Final Results

Close Brothers Dev VCT PLC 7 March 2002 CLOSE BROTHERS DEVELOPMENT VCT PLC Revenue return enhanced Total dividend for the year 4.00 pence 7 March 2002 Close Brothers Development VCT PLC ('the Company'), which provides equity and debt finance to growing unquoted companies across a variety of sectors and is managed by Close VCT Management, today announces preliminary results for the year ended 31 December 2001: Net Asset Value Â£13.6 million (2000: Â£14.2 million) Net Asset Value per share 93.8 pence (2000: 96.8 pence) Net final dividend 2.40 pence per share (2000: 2.35 pence) Interim dividend 1.60 pence per share (2000: 1.40 pence) Total dividend 4.00 pence per share (2000: 3.75 pence) During the course of the last year, Close VCT Management on behalf of the Company has invested Â£4.5 million in qualifying investments in addition to the amounts previously reserved for investment. After allowing for a further Â£400,000 which was invested subsequent to the year end, this represents a qualifying investment level of 76%. The following investments were made during the year: * Dolphin Nurseries (children's nurseries) * Leisure Links International (golf course) * Consolidated Communications (public relations) * Fastrack Resources Group (temporary and permanent staff recruitment) * Peakdale molecular (chemical compounding) * The Q Garden Company (garden centres) Roderick Davidson, Chairman of the Close Development VCT, commented: 'We are encouraged both by the strong investment progress made during the year and by the continued enhancement in the dividend payable to shareholders, which we consider to be a key element in a successful venture capital trust. The underlying portfolio companies are conservatively financed, established businesses, selected in line with our lower risk investment policy structured to provide income generation. We look forward to the future with confidence.' For further information, please contact: Patrick Reeve, Managing Director John West Ole Bettum, Director Justin Griffiths Close VCT Management Tavistock Communications Tel: 020 7426 4000 Tel: 020 7600 2288 Notes to Editors: 1. Close VCT Management is the specialist Venture Capital Trust division of Close Brothers Investment Limited (CBIL) led by Patrick Reeve (Managing Director) and Ole Bettum (Director). It was established in 1996 and currently manages a portfolio of four VCTs which have to date raised a total of Â£96 million from private investors. * Close Brothers Venture Capital Trust PLC invests in a broad range of unquoted asset-backed businesses in the hotel, care home, residential property development, health and fitness and cinema sectors. It is aimed at providing investors with a lower risk investment profile whilst at the same time generating a strong dividend yield * Close Brothers Protected VCT PLC is similarly aimed at providing investors with a lower risk investment opportunity, with 50% of net funds raised invested in loans guaranteed by The Royal Bank of Scotland. The majority of the balance is invested in a portfolio of 32 AIM stocks. * Close Brothers Development VCT PLC provides equity and debt finance to growing unquoted companies across a variety of sectors, with investments ranging from technology-orientated to service and asset-backed businesses * Close Technology & General VCT PLC offers investors the opportunity to participate in a balanced portfolio of technology and non-technology businesses. 2. Close Brothers Investment limited is a subsidiary of Close Brothers Group plc and is regulated by the FSA. CHAIRMAN'S STATEMENT Introduction I am pleased to present to you the preliminary results for the Company for the year ended 31 December 2001, being the third year following the launch of Close Brothers Development VCT PLC. The year under review has been a volatile one on both a domestic and global front. However, the expectations and targets that the Company set in the original prospectus continue to be met and qualifying unquoted investments now comfortably exceed the 70 per cent. level required by the Inland Revenue. The Company has been largely unaffected by the impact of the events of 11 September 2001 and has managed to enhance its revenue return despite a small fall in net asset value. Investment progress During the course of the year, the Manager on behalf of the Company has invested a further Â£4.5 million in qualifying investments in addition to the amounts previously reserved for investment. After allowing for a further Â£400,000 which was invested subsequent to the year end, this represents a qualifying investment level of 76%. The following