Final Results
Close Brothers Dev VCT PLC
26 February 2004
CLOSE BROTHERS DEVELOPMENT VCT PLC
PRELIMINARY RESULTS
26 February 2004
Close Brothers Development VCT PLC ('the Company'), which provides equity and
debt finance to growing unquoted companies across a variety of sectors, with
investments ranging from service to asset-backed businesses, today announces
preliminary results for the year ended 31 December 2003.
Financial Highlights:
Ordinary Shares 'C' Shares
Year ended Period ended
31 December 31 December
2003 2003
Dividends per share 4.00 pence 1.65 pence
Net asset value per share 76.30 pence 92.85 pence
Shareholder value per share since launch: Pence per share Pence per share
(ii) (ii)
Total dividends for the period
ended 31 December 1999 (i) 2.50 -
Total dividends for the year
ended 31 December 2000 3.75 -
Total dividends for the year
ended 31 December 2001 4.00 -
Total dividend for the year
ended 31 December 2002 4.50 -
Interim dividend for the year
ended 31 December 2003 1.80 0.75
Final dividend for the year
ended 31 December 2003(iii) (iv) 2.20 0.90
----- -----
Total dividends 18.75 1.65
Net asset value at 31 December
2003 76.30 92.85
----- ------
Total 95.05 94.50
===== ======
Notes
(i) assuming subscription for Ordinary Shares by the First Closing on
26 January 1999.
(ii) excluding tax benefits received upon subscription.
(iii) assuming subscription for C Shares by the First Closing on 31 December
2002.
(iv) those subscribing for C Shares after 30 June 2003 were not entitled to the
interim dividend.
For further information, please contact:
Patrick Reeve / Ole Bettum Justin Griffiths / John West
Close Venture Management Tavistock Communications
Tel: 020 7422 7831 Tel: 020 7920 3150
Notes to Editors:
1) Close Brothers Development VCT PLC is managed by Close Venture Management.
2) Close Venture Management is a subsidiary of Close Brothers Investment
Limited which 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 2003
or 2002, but is derived from those accounts. Statutory accounts for 2002
have been delivered to the Registrar of Companies and those for 2003 will be
delivered shortly. The auditors have reported on these accounts; their
report was unqualified and did not contain statements under s237(2) or (3)
Companies Act 1985.
CHAIRMAN'S STATEMENT
Introduction
I present the results of the Company for the year to 31 December 2003, being the
fifth year following the launch of Close Brothers Development VCT PLC Ordinary
Shares and the first full year of the 'C' Shares.
The net asset value at the year end, after proposing the final dividends of 2.20
pence per Ordinary Share and 0.90 pence per 'C' Share was 76.3 pence per
Ordinary Share and 92.85 pence per 'C' Share (or 78.5 pence per Ordinary Share
and 93.75 pence per 'C' Share before providing for such dividends). While this
represents a small decline from the respective NAV for the two classes of share
of 80.3 pence and 94.6 pence at the previous year end, the total return
performance of the Ordinary Shares in terms of asset value and dividend has
outperformed the FTSE100 Index since the Company's launch.
Investment review
Despite the slight fall in the NAV, the year has seen a number of positive
developments in building longer term shareholder value. Further funding across
both share portfolios has been provided to support growth in three investee
companies. These are Peakdale Molecular, which has seen a 50 per cent. annual
growth in sales since our original investment and which required finance for an
attractive collaboration with DeNovo Pharmaceuticals for a development of a
library of screening compounds; Careforce Group, which has now made its seventh
acquisition in the fast consolidating domiciliary care sector; and Automotive
Technik, which needed working capital to secure its intellectual property and
fund its order book which now stands at £20 million.
Funding has also been provided to two new companies, both involved in the pub
and brewery sector. City Centres Breweries has purchased the Smiles Brewery in
central Bristol, as the first step in building up an integrated freehold pub and
brewing business based in the South West, and, since the year end, the Bold Pub
Company acquired 10 freehold and long leasehold pubs in the North West.
The equity in Peakdale, despite its continued strong growth, was written down in
line with the fall in value of its quoted competitors. The Q Garden Company also
saw a further fall in value as it continues to find the trading climate
difficult. Both The Q Garden Company and Odyssey Clubs Group required additional
small investments within the Ordinary Share portfolio. Dolphin Nurseries, by
contrast, where trading is strong, has commenced work on its seventh freehold
day nursery and a third party professional valuation has led to a strong write
up in the value of our holding.
