Final Results

Northern Venture Trust PLC 17 November 2004 17 NOVEMBER 2004 NORTHERN VENTURE TRUST PLC PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2004 Northern Venture Trust PLC is a Venture Capital Trust (VCT) managed by Northern Venture Managers. The trust was one of the first VCTs launched on the London Stock Exchange in 1995 and has to date raised a total of £44 million from private investors. It invests mainly in unquoted venture capital holdings and aims to provide high long-term returns to shareholders through a combination of dividend yield and capital growth. Financial highlights - year ended 30 September 2004: (comparative figures as at 30 September 2003 in italics) 2004 2003 • Net assets £35,345,000 £34,000,000 • Net asset value per share 89.6p 85.7p • Investment income £1,671,000 £1,269,000 • Profit on ordinary activities before tax: Revenue £1,240,000 £823,000 Capital £3,956,000 £97,000 Total £5,196,000 £920,000 • Earnings per share: Revenue 2.5p 1.8p Capital 10.5p 0.5p Total 13.0p 2.3p • Dividend per share: Revenue 2.0p 1.7p Capital 10.0p 3.3p Total 12.0p 5.0p • Cumulative return to shareholders since launch: Dividends per share 44.0p 32.0p Net asset value plus dividends per share 133.6p 117.7p • Share price 82.5p 63.5p For further information, please contact: Alastair Conn, Managing Director Northern Venture Managers Limited 0191 244 6000 Website: www.nvm.co.uk Lucy Copeman/Marlene Scott Polhill Communications 020 7655 0540 CHAIRMAN'S STATEMENT The Chairman of Northern Venture Trust PLC, Professor Sir Frederick Holliday CBE, included the following points in his statement to shareholders: I am pleased to report on a busy and successful year for our company. The net asset value per share at 30 September 2004, after providing for dividends paid or proposed for the year totalling a record 12.0p, was 89.6p - an increase of 4.6% from the corresponding figure of 85.7p a year ago. Over the five years to September 2004 the company has achieved a net asset value total return of 32.5%, compared with a negative total return of 7.1% from the FTSE All-Share index. A number of significant and profitable investment disposals have been achieved; the investment portfolio is progressing well and the level of new investment completions was satisfactory, with ample liquidity in hand for further development of the portfolio. Earnings and dividend Total earnings per share for the year amounted to 13.0p, compared with 2.3p in the corresponding year to 30 September 2003. I have previously reminded shareholders that earnings per share will tend to fluctuate from year to year as realised investment gains, adjusted to exclude previous revaluation adjustments, are included under the accounting rules we follow because our company is no longer an investment company for Companies Act purposes. Investment income at £1,671,000 was 31.7% higher than in the preceding year, and the revenue surplus before tax increased by more than 50% from £823,000 to £1,240,000. The revenue element of earnings per share rose from 1.8p to 2.5p. Your directors recommend a revenue dividend of 2.0p per share (last year 1.7p) and a capital dividend of 10.0p per share (last year 3.3p). This makes a total dividend for the year of 12.0p, of which 2.0p was paid at the interim stage leaving a proposed final dividend of 10.0p which will, subject to shareholders' approval, be paid on 24 December 2004 to shareholders on the register on 26 November 2004. Following a number of enquiries from shareholders about the possibility of re-investing their dividends in new ordinary shares in the company, so benefiting from the new investment tax reliefs announced in the 2004 Budget, we have decided to introduce a dividend investment scheme. Shareholders will receive a separate letter giving further details at the same time as they receive the annual report. Including the proposed final dividend, subscribers in the original share issue nine years ago will have received cash dividends (including repayable tax credits) of 44p per share. An investor claiming initial income tax relief at 20% and capital gains tax deferral at 40% will therefore have received more than his/her 40p net investment back by way of tax-free cash dividends. The company has now distributed a total of over £15 million to shareholders through dividend payments. Investment portfolio The Manager's Review in the annual report gives details of developments in the investment portfolio during the year. Additions to venture capital investments during the year amounted to £6.3 million and sale proceeds were £11.5 million. Profits were taken on a number of quoted investment holdings and in the unquoted portfolio there were successful exits from T J Brent, CGI International and Keith Prowse. After setting aside cash for the final dividend referred to above, there remains a good reserve of liquidity for