were the investments made over the course of the year: Â£'000 Dolphin Nurseries (children's nurseries) 300 Leisure Links International (golf courses) 700 Consolidated Communications (public relations) 1,000 Fastrack Resources Group (temporary and permanent staff recruitment) 1,000 Peakdale Molecular (medicinal chemistry) 1,000 The Q Garden Company (garden centres) 500 4,500 Further details of individual investments can be found in the portfolio review. Results and dividend As at 31 December 2001 the net asset value of the Company was Â£13.6 million, compared to Â£14.2 million at 31 December 2000. This equates to net asset values per share of 93.8 pence and 96.8 pence respectively. The main reason for the fall in net asset value over the year is attributable to downward adjustments in our investments in Swetenhams Marketing Services and Odyssey Clubs Group. Net income after taxation for the year amounted to Â£635,000 (2000: Â£570,000) enabling the board to declare a net final dividend of 2.40 pence per share (2000: 2.35 pence). This is in addition to the interim dividend of 1.60 pence per share (2000: 1.40 pence) and brings the total dividend for the year to 4.00 pence (2000: 3.75 pence). The final dividend will be paid on 17 April 2002 to shareholders on the register on 15 March 2002. Outlook We are encouraged both by the strong investment progress made during the year and by the continued enhancement in the dividend payable to shareholders, which we consider to be a key element in a successful Venture Capital Trust. The underlying portfolio companies are conservatively financed, established businesses, selected in line with our lower risk investment policy structured to provide income generation. We look forward to the future with confidence. Roderick Davidson Chairman Close Brothers Development VCT PLC Statement of Total Return (incorporating the revenue account) for the year to 31 December 2001 Year ended Year ended Notes 31 December 2001 31 December 2000 Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 (Losses)/gains on investments 1 & 2 - (321) (321) - 652 652 Income 3 1,045 - 1,045 937 - 937 Investment management fees 1 & 4 (80) (239) (319) (81) (244) (325) Other expenses 1 & 5 (107) (30) (137) (99) (30) (129) Return on ordinary activities before tax 858 (590) 268 757 378 1,135 Tax on ordinary activities 6 (223) 70 (153) (187) 67 (120) Return attributable to equity shareholders 635 (520) 115 570 445 1,015 Dividends 7 (581) - (581) (550) - (550) Transfer to/(from) reserves 54 (520) (466) 20 445 465 Return per share 8 4.3p (3.6)p 0.7p 3.9p 3.0p 6.9p The revenue columns of this statement represent the profit and loss account of the Company. The accompanying notes are an integral part of this statement. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. Close Brothers Development VCT PLC Balance Sheet at 31 December 2001 31 December 31 December 2001 2000 Notes Â£'000 Â£'000 Fixed asset investments Qualifying 10,630 3,566 Non-qualifying 3,001 8,983 Total fixed asset investments 9 13,631 12,549 Current assets Debtors 10 86 87 Short term money market deposits 448 2,037 534 2,124 Creditors: due within one year 11 (514) (476) Net current assets 20 1,648 Net assets 13,651 14,197 Represented by: Called up share capital 12 7,280 7,331 Special reserve 13 6,513 6,593 Capital redemption reserve 13 51 - Capital reserve 13 realised (589) (398) unrealised 315 644 Revenue reserve 13 81 27 Total equity shareholders' funds 15 13,651 14,197 Net asset value per share 14 93.8p 96.8p Close Brothers Development VCT PLC Cash flow Statement for the year ended 31 December 2001 Year ended Year ended 31 December 31 December 2001 2000 Notes Â£'000 Â£'000 Operating activities Investment income received 668 560 Deposit interest received 86 206 Investment management fees paid (391) (322) Other cash payments (150) (135) Net cash inflow from operating activities 17 213 309 Taxation UK corporation tax paid - (18) Capital expenditure and financial investments Purchase of qualifying investments (7,140) (2,100) Purchase of non-qualifying investments - (4,494) Disposals of non-qualifying investments 5,994 1,500 Net cash outflow from investing activities (1,146) (5,094) Equity dividends paid Dividends paid on ordinary shares 7 (576) (425) Net cash outflow before financing (1,509) (5,228) Financing Redemption of own shares (80) (5) Decrease in cash and cash equivalents 16 (1,589) (5,233) Close Brothers Development VCT PLC Notes to the financial statements For the year ended 31 December 2001 1. ACCOUNTING POLICIES The financial statements are prepared in accordance with applicable accounting standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' (SORP) in all material aspects. The particular accounting policies adopted are described below. Accounting convention The financial statements are prepared under the historical cost convention, modified by the revaluation of certain investments. Capital reserves Realised reserves The following are accounted for in this reserve: - gains and losses on the realisation of investments; - expenses and finance costs, together with the related taxation effect; and - realised gains and losses on transactions undertaken to hedge an exposure of a capital nature. Unrealised reserve The following are accounted for in this reserve: - increases and decreases in the valuation of investments held at the year end; and - unrealised gains and losses on transactions undertaken to hedge an exposure of a capital nature. Special reserve This reserve is distributable and is primarily used for the cancellation of the Company's share capital. Investments Listed investments are stated at market value based upon middle market prices at the end of the accounting period. Unquoted investments are stated at a valuation determined by the directors in accordance with the British Venture Capital Trust Association guidelines. Other than amounts accrued under redemption premium on secured loan stock, the unrealised depreciation or appreciation on the valuation of investments is dealt with in the unrealised capital reserve and gains and losses arising on the disposal of investments are dealt with in the realised capital reserve. It is not the Company's policy to exercise controlling or significant influences over investee companies. Therefore the results of these companies are not incorporated into the revenue account except to the extent of any income accrued. Income and expenses All income and expenses are treated on the accruals basis and dividend income (other than on non-equity shares) is included in revenue when the investment is quoted ex-dividend. The fixed returns on non-equity shares and on debt securities are recognised on a time apportionment basis. Management expenses 75 per cent. of management expenses, representing the proportion of the investment management fee and other expenses attributable to the enhancement of the value of the investments of the Company, has been charged to capital reserves, net of corporation tax. The balance of expenses is charged to the revenue account. Taxation Taxation has been applied on the current basis in accordance with Financial Reporting Standard No.16. 2. (Losses)/gains on investments Year Year ended ended 31 December 31 December 2001 2000 Â£'000 Â£'000 Realised gains 8 1 Unrealised (losses)/gains (329) 651 (321) 652 Unrealised losses of Â£247,000 (year ended 31 December 2000: Â£66,000) arise as a result of the recognition of the earned portion of the ultimate redemption premium on unlisted loan stock, which are carried at cost. 3. Income Year Year ended ended 31 December 31 December 2001 2000 Â£'000 Â£'000 Income from investments UK franked investment income - 5 UK unfranked investment income 728 697 Other income 247 66 975 768 Other income Deposit income 70 169 Total income 1,045 937 Total income comprises: Interest 798 866 Dividends - 5 Other 247 66 Total 1,045 937 Income from investments: Listed 332 584 Unlisted 643 184 Total 975 768 4. Investment management fee Year Year ended ended 31 December 31 December 2001 2000 Â£'000 Â£'000 Charged to Revenue 80 81 Charged to Capital 239 244 Total 319 325 5. Other expenses Year Year Ended Ended 31 December 31 December 2001 2000 Â£'000 Â£'000 Secretarial and Administrative fee 40 40 Directors' fees 54 52 Auditors' remuneration - audit fees 13 12 Other 30 25 Less: charged to capital (30) (30) 107 99 6. Tax on ordinary activities 31 December 2001 31 December 2000 Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 UK corporation tax at 20% 153 - 153 62 (67) (5) Tax attributable to unfranked income 70 (70) - 125 - 125 223 (70) 153 187 (67) 120 7. Dividends and other appropriations Year ended Year ended 31 December 31 December Dividends on equity shares: 2000 2000 Â£'000 Â£'000 Interim paid of 1.60p per share (2000: 1.40p) 232 205 Final proposed of 2.40p per share (2000: 2.35p) 349 345 Total dividends 581 550 8. Return per share Year Ended Year Ended 31 December 31 December 2001 2000 Revenue Capital Total Revenue Capital Total 4.3 pence (3.6) pence 0.7 pence 3.9 pence 3.0 pence 6.9 pence Revenue return per share is based on the net revenue on ordinary activities after taxation but before deduction of dividends and other appropriations of Â£635,000 (2000: Â£570,000) in respect of the weighted number of shares in issue during the period, being 14,611,142 shares (2000: 14,662,607 shares). Capital return per ordinary share is based on net capital loss for the financial year of Â£520,000 (2000: Â£445,000 profit) in respect of the Ordinary Shares and based on the same weighted average number of shares as for revenue return shown above. 