Results, dividends and prospects
Ordinary Shares
As at 31 December 2003 the net asset value of the Ordinary Shares of the Company
was £11.1 million, compared to £11.8 million at 31 December 2002. This equates
to a net asset value per share of 76.3 pence (2002: 80.3 pence). Net income
after taxation for the year amounted to £590,000 (2002: £642,000) enabling the
board to declare a net final dividend of 2.2 pence per Ordinary share (2002: 2.7
pence). This is in addition to the interim dividend of 1.8 pence per share
(2002: 1.8 pence) and brings the total dividend for the year to 4.0 pence (2002:
4.5 pence). The final dividend will be paid on 5 April 2004 to shareholders on
the register on 12 March 2004.
'C' Shares
As at 31 December 2003 the net asset value of the 'C' Shares of the Company was
£10.9 million compared to £2.3 million at 31 December 2002, before the allotment
of £9.2 million of new funds. This equates to a net asset value per share of
92.85 pence (2002: 94.6 pence). Net income after taxation for the period
amounted to £168,000 (2002: a loss of £3,000) enabling the board to declare a
net final dividend of 0.9 pence per Ordinary share (2002: nil). This is in
addition to the interim dividend of 0.75 pence per share (2002: nil) and brings
the total dividend for the year to 1.65 pence (2002: nil). The final dividend
will be paid on 5 April 2004 to shareholders on the register on 12 March 2004.
Overall, the dividends were slightly lower than we anticipated, caused partly by
lower interest rates and also, in the case of the 'C' Shares, through an
investment programme that was weighted more towards the end of the year. In the
current year, we expect the investment portfolios of both classes of share to
support the Company's core strategy of providing a relatively low risk
investment profile, a strong dividend yield and the prospects of capital growth.
New 'C' Share issue
Following the successful 'C' Share issue which raised £11.7 million over the
years 2002 and 2003, we are issuing up to a further £13.2 million New 'C' Shares
in the period to 5 April 2004 for those who wish to take advantage of the
existing VCT rules before they change at the end of this tax year. As announced
by the Chancellor of the Exchequer on 10 December 2003, in return for greater
income tax relief, investors will not be able to use investment in a VCT to
defer chargeable capital gains from 6 April 2004.
Roderick Davidson
Chairman 26 February 2004
THE PORTFOLIO OF INVESTMENTS
Ordinary Shares
At 31 December 2003 At 31 December 2002
Equity Invested Unrealised Total Unrealised Movement in
owned at cost appreciation/ value appreciation/ unrealised
(depreciation) (depreciation) appreciation/
(depreciation)
£'000 £'000 £'000 £'000 £'000
Qualifying
investments
Automotive Technik
(Holdings) Limited 11% 770 (66) 704 6 (72)
Careforce Group
Limited 32% 1,740 709 2,449 602 107
City Screen
(Liverpool)
Limited 5% 50 - 50 - -
Consolidated
Communications
Management
Limited 11% 1,000 90 1,090 69 21
Dolphin Nurseries
Limited 20% 1,049 297 1,346 145 152
Leisure Links
International
Limited 26% 1,100 (238) 862 (290) 52
Odyssey Clubs
Group Limited 16% 1,737 (306) 1,431 (352) 46
Peakdale Molecular
Limited 8% 1,064 (100) 964 - (100)
The Q Garden
Company Limited 17% 566 (299) 267 (23) (276)
----- ----- ----- ----- ------
Total
qualifying
investments 9,076 87 9,163 157 (70)
----- ----- ------ ----- ------
Non-qualifying
investments - - - - -
----- ----- ----- ----- ------
Total
investments 9,076 87 9,163 157 (70)
===== ===== ===== ===== ======
'C' Shares
At 31 December 2003
Percentage Invested Unrealised Total
of equity at cost appreciation/
owned (depreciation)
£'000 £'000 £'000
Qualifying investments
Automotive Technik
(Holdings) Limited 9% 650 - 650
Careforce Group Limited 6% 910 10 920
City Centre Breweries
Limited 21% 600 - 600
Peakdale Molecular
Limited 3% 133 (67) 66
---- ----- ----
Total qualifying
investments 2,293 (57) 2,236
----- ----- -----
Non-qualifying investments
Barclays FRN 2,003 1 2,004
Bradford & Bingley FRN 1,997 2 1,999
Nationwide FRN 1,998 1 1,999
----- ----- -----
Total non-qualifying
investments 5,998 4 6,002
----- ----- -----
Total investments 8,291 (53) 8,238
===== ===== =====
Automotive Technik (Holdings) Limited
The company manufactures the Pinzgauer off-road vehicle, whose main clients are
the UK Ministry of Defence and overseas armed forces.
Careforce Group Limited
Careforce Group was established in 1999 to build, both organically and through
acquisition, a group providing home care services to the elderly, principally on
behalf of local authorities. Careforce currently operates an expanding branch
network around the UK.
City Centres Breweries Limited
City Centres Breweries was formed to purchase the Smiles Brewery in central
Bristol and thereafter to provide a base for building up an integrated brewery
and pub business based in the South West.
