Final Results

Finsbury Growth & Income Trust PLC 12 December 2005 NEWS RELEASE For immediate release - 12 December 2005 Finsbury Growth & Income Trust PLC Finsbury Growth & Income Trust PLC today announces preliminary results for the year ended 30 September 2005. 30 September 30 September Change 2005 2004 Share price (capital return) 260.3p 199.5p +30.5% Share price (total return)* +37.2% +37.4% - Net Asset Value per share (total return)* +31.5% +26.0% - FTSE All-Share Index (total return) (company benchmark) +24.9% +15.7% - Net Asset Value per share (capital return) 253.8p 203.5p +24.7% Premium/(discount) 2.6% (2.0)% - Shareholders' Funds £114.1m £74.2m +53.8% Market Capitalisation £117.0m £72.8m +60.7% Dividends 4.0p 1.8p +122.2% First Interim paid 4.0p - - Second Interim paid - 4.1p - Final paid 8.0p 5.9p +35.6% Total Total Expense Ratio (TER) (excluding exceptional expenses)# 1.0% 1.3% - *source: AITC #TER is calculated based on assets as at 30 September. Highlights: • Share price up by over 30% • Market Capitalisation up by over 60% • NAV up by over 20% • Total Expense Ratio down For and on behalf of Close Finsbury Asset Management Limited - Company Secretary - ENDS - The following are attached: • Chairman's Statement • Consolidated Statement of Total Return • Balance Sheet of the Group and of the Company • Consolidated Cash Flow Statement • Notes to the Preliminary Results For further information please contact: Tracey Lago, Close Finsbury Asset Management Limited 020 7426 6219 Jo Stonier/Eleanor Mitchell, Quill Communications 020 7763 6976 Michael Reeve, Chairman 020 7602 2624 Nick Train, Lindsell Train Limited 020 7225 6411 Chairman's Statement I am pleased to report on a very successful year for your Company during which it has substantially increased in size and value. As reported in the interim statement all shares held in treasury have been sold, and up to the year end, 6,492,213 new shares had been issued at a premium to net asset value ('NAV'). The number of shares in issue increased by 16.9% during the year and the market capitalisation of your Company increased by 60.7% to £117m. The market value of your shares increased by 30.5% and they have traded at a premium to NAV for most of the second half of the year, one of the few investment trust shares to do so. Furthermore the total dividend for the year, which was almost entirely paid out of retained profits of the year, represented an increase of 35.6% over that paid in the previous year. The NAV total return for the year was 31.5%, an outperformance of 6.6% against our benchmark, the FTSE All-Share Index total return. The total expense ratio reduced from 1.3% in the previous year (after excluding the exceptional costs incurred in connection with the placing and acquisition of Hansa Trust plc's shares in the Company) to 1.0% in the year under review. This cost may be compared with the much larger costs of approximately 2.0% incurred by open ended investment companies and unit trusts. Revenue Return and Dividend The revenue return per share rose to 8.21p compared with 6.12p in the previous year. Your Board has declared two interim dividends totalling 8.0p per share, the second one being in lieu of a final dividend (paid on 28 October 2005), which compares to dividends of 5.9p in aggregate in 2004. Statement of Total Return The total return for the year was 57.62p per share (2004: 43.39p) made up of a revenue return of 8.21p per share (2004: 6.12p) and a capital return of 49.41p (2004: 37.27p). Investments Shareholders will be aware that the Company has a highly concentrated portfolio, which at the year end included only 21 equity investments. Such a narrow range of investments is likely to produce a disparate performance to that in the more broadly based FTSE All-Share Index. Investments are made with a view to the long term and investment turnover is low. Investments in the FTSE Small Capitalisation and others decreased from 27.4% to 14.5% of the portfolio, largely as a result of the takeover of Glenmorangie and Manchester United. The proceeds of these sales were largely invested in building up existing FTSE 100 holdings and increasing the preference share portfolio. The average total return on the 21 equity investments held in the portfolio during the year was 34.6%. The seven fixed interest investments, which at the year end accounted for 15.5% of the value of the portfolio, made on average a total return of 21.7%. The sale of our investment in Manchester United for over £5m resulted in a profit of 81.3% on cost. The valuation of investments at 30 September 2005 was £132,911,000 (2004: £90,539,000). The NAV per Ordinary share was 253.8p (2004: 203.5p). An analysis of the investment portfolio is set out in the Annual Report. Borrowings Your Company has a revolving credit facility of £20m for a fixed term expiring in December 2008. This facility carries a variable rate of interest, which may be fixed if so required. In addition