Final Results

RNS Number : 8255Y

Close Brothers Venture Cap Tst PLC

10 July 2008

 



Close Brothers Venture Capital Trust PLC

As required by the UK Listing Authority's Disclosure and Transparency Rule 4.1, Close Brothers Venture Capital Trust PLC today issues the full text of the Annual Report and Financial Statements for the year ended 31 March 2008. 

This announcement was approved by the Board of Directors on 10 July 2008.

     Please click on the following link to view the full Annual Report and Financial Statements for the year to 31 March 2008: 

     http://www.rns-pdf.londonstockexchange.com/rns/8255Y_-2008-7-10.pdf

Alternatively you may view the Annual Report and Financial Statements at: www.closeventures.co.uk by clicking on the 'Our Funds' section.

Financial highlights

+158.5%      Net asset value total return growth (with dividends reinvested) since launch (April 1996) to 31 March 2008.

10.0p            Tax free dividend for the year to 31 March 2008.

     109.9p          Net asset value per share as at 31 March 2008.

      (0.3p)            Total negative return per share for the year ended 31 March 2008.

Ordinary shares     'C' shares

Total shareholder net asset value return to 31 March 2008: (pence) (pence)

Gross revenue dividends paid during the year ended 31 March 1997                                                           2.00         -

Gross revenue dividends paid during the year ended 31 March 1998                                                           5.20         2.00

Gross interim dividends and net final dividend paid during the year ended

31 March 1999                                                                                                                                                         11.05         8.75

Net revenue and capital dividends paid during the year ended 31 March 2000                                           3.00         2.70

Net revenue and capital dividends paid during the year ended 31 March 2001                                           8.55         4.80

Net revenue dividends paid during the year ended 31 March 2002                                                                7.60         7.60

Net revenue and capital dividends paid during the year ended 31 March 2003                                           7.70         7.70

Net revenue and capital dividends paid during the year ended 31 March 2004                                           8.20         8.20

Net revenue and capital dividends paid during the year ended 31 March 2005                                           9.75         9.75

Net revenue and capital dividends paid during the year ended 31 March 2006                                         11.75       11.75

Net revenue and capital dividends paid during the year ended 31 March 2007                                         10.00       10.00

Net revenue and capital dividends paid during the year ended 31 March 2008                                         10.00       10.00

                              ------------          ---------- 

Total dividends paid to 31 March 2008                                                                                                                94.80       83.25

Net asset value as at 31 March 2008                                                                                                                109.94     109.94

                              ------------        -----------

Total shareholder net asset value return to 31 March 2008                                                                      204.74     193.19

                             ------------         -----------

In addition to the above dividends, the Company will pay a first dividend from realised capital gains of 5 pence per share on

15 August 2008 to shareholders on the register at 18 July 2008.

Investment Objectives

Close Brothers Venture Capital Trust PLC (“Close Brothers VCT” or the “Company”) is a venture capital trust which raised a total of £39.7 million through an issue of Ordinary Shares in the spring of 1996 and through an issue of C Shares in the following year. The C Shares merged with the Ordinary Shares in 2001. The Company offers tax-paying investors substantial tax benefits at the time of investment, on payment of dividends and on the ultimate disposal of the investment. Its investment strategy is to minimise the risk to investors whilst maintaining an attractive yield. This is achieved as follows:

·          qualifying unquoted investments are predominantly in specially-formed companies which provide a high level of    asset backing for the capital value of the investment;

 

·          Close Brothers VCT invests alongside selected partners with proven experience in the sectors concerned;

 

·          investments are normally structured as a mixture of equity and loan stock. The loan stock represents the majority of the finance provided, and is secured on the assets of the investee company. Funds managed or advised by Close Ventures Limited typically own 50 per cent. of the equity of the investee company;

 

·         other than the loan stock issued to funds managed or advised by Close Ventures Limited and, in certain circumstances, temporary bridging finance prior to further investment by funds managed or advised by Close Ventures Limited,    investee companies do not normally have external borrowings; and

 

·          a clear strategy for the realisation of each qualifying unquoted investment within five years or shortly thereafter is

             identified from the outset.

