Final Results

Close Technology & General VCT PLC 13 April 2006 CLOSE TECHNOLOGY & GENERAL VCT PLC PRELIMINARY RESULTS 13 April 2006 Close Technology & General VCT PLC ('the Company'), which offers investors the opportunity to participate in a balanced portfolio of technology and non-technology businesses, today announces preliminary results for the year ended 31 December 2005. This announcement has been approved by the Board of Directors on 13 April 2006. Year ended 31 December 2005 Dividends paid per Ordinary share (pence) 9.00 Net asset value per Ordinary share (pence) 120.6 Pence per Ordinary share (ii) Ordinary shareholder value created per share since launch: Total dividends paid during the year ended 31 December 2001 (i) 1.00 Total dividends paid during the year ended 31 December 2002 2.00 Total dividends paid during the year ended 31 December 2003 1.50 Total dividends paid during the year ended 31 December 2004 7.50 Total dividends paid during the year ended 31 December 2005 9.00 ------------- Total dividends paid to 31 December 2005 21.00 Net asset value at 31 December 2005 120.6 ----------------------------------- ------------- Total return to 31 December 2005 141.6 ----------------------------------- ------------- Notes (i) Based on subscription by the first closing on 16 January 2001. Investors subscribing thereafter, up to 30 June 2001 received 0.5 pence per share. (ii) Excludes tax benefits upon subscription. For further information, please contact: Patrick Reeve Clemmie Carr / John West Close Venture Management Limited Tavistock Communications Tel: 020 7422 7830 Tel: 020 7920 3150 Notes 1) Close Technology & General VCT PLC is managed by Close Venture Management Limited. 2) Close Venture Management Limited 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 2005 or 2004, but is derived from those accounts. The restated financial information for the year ended 31 December 2004 is derived from the statutory accounts for that year. These statutory accounts prior to the restatement changes as described in note 5 below have been delivered to the Registrar of Companies. The financial information for the year ended 31 December 2005 has been derived from the statutory accounts for the year which will be delivered to the Registrar of Companies shortly. The auditors reported on those accounts; their report was unqualified and did not contain statements under s237(2) or (3) Companies Act 1985. 4) There were no changes in equity other than those arising from capital transactions with owners and distributions to owners. 5) Changes in accounting policies With effect from 1 January 2005, the Company adopted the new Financial Reporting Standards ('FRS') 21-26, that have been issued by the Accounting Standards Board as part of the convergence process between United Kingdom Generally Accepted Accounting Practice with International Financial Reporting Standards ('IFRS'). In the case of FRS 25 and 26, the Company applied the exemption from restating 2004 comparative figures on transition at 1 January 2005. The effects of the relevant accounting policies are disclosed in the respective notes below, restatement and adjustment of the relative comparative figures are detailed in note 5. Investments In accordance with FRS 26 'Financial Instruments Measurement', equity investments are designated as fair value through profit or loss ('FVTPL'). The total column of the Statement of Total Return represents the Company's profit and loss account. Investments listed on recognised exchanges are valued at the closing bid prices at the end of the accounting period. Unquoted investments' fair value is determined by the Directors in accordance with the International Private Equity and Venture Capital Valuation Guidelines. Fair value movements on equity investments and gains and losses arising on the disposal of investments are reflected in the capital column of the Statement of Total Return in accordance with the AITC SORP. Unquoted loan stock is classified as loans and receivables in accordance with FRS 26 and carried at amortised cost using the Effective Interest Rate ('EIR') method. Movements in the amortised cost relating to interest income are reflected in the revenue column of the Statement of Total Return and movements in respect of capital provisions are reflected in the capital column of the Statement of Total Return. Loan stock accrued interest is recognised in the Balance Sheet as part of the carrying value of loans and receivables at the end of each reporting period. Investments are recognised as financial assets on legal completion of the investment contract and are de-recognised on legal completion of the sale of an investment. Under the terms of the transitional provisions contained within FRS 26, the opening balances for revenue and unrealised capital reserves at 1 January 2005 in relation to the carrying values of loans and receivables and equity investment valuations have been adjusted to reflect the impact of the adoption of FRS 26. The adoption of FRS 26 has resulted in a decrease in unrealised capital reserves and a decrease in the carrying value of the equity investment at 1 January 2005 as a result of moving from mid to bid value. In addition it has resulted in a decrease in the revenue reserve as at 1 January 2005 as a result of the adjustment to the treatment of loan stock investment now held at amortised cost as determined