Final Results

PICCADILLY GROWTH TRUST PLC PRELIMINARY ANNOUNCEMENT OF AUDITED RESULTS The Directors announce the audited consolidated statement of results for the year ended 30 April 2002: CONSOLIDATED STATEMENT OF TOTAL RETURN (*incorporating the revenue account) Year ended Year ended 30 April 2002 30 April 2001 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Losses on - (2,801) (2,801) - (1,170) (1,170) investments Exchange losses on - (12) (12) - (60) (60) capital items Dividends and 247 - 247 231 - 231 interest Subsidiary's 25 - 25 42 - 42 dealing profit Investment - (107) (107) - (162) (162) management fee Other expenses (93) - (93) (80) - (80) Net return on ordinary activities before finance costs and 179 (2,920) (2,741) 193 (1,392) (1,199) taxation Interest payable - (77) (77) (3) (143) (146) and similar charges Return on ordinary 179 (2,997) (2,818) 190 (1,535) (1,345) activities before taxation Taxation on (9) - (9) (30) - (30) ordinary activities Return on ordinary 170 (2,997) (2,827) 160 (1,535) (1,375) activities after taxation for the period Dividends in (215) - (215) (165) - (165) respect of equity shares Transfer from (45) (2,997) (3,042) (5) (1,535) (1,540) reserves Return per ordinary 1.59p (27.99)p (26.40)p 1.94p (18.62)p (16.68)p share The revenue column of this statement is the consolidated revenue account of the Group. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. CONSOLIDATED BALANCE SHEET Year Ended Year Ended 30 April 30 April 2002 2001 £'000 £'000 Fixed assets 14,813 13,016 Investments Current assets Investments 45 - Debtors 715 104 Cash at bank - 103 760 207 Creditors - Amounts falling due (2,318) (2,355) within one year Net current liabilities (1,558) (2,148) Net assets 13,255 10,868 Capital and reserves Called up share capital 130 82 Share premium account 8,208 2,827 Capital redemption reserve 2 2 Capital reserve - realised 5,000 5,398 Capital reserve - unrealised (155) 2,444 Revenue reserve 70 115 Equity shareholders funds 13,255 10,868 Net asset value per ordinary 101.57p 131.83p share: CONSOLIDATED STATEMENT OF CASHFLOWS Year ended Year ended 30 April 30 April 2002 2001 £'000 £'000 Operating activities Investment income received 240 258 Deposit interest received 4 2 Investment management fees (80) (181) paid Company secretarial fees paid (12) (12) Other cash payments (82) (83) Income tax recovered 21 - Net cash inflow/(outflow) 91 (16) from operating activities Servicing of finance Loan interest paid and other (80) (146) finance costs Net cash outflow from (80) (146) servicing of finance Taxation Corporation tax paid (12) - Net cash outflow from (12) - taxation Capital expenditure and financial investments Purchases of listed (3,680) (2,035) investments Sale of listed investments 2,795 2,240 Net cash outflow/(inflow) from capital expenditure and financial investment (885) 205 Equity dividends paid (190) (165) Financing Amounts (repaid)/drawn under (825) 200 revolving credit facility Issue of shares 1,492 - Expenses of share issue (171) - Net cash inflow from 496 200 financing (Decrease)/increase in cash (580) 78 The above financial information does not constitute statutory financial statements as defined in Section 240 of the Companies Act 1985. The comparative financial information is based on the statutory financial statements for the year ended 30 April 2001. Those financial statements, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. Statutory financial statements for the year ended 30 April 2002 will be delivered to the Registrar. CHAIRMAN'S STATEMENT The performance of Piccadilly Growth Trust last year was a tale of two halves. From May until September the market was falling and growth stocks were performing badly, culminating in the events of September 11 and resultant collapse of markets worldwide. Our portfolio underperformed its benchmark and our gearing, although reduced, exacerbated this underperformance. Since the end of September markets have shown some recovery and the performance differential between growth and value stocks has reduced. Our portfolio has outperformed its benchmark and gearing has helped rather than hindered. We have declared total dividends of 2.0p net per ordinary share, the same as we paid last year. Our aim is to provide growth in income and we regret being unable to increase the dividend. However over the past couple of years companies have tended to ignore shareholders wishes for a rising dividend and in many cases have cut back payments. This has fed through to a reduction in our income per share and therefore we cannot increase the dividend without instructing our investment manager to change his strategy and go for income rather than growth, a philosophy we are unwilling to undertake. We have however instituted a more active use of our trading subsidiary. This takes short term positions in shares with the intention of making trading profits which are then passed on to the parent company as income. We believe this will continue to bolster the income account, in the year reported the trading subsidiary declared a dividend of £40,000. The Board reviewed accounting policies during the year and have made one minor change. When the Company first listed we decided that all management expenses would be charged to the capital account. This was on the basis that our mandate was for capital growth. However we do provide dividend income to shareholders and felt that allowance should be made for this. Having reviewed the relative contributions from each area we have decided to charge expenses 90% to capital and 10% to income in future years. The major event for the company recently was the KHSFC reconstruction, where we provided our quoted shares to shareholders of KHSFC, in place of their investment in a private company. As a result of this deal we issued 2.3 million shares, increasing the size of the company by 21.4%. This should further reduce our expense ratio and help the liquidity of our shares. We welcome KHSFC shareholders and hope their investment with us will prove rewarding. We will continue to seek other ways of expanding the size of the Company as we believe this would be of benefit to existing shareholders. The Annual General Meeting contains resolutions that will allow Directors to both issue new shares and to buy in shares. If passed, this gives the Board the ability to partially control the discount between the share price and asset value by buying stock in on a wide discount and issuing on a premium. The Board wishes to prevent undue volatility in the share price and to ensure the price moves in conjunction with the asset value. I hope you will support these measures, which when used will be to the benefit of shareholders. There now appears to be a consensus that the economic slowdown world-wide has bottomed and that recovery has started. There is, of course, much debate about how strong the recovery will be with some forecasters predicting reasonable growth and others a profitless recovery. Suffice it to say that equity markets are at a relatively low level and our investment manager has a portfolio of stocks with good growth prospects at a reasonable value. We therefore hope to report continuing improvement in our asset value over the next year. Peter Metcalfe Chairman 13 June 2002 Copies of the Company's Annual Report and Accounts for the year ended 30 April 2002 will be sent to shareholders in July and will be available to members of the public from the Registered Office at 23 Cathedral Yard, Exeter, Devon, EX1 1HB.

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