Financial Calendar

Annual General Meeting                                                                                                                                  2 September 2008

Announcement of interim results for the six months ended 30 September 2008                                    November 2008

Record date for first dividend                                                                                                                                     18 July 2008

Payment of first dividend                                                                                                                                       15 August 2008

Payment of second dividend                                                                                                                                    January 2009

Chairman's Statement

Introduction

The financial performance for the year to 31 March 2008 was subdued, with a negative total return of 0.3 pence per share, compared with a positive total return of 13.7 pence for 2007 and 7.5pence for 2006. This was principally caused by the slow down in consumer spending adversely affecting both the trading in our pub investments and the property sales within our residential development companies while the decline in property values generally led to a reduction in the value of our successful hotel at Stansted Airport. These in turn affected both the capital value of our portfolio and the income received from our investments. In line with the Company's objective, dividends of 10 pence per share were paid in the year, resulting in a fall in asset value to 109.9 pence per share.

Investment progress and performance

Some £3.5 million was invested into new and existing asset-based investee companies. The biggest investment was £1 million in Sky Hotel Heathrow Limited to purchase The Stanwell Hall Hotel, a 19 bedroom hotel close to Heathrow's Terminal Five and also to extend it to 53 bedrooms, with a further £2.2 million reserved for investment. We disposed of our investment in The Bold Pub Company Limited, realising a profit of £603,000 on the investment of £1.39 million, in addition to a running yield of over 10% on funds invested. We also part-disposed of our investment in The Pelican Inn Limited realising, a loss of £127,000 on our cost of £359,000.

Trading in all of our hotels continues to improve as actions taken by their management have more than offset the effects of a slowing economy, generally leading to increases in valuations. Despite strong trading performance, the third party valuation for the Stansted hotel has fallen, however, in line with sections of the commercial property market. Our cinemas are performing well, while our newly-opened health and fitness clubs saw continued strong growth in membership. Against this, our pub investments saw markedly tougher trading as a result of reduced consumer spending and the effects of the smoking ban. In addition, we are in the process of reducing our exposure to the residential development market, where we have seen a sharp decline in sales; of the total £7.7 million that the Company has invested in that sector, currently around 40 per cent. is now in the form of cash, and we see this proportion increasing further over the next few months.  

Risks, uncertainties and prospects

The key risk continues to be the outlook for the UK economy which, while currently still growing, is being affected by the unease in the wholesale financial and housing markets. While this has had an overall adverse effect on asset values, we believe that the resulting shortage of available bank finance will give rise to additional investment opportunities for a cash rich fund like ourselves. This is because your Company's policy of providing both equity and debt finance, without the use of external borrowings, not only reduces the risk to the existing portfolio, but also makes our form of investment more attractive at a time when banks are reducing their lending activities. Further detailed analysis of the other risks and uncertainties facing the business are shown in the Directors' Report and Business Review in the Annual Report and Financial Statements.

New opportunities in progress include a psychiatric hospital in the South Downs, north of Portsmouth, where we have already exchanged contracts subject to planning. This would take the VCT back into the healthcare sector, which we left two years ago, following the sale of our final two care homes in Romford and Dover. We are reviewing our options for our substantial investment in the Stansted hotel; if we decide to sell the investment, the profit that would arise would underpin our dividend objective and provide liquidity for further investment.

Dividend reinvestment scheme

I draw to shareholders' attention a Dividend Reinvestment Scheme whereby shareholders may elect to reinvest the whole of the dividend due for payment on 15 August 2008 by subscribing for New Ordinary Shares.

Benefits to individual shareholders arising on participating in the Dividend Reinvestment Scheme include:

·          income tax relief on the reinvestment at the rate of 30 per cent. (VCT investments cannot exceed £200,000 in one tax year to be able to obtain this relief and new shares need to be held for at least five years);

·          any gains arising on disposal of shares in a VCT will be exempt from tax (any loss will not be an allowable capital loss); and

·          any future dividends on the new shares are not subject to income tax.

