Interim Results
Close Brothers Dev VCT PLC
21 September 2004
21 September 2004
CLOSE BROTHERS DEVELOPMENT VCT PLC
INTERIM RESULTS
Close Brothers Development VCT PLC VCT PLC ('the Company'), today announces its
interim results for the six months to 30 June 2004.
Financial Highlights:
•NAV per Ordinary Share of 75.5 pence (2003: 78.3 pence)
•NAV per C Share of 94.3 pence (2003: 94.3 pence)
•Interim dividend of 1.8 pence per Ordinary Share (2003: 1.8 pence)
•Interim dividend of 1.10 pence per C Share(1) (2003: 0.75 pence)
(1) Those shareholders who subscribed in the period ended 30 June 2004 will not
receive the interim dividend but will receive a final dividend based on the next
period's results.
For further information, please contact:
Patrick Reeve/ Ole Bettum Justin Griffiths/ John West
Close Venture Management Limited Tavistock Communications
Tel: 020 7422 7830 Tel: 020 7920 3150
Notes to Editors:
1) Close Brothers Development VCT PLC is managed by Close Venture
Management Limited.
2) Close Venture Management Limited is a subsidiary of Close Brothers Group
Plc and is regulated by the FSA.
3) Unaudited interim reports for the period will be sent to shareholders
shortly.
4) The financial information set out in the announcement does not
constitute the Company's statutory accounts for the six months ended 30 June
2004 or 2003. The financial information for the year ended 31 December 2003
is derived from the statutory accounts delivered to the Registrar of
Companies. The auditors reported on those accounts; their report was
unqualified and did not contain a statement under s237 (2) or (3) of the
Companies Act 1985.
Chairman's statement
Introduction
The investment strategy of the Company is to establish a diversified portfolio
of holdings in smaller, unquoted companies whilst at the same time selecting and
structuring investments in such a way as to reduce the risk normally associated
with investment in such companies. This is achieved as follows:
• Qualifying Investments representing approximately 80 per cent. of net funds
raised, comprise investments in businesses across a broad spread of
industries.
• Up to two thirds of Qualifying Investments comprising debt secured on
'bankable' assets. This debt generates a significant proportion of the total
anticipated return from individual investments.
• Up to 20 per cent. of net funds raised being in Non-Qualifying Investments
comprising fixed and floating interest rate securities, financial
instruments and short term money market deposits all issued by, or with,
major banks with a Moody's credit rating of at least A.
Investment progress
The period under review saw a further 'C' Share issue, in which the Company
raised a total of £7 million for the 2003/04 season, which takes the total
fundraising for the 'C' Shares to £18.6 million. This will enable the Company to
diversify and develop further its investment portfolio.
Two investments in new companies were made during the period; £827,000 in Bold
Pub Company, which owns 11 freehold pubs in North West England, and £1,000,000
in Grosvenor Healthcare, which provides healthcare services to large corporates
(with a further amount of £750,000 reserved for investment in the following tax
year). Both companies are trading ahead of expectations. In addition, a further
£238,000 was invested in Automotive Technik, to fund working capital following a
substantial order from the New Zealand Ministry of Defence which also led to an
increase in the company's valuation. This was partially balanced by an
additional write down of the Q Gardens Company, where a further £65,000 was
invested to support trading, and a provision against Consolidated Communications
in view of market ratings.
Overall, this led to a 0.8 pence decline in the net asset value per Ordinary
share, and a 1.5 pence increase in the net asset value per 'C' Share. Following
the half year the investment in Leisure Links International was sold, realising
a capital loss of £213,000 for the Ordinary Share portfolio. Despite the
continuing depressed level of the Ordinary Share's NAV, we consider that the
prospects for the portfolio as a whole are encouraging.
Results and dividends
As at 30 June 2004 the net asset value of the Ordinary Share portfolio was £10.8
million, (2003: £11.4 million), equivalent to 75.5 pence per share (2003: 78.3
pence) for the Ordinary Shares, while the 'C' Share portfolio was £17.7 million,
(2003: £11.0 million), or 94.3 pence per share (2003: 94.3 pence). Net income
after taxation for the Ordinary Shares was £200,000 for the six months, (2003:
£311,000) and the board declares a maintained net interim dividend of 1.8 pence
per Ordinary Share (2003: 1.8 pence per share). Net income after taxation for
the 'C' Share portfolio was £201,000 (2003: £60,000), enabling an interim
dividend of 1.1 pence to be paid (2003: 0.75pence) (Nil for those shareholders
who subscribed after 31 December 2003). Dividends are payable on 15 October 2004
to those shareholders registered on 1 October 2004.
The following is the total return of the Company since launch in January 1999.
