Interim Results

Capitaltech PLC 27 February 2001 CapitalTech plc Half-Yearly Report 6 months to 31 October 2000 HALF YEAR TO 31 OCTOBER 2000 We are pleased to report that during the half year to 31 October 2000, we made good progress towards our aim of building a solid asset base. First, our balance sheet shows our net asset value increased in the half year by £7m from the £11.3m at 30 April 2000 to £18.3m at 31 October 2000. This increase of 61% in our net assets is principally due to the acquisition in exchange for shares in September 2000 of three residential property unit trusts which brought in net assets of £9.1m . Second, we have had regard to advices from new property managers appointed in October and to the stock market's continuing lack of appetite for new technology investment. We have carried out a programme of repair and refurbishment and accelerated depreciation of furnishings of the property portfolios acquired in the previous year to bring them up to standard. We have written all of these costs through profit and loss account amounting to around £500,000. We have, with our new property managers, examined the rents receivable on portfolios acquired and provided some £200,000 against non-recovery of outstanding rents. We are considering the possibility of seeking recovery in respect of the foregoing matters. Additionally,in respect of the unit trust properties acquired in the current year, repair requirements have been reflected in the directors' assessment of the condition, and fair value, of these properties. We also worked towards enhancing the composition of our increased asset base by rationalising it through sales of poorer performing or lower yielding properties. Disposals of some £5m of low yielding property have, after deducting costs, realised £279,000 less than carrying value, which is generally April 2000 revaluation. However, £247,000 of previous valuation surpluses was realised in the period meaning that in reality these properties, after costs of sale, realised very close to effective acquisition cost. We have considered carefully the ongoing carrying value of certain non-property investments. During the half year we restricted further investment diversification to property related and traditional businesses. The result of all this activity is that the profit and loss account shows a loss for the half year of £1,942,000. We regarded the debt, particularly because of that taken on in the course of making opportunistic acquisitions late in the previous financial year, as higher than we are happy with long term relative to net assets. We plan to reduce debt, and hence the interest payable, further. In addition to routine sales, similar to those in the half year, we are currently hoping to sell as portfolios some £15m of property and have granted options allowing a new proposed fund to acquire up to a further £11m of properties from us. Of our net current liabilities of £12.9m, £11.9m was well secured property lending which is normally taken as medium term debt. The repayment profile, and extent, of this lending is being discussed with our bankers in the context of the prospective sales referred to above. The net asset value per ordinary share at 31 October 2000 was 31.3p. Robert F M Adair Chairman 27 February 2001 6 6 12 months months months to to to 31-Oct-00 31-Oct-99 30-Apr-00 £000 £000 £000 TURNOVER Continuing operations 1,646 1,845 3,869 Acquisitions 305 - - 1,951 1,845 3,869 OPERATING (LOSS)/PROFIT Continuing operations: Trading (loss)/profit (358) 605 1,056 Goodwill - amortisation (44) (6) (51) - impairment losses - - (144) Acquisitions: Trading profit 165 - - Goodwill amortisation (1) - - GROUP OPERATING (LOSS)/PROFIT (238) 599 861 Share of operating loss on joint venture - (39) (35) TOTAL OPERATING (LOSS)/PROFIT (238) 560 826 Continuing operations: (Write down)/net write back of provision (202) - 21 for unlisted investments Gain on disposal of other fixed asset - - 119 investment (Loss)/gain on disposal of investment (279) 1 (846) properties Negative goodwill release 52 78 1,234 Other income 286 - - Loan stock redeemed below par - - 303 Net interest payable (1,561) (506) (1,642) (LOSS)/PROFIT ON ORDINARY ACTIVITIES (1,942) 133 15 BEFORE TAX Taxation - - 176 (LOSS)/PROFIT ATTRIBUTABLE TO MEMBERS OF (1,942) 133 191 PARENT COmpany