The Circular dated 10 July 2008 which is enclosed with the Annual Report and Financial Statements which will be posted to Shareholders, 'Introduction of a Dividend Reinvestment Scheme', details the mechanics of this Scheme.

Proposed change to the Company's Articles of Association

At the Annual General Meeting, a special resolution will be proposed to adopt new Articles (the 'New Articles') in order to update the Company's existing Articles of Association (the 'Current Articles') and to take account of the changes that have been brought into force by the Companies Act 2006. Whilst the Company will be incorporating the new provisions of the Companies Act 2006 in relation to electronic and/or website communications, it does not yet intend to communicate with its shareholders via such means. A further resolution will be proposed to enable the Directors to manage the conflicts of interest as permitted by the Companies Act 2006 and which will come into force on 1 October 2008 or such later date as section 175 of the Companies Act 2006 provides. The Directors are proposing a resolution to allow Directors to approve actual or potential conflicts situations, should it be in the Company's best interests to do so, and to allow conflicts of interest to be dealt with in a similar way to the current position. A summary of the principal changes that are proposed to be made to the Current Articles by resolutions 11 and 12 is contained in the Directors' Report and Business Review in the Annual Report and Financial Statements.

Results and dividends

As at 31 March 2008, the net asset value was £39.2 million or 109.9 pence per share compared to £43.1 million or 120.2 pence per share as at 31 March 2007. Revenue return after taxation was £1.5 million for the period compared to £2.0 million for the year to 31 March 2007. The Board now declares a first dividend of 5 pence per share. The dividend will be paid on 15 August 2008 to shareholders on the register on 18 July 2008. This is in line with the Board's objective of paying out a dividend of 10 pence per share per annum, subject to the availability of realised capital and revenue reserves.

Income Statement

	Year ended 31 March 2008			Year ended 31 March 2007
	Revenue £'000	Capital £'000	Total £'000	Revenue £'000	Capital £'000	Total £'000
(Losses)/gains on investments   Investment income   Investment management fees   Other expenses   Return/(loss) on ordinary activities before tax    Tax (charge)/credit on ordinary activities   Return/(loss) attributable to shareholders Basic and diluted return per share (pence) (excluding Treasury shares)	- 2,443 (250) (289) --------- 1,904 (401) --------- 1,503 --------- 4.2 ---------	(1,081) - (749)                           - -------- (1,830)                                          225 ---------- (1,605) ---------- (4.5) ----------	(1,081) 2,443 (999) (289) --------- 74 (176) --------- (102) --------- (0.3) ---------	- 2,997 (232) (220) -------- 2,545 (535) ---------                2,010 ---------                     5.6  ---------	3,374 - (678) - --------- 2,696 203 --------- 2,899 --------- 8.1 ---------	3,374 2,997 (910) (220) -------- 5,241 (332) --------- 4,909 --------- 13.7 ---------

The total column of this Income Statement represents the profit and loss account of the Company. The supplementary revenue and capital columns have been prepared in accordance with the Association of Investment Trust Companies' Statement of Recommended Practice.

All revenue and capital items in the above statement derive from continuing operations. There are no recognised gains or losses other than the results for the year disclosed above. Accordingly a statement of total recognised gains and losses is not required.

Note of Historical Cost Profits and Losses

	31 March 2008 £'000	31 March 2007 £'000
Return on ordinary activities before taxation Add back: unrealised losses on investments Historical cost return on ordinary activities before taxation Historical cost (loss)/return for the year after taxation and dividends	74 1,563 ----------- 1,637 ----------- (2,127) -----------	5,241 712 ---------- 5,953 ---------- 2,033 ----------