Pence per Ordinary Pence per 'C'Share
Share
Dividends declared for the
period ended 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 -
Dividends declared for the
year to 31 December 2003 4.00 1.65
Interim dividend for the six
months to 30 June 2004 1.80 1.10
------- ------
20.55 2.75
Net asset value at 30 June 2004 75.50 94.34
------- -------
Total return at 30 June 2004 96.05 97.09
======= =======
R M Davidson
Chairman 20 September 2004
Portfolio summary
Ordinary Share Portfolio
Company Equity Invested Unrealised Total
owned at cost appreciation value
/(depreciation)
£'000 £'000 £'000
Careforce Staffing Limited
--------------------------
Careforce 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. 30% 1,740 724 2,464
Odyssey Clubs Group Limited
-----------------------------
Odyssey owns a 30,000 sq.ft.
health and fitness club on an
11 acre site outside Stevenage
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. 16% 1,737 (306) 1,431
Dolphin Nurseries Limited
---------------------------
Dolphin aims at building a group
of private children's day
nurseries in and around Greater
London. The company currently
operates five nurseries at
Upminster, Chigwell, Bracknell,
Tooting and Kingston-upon-Thames. 16% 1,049 354 1,403
Peakdale Molecular Limited
----------------------------
Peakdale Molecular is a Derbyshire
based contract chemistry company,
developing and providing
pharmaceutical customers with
novel compounds for use in later
stage drug discovery. 9% 1,064 (77) 987
Leisure Links International Limited
-----------------------------------
Leisure Links was formed to own
and operate the golf course at
Test Valley in Hampshire. 26% 1,100 (213) 887
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. 11% 1,000 (12) 988
Automotive Technik Limited
--------------------------
Automotive manufactures the
Pinzgauer off-road vehicle.
Automotive Technik's main clients
include the UK Ministry of Defence
and overseas armed forces. 11% 770 188 958
The Q Garden Company Limited
----------------------------
Q Garden was formed to own and
operate garden centres, and now
has three sites in Fareham,
Chinnor and Stow-on-the-Wold. 17% 583 (458) 125
City Screen (Liverpool) Limited
---------------------------------
City Screen was formed to own and
operate a three screen 'art house'
cinema in the centre of Liverpool,
which opened in February 2003. 5% 50 (5) 45
The Bold Pub Company Limited
----------------------------
The Bold Pub Company was formed
to acquire a group of ten freehold
and long leasehold pubs in the
North West of England and is
aiming to increase the size of
its portfolio. 4% 130 14 144
Grosvenor Health Limited
------------------------
Grosvenor Health was formed
to acquire the UK occupational
healthcare business of Capio,
which provides healthcare
services to large corporates. 6% 325 3 328
Total Qualifying investments
held at 30 June 2004 9,548 212 9,760
---------------------------- ======= ===== ======
'C' Share Portfolio
Careforce Staffing Limited
--------------------------
Further financing 6% 910 30 940
Peakdale Molecular Limited
--------------------------
Further financing 3% 133 (67) 66
City Centre Breweries Limited
-----------------------------
City Centre Breweries owns the
freehold Smiles brewery in central
Bristol, and operates two pubs. 24% 750 (113) 637
Automotive Technik Limited
--------------------------
Further financing 9% 650 192 842
The Bold Pub Company Limited
----------------------------
Further financing 18% 540 57 597
Grosvenor Health Limited
--------------------------
Further financing 29% 675 (1) 674
Total Qualifying investments held
at 30 June 2004 3,658 98 3,756
---------------------------------- ======= ===== ======
Statement of total return
(incorporating the revenue account)
for the six months to 30 June 2004
Ordinary Shares
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 2004 30 June 2003 31 December 2003
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
-------------------------------------------------------------------------------------------------
Gains/(losses)
on investments - 2 2 - (255) (255) - (443) (443)
Income 361 - 361 515 - 515 976 - 976
Investment
management
fees (36) (108) (144) (34) (102) (136) (67) (201) (268)
Other expenses (43) - (43) (45) (13) (58) (93) (26) (119)
---- -- ---- ---- ---- ---- ---- ---- -----
Return on
ordinary
activities
before tax 282 (106) 176 436 (370) 66 816 (670) 146
Tax on
ordinary
activities (82) 35 (47) (125) 30 (95) (226) 74 (152)
---- -- ---- ----- -- ---- ----- -- -----
Return
attributable
to equity
shareholders 200 (71) 129 311 (340) (29) 590 (596) (6)
Dividends (257) - (257) (262) - (262) (583) - (583)
----- -- ----- ----- --- ----- ----- ------ -----
Transfer
(from)/to
reserves (57) (71) (128) 49 (340) (291) 7 (596) (589)
==== ==== ===== == ===== ===== === ===== =====
Return per
share 1.4p (0.5)p 0.9p 2.1p (2.3)p (0.2)p 4.0p (4.0)p (0.0)p
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued during the period.