9. Investments 31 December 31 December 2001 2000 Â£'000 Â£'000 Investments listed on a recognised investment exchange 3,001 8,983 Qualifying unlisted investments 10,630 3,566 Total 13,631 12,549 Qualifying unlisted Listed Total Valuation basis Â£'000 Â£'000 Â£'000 Opening valuation: 1 January 2001 3,566 8,983 12,549 Purchases at cost 7,150 - 7,150 Disposal - proceeds - (5,994) (5,994) - realised profit - 8 8 Unrealised (depreciation)/appreciation (86) 4 (82) Closing valuation: 31 December 2001 10,630 3,001 13,631 Opening unrealised appreciation 716 - 716 Change in unrealised (depreciation)/appreciation (86) 4 (82) Closing unrealised appreciation 630 4 634 Historical cost basis Opening book cost 2,850 8,983 11,833 Additions at cost 7,150 - 7,150 Disposals at cost - (5,986) (5,986) Closing book cost 10,000 2,997 12,997 In addition Close Brothers Development VCT PLC holds 15,000 Warrants in Consolidated Communications Management Ltd exercisable for 15,000 shares at Â£15 per share. The directors' valuation of the Warrants is nil. 10. Debtors 31 December 31 December 2001 2000 Â£'000 Â£'000 Prepayments and accrued income 86 87 11. Creditors: amounts falling due within one year 31 December 31 December 2001 2000 Â£'000 Â£'000 UK corporation tax payable 109 - Proposed dividend 349 345 Other creditors 56 131 514 476 12. Share Capital 31 December 31 December 2001 2000 Â£'000 Â£'000 Authorised: 15,000,000 Ordinary Shares of 50p each 7,500 7,500 Allotted, called-up and fully-paid: 14,559,942 Ordinary Shares of 50p each 7,280 7,331 During the year the Company purchased for cancellation 102,665 shares for a consideration of Â£79,451. This represents approximately 0.7% of the share capital in issue at 31 December 2001. 13. Reserves Capital Realised Unrealised Redemption Special capital capital Revenue reserve reserve reserve reserve reserve Total Ordinary Shares Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Beginning of year - 6,593 (398) 644 27 6,866 Redemption of own shares 51 (80) - - - (29) Gains/(losses) on investments - - 8 (329) - (321) Capitalised expenses net of tax - - (199) - - (199) Retained net revenue - - - - 54 54 End of year 51 6,513 (589) 315 81 6,371 14. Net asset value per share The net asset value per share and the net asset values at the year end calculated in accordance with the Articles of Association were as follows: 31 December 31 December 2001 2000 Net asset value per share attributable 93.8 pence 96.8 pence The movements during the period of the assets attributable were as follows: 31 December 31 December 2001 2000 Â£'000 Â£'000 Total assets attributable at beginning of the year 14,197 13,737 Redemption of own shares (80) - Total return for the year 115 1,015 Dividends appropriated in the year (581) (550) Cost of share premium cancellation - (5) Total net assets attributable at end of year 13,651 14,197 Net asset value per share is based on net assets at the year end. 15. Reconciliation of movements in shareholders' funds 31 December 31 December 2001 2000 Â£'000 Â£'000 Opening shareholders' funds 14,197 13,737 Decrease in share premium - (6,598) Creation of special reserve - 6,593 Redemption of own shares (80) - Total return to shareholders before dividends 115 1,015 Dividends (581) (550) Closing shareholders' funds 13,651 14,197 16. Analysis of changes in cash during the year 31 December 31 December 2001 2000 Â£'000 Â£'000 Beginning of the year 2,037 7,270 Net cash outflow (1,589) (5,233) End of the year 448 2,037 17. Reconciliation of net revenue before finance costs and taxation to net cash inflow from operating activities 31 December 31 December 2001 2000 Â£'000 Â£'000 Net revenue before finance costs and taxation 858 757 Investment management fee charged to capital (239) (244) Other expenses charged to capital (30) (30) Increase in debtors (251) (47) Decrease in creditors (86) (2) Tax on investment income (39) (125) Net cash inflow from operating activities 213 309 18. Annual Report and Accounts Copies of the Annual Report and Accounts will be sent to Close Brothers Development VCT PLC's shareholders. Copies of this announcement and of the Annual Report and Accounts will be made available to the public at Close Brothers Development VCT PLC's registered office at