your Company has an uncommitted facility of £5m. At 30 September 2005, £18,100,000 was drawn down under the revolving credit facility. Purchases and sale of shares Your Board intend to continue to grow your Company by issuing shares at a premium to NAV as demand arises. At the time of writing a further 1,582,930 Ordinary shares at a total consideration of £4,042,612, have been issued at a premium since the year end. An Extraordinary General meeting of the Company was held on Friday, 9 December 2005 at which resolutions to renew the authority to allot new Ordinary shares and to disapply pre-emption rights in respect of such allotments up to 10% of the issued Ordinary share capital were proposed and passed by shareholders. Such resolutions enable your Board to continue the policy of issuing new shares at a premium to NAV into the market which demand arises. It is also your Board's policy to continue to manage the discount, by buying back shares, at the absolute discretion of the Board, should shares in your Company trade at a discount of 5% to NAV in the market. Therefore an appropriate resolution will be tabled at the Annual General Meeting to empower your Company to acquire up to 14.99% of its issued share capital of which 10% may be retained in treasury and be available for re-issue as demand arises. Outlook In the current year it will not be easy for your Company to repeat the substantial progress I have just reported on. There are a number of clouds on the horizon, which could influence the performance of the stock market: substantial increases in fuel costs, a slowing rate of economic growth in the developed world and continuing terrorist attacks coupled with the ongoing problems in the Middle East, to name just a few. However your Board believes that the investment strategy adopted by your Investment Adviser with the objective of achieving long term growth and increasing revenue return should continue to enable your Company to grow and deliver increasing total returns to shareholders. Annual General Meeting The Annual General Meeting of the Company will be held at 10 Crown Place, London EC2A 4FT on Thursday, 26 January 2006 at 12 noon. I hope that as many shareholders as are able will attend so that they, the Board and our Advisers can exchange views. Nick Train, our Investment Adviser, will give a presentation following the formal business of the meeting. Thereafter light refreshments will be served. Michael Reeve Chairman Consolidated Statement of Total Return incorporating the revenue account for the year ended 30 September 2005 ---------------- -------- --- -------- --- -------- --- ------ --- ------ --- ------- Revenue Capital Total Revenue Capital Total 2005 2005 2005 2004 2004 2004 £'000 £'000 £'000 £'000 £'000 £'000 ---------------- -------- -------- -------- ------- ------- ------- Gains on investments - 21,224 21,224 - 14,617 14,617 Income (note 2) 4,369 - 4,369 3,283 - 3,283 Investment management fee (note 3) (246) (499) (745) (163) (332) (495) Other expenses (458) - (458) (631) - (631) -------- -------- -------- ------ ------ ------- Net return before finance costs and taxation 3,665 20,725 24,390 2,489 14,285 16,774 Interest payable and similar charges (334) (677) (1,011) (212) (430) (642) -------- -------- -------- ------ ------ ------- Return on ordinary activities before taxation 3,331 20,048 23,379 2,277 13,855 16,132 Taxation on - - - - - - ordinary -------- -------- -------- ------ ------ ------- activities Return on ordinary activities after taxation for the financial year 3,331 20,048 23,379 2,277 13,855 16,132 Dividends in respect of equity shares (3,361) - (3,361) (2,132) - (2,132) ---------------- -------- -------- -------- ------ ------ ------- Transfer (from)/to reserves (30) 20,048 20,018 145 13,855 14,000 ---------------- -------- -------- -------- ------ ------ ------- ---------------- -------- -------- -------- ------ ------ ------- Return per share 8.21p 49.41p 57.62p 6.12p 37.27p 43.39p (note 4) ---------------- -------- -------- -------- ------ ------ ------- The revenue column of this statement is the profit and loss account of the Group. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. Balance Sheet of the Group and of the Company as at 30 September 2005 Group Group Company Company 2005 2004 2005 2004 £'000 £'000 £'000 £'000 -------------------- --------- ------- -------- -------- Fixed asset investments Investment in subsidiary undertaking - - 645 645 Financial investments 132,911 90,539 132,911 90,539 -------------------- --------- ------- -------- -------- 132,911 90,539 133,556 91,184 Current assets Debtors 1,313 530 1,313 530 Cash at bank 218 251 218 251 -------------------- --------- ------- -------- -------- 1,531 781 1,531 781 Creditors Amounts falling due within one year (20,370) (17,090) (21,015) (17,735) -------------------- --------- ------- -------- -------- Net current liabilities (18,839) (16,309) (19,484) (16,954) -------------------- --------- ------- -------- -------- Net