Interim Results
Close Brothers Dev VCT PLC
21 September 2006
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 2006.
For further information, please contact:
Patrick Reeve Clemmie Carr
Close Venture Management Limited Tavistock Communications
Tel: 020 7422 7830 Tel: 020 7920 3150
Notes to Editors:
Close Brothers Development VCT PLC is managed by Close Venture Management
Limited.
Close Venture Management Limited is a subsidiary of Close Brothers Group Plc and
is regulated by the Financial Services Authority.
Unaudited interim reports for the period will be sent to shareholders shortly.
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the six months ended 30 June 2006 or 2005. The
financial information for the year ended 31 December 2005 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 limit the risk normally associated
with investments in these companies. Following the amendments to the company's
investment policy, approved at the Annual General Meeting held in May of this
year, the portfolio also includes a limited number of higher risk companies
which the Board believes have greater growth prospects.
Investment review
Ordinary share portfolio
After the strong performance of the last two years, where the recovery in the
net asset value of the Ordinary shares was driven in large part by three
successful trade sales and a flotation, the first six months of this year has
been a period of consolidation. This resulted in a negative return for the
period of 6.8 pence per share, the majority of which was caused by the reduction
in the share price of our holding in Careforce plc which is quoted on AIM. In
addition, partial provision has been made against two investments, Peakdale
Molecular and Evolutions Television, where previous strong growth slowed in the
early months of the year (these have been reduced to around cost). Other
businesses, however, have performed promisingly, in particular The Bold Pub
Company, where a strong return is being achieved on its thirty freehold pubs in
the Northwest of England, and Lowcosttravelgroup, the online travel business,
where sales have increased sharply since our investment in 2005.
C share portfolio
The C share portfolio showed a negative return for the period of 1.4 pence per
share for similar reasons to those stated for the Ordinary shares. The portfolio
is now nearing its required 70% investment level with some £1.2 million invested
during the period with further investments in progress. Key new investments,
which were shared with the Ordinary share portfolio, included RFI Global
Services, which provides testing facilities to mobile phone manufacturers
worldwide, Blackbay, which provides systems for field force and supply chain
logistics, and Dexela, which has designed a potentially revolutionary form of
imaging system for the screening of breast cancer.
Results and dividends
As at 30 June 2006 the net asset value of the company's Ordinary shares was
£12.4m or 95.0p per share (2005: £13.1m or 96.8p per share). Net income after
taxation was £201,000 (2005: £180,000). It is currently anticipated that the
directors will be able to declare a second dividend for the year of 2p per
ordinary share which is expected to be announced in November.
As at 30 June 2006 the net asset value of the C shares was £19.0m or 105.0p per
share (2005: £19.3m or 104.9p per share). It is currently anticipated that the
directors will be able to declare a second dividend for the C shares of 3p per
year per share, which is also expected to be announced in November.
Shareholders are reminded that the Ordinary shares and C shares will merge after
the end of this financial year, with the C shares converting to the Ordinary
shares in the ratio of their respective net asset values. We will be writing to
you further on this subject in due course.
R M Davidson
Chairman 20 September 2006
FINANCIAL HIGHLIGHTS
The following is the total return of the Company since launch in January 1999.
Ordinary Shares C Shares
-------------------------- ---------- ----------
Shareholder value per share since launch: Pence per share(ii) Pence per share(ii)
Dividends paid during the year to
31 December 1999 (i) 1.00 -
Dividends paid during the year to
31 December 2000 3.65 -
Dividends paid during the year to
31 December 2001 3.20 -
Dividends paid during the year to
31 December 2002 4.20 -
Dividends paid during the year to
31 December 2003(iii) & (iv) 4.50 0.75
Dividends paid during the year to
31 December 2004 4.00 2.00
Dividends paid during the year to
31 December 2005 5.20 5.90
Dividends paid during the six
months to 30 June 2006 1.00 1.50
---------- ----------
26.75 10.15
Net asset value at 30 June 2006 95.04 105.02
---------- ----------
Total cumulative return at 30 June 2006 121.79 115.17
---------- ----------
Notes
(i) Assuming subscription for Ordinary Shares by the First Closing on 26 January
1999.