investment in the new financial year. VCT qualifying status The company has continued to retain PricewaterhouseCoopers LLP as advisers on VCT taxation matters, and has throughout the year met the qualifying conditions laid down by the Inland Revenue for its formal approval as a VCT. Shareholder issues During the year the mid-market share price rose from 63.5p to 82.5p, an increase of 29.9%. This had the effect of reducing the discount to the year-end net asset value to 7.9%. The company bought back and cancelled just over 520,000 ordinary shares, equivalent to 1.3% of the issued share capital at the start of the year. This was approximately half the number of shares bought back in the preceding year, reflecting the fact that from October 2003 to March 2004 there was a welcome increase in secondary trading in the company's shares. However the secondary market in VCT shares generally is now at a low ebb: the combination of 40% income tax relief on new VCT subscriptions with the move by certain VCT management groups to buy back shares at a fixed 10% discount has led to secondary demand virtually disappearing. This is not necessarily a bad thing, but does perhaps call into question the value of a stock market listing for VCTs. We will be seeking shareholders' approval at the annual general meeting to a renewal of the directors' authorities to issue new shares up to 10% of the present issued capital and to buy back up to 10% of the company's shares in the market for cancellation. Northern Venture Managers As I reported at the interim stage, in December 2003 the staff of Northern Venture Managers completed a management buy-out of the company following the acquisition of their parent, Edinburgh Fund Managers Group, by Aberdeen Asset Management. The independent directors of Northern Venture Trust encouraged this move and consider that the outcome has been highly satisfactory for Northern Venture Trust and its shareholders. Prospects The company's articles of association require that in 2005 shareholders should be invited to vote on the question of future continuation. Your board has kept this matter under regular review and, as I have previously indicated to shareholders, it is our intention to recommend at a specially convened extraordinary general meeting that the company continue its active operations for at least another five years. We believe that Northern Venture Trust has achieved the happy result of producing good returns for shareholders whilst achieving the end for which VCTs were created, namely to provide essential funding for small unquoted companies at the grass roots of the UK economy, and that the company is well placed to achieve more of the same in the future. We are conscious that at this stage in the company's development there will be some shareholders who would like to have a means of exiting from their investment, whilst others may wish to increase their investment (particularly in the current two-year period of enhanced VCT tax reliefs), and we are actively considering how best to satisfy the aspirations of both groups. Professor Sir Frederick Holliday Chairman The audited financial statements for the year ended 30 September 2004 will show the results set out below. PROFIT AND LOSS ACCOUNT for the year ended 30 September 2004 Year ended 30 September 2004 Year ended 30 September 2003 Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000 Profits recognised in the year on realisation of investments - 4,578 4,578 - 653 653 Income 1,671 - 1,671 1,269 - 1,269 Investment management fee (207) (622) (829) (185) (556) (741) Other expenses (224) - (224) (214) - (214) ------ ------ ------ ------ ------ ------ Profit on ordinary activities before interest and tax 1,240 3,956 5,196 870 97 967 Interest payable - - - (47) - (47) ------ ------ ------ ------ ------ ------ Profit on ordinary activities before tax 1,240 3,956 5,196 823 97 920 Tax on ordinary activities (246) 239 (7) (118) 118 - ------ ------ ------ ------ ------ ------ Profit on ordinary activities after tax 994 4,195 5,189 705 215 920 Dividends (791) (3,946) (4,737) (678) (1,309) (1,987) ------ ------ ------ ------ ------ ------ Retained profit/(loss) for the year 203 249 452 27 (1,094) (1,067) ------ ------ ------ ------ ------ ------ Earnings per share 2.5p 10.5p 13.0p 1.8p 0.5p 2.3p Dividend per share 2.0p 10.0p 12.0p 1.7p 3.3p 5.0p STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES for the year ended 30 September 2004 Year ended 30 September 2004 Year ended 30 September 2003 Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000 Profit on ordinary activities after tax 994 4,195 5,189 705 215 920 Unrealised gains on revaluation of investments - 1,012 1,012 - 3,015 3,015 ------ ------ ------ ------ ------ ------ Total recognised gains and losses during the year 994 5,207 6,201 705 3,230 3,935 ------ ------ ------ ------ ------ ------ NOTE