Balance Sheet

	31 March 2008 £'000	31 March 2007 £'000
Fixed asset investments Qualifying Non-qualifying Total fixed asset investments Current assets Debtors Cash at bank Creditors: amounts falling due within one year Net current assets Net assets Capital and reserves Called up share capital Special reserve Capital redemption reserve Realised capital reserve Unrealised capital reserve Owe treasury shares reserve Revenue reserve Shareholders' funds Net asset value per share (pence) excluding Treasury shares	32,546 1,475 ------------ 34,021 94 5,409 ----------- 5,503 (349) ----------- 5,154 ----------- 39,175 --------- 17,939 14,110 1,914 1,952 2,174 (252) 1,338 ----------- 39,175 ----------- 109.9 --------	32,264 - ----------- 32,264 180 11,066 ----------- 5,503 (394) ----------- 10,852 ----------- 43,116 --------- 17,939 14,110 1,914 4,021 3,737 - 1,395 ----------- 43,116 ----------- 120.2 ---------

Reconciliation of Movement in Shareholders' Funds

	Called-up share capital £’000	Special reserve £’000	Capital redemption reserve £’000	Own treasury share reserve £’000	Realised capital reserve £’000	Unrealised capital reserve £’000	Revenue reserve £’000	Total £’000
As at 31 March 2007	17,939	14,110	1,914	-	4,021	3,737	1,395	43,116
Purchase of own shares for Treasury	-	-	-	(252)	-	-	-	(252)
Net realised gains on investments in the year	-	-	-	-	482	-	-	482
Capitalised investment management and performance fees (net of tax)	-	-	-	-	(523)	-	-	(523)
Movement in unrealised appreciation	-	-	-	-	-	(1,563)	-	(1,563)
Revenue return attributable to shareholders	-	-	-	-	-	-	1,503	1,503
Dividends paid	-	-	-	-	(2,028)	-	(1,560)	(3,588)
As at 31 March 2008	17,939 ----------	14,110 ----------	1,914 ----------	(252) ----------	1,952 ---------	2,174 ---------	1,338 ---------	39,175 ---------
As at 31 March 2006	17,939	14,110	1,914	-	2,204	4,449	1,179	41,795
Net realised gains on investments in the year	-	-	-	-	4,086	-	-	4,086
Capitalised investment management and performance fees (net of tax)	-	-	-	-	(475)	-	-	(475)
Movement in unrealised appreciation	-	-	-	-	-	(712)	-	(712)
Revenue return attributable to shareholders	-	-	-	-	-	-	2,010	2,010
Dividends paid	-	-	-	-	(1,794)	-	(1,794)	(3,588)
As at 31 March 2007	17,939 ---------	14,110 ----------	1,914 --------	- ---------	4,021 ---------	3,737 ---------	1,395 ----------	43,116 ---------

Cash Flow Statement

	31 March 2008 £'000	31 March 2007 £'000
Operating activities Investment income received Dividend income received Deposit interest received Other income Investment management fees paid Administrative expenses paid Net cash inflow from operating activities Taxation UK Corporation tax paid Capital expenditure and financial investment Purchase of investments Disposal of investments Net cash (outflow)/inflow from investing activities Equity dividends paid Dividends paid on Ordinary shares Net cash (outflow)/inflow before financing Financing Purchase of own shares for Treasury Net cash (outflow) form financing Cash (outflow)/inflow in the year	1,845 - 479 143 (1,079) (279) ---------- 1,109 (155) (5,011) 2,240 ----------- (2,771) (3,588) ---------- (5,405) (252) ---------- (252) (5,657)	2,410 4 302 - (798) (235) ---------- 1,683 (447)                                (5,343)                               12,919 ----------- 7,576 (3,588) ------------ 5,224                                          - ------------ - 5,224

Notes to the Financial Statements

1. Accounting convention

The financial statements have been prepared in accordance with the historical cost convention, modified to include the revaluation of investments, in accordance with applicable United Kingdom law and accounting standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' ('SORP') issued by the Association of Investment Trust Companies ('AITC') in January 2003 and revised in December 2005. Accounting policies have been applied consistently in current and prior periods.

2. Accounting policies

Investments

Quoted and unquoted equity investments

In accordance with FRS 26 'Financial Instruments: Recognition and Measurement', quoted and unquoted equity investments are designated as fair value through profit or loss ('FVTPL'). Unquoted investments' fair value is determined by the Directors in accordance with the International Private Equity and Venture Capital Valuation Guidelines (IPEVCV 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 Income Statement in accordance with the AITC SORP. Realised gains or losses on the sale of investments will be reflected in the realised capital reserve, and unrealised gains or losses arising from the revaluation of investments will be reflected in the unrealised capital reserve.