by the EIR method. Dividends In accordance with FRS 21 'Events after the balance sheet date', dividends declared by the Company are accounted for in the period in which the dividend has been approved. Comparatives for revenue reserves at 31 December 2004 have been restated in recognition of a change in accounting policy. The adoption of FRS 21 has resulted in a decrease in the distribution liability as a result of the de-recognition of proposed dividends thereon and an increase in the revenue reserves as at 31 December 2004. A reconciliation of reserves incorporating the restatements and adjustments required by the adoption of FRS 21 and FRS 26 is illustrated below: Reconciliation of revenue reserves £'000 Revenue reserves previously reported at 31 December 2004 147 Restatement as required by adoption of FRS 21 - change in accounting for dividends 139 -------- Restated revenue reserves at 31 December 2004 286 Adjustment as required by adoption of FRS 26 - change in valuation of loan stock investments to amortised cost (60) using the EIR method -------- Revenue reserves as at 1 January 2005 as adjusted 226 ======== Reconciliation of unrealised capital reserves £'000 Unrealised capital reserves previously reported at 31 December 2004 (637) Adjustment as required by adoption of FRS 26 - change in valuation of quoted investments to bid price (111) -------- Unrealised capital reserves as at 1 January 2005 as adjusted (748) ======== The restatements and adjustments to reserves at 31 December 2004 and 1 January 2005 as described in note 5 above are noted in the reconciliation of reserves as follows: Capital Realised Share Special redemption capital Unrealised Revenue premium reserve reserve reserve capital reserve £'000 £'000 £'000 £'000 £'000 £'000 --------------------- ------ ------ ------- ------- ------- ------- At 31 December 2004 165 5,894 237 2,722 (637) 147 FRS 21 prior year adjustment 139 ------ ------ ------- ------- ------- ------- Restated opening reserves as at 31 December 2004 165 5,894 237 2,722 (637) 286 Adjustment to balances as at 1 January 2005 for FRS 26 (111) (60) ------ ------ ------- ------- ------- ------- Adjusted opening reserves at 1 January 2005 165 5,894 237 2,722 (748) 226 Cancellation of shares - (109) 50 - - - Capitalised fees and expenses - - - (381) - - Tax effect of capitalised fees and expenses - - - 105 - - Realised gains on investments - - - 2,767 - - Commission on purchase/disposal - - - (112) - - Foreign exchange - - - 36 - - Increase in unrealised appreciation - - - - (279) - Distributions - - - (829) - (415) Retained net revenue - - - - - 425 --------------------- ------ ------ ------- ------- ------- ------- At 31 December 2005 165 5,785 287 4,311 (1,027) 235 --------------------- ------ ------ ------- ------- ------- ------- With the exception of the revised accounting policies as described in note 5 above, this announcement has been prepared on the basis of the accounting policies as stated in the previous years' financial statements. CHAIRMAN'S STATEMENT Introduction I am delighted once again to report a further year of excellent performance for your Company. The total return per share was 18.5 pence, compared to 9.8 pence for the previous financial year, while net asset value rose from 112.3 pence per share (restated) to 120.6 pence. This means that for every £1 invested by shareholders on flotation, ignoring any tax reliefs, shareholders have received 141.6 pence in value, of which 21 pence has been paid in the form of dividends. Investment progress As reported at the interim stage, two attractive sales of investments were achieved. The first was in the disposal of Automotive Technik, a manufacturer of military vehicles, which realised a profit of £2.05 million and the second was in the sale of Cassium Technologies, a software services provider, where profit of £790,000 was realised. The main new investments on the technology side of the portfolio were made in Xceleron (£500,000), a spin-out from York University which provides analysis services to the pharmaceutical industry, and Lowcosttravelgroup (£120,000), a fast-growing provider of internet travel services. On the non-technology side of the portfolio, new investments included a further £667,000 in Q Gardens, which secured the VCT a first charge over the 7 acre freehold garden centre in Fareham, £500,000 in Weybridge Limited, which is developing a health and fitness club on a 30 acre freehold site in Weybridge, Grosvenor Health (£100,000) to fund an acquisition by this successful provider of occupational healthcare, City Screen (Brixton) and City Screen (Exeter) (£210,000) to purchase these two freehold art-house cinemas, and Tower Bridge Health Clubs (£170,000) to develop a new health and fitness club on the Thames next to Tower Bridge. In addition, a further £560,000 was invested in six separate companies owning and operating freehold pubs around the UK. Overall, the portfolio is performing well with particular uplifts in valuations in Peakdale Molecular, Grosvenor Health, and Evolutions Television, offset in part by declines in the holding values of sparesFinder, Q Gardens, and of some AIM quoted investments (primarily Tepnel Life Sciences and Portrait Software). New C Share issue A new issue of C Shares, to be invested alongside the current issue of Ordinary shares, has successfully raised £35.5 million and closed before its final