OF HISTORICAL COST PROFITS AND LOSSES for the year ended 30 September 2004 Year ended 30 September 2004 Year ended 30 September 2003 Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000 Reported profit on ordinary activities before tax 1,240 3,956 5,196 823 97 920 Realisation of investment revaluation gains/(losses) of prior years - 2,113 2,113 - (2,113) (2,113) ------ ------ ------ ------ ------ ------ Historical cost profit/(loss) for the year before tax 1,240 6,069 7,309 823 (2,016) (1,193) ------ ------ ------ ------ ------ ------ Historical cost profit/(loss) for the year after taxation and dividends 203 2,362 2,565 27 (3,207) (3,180) ------ ------ ------ ------ ------ ------ BALANCE SHEET as at 30 September 2004 30 30 September September 2004 2003 £000 £000 Venture capital investments: Unquoted 22,301 22,359 Quoted 4,993 4,867 ------- ------- 27,294 27,226 Other listed 2,446 3,750 investments ------- ------- Total fixed asset 29,740 30,976 investments ------- ------- Current assets: Debtors 153 313 Cash at bank 9,453 4,500 ------- ------- 9,606 4,813 Creditors (amounts falling due within one year) (4,001) (1,789) ------- ------- Net current assets 5,605 3,024 ------- ------- Net assets 35,345 34,000 ------- ------- Capital and reserves: Called-up equity share 9,860 9,922 capital Share premium 14,463 14,286 Capital redemption 654 524 reserve Revaluation reserve (299) 802 Profit and loss 10,667 8,466 account ------- ------- Total equity 35,345 34,000 shareholders' funds ------- ------- Net asset value per 89.6p 85.7p share CASH FLOW STATEMENT for the year ended 30 September 2004 Year ended Year 30 September ended 2004 30 September 2003 £000 £000 £000 £000 Cash flow statement Net cash inflow from operating 746 383 activities Taxation: Corporation tax - - paid Financial investment: Purchase of (6,259) (3,063) investments Sale/repayment of 13,085 9,165 investments ------ ------ Net cash inflow from financial 6,826 6,102 investment Equity dividends (2,500) (688) paid ------ ----- - Net cash inflow 5,072 5,797 before financing Financing: Issue of ordinary 258 - shares Share issue (13) - expenses Purchase of ordinary shares for cancellation (364) (580) ------ ------ Net cash outflow from financing (119) (580) ------ ----- - Increase in cash 4,953 5,217 at bank ------ ----- - Reconciliation of profit before tax to net cash flow from operating activities Profit on ordinary activities before tax 5,196 920 Decrease in 153 123 debtors Decrease in (25) (7) creditors Profit recognised on realisation of (4,578) (653) investments ------ ----- - Net cash inflow from operating 746 383 activities ------ ----- - Reconciliation of movement in net funds 1 Cash flows 30 October September 2003 2004 £000 £000 £000 Cash at bank 4,500 4,953 9,453 ----- ------ ------ INVESTMENT PORTFOLIO SUMMARY as at 30 September 2004 Valuation % of net assets £000 by valuation Fifteen largest venture capital investments: CGI Group 2,325 6.6 TFB Group 2,211 6.3 John Fredericks Plastics 1,356 3.8 Computer Software Group** 1,354 3.8 Alaric Systems 1,184 3.3 Weldex (International) Offshore 1,124 3.2 Cyclacel Group 1,051 3.0 Alizyme* 973 2.8 DxS 940 2.7 Interlube Systems 920 2.6 Remsdaq 770 2.2 Tolwood 750 2.1 IRIS Technology 685 1.9 Omnico Plastics 665 1.9 Union Snack 648 1.8 ------- ------ 16,956 48.0 Other venture capital investments 10,338 29.2 ------- ------ Total venture capital investments 27,294 77.2 Other listed investments 2,446 6.9 ------- ------ Total fixed asset investments 29,740 84.1 Net current assets 5,605 15.9 ------- ------ Net assets 35,345 100.0 ------- ------ * Listed on the London Stock Exchange **Traded on the Alternative Investment Market The above summary of results for the year ended 30 September 2004 does not constitute statutory financial statements within the meaning of Section 240 of the Companies Act 1985 and has not been delivered to the Registrar of Companies. Statutory financial statements will be filed with the Registrar of Companies in due course; the independent auditors' report on those financial statements under Section 235 of the Companies Act 1985 is unqualified and does not contain a statement under Section 237(2) or (3) of the Companies Act 1985. The proposed final dividend of 10.0p per share for the year ended 30 September 2004 will, if approved by shareholders, be paid on 24 December 2004 to shareholders on the register at the close of business on 26 November 2004. The full annual report including financial statements for the year ended 30 September 2004 is expected to be posted to shareholders on 22 November 2004 and will be available to the public at the registered office of the company at Northumberland House, Princess Square, Newcastle upon Tyne NE1 8ER. ENDS This information is provided by RNS The company news service from the London Stock Exchange

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