City Screen (Liverpool) Limited
The company was formed to own and operate a three screen 'art house' cinema in
the centre of Liverpool, which opened in February 2003.
Consolidated Communications Management Limited
Consolidated Communications is a management buy-out of an established public
relations agency, formed in 1991, with a broad range of 'blue chip' clients. In
2001 the Company was named 'Consultancy of the Year' at the PR Week Awards.
Dolphin Nurseries Limited
Dolphin is building a group of private children's day nurseries in and around
Greater London. The company currently operates four nurseries at Upminister,
Chigwell, Bracknell and Tooting and has three new developments in the pipeline.
Leisure Links International Limited
Leisure Links owns and operates a golf course at Test Valley in Hampshire.
Odyssey Clubs Group Limited
Odyssey owns a 30,000 sq.ft. health and fitness club on an 11 acre site outside
Stevenage, a 20,000 sq.ft. club in Henley and has a 50% stake in a company which
owns a 30,000 sq.ft. club on a 6 acre site outside Beaconsfield in
Buckinghamshire.
Peakdale Molecular Limited
Peakdale Molecular is principally engaged in research, processing and the supply
of chemical compounds to the major pharmaceutical companies. It operates from a
substantial freehold site in Chapel-en-le-Frith, Derbyshire.
The Q Garden Company Limited
The Q Garden Company is a chain of garden centres based in the south of England.
It currently owns three centres in Fareham (Hampshire), Chinnor (Oxfordshire)
and Stow-on-the-Wold (Gloucestershire).
Statement of Total Return
(incorporating the revenue account)
for the year to 31 December 2003
Ordinary Shares 'C' Shares Total
Year ended Year ended Year ended
31 December 2003 31 December 2003 31 December 2003
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
------------------------------------------------------------------------------------------------------
Losses on
investments - (443) (443) - (65) (65) - (508) (508)
Income 976 - 976 347 - 347 1,323 - 1,323
Investment
management
fees (67) (201) (268) (65) (194) (259) (132) (395) (527)
Other expenses (93) (26) (119) (75) (24) (99) (168) (50) (218)
-------------------------------------------------------------------------------------------------------
Return on
ordinary
activities
before tax 816 (670) 146 207 (283) (76) 1,023 (953) 70
Tax on
ordinary
activities (226) 74 (152) (39) 43 4 (265) 117 (148)
-------------------------------------------------------------------------------------------------------
Return
attributable
to equity
shareholders 590 (596) (6) 168 240) (72) 758 (836) (78)
Dividends (583) - (583) (157) - (157) (740) - (740)
-------------------------------------------------------------------------------------------------------
Transfer to/
(from)
reserves 7 (596) (589) 11 (240) (229) 18 (836) (818)
=======================================================================================================-
Return per
share 4.0p (4.0)p (0.0)p 1.8p (2.5)p (0.7)p 2.9p (3.2)p (0.3)p
The revenue columns of this statement represent the profit and loss account of
the Company.
No operations were acquired or discontinued in the year.
Statement of Total Return
(incorporating the revenue account)
for the year to 31 December 2002
Ordinary Shares 'C' Shares Total
Year ended Period ended Year ended
31 December 2002 31 December 2002 31 December 2002
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Losses on
investments - (1,771) (1,771) - - - - (1,771) (1,771)
Income 1,059 - 1,059 4 - 4 1,063 - 1,063
Investment
management fees (77) (231) (308) (3) (7) (10) (80) (238) (318)
Other expenses (113) (29) (142) (4) (1) (5) (117) (30) (147)
-----------------------------------------------------------------------------------------------------------
Return on
ordinary
activities
before tax 869 (2,031) (1,162) (3) (8) (11) 866 (2,039) (1,173)
Tax on
ordinary
activities (227) 68 (159) - 2 2 (227) 70 (157)
-----------------------------------------------------------------------------------------------------------
Return
attributable
to equity
shareholders 642 (1,963) (1,321) (3) (6) (9) 639 (1,969) (1,330)
Dividends (660) - (660) - - - (660) - (660)
-----------------------------------------------------------------------------------------------------------
Transfer from
reserves (18) (1,963) (1,981) (3) (6) (9) (21) (1,969) (1,990)
===========================================================================================================
Return per
share 4.4p (13.4)p (9.0)p (0.2)p (0.4)p (0.6)p 3.7p (11.5)p (7.8)p
The revenue columns of this statement represent the profit and loss account of
the Company.
The 'C' Share return covers the period from 25 October 2002 to 31 December 2002.
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued in the year.