Unquoted loan stock

Unquoted loan stock is classified as loans and receivables in accordance with FRS 26 and carried at amortised cost using the Effective Interest Rate method ('EIR') less impairment. Movements in the amortised cost relating to interest income are reflected in the revenue column of the Income Statement, and hence are reflected in the Revenue reserve, and movements in respect of capital provisions are reflected in the capital column of the Income Statement, and are reflected in the Realised capital reserve following sale, or in the Unrealised capital reserve on revaluation. Loan stocks which are not impaired or past due are considered fully performing in terms of contractual interest and capital repayments and the Board does not consider that there is a current likelihood of a shortfall on security cover for these assets. For unquoted loan stock, the amount of the impairment is the difference between the asset's carrying value and the present value of estimated future cash flows, discounted at the effective interest rate.

Floating rate notes

In accordance with FRS 26 'Financial Instruments: Recognition and Measurement', floating rate notes are designated as fair value through profit or loss ('FVTPL'). Floating rate notes are valued at market bid price at the balance sheet date. 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. Dividend income is not recognised as part of the fair value movement of an investment, but is recognised separately as investment income through the Revenue reserve when a share becomes ex-dividend. Loan stock accrued interest is recognised in the Balance Sheet as part of the carrying value of the loans and receivables at the end of each reporting period.

It is not the Company's policy to exercise control or significant influence over investee companies. Therefore in accordance with the exemptions under FRS 9 'Associates and joint ventures', those undertakings in which the Company holds more than 20 per cent. of the equity are not regarded as associated undertakings.

Investment income

Unquoted equity income

Dividend income is included in revenue when the investment is quoted ex-dividend.

Unquoted Loan stock income

The fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis using an effective interest rate over the life of the financial instrument.

Bank interest income

Interest income is recognised on an accruals basis using the rate of interest agreed with the bank.

Floating rate note income

Floating rate note income is recognised on an accruals basis using the interest rate applicable to the floating rate note at that time.

Investment management fees and other expenses

All expenses have been accounted for on an accruals basis. Expenses are charged through the Revenue account except the following which are charged through the Realised capital reserve:

·          75 per cent. of Management fees are allocated to the capital account to the extent that these relate to an enhancement in the value of the investments. This is in line with the Board’s expectation that over the long term 75 per cent. of the Company’s investment returns will be in the form of capital gains; and

·          expenses which are incidental to the purchase or disposal of an investment are charged through the Realised capital reserve.

Taxation

Taxation is applied on a current basis in accordance with FRS 16 'Current tax'. Taxation associated with capital expenses is applied in accordance with the SORP. In accordance with FRS 19 'Deferred tax', deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax or a right to pay less tax, at a future date, at rates expected to apply when they crystallize based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the financial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. The specific nature of taxation of venture capital trusts means that it is unlikely that any deferred tax will arise. The Directors have considered the requirements of FRS 19 and do not believe that any provision should be made.

Performance incentive fee

In the event that a performance incentive fee crystallises, the fee will be allocated between Revenue and Realised capital reserves based upon the proportion to which the calculation of the fee is attributable to revenue and capital returns.

Reserves

Realised capital reserves

The following are disclosed in this reserve:

·          gains and losses compared to cost on the realisation of investments;

·          expenses, together with the related taxation effect, charged in accordance with the above policies; and

·          dividends paid to equity holders.

Unrealised capital reserves

The following are disclosed in this reserve:

·          increases and decreases in the valuation of investments against cost held at the year end; and

Special reserve

The cancellation of the share premium account has created a special reserve that can be used to fund market purchases and subsequent cancellation of own shares and for other distributable purposes.

Capital redemption reserve

This reserve accounts for amounts by which the issued share capital is diminished through the repurchase of the Company's own shares.

Own treasury shares held reserve

This reserve accounts for amounts by which the distributable reserves of the Company are diminished through the

repurchase of the Company's own shares for Treasury.

