Final Results

CHELVERTON GROWTH TRUST PLC PRELIMINARY ANNOUNCEMENT OF RESULTS The Directors announce the unaudited statement of results for the year ended 31 August 2005 as follows:- SUMMARISED STATEMENT OF TOTAL RETURN (*incorporating the revenue account) of the Company 1 September 2004 1 September 2003 to 31 August 2005 to 31 August 2004 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 826 826 - 1,104 1,104 Income 57 - 57 130 - 130 Investment management (44) (134) (178) (43) (128) (171) fee Other expenses (211) - (211) (213) - (213) Net return before finance costs and taxation (198) 692 494 (126) 976 850 Interest payable (8) (26) (34) (8) (24) (32) Return on ordinary activities before taxation (206) 666 460 (134) 952 818 Taxation on ordinary - - - - - - activities Return on ordinary activities after taxation (206) 666 460 (134) 952 818 Transfer (from)/to (206) 666 460 (134) 952 818 reserves Revenue Capital Total Revenue Capital Total Pence Pence Pence Pence Pence Pence Return per Ordinary (1.14) 3.67 2.53 (0.73) 5.21 4.48 share * The revenue column of this statement is the revenue account of the Company. BALANCE SHEET As at 31 August 2005 31 August 2005 31 August 2004 £'000 £'000 Fixed assets Investments 7,179 7,711 Current assets Debtors 364 33 Cash at bank 41 - 405 33 Creditors - amounts falling due within one year Creditors 310 923 Net current assets / 95 (890) (liabilities) Net assets 7,274 6,821 Share capital and reserves Called up share capital 182 182 Share premium account 2,674 2,674 Capital reserve - realised 1,537 (611) - unrealised (1,137) 352 - capital redemption reserve 7 7 Revenue reserve 4,011 4,217 Equity shareholders' funds 7,274 6,821 Pence Pence Net Asset Value per Ordinary 40.10 37.55 share SUMMARISED STATEMENT OF CASH FLOWS For the year ended 31 August 2005 1 September 2004 1 September 2003 to 31 August 2005 to 31 August 2004 £'000 £'000 Operating activities Investment income received 69 100 Deposit interest received 5 3 Investment management fees paid (178) (170) Secretarial fees paid (47) (45) Other cash payments (160) (167) Net cash outflow from operating (311) (279) activities Returns on investments and servicing of finance Interest paid (42) (28) Final distribution from subsidiary - 27 undertaking Net cash outflow from returns on (42) (1) investments and servicing of finance Capital expenditure and financial investment Purchases of investments (2,271) (1,811) Sales of investments 3,302 2,168 Net cash inflow from capital expenditure and financial 1,031 357 investment Financing Share repurchase (7) (133) Net cash inflow/ (outflow) 671 (56) Increase/ (decrease) in cash 671 (56) NOTE The above financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. This financial information has been prepared on the basis of the accounting policies stated in the statutory accounts for the year ended 31 August 2004. The auditors have reported on those accounts; their report was unqualified and did not contain a statement under Section 237 (2) or (3) of the Companies Act 1985. The 31 August 2004 accounts have been delivered to the Registrar of Companies. CHAIRMAN'S STATEMENT The revival of investor interest in FTSE 100 companies, and the takeover speculation around a number of companies in the FTSE 350, have distracted investors from the progress being made in many smaller companies. The development seen in the first six months has, therefore, not continued to the end-of-year accounts. Since the fund was launched, however, it has outperformed its benchmark, the FTSE All-Share Index, and since the merger in August 2001 the net asset value per share has increased by 16.8% compared to a rise of 2.7% in the benchmark index. Chelverton's net asset value per share has increased this year from 37.55p to 40.10p - an increase of 6.8%. In the same period the Company's benchmark index rose by 20.1%, and the FTSE 100, which makes up over 90% of the FTSE All-Share Index, rose 18.8%. While it is disappointing not to have outperformed the benchmark index during the year, it is not surprising that periodically a portfolio of smaller companies will perform less well than the larger market. The discount of the share price to the net asset value per share has narrowed in the last year from 24.1% to 15.2% and your Board and Manager continue to work on reducing it further. The Manager will be introducing a Monthly Savings Scheme across all of the funds managed by Chelverton Asset Management Limited, and it is anticipated that a build up of regular monthly purchasing will improve our market position. During the year the Company purchased 21,875 shares from a number of shareholders who took advantage of our free share dealing proposal. The purchase of these shares at the mid-market price was marginally asset-enhancing but was primarily designed to provide a simple exit for shareholders with relatively small holdings. It is intended to renew these buy-back powers at the forthcoming Annual General Meeting. David Horner, the Manager, has increased his personal holding to 1,250,000 (6.9%) with the purchase of an additional 243,632 shares through the year and has stated his intention, when not restricted by close periods, to continue to acquire shares. The political/economic situation remains uncertain at home and abroad, and that uncertainty is compounded by challenges from natural phenomena. The price of energy impacts on virtually every aspect of daily life, and if the oil price remains at historically high levels, it will act as a drag on the world economy. Closer to home the spending by the Government may have to be reined in as the UK economy is proving to be less resilient than the Government's projections. Notwithstanding these uncertainties the portfolio is in good shape with investments in some very interesting companies that would appear, given conventional yardsticks, to be undervalued. The Annual Report for the year ended 31 August 2005 will be the last for which accounts are prepared on the basis of existing UK Generally Accepted Accounting Principles ('UK GAAP'). For the financial year to 31 August 2006 our accounts will be prepared under the requirements of the revised version of UK GAAP which is converging with International Financial Reporting Standards ('IFRS'). The main difference resulting from this change will be that the portfolio will be valued at bid prices rather than the mid-market prices. If the new standards had been applied at 31 August 2005, the resulting reduction in value of the portfolio would have been in the order of 1.66p per Ordinary share. Pratt Thompson Chairman 19 October 2005

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