Balance Sheet
at 31 December 2003
Notes Ordinary Shares 'C' Shares Total
31 December 31 December 31 December
2003 2003 2003
£'000 £'000 £'000
Fixed asset
investments
Qualifying 9,163 2,236 11,399
Non-qualifying - 6,002 6,002
------ ------ -------
Total fixed asset
investments 10 9,163 8,238 17,401
Current assets
Debtors 12 35 51 86
Cash 2,468 2,792 5,260
------ ------ -------
2,503 2,842 5,346
Creditors: due
within one year 13 (580) (200) (763)
------ ------ -------
Net current assets 1,923 2,642 4,583
------ ------ -------
Net assets 11,086 10,880 21,984
======= ====== ========
Represented by:
Called up share
capital 14 7,264 5,859 13,123
Share premium 15 48 - 48
Special reserve 15 6,416 5,259 11,675
Capital redemption
reserve 15 120 - 120
Capital reserve 15
realised (2,166) (182) (2,348)
unrealised (666) (64) (730)
Revenue reserve 15 70 8 96
------ ------ -------
Total equity
shareholders'
funds 17 11,086 10,880 21,984
======= ====== ========
Net asset value
per share 16 76.3p 92.8p 83.8p
The financial statements were approved by the Board of Directors on 26 February
2004.
Signed on behalf of the Board of Directors.
Roderick Davidson
Chairman
Balance Sheet
at 31 December 2002
Ordinary Shares 'C' Shares Total
31 December 31 December 31 December
2002 2002 2002
£'000 £'000 £'000
Fixed asset
investments
Qualifying 10,193 - 10,193
Non-qualifying 1,499 - 1,499
------ ------ -------
Total fixed asset
investments 11,692 - 11,692
Current assets
Debtors 48 862 910
Cash 694 1,487 2,181
------ ------ -------
742 2,349 3,091
Creditors: due within
one year (663) (29) (692)
------ ------- -------
Net current assets 79 2,320 2,399
------ ------- -------
Net assets 11,771 2,320 14,091
======= ======= =======
Represented by:
Called up share
capital 7,333 1,226 8,559
Share premium 48 1,103 1,151
Special reserve 6,513 - 6,513
Capital redemption
reserve 51 - 51
Capital reserve
realised (779) (6) (785)
unrealised (1,458) - (1,458)
Revenue reserve 63 (3) 60
------ ------- -------
Total equity
shareholders' funds 11,771 2,320 14,091
======= ======= =======
Net asset value per
share 80.3p 94.6p 82.3p
Cash flow Statement
for the year ended 31 December 2003
Ordinary Shares 'C' Shares Total
Year ended Period ended Year ended
31 December 31 December 31 December
2003 2003 2003
£'000 £'000 £'000
Operating activities
Investment income
received 860 118 978
Deposit interest
received 67 173 240
Investment management
fees paid (272) (205) (477)
Other cash payments (128) (88) (216)
------ ------ ------
Net cash inflow from
operating activities 527 (2) 525
Taxation
UK corporation tax
paid (155) - (155)
Capital expenditure and
financial investments
Purchase of qualifying
investments (698) (2,293) (2,991)
Purchase of non-qualifying
investments - (5,998) (5,998)
Disposal of qualifying
investments 1,500 - 1,500
Disposals of non-qualifying
investments 1,355 - 1,355
------ ------ ------
Net cash inflow from
investing activities 2,145 (8,291) (6,146)
Equity dividends paid
Dividends paid on ordinary (658) (53) (711)
shares ------ ------ ------
Net cash inflow
before financing 1,871 (8,346) (6,475)
Financing
Issue of equity net
of expenses - 9,665 9,665
Cancellation of
shares (97) - (97)
Cost of share premium
cancellation - (14) (14)
------ ------ ------
Net cash (outflow)/
inflow from financing (97) 9,651 9,554
Increase in cash 1,774 1,305 3,079
====== ====== ======
Cash flow Statement
for the year ended 31 December 2002
Ordinary Shares 'C' Shares Total
Year ended Period ended Year ended
31 December 31 December 31 December
2002 2002 2002
£'000 £'000 £'000
Operating activities
Investment income
received 713 - 713
Deposit interest
received 25 4 29
Investment management
fees paid (250) - (250)
Other cash payments (152) - (152)
------- ------ ------
Net cash inflow from
operating activities 336 4 340
Taxation
UK corporation tax
paid (108) - (108)
Capital expenditure and
financial investments
Purchase of qualifying
investments (1,269) - (1,269)
Purchase of
investments non-qualifying - - -
Disposal of qualifying
investments 300 - 300
Disposals of non-qualifying
investments 1,500 - 1,500
------- ------ ------
Net cash inflow from
investing activities 531 - 531
Equity dividends paid
Dividends paid on ordinary
shares (614) - (614)
------- ------ ------
Net cash inflow
before financing 145 4 149
Financing
Issue of equity net
of expenses 101 1,483 1,584
------- ------ ------
Increase in cash 246 1,487 1,733
======= ====== ======
This information is provided by RNS
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