(ii) Excluding tax benefits received upon subscription.
(iii) Assuming subscription for C Shares by the First Closing on 31 December
2002.
(iv) Those subscribing for C Shares after 30 June 2003 were not entitled to the
interim dividend.
INCOME STATEMENT
for the six months to 30 June 2006
Ordinary Shares
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 2006 30 June 2005 31 December 2005
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
-------- ------ ----- ----- ----- ----- ----- ----- -----
(Losses)/gains on
investments - (987) (987) - 657 657 - 1,423 1,423
Investment
income 371 - 371 343 - 343 696 - 696
Investment
management fee (42) (127) (169) (44) (131) (175) (88) (263) (351)
Other expenses (43) - (43) (42) - (42) (77) - (77)
----- ------- ---- ----- ------- ---- ------ ----- -----
Return/(loss) on
ordinary activities
before tax 286 (1,114) (828) 257 526 783 531 1,160 1,691
Tax on ordinary
activities (85) 32 (53) (77) 42 (35) (150) 85 (65)
----- ------- ---- ----- ------- ---- ------ ----- -----
Return/(loss)
attributable to
equity shareholders 201 (1,082) (881) 180 568 748 381 1,245 1,626
===== ======= ==== ===== ======= ==== ====== ===== =====
Basic and diluted
return/(loss) per
share (pence) 1.5 (8.3) (6.8) 1.3 4.1 5.4 2.8 9.1 11.9
----------- ----- ------- ---- ----- ------ ---- ------ ----- -----
All of the Company's activities derive from continuing operations.
The Company has no recognised gains or losses other than the results for the
year as set out above, accordingly a statement of total recognised gains and
losses is not required.
The total column of this Income Statement represents the profit and loss account
of the Ordinary Shares. The supplementary revenue return and capital return
columns have been prepared in accordance with the Association of Investment
Trust Companies' Statement of Recommended Practice.
INCOME STATEMENT
for the six months to 30 June 2006
C Shares
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 2006 30 June 2005 31 December 2005
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
-------- ------ ----- ----- ----- ----- ----- ----- -----
(Losses)/gains on
investments - (422) (422) - 1,009 1,009 - 1,638 1,638
Investment
income 556 - 556 582 - 582 1,092 - 1,092
Investment
management fee (59) (178) (237) (64) (191) (255) (127) (382) (509)
Other expenses (60) - (60) (55) - (55) (102) - (102)
----- ------ ---- ----- ------ ----- ------ ----- -----
Return/(loss) on
ordinary activities
before tax 437 (600) (163) 463 818 1,281 863 1,256 2,119
Tax on ordinary
activities (133) 41 (92) (137) 63 (74) (253) 127 (126)
----- ------ ---- ----- ------ ----- ------ ---- -----
Return/(loss)
attributable to
equity shareholders 304 (559) (255) 326 881 1,207 610 1,383 1,993
===== ======= ==== ===== ======= ===== ====== ===== =====
Basic and diluted
return/(loss) per
share (pence) 1.7 (3.1) (1.4) 1.8 4.8 6.6 3.3 7.5 10.8
----- ------- ---- ----- ------- ----- ------ ------ -----
All of the Company's activities derive from continuing operations.
The Company has no recognised gains or losses other than the results for the
year as set out above, accordingly a statement of total recognised gains and
losses is not required.
The total column of the Income Statement represents the profit and loss account
of the C Shares. The supplementary revenue return and capital return columns
have been prepared in accordance with the Association of Investment Trust
Companies' Statement of Recommended Practice.
