Final Results

Close Brothers Dev VCT PLC 04 February 2003 CLOSE BROTHERS DEVELOPMENT VCT PLC PRELIMINARY RESULTS 4 February 2003 Close Brothers Development VCT PLC ('the Company'), which provides equity and debt finance to growing unquoted companies across a variety of sectors, with investments ranging from service to asset-backed businesses, today announces preliminary results for the year ended 31 December 2002. Financial Highlights: Ordinary Shares 'C' Shares Year ended Period ended 31 December 2002 31 December 2002 Dividends per share 4.50 pence 0.00 pence Net asset value per share 80.26 pence 94.64 pence Shareholder value per share since launch: Pence per share Pence per share (ii) (ii) Total dividends for the period ended 31 December 1999 (i) 2.50 - Total dividends for the year ended 31 December 2000 3.75 - Total dividends for the year ended 31 December 2001 4.00 - Interim dividend for the year ended 31 December 2002 1.80 - Final dividend for the year ended 31 December 2002 2.70 - Net asset value at 31 December 2002 80.26 94.64 Total 95.01 94.64 Notes (i) assuming subscription for Ordinary Shares by the First Closing on 26 January 1999. (ii) excluding tax benefits received upon subscription. Commenting on the results, Roderick Davidson, Chairman of the Company, said: ' The period under review has been more volatile than we were anticipating, particularly towards the end of the year, as a more difficult economic environment led to tougher trading conditions for some of our investee companies. Despite these tougher trading conditions, a good proportion of the companies in our portfolio continue to perform well. Additionally, we are reviewing a variety of prospects for investment by both the Ordinary Shares and the new 'C' Shares. We anticipate that the current climate will give rise to interesting investment opportunities at attractive valuations though particular attention will need to be paid to trading prospects. We look forward to continuing our strategy of seeking to limit investment risk whilst generating an attractive tax free dividend yield.' For further information, please contact: Patrick Reeve / Ole Bettum Justin Griffiths Close Venture Management Tavistock Communications Tel: 020 7426 4000 Tel: 020 7600 2288 Notes to Editors: 1) Close Brothers Development VCT PLC is managed by Close Venture Management. 2) Close Venture Management is a subsidiary of Close Brothers Investment Limited which is authorised and regulated by the Financial Services Authority. 3) The financial information set out in this announcement does not constitute the company's statutory accounts for the years ended 31 December 2002 or 2001, but is derived from those accounts. Statutory accounts for 2001 have been delivered to the Registrar of Companies and those for 2002 will be delivered shortly. The auditors have reported on these accounts, their reports were unqualified and did not contain statements under s237(2) or (3) Companies Act 1985. CHAIRMAN'S STATEMENT Introduction I present the results of the Company for the year to 31 December 2002, being the fourth year following the launch of Close Brothers Development VCT PLC. The period under review has been more volatile than we were anticipating, particularly towards the end of the year, as a more difficult economic environment led to tougher trading conditions for some of our investee companies. This has led to a reduction in net asset value to 80.3 pence per Ordinary Share, from 92 pence at the interim stage and 93.8 pence at 31 December 2001. As anticipated at the time of the launch of the 'C' Share prospectus in September 2002, the Company is declaring a total dividend for the year of 4.5 pence per Ordinary Share, up from 4.0 pence the previous year. This reinforces the board's commitment, whenever possible, to providing shareholders with a strong dividend yield. The following, therefore, is the total return of the Company since launch in January 1999. Pence per Ordinary Share Dividends declared for the year to 31 December 1999 2.50 Dividends declared for the year to 31 December 2000 3.75 Dividends declared for the year to 31 