closing date of 4 April 2006. The investment programme has now begun with investments, alongside the Ordinary Shares, in RFI Global Services which provides testing services to mobile phone manufacturers worldwide, Evolutions Television, to support an acquisition, and Blackbay, a provider of software for mobile field services. Dividend and prospects Overall, we continue to be encouraged by the progress of the portfolio and the prospects of the Company look promising for the year ahead. As already indicated, it is intended that, as far as practicable, and if the Company's performance permits, the Company will pay a total dividend of 8 pence per share per annum for future periods in respect of the Ordinary Shares. Following the introduction of the revised financial reporting standards and the resulting changes to the way dividends are recognised in the accounts, Ordinary shareholders received an extra dividend of 4 pence per share on 4 November 2005. The first dividend for the current financial year will also be 4 pence per Ordinary Share payable out of capital profits and will be paid on 26 May 2006 to those shareholders on the register on 28 April 2006. The first dividend in respect of the new C Shares will be declared in September 2006 and paid in November 2006. Dr Neil Cross Chairman 13 April 2006 Statement of Total Return (incorporating the Revenue Account) Year ended 31 December 2005 Year ended 31 December 2004 (Restated)* Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 ---------------------- ------- ------- ------- --- ------ ------ ------- Gains on investments - 2,412 2,412 - 1,274 1,274 Investment income 812 - 812 670 - 670 Investment management fees (126) (381) (507) (104) (312) (416) Other expenses (128) - (128) (126) - (126) ---------------------- ------- ------- ------- --- ------ ------ ------- Return on ordinary activities before tax 558 2,031 2,589 440 962 1,402 Tax on ordinary activities (133) 105 (28) (101) 78 (23) ---------------------- ------- ------- ------- --- ------ ------ ------- Return attributable to shareholders 425 2,136 2,561 339 1,040 1,379 Dividends (415) (829) (1,244) (353) (699) (1,052) ---------------------- ------- ------- ------- --- ------ ------ ------- Transfer to/(from) reserves 10 1,307 1,317 (14) 341 327 ---------------------- ------- ------- ------- --- ------ ------ ------- Basic and diluted return per share (pence) 3.1 15.4 18.5 2.4 7.4 9.8 ---------------------- ------- ------- ------- --- ------ ------ ------- *Comparative figures have been restated in accordance with FRS 21 in respect of dividends as disclosed in note 5 to this announcement. The total column of this Statement of Total Return represents the profit and loss account of the Company in accordance with FRS 26. There are no recognised gains and losses other than the results for either year disclosed above. Accordingly a statement of total recognised gains and losses is not required. Balance Sheet 31 December 31 December 2005 2004 (Restated)* £'000 £'000 ----------- --------------- Fixed asset investments Qualifying 10,438 9,534 Non-qualifying 1,847 1,328 ----------- --------------- Total fixed asset investments 12,285 10,862 Current Assets Debtors 45 61 Cash at bank 4,754 4,819 ----------- -------------- 4,799 4,880 Creditors: amounts falling due within one year (420) (117) ----------- -------------- Net current assets 4,379 4,763 ----------- -------------- Total assets less current 16,664 15,625 liabilities ----------- -------------- Capital and reserves Called up share capital 6,908 6,958 Share premium 165 165 Special reserve 5,785 5,894 Capital redemption reserve 287 237 Realised capital reserve 4,311 2,722 Unrealised capital reserve (1,027) (637) Revenue reserve 235 286 ----------------------- ----------- -------------- Total equity shareholders' funds 16,664 15,625 ----------------------- ----------- -------------- Net asset value per share (pence) 120.6 112.3 ----------------------- ----------- -------------- *Comparative figures have been restated in accordance with FRS 21 in respect of dividends as disclosed in note 5 to this announcement. Cash Flow Statement Year ended Year ended 31 December 31 December 2005 2004 £'000 £'000 ----------- ------------ Operating activities Investment income received 614 593 Deposit interest received 112 50 Other cash receipt 174 - Investment management fees paid (389) (480) Other cash payments (136) (119) ----------- ------------ Net cash inflow from operating activities 375 44 Taxation UK corporation tax paid (25) (8) Capital expenditure and financial investments Purchase of qualifying investments (3,524) (2,645) Purchase of non-qualifying investments (1,075) (314) Disposals of qualifying investments 4,616 7,067 Disposals of non-qualifying investments 1,016 568 Cost of disposals (95) - ----------- ------------ Net cash inflow from investing activities 938 4,676 Equity dividends paid Dividends paid on ordinary shares (1,244) (1,052) ----------- ------------ Net cash inflow before financing 44 3,660 ----------- ------------ Financing Cancellation of share capital (109) (351) ----------- ------------ Net cash outflow from financing (109) (351) ----------- ------------ Cash (outflow)/inflow in the year (65) 3,309 ----------- ------------ This information is provided by RNS The company news service from the London Stock Exchange

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