INCOME STATEMENT
for the six months to 30 June 2006
Total
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 2006 30 June 2005 31 December 2005
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
(Losses)/gains on
investments - (1,409) (1,409) - 1,666 1,666 - 3,061 3,061
Investment
income 927 - 927 925 - 925 1,788 - 1,788
Investment
management fee (101) (305) (406) (108) (322) (430) (215) (645) (860)
Other expenses (103) - (103) (97) - (97) (179) - (179)
----- ------- ----- ----- ------ ----- ------ ----- -----
Return/(loss) on
ordinary activities
before tax 723 (1,714) (991) 720 1,344 2,064 1,394 2,416 3,810
Tax on ordinary
activities (218) 73 (145) (214) 105 (109) (403) 212 (191)
----- ------- ----- ----- ------- ----- ------ ----- -----
Return/(loss)
attributable to
equity shareholders 505 (1,641) (1,136) 506 1,449 1,955 991 2,628 3,619
===== ======= ===== ===== ======= ===== ====== ===== =====
The total column of the Income Statement represents the profit and loss account
of the Company. The supplementary revenue return and capital return columns have
been prepared in accordance with the Association of Investment Trust Companies'
Statement of Recommended Practice.
BALANCE SHEET
as at 30 June 2006
Ordinary Shares
Unaudited Unaudited Audited
30 June 2006 30 June 2005 31 December 2005
£'000 £'000 £'000
---------- ---------- -----------
Fixed asset investments
Qualifying investments 8,713 6,944 8,759
Non-qualifying investments - 60 46
---------- ---------- -----------
Total fixed asset investments 8,713 7,004 8,805
Current assets
Debtors 428 68 111
Cash at bank 3,512 6,678 4,975
---------- ---------- -----------
3,940 6,746 5,086
Creditors: amounts falling
due within one year (257) (605) (201)
---------- ---------- -----------
Net current assets 3,683 6,141 4,885
---------- ---------- -----------
Net assets 12,396 13,145 13,690
========== ========== ===========
Capital and reserves
Called up share capital 6,521 6,788 6,678
Share premium 48 48 48
Special reserve 5,199 5,671 5,477
Capital redemption reserve 863 596 706
Realised capital reserve (1,036) (875) (941)
Unrealised capital reserve 633 877 1,621
Revenue reserve 168 40 101
---------- ---------- -----------
Equity shareholders' funds 12,396 13,145 13,690
========== ========== ===========
Net asset value per share
(pence) 95.0 96.8 102.5
BALANCE SHEET
as at 30 June 2006
C Shares
---------- ---------- -----------
Unaudited Unaudited Audited
30 June 2006 30 June 2005 31 December 2005
£'000 £'000 £'000
---------- ---------- -----------
Fixed asset investments
Qualifying investments 11,389 6,768 9,456
Non-qualifying investments 3,598 7,762 7,704
---------- ---------- -----------
Total fixed asset investments 14,987 14,530 17,160
Current assets
Debtors 6 130 55
Cash at bank 4,848 4,916 2,907
---------- ---------- -----------
4,854 5,046 2,962
Creditors: amounts falling
due within one year (811) (256) (390)
---------- ---------- -----------
Net current assets 4,043 4,790 2,572
---------- ---------- -----------
Net assets 19,030 19,320 19,732
========== ========== ===========
Capital and reserves
Called up share capital 9,060 9,212 9,151
Share premium 3,160 3,160 3,160
Special reserve 4,695 4,976 4,864
Capital redemption reserve 310 159 219
Realised capital reserve 254 483 393
Unrealised capital reserve 1,285 1,113 1,707
Revenue reserve 266 217 238
---------- ---------- -----------
Equity shareholders' funds 19,030 19,320 19,732
========== ========== ===========
Net asset value per share
(pence) 105.0 104.9 107.8
BALANCE SHEET
as at 30 June 2006
Total
---------- ---------- -----------
Unaudited Unaudited Audited
30 June 2006 30 June 2005 31 December 2005
£'000 £'000 £'000
---------- ---------- -----------
Fixed asset investments
Qualifying investments 20,102 13,712 18,215
Non-qualifying investments 3,598 7,822 7,750
---------- ---------- -----------
Total fixed asset investments 23,700 21,534 25,965
Current assets
Debtors 434 198 166
Cash at bank 8,360 11,594 7,882
---------- ---------- -----------
8,794 11,792 8,048
Creditors: amounts falling
due within one year (1,068) (861) (591)
---------- ---------- -----------
Net current assets 7,726 10,931 7,457
---------- ---------- -----------
Net assets 31,426 32,465 33,422
========== ========== ===========
Capital and reserves
Called up share capital 15,581 16,000 15,829
Share premium 3,208 3,208 3,208
Special reserve 9,894 10,647 10,341
Capital redemption reserve 1,173 755 925
Realised capital reserve (782) (392) (548)
Unrealised capital reserve 1,918 1,990 3,328
Revenue reserve 434 257 339
---------- ---------- -----------
Equity shareholders' funds 31,426 32,465 33,422
========== ========== ===========
This interim information was approved by the Board of Directors on 20 September
2006.