December 2001 4.00 Dividends declared for the year to 31 December 2002 4.50 14.75 Net asset value at 31 December 2002 80.26 Total return at 31 December 2002 95.01 This return from an opening net asset value of 95 pence on launch compares to a 27.3 per cent. fall in the FTSE 100 index and a 24.3 per cent. fall in the AIM index over the period since launch, in both cases with dividends reinvested. Investment review Despite the tougher trading conditions, a good proportion of the Companies in our portfolio continue to perform well. These include Careforce Group (domiciliary care services to the elderly) and Dolphin Nurseries (children's day nurseries), which have both seen their value enhanced since the half year. The slowdown in consumer spending, however, has affected Odyssey Clubs Group (health clubs) and Leisure Links International (golf clubs), both of which have had provisions made against the equity element of our investment. Most disappointing of all is Fastrack Resources Group (temporary recruitment services), which is being placed into creditors' voluntary liquidation. Although we had a first charge over a portion of the debtor book and over the goodwill of the business, we have deemed it prudent at this stage to make a full provision against our investment. In addition to providing further resources to existing investee companies, investments were made in two new businesses during the year. The first was a £480,000 investment in Automotive Technik, a manufacturer of military off-road vehicles whose main clients are the UK Ministry of Defence and armed forces overseas. The second was a small investment of £50,000 in a new specialist three screen 'art house' cinema opening in February in the centre of Liverpool. Both of these investments were part of larger fundraisings, syndicated between one or more of the other Close Brothers VCT's. Results and dividend Ordinary Shares As at 31 December 2002 the net asset value of the Ordinary Shares of the Company was £11.8 million, compared to £13.7 million at 31 December 2001. This equates to a net asset value per share of 80.3 pence (2001: 93.8 pence). Net income after taxation for the year amounted to £642,000 (2001: £635,000) enabling the board to declare a net final dividend of 2.7 pence per share (2001: 2.4 pence). This is in addition to the interim dividend of 1.8 pence per Ordinary Share (2001: 1.6 pence) and brings the total dividend for the year to 4.5 pence (2000: 4.0 pence). The final dividend will be paid on 6 March 2003 to shareholders on the register on 14 February 2003. 'C' Shares As at 31 December 2002 the net asset value of the 'C' Shares of the Company was £2.3 million. This equates to net asset value per share of 94.6 pence from an initial subscription price of 95 pence after taking account of issue costs. Net income after taxation for the period amounted to a loss of £3,000, consequently the board do not recommend payment of a dividend in respect of 'C' Shares. 'C' Share issue and future prospects During the Autumn of last year we launched a fundraising of up to £20 million in a new class of 'C' Shares. Applications totalling £3.6 million have been received to date and the offers for subscription are currently scheduled to remain open until April. We are reviewing a variety of prospects for investment by both the Ordinary Shares and the new 'C' Shares. We anticipate that the current climate will give rise to interesting investment opportunities at attractive valuations though particular attention will be paid to trading prospects. We look forward to continuing our strategy of seeking to limit investment risk whilst generating an attractive tax free dividend yield. Roderick Davidson Chairman 4 February 2003 THE PORTFOLIO OF INVESTMENTS At 31 December 2002 Percentage Invested Unrealised Total of equity at cost appreciation owned £'000 £'000 £'000 Qualifying investments Automotive Technik (Holdings) Limited 8.9% 480 6 486 Careforce Group Limited 37.2% 1,500 602 2,102 City Screen (Liverpool) Limited 4.5% 50 - 50 Consolidated Communications Management Limited 10.8% 1,000 69 1,069 Dolphin Nurseries Limited 