           
Other income/(loss)                             8            (1)            (5) 


                                                                               
                                      ___________    ___________    ___________
                                                                               
                                            1,554          1,062          2,486
                                                                               
                                        _________      _________      _________
                                                                               

3. Proposed dividends
               Unaudited             Unaudited             Audited              
               6 months to           6 months to           Year ended           
               30 June 2013          30 June 2012          31 December 2012     
               Interim               Interim               Final                
                                                                                
                                                                                
                                                                                
                 Pence per             Pence per             Pence per          


                share       £'000     share       £'000     share       
£'000     


                                                                                
                                                                                
                                                                                

Ordinary               2.7       675         2.7       675         4.9     
1,225
shares                                                                          
                                                                                
                                                                                
                                                                                

Preference                                                                      

shares -                                                                        


                  1.75       175        1.75       175        1.75       
175
fixed                                                                            
                                                                             
                       _________             _________             
_________ 
                                                                             
                             850                   850                 
1,400 
                                                                             
                         _______               _______               
_______ 
                                                                             
The directors have declared an interim dividend of 2.7p (2012 - 2.7p) per
ordinary share, payable on 7 November 2013 to shareholders registered on 11
October 2013. The shares will be quoted ex-dividend on 9 October 2013. 
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. 
Amounts recognised as distributions to ordinary shareholders in the period: 


                  Unaudited             Unaudited             Audited              
               6 months to           6 months to           Year ended           
               30 June 2013          30 June 2012          31 December 2012     
                                                                                
                                                                                
                                                                                
                   Pence per             Pence per             Pence per          


                share       £'000     share       £'000     share       
£'000     


                                                                                
                                                                                
                                                                                

Ordinary                                                                        

shares -                                                                        
                                                                                

final                  4.9     1,225         4.7     1,175         4.7     
1,175
                                                                                

Ordinary                                                                        

shares -                                                                        
                                                                                

interim                  -         -           -         -         2.7       
675
                                                                                

Preference                                                                      

shares -                                                                        
                                                                                

fixed                 1.75       175        1.75       175         3.5       
350
                                                                                


                       _________             _________             
_________ 
                                                                             
                           1,400                 1,350                 
2,200 
                                                                             
                         _______               _______               
_______ 


                                                                                
    4. Earnings per ordinary share
                                               Unaudited  Unaudited  Audited   
                                               6 months   6 months   Year ended
                                               to 30 June to 30 June 31        
                                               2013       2012       December  
                                               £'000      £'000      2012     
                                                                       £'000     


                                                                           
Basic earnings per share                                                        
                                                                           
Calculated on the basis of:                                                     
                                                                           
Net revenue profit after preference                 1,180        704      1,754
dividends                                                                       
                                                                           
Net capital profit                                    852        338         11 


                                                                               
                                                _________  _________  _________


                                                                           
Net total earnings after preference                 2,032      1,042      1,765
dividends                                                                       


                                                                               
                                                  _______    _______    _______


                                                                           
Ordinary shares in issue                           25,000     25,000     25,000 


                                                                               
                                                  _______    _______    _______


                                                                           
Diluted earnings per share                                                      
                                                                           
Calculated on the basis of:                                                     
                                                                           
Net revenue profit                                  1,355        879      2,104 
                                                                           
Net capital profit                                    852        338         11 


                                                                               
                                                _________  _________  _________


                                                                           
Profit after taxation                               2,207      1,217      2,115 


                                                                               
                                                  _______    _______    _______


                                                                           
Ordinary and preference shares in issue            35,000     35,000     35,000 


                                                                               
                                                  _______    _______    _______
                                                                               


Diluted earnings per share is calculated taking into account the preference
shares which are convertible to ordinary shares on a one for one basis, under
certain conditions, at any time during the period 1 January 2006 to 31 December
2025 (both dates inclusive).

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:
                                   Unaudited    Unaudited    Audited     
                                30 June      30 June      31 December 
                                2013         2012         2012        
                                £'000        £'000        £'000       
                                                                      
                                                                      


                                                                  
Total net assets                      24,152       23,297       23,345 
                                                                  
Less convertible preference         (10,000)     (10,000)     (10,000)
shares                                                                 


                                                                      
                                ____________ ____________ ____________


                                                                  
Net assets attributable to            14,152       13,297       13,345
ordinary shareholders                                                  


                                                                      
                                   _________    _________    _________
                                                                      



Diluted net asset value is calculated on the total net assets in the table
above and on 35,000,000 shares, taking into account the preference shares which
are convertible to ordinary shares on a one for one basis, under certain
conditions, at any time during the period 1 January 2006 to 31 December 2025
(both dates inclusive).