Statement of total return
(incorporating the revenue account)
for the six months to 30 June 2004
'C' Shares
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 2004 30 June 2003 31 December 2003
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses)
on investments - 128 128 - 2 2 - (65) (65)
Income 365 - 365 128 - 128 347 - 347
Investment
management
fees (36) (108) (144) (33) (97) (130) (65) (194) (259)
Other expenses (45) - (45) (35) (12) (47) (75) (24) (99)
---- --- ---- ---- ---- ---- ---- ---- ----
Return on
ordinary
activities
before tax 284 20 304 60 (107) (47) 207 (283) (76)
Tax on
ordinary
activities (83) 36 (47) - 26 26 (39) 43 4
---- -- ---- ---- -- -- ---- -- ---
Return
attributable
to equity 201 56 257 60 (81) (21) 168 (240) (72)
shareholders
Dividends (129) - (129) (53) - (53) (157) - (157)
----- -- ----- ---- --- ---- ----- ---- -----
Transfer
to/(from)
reserves 72 56 128 7 (81) (74) 11 (240) (229)
== == === == ==== ==== == ===== =====
Return per
share 1.3p 0.4p 1.7p 0.8p (1.1)p (0.3)p 1.8p (2.5)p (0.7)p
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued during the period.
Statement of total return
(incorporating the revenue account)
for the six months to 30 June 2004
Total
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 2004 30 June 2003 31 December 2003
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains/(losses)
on investments - 130 130 - (253) (253) - (508) (508)
Income 726 - 726 643 - 643 1,323 - 1,323
Investment
management
fees (72) (216) (288) (67) (199) (266) (132) (395) (527)
Other expenses (88) - (88) (80) (25) (105) (168) (50) (218)
---- --- ---- ---- ---- ----- ----- ---- -----
Return on
ordinary
activities
before tax 566 (86) 480 496 (477) 19 1,023 (953) 70
Tax on
ordinary
activities (165) 71 (94) (125) 56 (69) (265) 117 (148)
----- -- ---- ----- -- ---- ----- --- -----
Return
attributable
to equity 401 (15) 386 371 (421) (50) 758 (836) (78)
shareholders
Dividends (386) - (386) (315) - (315) (740) - (740)
----- --- ----- ----- ---- ----- ----- ---- -----
Transfer
to/(from)
reserves 15 (15) - 56 (421) (365) 18 (836) (818)
== ==== ==== === ===== ===== == ===== =====
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 during the period
Balance sheet
as at 30 June 2004
Ordinary Shares
Unaudited Unaudited Audited
30 June 2004 30 June 2003 31 December 2003
£'000 £'000 £'000
Fixed asset
investments
Qualifying 9,760 10,484 9,163
Non-qualifying - - -
------ ------ -----
Total fixed asset
investments 9,760 10,484 9,163
Current assets
Debtors 78 347 35
Cash: short term money
market 1,593 1,195 2,468
----- ----- -----
deposits
1,671 1,542 2,503
Creditors: due within one
year (644) (611) (580)
----- ----- -----
Net current assets 1,027 931 1,923
----- --- -----
Net assets 10,787 11,415 11,086
====== ====== ======
Represented by:
Called up share capital 7,144 7,287 7,264
Share premium 48 48 48
Special reserve 6,245 6,447 6,416
Capital redemption reserve 241 97 120
Capital reserve
- realised (2,240) (1,953) (2,166)
- unrealised (664) (623) (666)
Revenue reserve 13 112 70
-- --- --
Total equity shareholders'
funds 10,787 11,415 11,086
====== ====== ======
Net asset value per share 75.5p 78.3p 76.3p
Balance sheet
as at 30 June 2004
'C' Shares
Unaudited Unaudited Audited
30 June 2004 30 June 2003 31 December 2003
£'000 £'000 £'000
Fixed asset
investments
Qualifying 3,756 393 2,236
Non-qualifying 6,003 6,000 6,002
----- ----- -----
Total fixed asset
investments 9,759 6,393 8,238
Current assets
Debtors 52 (71) 51
Cash: Short term money
market 8,169 4,915 2,792
----- ----- -----
deposits
8,221 4,844 2,843
Creditors: due within one
year (310) (188) (200)
----- ----- -----
Net current assets 7,911 4,656 2,643
----- ----- -----
Net assets 17,670 11,049 10,880
====== ====== ======
Represented by:
Called up share capital 9,366 5,859 5,859
Share premium 3,160 5,273 -
Special reserve 5,251 - 5,259
Capital redemption reserve 5 - -
Capital reserve
- realised (255) (89) (182)
- unrealised 63 2 (64)
Revenue reserve 80 4 8
----- --- ----
Total equity shareholders'
funds 17,670 11,049 10,880
====== ====== ======
Net asset value per share 94.3p 94.3p 92.8p
Balance sheet
as at 30 June 2004
Total
Unaudited Unaudited Audited
30 June 2004 30 June 2003 31 Decmber 2003
£'000 £'000 £'000
Fixed asset investments
Qualifying 13,516 10,877 11,399
Non-qualifying 6,003 6,000 6,002
----- ----- -----
Total fixed asset investments 19,519 16,877 17,401
Current assets
Debtors 130 276 86
Cash: Short term money market 9,762 6,110 5,260
----- ----- -----
Deposits
9,892 6,386 5,346
Creditors: due within one
year (954) (799) (780)
----- ----- -----
Net current assets 8,938 5,587 4,566
----- ----- -----
Net assets 28,457 22,464 21,966
====== ====== ======
Represented by:
Called up share capital 16,510 13,146 13,123
Share premium 3,208 5,321 48
Special reserve 11,496 6,447 11,675
Capital redemption reserve 246 97 120
Capital reserve
- realised (2,495) (2,042) (2,348)
- unrealised (601) (621) (730)
Revenue reserve 93 116 78
-- ------ ----
Total equity shareholders'
funds 28,457 22,464 21,966
====== ====== ======
The interim information was approved by the Board of Directors on 20 September
2004.