Signed on behalf of the Board of Directors
Roderick Davidson
Chairman
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
for the year ended 30 June 2006
Ordinary Shares
Called up Capital Realised Unrealised
share Share Special redemption capital capital Revenue
capital premium reserve reserve reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 July 2005 6,788 48 5,671 596 (875) 877 40 13,145
Net realised gains on investments in
the period - - - - 23 - - 23
Capitalised investment management and
performance fees - - - - (131) - - (131)
Tax relief on costs charged to capital - - - - 42 - - 42
Share redemptions (110) - (194) 110 - - - (194)
Movement in unrealised appreciation - - - - - 744 - 744
Revenue return - - - - - - 222 222
Dividends - - - - - - (161) (161)
------- ------- ------- ------- ------- ------- ------- ------
As at 31 December 2005 6,678 48 5,477 706 (941) 1,621 101 13,690
------- ------- ------- ------- ------- ------- ------- ------
Net realised gains on investments in
the year - - - - 1 - - 1
Capitalised investment management and
performance fees - - - - (127) - - (127)
Tax relief on costs charged to capital - - - - 32 - - 32
Share redemptions (157) - (278) 157 - - - (278)
Movement in unrealised appreciation - - - - - (988) - (988)
Revenue return - - - - - - 201 201
Dividends - - - - - - (134) (134)
------- ------- ------- ------- ------- ------- ------- ------
As at 30 June 2006 6,521 48 5,199 863 (1,036) 633 168 12,396
------- ------- ------- ------- ------- ------- ------- ------
RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
for the year ended 30 June 2006
C Shares
Called up Capital Realised Unrealised
share Share Special redemption capital capital Revenue
capital premium reserve reserve reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 July 2005 9,212 3,160 4,976 159 483 1,113 217 19,320
Net realised gains on investments in
the period - - - - (104) - - (104)
Capitalised investment management and
performance fees - - - - (72) - - (72)
Tax relief on costs charged to capital - - - - 86 - - 86
Share redemptions (61) - (112) 60 - - - (113)
Movement in unrealised appreciation - - - - - 594 - 594
Revenue return - - - - - - 335 335
Dividends - - - - - - (314) (314)
------- ------- ------- ------- ------- ------- ------- -------
As at 31 December 2005 9,151 3,160 4,864 219 393 1,707 238 19,732
------- ------- ------- ------- ------- ------- ------- -------
Net realised gains on investments in
the year - - - - - - - -
Capitalised investment management and
performance fees - - - - (178) - - (178)
Tax relief on costs charged to capital - - - - 41 - - 41
Share redemptions (91) - (169) 91 - - - (169)
Movement in unrealised appreciation - - - - - (422) - (422)
Revenue return - - - - - - 304 304
Dividends - - - - - - (277) (277)
------- ------- ------- ------- ------- ------- ------- -------
As at 30 June 2006 9,060 3,160 4,695 310 254 1,285 266 19,030
------- ------- ------- ------- ------- ------- ------- -------
Cash flow statement
for the six months to 30 June 2006
Ordinary Shares
---------- --------- ------------
Unaudited Unaudited Audited
Six months to Six months to Year ended
30 June 2006 30 June 2005 31 December
2005
£'000 £'000 £'000
---------- --------- ------------
Operating activities
Investment income received 182 122 253
Deposit income received 68 70 144
Other income received 3 - 6
Investment management fees paid (181) (126) (453)
Other cash payments (390) (79) (3)
---------- --------- ------------
Net cash (outflow)/inflow
from operating activities (318) (13) (53)