20.0% 1,049 145 1,194 Fastrack Resources Group Limited 32.7% 1,090 (1,090) - Leisure Links International Limited 26.3% 1,100 (290) 810 Odyssey Clubs Group Limited 16.0% 1,700 (352) 1,348 Peakdale Molecular Limited 7.8% 1,000 - 1,000 Swetenhams Marketing Services Limited 16.2% 1,500 157 1,657 The Q Garden Company Limited 15.0% 500 (23) 477 Total qualifying investments by value 10,969 (776) 10,193 Non-qualifying investments Royal Bank of Scotland FRN due January 2003 1 ,499 - 1,499 Total investments 12,468 (776) 11,692 Automotive Technik (Holdings) Limited The Company holds the licence to manufacture the Pinzgauer off-road vehicle, whose main clients are the UK Ministry of Defence and overseas armed forces. Careforce Group Limited Careforce Group 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 nine branches around the UK. City Screen (Liverpool) Limited The Company was formed to own and operate a three screen 'art house' cinema in the centre of Liverpool, which is due to open in February 2003. Consolidated Communications Management Limited Consolidated Communications is a management buy-out of an established public relations agency, formed in 1991, with a broad range of 'blue-chip' clients. In 2001 the Company was named 'Consultancy of the Year' at the PR Week Awards. Dolphin Nurseries Limited Dolphin is building a group of private children's day nurseries in and around Greater London. The Company currently operates four nurseries at Upminister, Chigwell, Bracknell and Tooting. Fastrack Resources Group Limited Fastrack provided recruitment services in respect of both temporary and permanent staff, with a particular specialisation in the rail sector. The Company is being placed in creditors' voluntary liquidation. Leisure Links International Limited Leisure Links owns and operates two golf courses at Test Valley in Hampshire and Chesfield Downs outside Stevenage. 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. Peakdale Molecular Limited Peakdale Molecular is principally engaged in research, processing and the supply of chemical compounds to the major pharmaceutical companies. It operates from a substantial freehold site in Chapel-en-le-Frith, 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 Q Garden Company Limited The Q Garden Company is a chain of garden centres based in the south of England. It currently owns four centres in Fareham (Hampshire), Chinnor (Oxfordshire), Stow-on-the-Wold (Gloucestershire) and Nazeing (Essex). Statement of Total Return (incorporating the revenue account) for the year to 31 December 2002 Year ended Period ended Year ended 31 December 2002 31 December 2002 31 December 2002 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Losses on investments - (1,771) (1,771) - - - - (1,771) (1,771) Income 1,059 - 1,059 4 - 4 1,063 - 1,063 Investment management fees (77) (231) (308) (3) (7) (10) (80) (238) (318) Other expenses (113) (29) (142) (4) (1) (5) (117) (30) (147) Return on ordinary activities before tax 869 (2,031) (1,162) (3) (8) (11) 866 (2,039) (1,173) Tax on ordinary (227) 68 (159) - 2 2 (227) 70 (157) activities Return attributable to equity shareholders 642 (1,963) (1,321) (3) (6) (9) 639 (1,969) (1,330) Dividends (660) - (660) - - - (660) - (660) Transfer from reserves (18) (1,963) (1,981) (3) (6) (9) (21) (1,969) (1,990) Return per share 4.4p (13.4)p (9.0)p (0.2)p (0.4)p (0.6)p 4.2p (13.8)p (9.6)p The revenue columns of this statement represent the profit and loss account of the Company. The 'C' Share return covers the period from 25 October 2002 to 31 December 2002. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. Statement of Total Return (incorporating the revenue account) for the year to 31 December 2001 Ordinary Shares 'C' Shares Total Year ended Year ended Year ended 31 December 2001 31 December 2001 31 December 2001 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Losses on investments - (321) (321) - - - - (321) (321) Income 1,045 - 1,045 - - - 1,045 - 1,045 Investment management fees (80) (239) (319) - - - (80) (239) (319) Other expenses (107) (30) (137) - - - (107) (30) (137) Return on ordinary activities before tax 858 (590) 268 - - - 858 (590) 268 Tax on ordinary (223) 70 (153) - - - (223) 70 (153) activities Return attributable to Equity shareholders 635 (520) 115 - - - 635 (520) 115 Dividends (581) - (581) - - - (581) - (581) Transfer to/(from) reserves 54 (520) (466) - - - 54 (520) (466) Return per share 4.3p (3.6)p 0.7p 0.0p 0.0p 0.0p 4.3p (3.6)p 0.7p The revenue columns of this statement represent the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. Balance Sheet at 31 December 2002 Ordinary Shares 'C' Shares Total 31 December 2002 31 December 2002 31 December 2002 £'000 £'000 £'000 Fixed asset investments Qualifying 10,193 - 10,193 Non-qualifying 1,499 - 1,499 Total fixed asset investments 11,692 - 11,692 Current assets Debtors 48 862 910 Short term money market deposits 694 1,487 2,181 742 2,349 3,091 Creditors: due within one year (663) (29) (692) Net current assets 79 2,320 2,399 Net assets 11,771 2,320 14,091 Represented by: Called up share capital 7,333 1,226 8,559 Share premium 48 1,103 1,151 Special reserve 6,513 - 6,513 Capital redemption reserve 51 - 51 Capital reserve realised (779) (6) (785) unrealised (1,458) - (1,458) Revenue reserve 63 (3) 60 Total equity shareholders' funds 11,771 2,320 14,091 Net asset value per share 80.3p 94.6p 82.3p Balance Sheet at 31 December 2001 Ordinary Shares 'C' Shares Total 31 December 2001 31 December 2001 31 December 2001 £'000 £'000 £'000 Fixed asset investments Qualifying 10,630 - 10,630 Non-qualifying 3,001 - 3,001 Total fixed asset investments 13,631 - 13,631 Current assets Debtors 86 - 86 Short term money market deposits 448 - 448 534 - 534 Creditors: due within one year (514) - (514) Net current assets 20 - 20 Net assets 13,651 - 13,651 Represented by: Called up share capital 7,280 - 7,280 Special reserve 6,513 - 6,513 Capital redemption reserve 51 - 51 Capital reserve realised (589) - (589) unrealised 315 - 315 Revenue reserve 81 - 81 Total equity shareholders' funds 13,651 - 13,651 Net asset value per share 93.8p - 93.8p Signed on behalf of the Board of Directors Roderick Davidson Chairman Cash flow Statement for the year ended 31 December 2002 Ordinary Shares 'C' Shares Total Year ended Period ended Year ended 31 December 2002 31 December 2002 31 December 2002 £'000 £'000 £'000 Operating activities Investment income received 713 - 713 Deposit interest received 25 4 29 Investment management fees paid (250) - (250) Other cash payments (152) - (152) Net cash inflow from operating activities 336 4 340 Taxation UK corporation tax paid (108) - (108) Capital expenditure and financial investments Purchase of qualifying investments (1,269) - (1,269) Purchase of non-qualifying investments - - - Disposal of non-qualifying investments 300 - 300 Disposals of non-qualifying investments 1,500 - 1,500 Net cash inflow from investing activities 531 - 531 Equity dividends paid Dividends paid on ordinary shares (614) - (614) Net cash inflow before financing 145 4 149 Financing Issue of ordinary shares net of expenses 101 1,483 1,584 Increase in cash 246 1,487 1,733 Cash flow Statement for the year ended 31 December 2001 Ordinary Shares 'C' Shares Total Year ended Year ended Year ended 31 December 2001 31 December 2001 31 December 2001 £'000 £'000 £'000 Operating activities Investment income received 668 - 668 Deposit interest received 86 - 86 Investment management fees paid (391) - (391) Other cash payments (150) - (150) Net cash inflow from operating activities 213 - 213 Taxation UK corporation tax paid - - - Capital expenditure and financial investments Purchase of qualifying investments (7,140) - (7,140) Purchase of non-qualifying investments - - - Disposals of non-qualifying investments 5,994 - 5,994 Net cash outflow from investing activities (1,146) - (1,146) Equity dividends paid Dividends paid on ordinary shares (576) - (576) Net cash outflow before financing (1,509) - (1,509) Financing Redemption of own shares (80) - (80) Decrease in cash (1,589) - (1,589) This information is provided by RNS The company news service from the London Stock Exchange

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