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 paid or approved by shareholders in an Annual General Meeting.

3.    (Losses)/gains on investments

Year ended         Year ended

31 March 2008      31 March 2007    

£'000                       £'000

Unrealised losses on investments held at fair value through profit        (1,543)                    (687)        

and loss account

Unrealised impairments on investments held at amortised cost              (20)                        (25)

                                                                                                                ------------               -----------

Unrealised losses sub-total                                                             (1,563)                    (712)

Realised gains on investments held at fair value through profit and       482                        4,111

loss account                                                                                           ------------                -----------

Realised gains sub-total                                                                     482                         4,111

Cost of disposal                                                                                       -                            (25)

                                                                                                                ------------               -----------

                                                                                                               (1,081)                    3,374

                                                                                                                ------------               -----------

Interest income on impaired investments at 31 March 2008 amounted to £10,000 (2007: £1,000). These investments are held at amortised cost.

4.  Investment income        

Year ended         Year ended

31 March 2008     31 March 2007    

£'000                      £'000

Income recognised on investments held at fair value

through profit and loss

UK dividend income                                                                                 -                              5

Floating rate note interest                                                                       61                            -

Bank deposit interest                                                                             390                         318

Other income                                                                                         95                           128

                                                                                                             -----------                 ----------

                                                                                                              546                          451

Income recognised on investments held at amortised cost

Return on loan stock investments                                                         1,897                       2,546

                                                                                                             -----------                 -----------

                                                                                                              2,443                      2,997

                                                                                                             -----------                 -----------

5.   Tax charge/(credit) on ordinary activities

Year ended                       Year ended

31 March 2008                   31 March 2007

Revenue     Capital      Total      Revenue    Capital      Total

       £'000         £'000      £'000            £'000        £'000      £'000

UK Corporation tax                                                                           176                 -          176              332                -         332

Tax attributable to capital expenses                                                225           (225)             -               203          (203)            -

                                                                                                                                                ----------------------------------------------------------------------------------------------------------

                                                                                                         401           (225)          176              535          (203)        332

                                                                                                                                                -----------------------------------------------------------------------------------------------------------

The tax charge for the year is lower than the standard rate of corporation tax of 30 per cent. The differences are explained below.

Year ended                          Year ended

31 March 2008                      31 March 2007

Revenue    Capital    Total           Revenue     Capital      Total

                                                                                                       £'000        £'000    £'000                 £'000         £'000      £'000

Return on ordinary activities before taxation                                 1,904     (1,830)         74                 2,545          2,696      5,241

                                                                                                                                                   ----------------------------------------------------------------------------------------------------------

Tax on profit at the standard rate                                                     571        (549)         22                    763             808       1,571

Factors affecting the charge: 

Consortium relief in respect of prior years                                      (170)             -       (170)                 (230)               -         (230)

Accrual in respect of previous accounting periods                             -               -             -                         3               -               3

Capital losses not subject to taxation                                                   -           324        324                         -       (1,011)    (1,011)

Tax attributable to capitalised expenses                                          225        (225)            -                     203          (203)             -

Expenses charged to capital                                                           (225)        225             -                    (203)          203              -

Non-taxable income                                                                              -               -             -                        (1)              -             (1)

                                                                                                                                                          ------------------------------------------------------------------------------------------------------

                                                                                                           401        (225)       176                       535       (203)           33

                                                                                                       -----------------------------------------------------------------------------

Notes

(i) Venture Capital Trusts are not subject to corporation tax on capital gains.

(ii) Tax relief on expenses charged to capital has been determined by allocating tax relief to expenses by reference to the applicable corporation tax

rate of 30 per cent. and allocating the relief between revenue and capital in accordance with the SORP.

(iii) No deferred tax asset or liability has arisen in the year.