Close Brothers Investment Limited, 12 Appold Street, London, EC2A 2AW. THE PORTFOLIO OF INVESTMENTS At 31 December 2001 Percentage Invested Unrealised Total of equity at cost appreciation owned Â£'000 Â£'000 Â£'000 Qualifying investments Careforce Staffing Limited 40.0% 1,500 28 1,528 Consolidated Communications Management Limited 7.0% 1,000 21 1,021 Dolphin Nurseries Limited 20.0% 1,300 - 1,300 Fastrack Resources Group Limited 32.7% 1,000 10 1,010 Leisure Links International Limited 40.0% 700 16 716 Odyssey Clubs Group Limited 18.0% 1,500 446 1,946 Peakdale Molecular Limited 7.2% 1,000 5 1,005 Swetenhams Marketing Services Limited 16.2% 1,500 104 1,604 The Q Garden Company Limited 15.0% 500 - 500 Total qualifying investments by value 10,000 630 10,630 Non-qualifying investments Northern Rock FRN due January 2004 1,498 2 1,500 Royal Bank of Scotland FRN due January 2003 1,499 2 1,501 Total non-qualifying investments 2,997 4 3,001 Total investments 12,997 634 13,631 Where otherwise stated, valuations are at cost, with adjustments made for the accrued redemption premium on secured loan stock. Careforce Staffing Ltd Careforce Staffing was established in 1999 to build, both organically and through acquisition, a group providing home care services to the elderly, principally on behalf of local authorities. Careforce currently operates four units, in Essex, Hertfordshire, Cambridge and Rotherham. The business is peforming well and plans are underway for flotation on the Alternative Investment Market. Consolidated Communications Management Limited Consolidated Communications is a management buy-out of an established public relations company, formed in 1991, with a broad range of 'blue-chip' clients. Although the public relations industry has been adversely affected following the events of September 11th, Consolidated Communications has continued to win new clients and was recently named 'Agency of the Year' by PR Week. Dolphin Nurseries Limited (formerly First Start Children's Nurseries Ltd) Dolphin aims at building a group of private children's day nurseries in and around Greater London. An existing nursery in Upminister has been purchased and sites in Chigwell and Tooting are being developed. Fastrack Resources Group Limited Fastrack provides recruitment services in respect of both temporary and permanent staff, with a particular specialisation in the rail sector. Leisure Links International Limited Leisure Links was formed by an experienced management team to build up a group owning and operating golf courses, with associated consultancy services. The Company's first course is the Test Valley Golf Club in Hampshire. Subsequent to the year end, a second course was acquired, Chesfield Downs, outside Stevenage with the Company investing a further Â£400,000 to help fund the acquisition. Odyssey Clubs Group Ltd Odyssey owns a 30,000 sq.ft. health and fitness club on an 11 acre site outside Stevenage, a 20,000 sq.ft. club in Henley and has a 50% stake in a company which owns a 30,000 sq.ft. club on a 6 acre site outside Beaconsfield in Buckinghamshire. Another venture capital trust managed by a third party, has invested Â£600,000 to enhance further its facilities and the investment is valued on the basis of the price of this new investment. This has increased the value from the interim stage, though the investment is still below its valuation at 31 December 2000. Peakdale Molecular Limited Peakdale Molecular is a medicinal chemistry company founded in 1992. Its business is that of providing chemical compounds to clients such as Glaxo SmithKline and Pfizer for use in early stage drug discovery. The company operates from a substantial freehold site in Derbyshire. Swetenhams Marketing Services Swetenhams provides data-related marketing services to the direct marketing industry, comprising list broking and management services, hosting and market automation systems. The Company was adversely affected by market conditions affecting the software industry generally, but after a successful restructuring, the Company is now performing once again to plan. The valuation, which was written down to below cost at the interim stage, has now been increased to original cost, though this is still below its valuation at 31 December 2000. The Q Garden Company Limited The Q Garden Company is a chain of garden centres based in the south of England. It currently owns three centres in Fareham, Oxfordshire and Essex, two of which are freehold properties. This information is provided by RNS The company news service from the London Stock Exchange

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