assets 114,072 74,230 114,072 74,230 -------------------- --------- ------- -------- -------- Capital and reserves Called up share capital 11,237 9,614 11,237 9,614 Other reserves: Share premium 14,843 121 14,843 121 Special reserve 12,424 12,424 12,424 12,424 Capital redemption reserve 3,453 3,453 3,453 3,453 Capital reserve - realised 45,931 34,159 45,931 34,159 Capital reserve - unrealised 24,402 12,647 25,047 13,292 Revenue reserve 1,782 1,812 1,137 1,167 -------------------- --------- ------- -------- -------- Equity shareholders' funds 114,072 74,230 114,072 74,230 -------------------- --------- ------- -------- -------- Net asset value per share 253.8p 203.5p 253.8p 203.5p -------------------- --------- ------- -------- -------- Consolidated Cash Flow Statement for the year ended 30 September 2005 2005 2004 £'000 £'000 ----------------------------- --------- -------- Net cash inflow from operating activities 2,573 1,952 Servicing of finance Bank overdraft and loan interest paid (1,020) (577) Taxation Taxation recovered - - Financial investment Purchases of investments (40,111) (10,169) Sales of investments 19,006 7,567 ----------------------------- --------- -------- Net cash outflow from financial investment (21,105) (2,602) Equity dividends paid (3,061) (1,879) ----------------------------- --------- -------- Net cash outflow before financing (22,613) (3,106) Financing Repurchase and cancellation of own shares - (736) Shares purchased and held in Treasury - (7,013) Treasury shares sold 4,236 3,571 Issue new shares 15,494 - Drawdown of loans 2,850 6,550 ----------------------------- --------- -------- Net cash inflow from financing 22,580 2,372 ----------------------------- --------- -------- Decrease in cash (33) (734) ----------------------------- --------- -------- Reconciliation of net cash flow to movement in net debt Decrease in cash resulting from cashflows (33) (734) Increase in debt (2,850) (6,550) ----------------------------- --------- -------- Movement in net debt (2,883) (7,284) Net debt at 1 October (14,999) (7,715) ----------------------------- --------- -------- Net debt at 30 September (17,882) (14,999) ----------------------------- --------- -------- Notes 1 Revenue Account The revenue columns of the Statement of Total Return represent the revenue accounts of the Group. All revenue and capital items in the above statement derive from continuing operations. No operations have been acquired or discontinued during the year. 2 Income 2005 2004 £'000 £'000 Income from UK listed investments Franked investment income 4,187 3,214 Unfranked investment income 109 51 -------- ------- 4,296 3,265 -------- ------- Other income Bank interest receivable 73 18 -------- ------- 73 18 -------- ------- Total Income 4,369 3,283 -------- ------- Total income comprises: Dividends 4,187 3,214 Interest from fixed interest securities 109 51 Bank interest 73 18 -------- ------- 4,369 3,283 -------- ------- 3 Investment Management Fees Revenue Capital Total Revenue Capital Total 2005 2005 2005 2004 2004 2004 £'000 £'000 £'000 £'000 £'000 £'000 Investment management fees 209 425 634 138 283 421 Irrecoverable VAT thereon 37 74 111 25 49 74 -------- ------- ------- -------- -------- ------- 246 499 745 163 332 495 -------- ------- ------- -------- -------- ------- 4 Return per share Revenue return per share is based on £3,331,000 (2004: £2,277,000) net revenue on ordinary activities after taxation, and on the weighted average number of shares in issue during the year, and for this purpose, shares held in treasury are treated as not being in issue, of 40,573,992 (2004: 37,177,663). Capital return per share is based on net capital return for the financial year of £20,048,000 (2004: £13,855,000) and on the weighted average number of shares in issue during the year of 40,573,992 (2004: 37,177,663). 5 Comparative information This preliminary statement is not the Company's statutory accounts. The above results for the year ended 30 September 2005 have been agreed with the Auditors and are an abridged version of the Company's full draft accounts, which have not yet been approved, audited or filed with the Registrar of Companies. They have been prepared using the same accounting policies as those adopted in the financial statements for the year ended 30 September 2004. The statutory accounts for the year ended 30 September 2004 have been delivered to the Registrar of Companies and those for 30 September 2005 will be despatched to shareholders shortly. The statutory accounts for the year ended 30 September 2004 received an audit report which was unqualified and did not contain statements under Section 237 (2) and (3) of the Companies Act 1985. Close Finsbury Asset Management Limited Company Secretary 12 December 2005 This information is provided by RNS The company news service from the London Stock Exchange

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