6. Dividends

Year ended                                 Year ended

31 March 2008                            31 March 2007

Revenue    Capital    Total                 Revenue     Capital      Total

                                                                                                       £'000        £'000    £'000                       £'000         £'000      £'000

First dividend paid on 4 August 2006 -

5 pence per share                                                                                 -               -            -                           897           897      1,794

Second dividend paid on 5 January

2007 - 5 pence per share                                                                      -               -            -                           897           897      1,794

First dividend paid on 5 April 2007 -

5 pence per share                                                                              663       1,131     1,794                              -                -             -

Second dividend paid on 4 January

2008 - 5 pence per share                                                                   897          897     1,794                              -                -             -

                                                                                                                                                              -------------------------------------------------------------------------------------------------------

                                                                                                         1,560       2,028     3,588                      1,794          1,794      3,588

                                                                                                                                                              -------------------------------------------------------------------------------------------------------

In addition to the dividends summarised above, the Directors have declared a first dividend of 5 pence per share to be paid on

15 August 2008 to shareholders on the register as at 18 July 2008.

7. Basic and diluted return per share

Year ended                                        Year ended

31 March 2008                                    31 March 2007

Revenue    Capital    Total                          Revenue    Capital    Total

                                                                                                     pence     pence  pence                              pence     pence  pence      

Ordinary shares                                                                                 4.2         (4.5)      (0.3)                                    5.6           8.1      13.7

                                                                                                                                                              ------------- ------------------------------------------------------------------------------------------------

Revenue return per share is based upon the net revenue return attributable to shareholders for the year of £1,503,000 (2007: £2,010,000) in respect of the weighted average number of shares in issue during the year, being 35,807,404 (2007: 35,878,228). Capital return per share is based upon the net capital loss attributable to shareholders for the year of £1,605,000 (2007: profit £2,899,000) in respect of the same weighted average number of shares as for the revenue return above.

8. Net asset value per share

       Year ended            Year ended

      31 March 2008        31 March 2007    

               pence                     pence

Net asset value per share                                                                                       109.9                        120.2

                      --------------                            --------------

The net asset value per share at the year end is calculated in accordance with the Articles of Association and is based upon net assets of £39,175,000 (2007: £43,116,000) and the total shares in issue at 31 March 2008 (less the Treasury shares) of 35,633,683 (2007: 35,878,229).

8. Reconciliation of revenue return on ordinary activities before taxation to net cash inflow from operating activities

  Year ended           Year ended

31 March 2008         31 March 2007

       £'000                        £'000

Revenue return on ordinary activities before taxation                                  1,904                        2,545

Investment management fees charged to capital                                          (749)                         (585)

Performance fees charged to capital                                                                  -                            (93)

Movement in accrued amortised loan stock interest                                        (53)                        (195)

Decrease/(increase) in debtors                                                                         53                           (83)

(Decrease)/increase in creditors                                                                     (46)                            94

        --------------                           --------------

Net cash inflow from operating activities                                             1,109                        1,683

       --------------                            --------------

9. Post balance sheet events

Since 31 March 2008 the Company has completed the following investments:

·          Further investment in Sky Hotel Heathrow Limited of £1,000,000 on 7 April 2008

 

·          Investment in Droxford Hospital Limited of £312,500 on 9 May 2008

 

·          Two further investments in The Crown Hotel Harrogate Limited of £100,000 each on 2 and 7 April 2008

10. Related party transactions

The Manager, Close Ventures Limited, is considered to be a related party by virtue of the fact that it is party to a Management

agreement from the Company (details disclosed on page 19 of the Annual Report and Financial Statements). During the year, services of a total value of £1,043,000

(2007: £910,000) were purchased by the Company from Close Ventures Limited, this includes £972,000 investment management fee, £27,000 performance incentive fee under-accrued in the prior year and £44,000 administration fee. At the financial year end, the

amount due to Close Ventures Limited disclosed as accruals and deferred income was £241,000 (2007: £310,000). Buy-backs of shares during the year were transacted through Winterflood Securities Limited, a subsidiary of Close Brothers Group plc. A total of 244,546 shares were purchased for Treasury at an average price of 102.5 pence per share.

10 July 2008

For further information, please contact:

Patrick Reeve of Close Ventures Limited

Tel: [phone]

 

END

 

 

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