Signed on behalf of the Board of Directors
Roderick Davidson
Chairman
Cash flow statement
for the six months to 30 June 2004
Ordinary Shares
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 2004 30 June 2003 31 December 2003
£'000 £'000 £'000
Operating activities
Investment income received 193 228 860
Deposit interest received 40 28 67
Investment management fees
paid (147) (138) (272)
Other cash payments (74) (91) (128)
---- -----
Net cash inflow from
operating activities 12 27 527
Taxation
UK corporation tax paid - - (155)
Capital expenditure and
financial investments
Purchase of qualifying
investments (472) (564) (698)
Purchase of non-qualifying
investments - - -
Disposal of non-qualifying
investments - - 1,500
Disposals of non-qualifying
investments - 1,500 1,355
---- ----- -----
Net cash (outflow)/inflow
from investing activities (472) 936 2,157
Equity dividends paid
Dividends paid on ordinary
shares (319) (396) (658)
----- ----- -----
Net cash (outflow)/inflow
before financing (779) 567 1,871
Financing
Issue of equity net of
expenses - - -
Cancellation of shares (96) (66) (97)
---- ---- ----
(Decrease)/increase in cash (875) 501 1,774
Cash flow statement
for the six months to 30 June 2004
'C' Shares
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 2004 30 June 2003 31 December 2003
£'000 £'000 £'000
Operating activities
Investment income received 241 (5) 118
Deposit interest received 89 95 173
Investment management fees
paid (144) (10) (205)
Other cash payments (5) (3) (88)
--- --- ----
Net cash inflow/(outflow)
from operating activities 181 77 (2)
Taxation
UK corporation tax paid - - -
Capital expenditure and
financial investments
Purchase of qualifying
investments (1,362) (6,131) (2,293)
Purchase of non-qualifying
investments - - (5,998)
Disposals of non-qualifying
investments - - -
Net cash outflow from
investing activities (1,362) (6,131) (8,291)
Equity dividends paid
Dividends paid on ordinary
shares (105) - (53)
Net cash outflow before
financing (1,286) (6,054) (8,346)
Financing
Issue of equity net of
expenses 6,672 9,482 9,665
Cancellation of shares (9) - (14)
Net cash inflow from
financing 6,663 9,482 9,651
Increase in cash 5,377 3,428 1,305
Cash flow statement
for the six months to 30 June 2004
Total
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 2004 30 June 2003 31 December 2003
£'000 £'000 £'000
Operating activities
Investment income received 434 223 978
Deposit interest received 129 123 240
Investment management fees
paid (291) (148) (477)
Other cash payments (79) (94) (216)
---- ---- -----
Net cash inflow from
operating activities 193 104 525
Taxation
UK corporation tax paid - - (155)
Capital expenditure and
financial investments
Purchase of qualifying
investments (1,834) (6,695) (2,991)
Purchase of non-qualifying
investments - - (5,998)
Disposals of qualifying
investments - - 1,500
Disposals of non-qualifying
investments - 1,500 1,355
--- ----- -----
Net cash outflow from
investing activities (1,834) (5,195) (6,134)
Equity dividends paid
Dividends paid on ordinary
shares (424) (396) (711)
----- ----- -----
Net cash outflow before
financing (2,065) (5,487) (6,475)
Financing
Issue of equity net of
expenses 6,672 9,482 9,665
Cancellation of shares (105) (66) (97)
Cost of share premium
cancellation - - (14)
---- --- ----
Net cash inflow from
financing 6,567 9,416 9,554
Increase in cash 4,502 3,929 3,079
This information is provided by RNS
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