6. Financial information

This interim statement is not the company's statutory accounts. The statutory
accounts for the year ended 31 December 2012 have been delivered to the
Registrar of Companies and received an audit report which was unqualified, did
not include a reference to any matters to which the auditors drew attention by
way of emphasis without qualifying the report, and did not contain statements
under section 498(2) or (3) of the Companies Act 2006.

The Interim Report will be sent to the company's shareholders shortly, and
members of the public may obtain a copy at that time on application to the
company's registered office or by download at the company's website
www.baitgroup.co.uk.


7. Retained earnings

The table below shows the movement in the retained earnings analysed between
revenue and capital items.
                                        Capital       Retained     
                                        reserve       earnings     
                                        £'000                      
                                                      £'000        
                                                                   
                                                                   


                                                               
1 January 2013                               (12,900)         1,245 
                                                               
Allocation of profit for the year                 852         1,355 
                                                               
Ordinary and preference dividends paid              -       (1,400) 


                                                                   
                                         ____________  ____________


                                                               
At 30 June 2013                              (12,048)         1,200 


                                                                   
                                            _________     _________
                                                                   


The capital reserve includes £1,213,000 of investment holding gains (30 June
2012 - £45,000, 
31 December 2012 - £87,000 loss). 
                                                                                
DIRECTORS' RESPONSIBILITIES STATEMENT 
Principal risks and uncertainties 
The principal risks and uncertainties faced by the company continue to be as
described in the previous annual accounts. Further information on each of these
areas, together with the risks associated with the company's financial
instruments are shown in the Directors' Report and notes to the financial
statements within the Annual Report and Accounts for the year ended 31 December
2012. 
The Chairman's Statement and Managing Director's report include commentary on
the main factors affecting the investment portfolio during the period and the
outlook for the remainder of the year. 
Directors' responsibilities statement 
The Directors are responsible for preparing the half-yearly report in
accordance with applicable law and regulations. The Directors confirm that to
the best of their knowledge the interim financial statements, within the
half-yearly report, have been prepared in accordance with IAS 34 'Interim
Financial Reporting'. The Directors further confirm that the Chairman's
Statement and Managing Director's Report includes a fair review of the
information required by 4.2.7R and 4.2.8R of the FSA's Disclosure and
Transparency Rules. 
The Directors of the company are listed in the section preceding the Chairman's
Statement. 
The half-yearly report was approved by the Board on 29 August 2013 and the
above responsibility statement was signed on its behalf by: 


    Jonathan C Woolf
    
    INDEPENDENT REVIEW REPORT TO

BRITISH & AMERICAN INVESTMENT TRUST PLC


Introduction

We have reviewed the condensed set of consolidated financial statements in the
half-yearly financial report of British & American Investment Trust PLC for the
six months ended 30 June 2013 which comprises the Consolidated Income
Statement, the Consolidated Statement of Changes in Equity, the Consolidated
Balance Sheet, the Consolidated Cashflow Statement and the related explanatory
notes that have been reviewed. We have read the other information contained in
the half yearly financial report Group Financial Highlights, the Chairman's
Statement, the Managing Director's Report, the Group Investment Portfolio and
the Directors responsibilities statement, and considered whether it contains
any apparent misstatements or material inconsistencies with the information in
the condensed set of financial statements.


This report is made solely to the company's members, as a body, in accordance
with International Standard on Review Engagements (UK and Ireland) 2410,
'Review of Interim Financial Information performed by the Independent Auditor
of the Entity'. Our review work has been undertaken so that we might state to
the company's members those matters we are required to state to them in an
independent  review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other
than the company and the company's members as a body, for our review work, for
this report, or for the conclusion we have formed. 
Directors' responsibilities 
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the Disclosure and Transparency
Rules of the United Kingdom's Financial Services Authority. 
As disclosed in note 1,the annual financial statements of the group are
prepared in accordance with International Financial Reporting Standards as
adopted by the European Union. The condensed set of financial statements
included in this half-yearly financial report has been prepared in accordance
with International Accounting Standard 34, 'Interim Financial Reporting', as
adopted by the European Union. 
Our responsibility 
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. 
Scope of review 
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity'.   A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK and
Ireland) and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion. 
Conclusion 
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2013 is not prepared, in all
material respects, in accordance with International Accounting Standard 34,
'Interim Financial Reporting', as adopted by the European Union and the
Disclosure and Transparency Rules of the United Kingdom's Financial Services
Authority. 
GRANT THORNTON UK LLP
AUDITOR 
London 
29 August 2013 

END 
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