Taxation
UK corporation tax paid - (148) (536)
Capital expenditure and financial investment
Purchase of qualifying investments (760) (660) (1,595)
Disposals of qualifying investments 27 2,388 2,405
---------- --------- ------------
Net cash (outflow)/inflow
from investing activities (733) 1,728 810
Equity dividends paid
Dividends paid on ordinary shares (134) (551) (713)
---------- --------- ------------
Net cash (outflow)/inflow
before financing (1,185) 1,016 (492)
Financing
Cancellation of shares (278) (318) (513)
---------- --------- ------------
Net cash outflow from financing (278) (318) (513)
---------- --------- ------------
(Decrease)/increase in cash in the period (1,463) 698 (1,005)
========== ========= ============
Cash flow statement
for the six months to 30 June 2006
C Shares
---------- ---------- ------------
Unaudited Unaudited Audited
Six months to Six months to Year ended
30 June 2006 30 June 2005 31 December
2005
£'000 £'000 £'000
---------- ---------- ------------
Operating activities
Investment income received 328 327 482
Deposit income received 233 114 528
Other income received - - 16
Investment management fees paid (262) (175) (451)
Other cash (payments)/receipts 301 (18) -
---------- ---------- ------------
Net cash inflow from
operating activities 600 248 575
Taxation - - -
Capital expenditure and financial investment
Purchase of qualifying investments (2,147) (1,685) (3,620)
Purchase of non-qualifying investments (68) (92) (92)
Disposals of qualifying investments - 2,316 2,340
Disposals of non-qualifying investments 4,000 - -
---------- ---------- ------------
Net cash inflow/(outflow)
from investing activities 1,785 539 (1,372)
Equity dividends paid
Dividends paid on ordinary shares (277) (779) (1,093)
---------- ---------- ------------
Net cash inflow/(outflow) before financing 2,108 8 (1,890)
Financing
Cancellation of shares (167) (137) (248)
---------- ---------- ------------
Net cash outflow from financing (167) (137) (248)
---------- ---------- ------------
Increase/(decrease) in cash in the period 1,941 (129) (2,138)
========== ========== ============
Cash flow statement
for the six months to 30 June 2006
Total
---------- --------- ------------
Unaudited Unaudited Audited
Six months to Six months to Year ended
30 June 2006 30 June 2005 31 December
2005
£'000 £'000 £'000
---------- --------- ------------
Operating activities
Investment income received 510 449 735
Deposit income received 301 184 672
Other income received 3 - 22
Investment management fees paid (443) (301) (904)
Other cash payments (89) (97) (3)
---------- --------- ------------
Net cash inflow from operating activities 282 235 522
Taxation
UK corporation tax paid - (148) (536)
Capital expenditure and financial investment
Purchase of qualifying investments (2,907) (2,345) (5,215)
Purchase of non-qualifying investments (68) (92) (92)
Disposals of qualifying investments 27 4,704 4,745
Disposals of non-qualifying investments 4,000 - -
---------- --------- ------------
Net cash inflow/(outflow)
from investing activities 1,052 2,267 (562)
Equity dividends paid
Dividends paid on ordinary and C shares (411) (1,330) (1,806)
---------- --------- ------------
Net cash inflow/(outflow) before financing 923 1,024 (2,382)
Financing
Cancellation of shares (445) (455) (761)
---------- --------- ------------
Net cash outflow from financing (445) (455) (761)
---------- --------- ------------
Increase/(decrease) in cash in the period 478 569 (3,143)
========== ========= ============
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