Preference share dividend (1) (5) (16) Proposed ordinary dividend - - (145) RESULT FOR PERIOD (1,943) 128 30 (Loss)/earnings per share - basic and (4.93p) 3.35p 1.69p diluted 31-Oct-00 31-Oct-99 30-Apr-00 £000 £000 £000 FIXED ASSETS Intangible assets Positive goodwill 444 216 440 Negative goodwill (360) (1,244) (355) 84 (1,028) 85 Tangible assets Investment properties 67,043 15,895 46,996 Other 69 186 80 67,112 16,081 47,076 Investments Joint venture - share of gross assets 48 91 48 - share of gross liabilities (36) (79) (36) 12 12 12 Other 1,046 101 440 1,058 113 452 68,254 15,166 47,613 CURRENT ASSETS Debtors 1,591 1,441 2,990 Cash at bank and in hand 835 353 979 2,426 1,794 3,969 CREDITORS: amounts falling due within one year Borrowings 12,376 828 5,770 Other creditors 2,972 1,035 2,204 15,348 1,863 7,974 NET CURRENT liabilities (12,922) (69) (4,005) TOTAL ASSETS LESS CURRENT LIABILITIES 55,332 15,097 43,608 CREDITORS: amounts falling due after more (37,072) (14,997) (32,291) than one year 18,260 100 11,317 CAPITAL AND RESERVES Called up share capital 1,909 228 775 Deferred consideration 193 193 193 Share premium account 8,631 653 698 Revaluation reserve - investment properties 1,747 320 1,994 - other 97 - 97 Capital redemption reserve 30 - 9 Merger reserve 9,100 858 9,282 Preference dividend reserve - 22 - Profit and loss account (3,447) (2,174) (1,731) 18,260 100 11,317 6 6 12 months months months to to to 31-Oct-00 31-Oct-99 30-Apr-00 £000 £000 £000 (Loss)/profit attributable to members (1,942) 133 191 of the parent company Unrealised surplus on revaluation of - 320 1,994 properties Unrealised surplus on revaluation of - - 97 unlisted investments Total recognised gains and losses (1,942) 453 2,282 relating to period GROUP RECONCILIATION OF SHAREHOLDERS' FUNDS 6 months 6 months 12 months to to to 31-Oct-00 31-Oct-99 30-Apr-00 £000 £000 £000 Total recognised gains and losses (1,942) 453 2,282 Preference share dividend (1) - (16) Proposed ordinary share dividend - - (145) New ordinary shares issued 503 865 584 Share premium arising on new ordinary 8,584 - 45 shares issued Merger reserve arising on new ordinary - - 9,832 shares issued Fair value adjustment to merger reserve (181) - - Redemption of preference share capital (20) - (30) Release of preference dividend reserve - - (17) Total movements during the year 6,943 1,318 12,535 Opening shareholders' funds 11,317 (1,218) (1,218) Closing shareholders' funds 18,260 100 11,317 BASIS OF PREPARATION The interim financial statements are unaudited and do not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. These statements have been prepared on the basis of the accounting policies set out in the Group's 2000 Annual Report and Accounts and were approved by the board of directors on 27 February 2001. Financial statements for the year ended 30 April 2000 are abridged statements; full accounts with an unqualified audit report have been lodged with the Registrar of Companies. (LOSS)/EARNINGS PER ORDINARY SHARE The calculation of basic and diluted (loss)/earnings per ordinary share is based on the following: 6 months 6 months 12 months to to to 31-Oct-00 31-Oct-99 30-Apr-00 £000 £000 £000 (Deficit)/profit (1,942) 133 191 Preference dividend (1) (5) (16) (1,943) 128 175 The weighted average number of ordinary shares in issue during the period: Basic 39,447,227 3,825,512 10,361,954 Dilutive potential ordinary shares - 120 - arising from share option schemes 39,447,227 3,825,632 10,361,954 HALF-YEARLY REPORT The half-yearly report will be posted to shareholders on or about 27 February 2001 and copies will be available from the Company Secretary, CapitalTech plc, James Sellars House, 144 West George Street, Glasgow, G2 2HG. INDEPENDENT REVIEW REPORT TO CAPITALTECH PLC Introduction We have been instructed by the company to review the financial information set out on pages 3 to 6 and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The Listing Rules of the Financial Services Authority require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999 /4 issued by the Auditing Practices Board. A review consists principally of making enquiries of management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 31 October 2000. Ernst & Young Glasgow 27 February 2001 END

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