Interim Results
Close Brothers Dev VCT PLC
30 August 2007
Close Brothers Development VCT PLC
Interim Results for the six months to 30 June 2007
Close Brothers Development VCT PLC today announces its interim results for the
six months ended 30 June 2007. This announcement was approved by the Board of
Directors on 30 August 2007.
Financial highlights
Ordinary Shares C Shares
Shareholder value per share since launch: Pence per Pence per
share(ii) share(ii)
Dividends paid during the year to 31 December 1999(i) 1.00 -
Dividends paid during the year to 31 December 2000 3.65 -
Dividends paid during the year to 31 December 2001 3.20 -
Dividends paid during the year to 31 December 2002 4.20 -
Dividends paid during the year to 31 December 2003
(iii) & (iv) 4.50 0.75
Dividends paid during the year to 31 December 2004 4.00 2.00
Dividends paid during the year to 31 December 2005 5.20 5.90
Dividends paid during the year to 31 December 2006 3.00 4.50
Dividends paid during the six months to 30 June 2007(v) 1.50 1.61
30.25 14.76
Net asset value as at 30 June 2007 101.49 108.75
Total cumulative return at 30 June 2007 131.74 123.51
In addition to the dividends paid above, the Board has declared a second
dividend of 3.5 pence(comprising 1 pence revenue and 2.5 pence capital profits)
per Ordinary share to be paid on 5 October 2007 to shareholders on the register
on 7 September 2007.
Notes
(i) Assumes subscription for Ordinary shares by the first closing on 26 January
1999.
(ii) Excludes tax benefits upon subscription.
(iii)Assuming subscription of 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.
(v) On 31 March 2007, the C shares were converted into Ordinary shares in the
ratio of 1.0715 Ordinary shares for each C share. The dividends paid since
31 March 2007 and the net asset value of each C share shown above, is based
on the conversion factor of 1.0715 of Ordinary shares.
CHAIRMAN'S STATEMENT
Investment progress
I am pleased to report that the six months to 30th June 2007 has been a
successful period for Close Brothers Development VCT. Net asset value per
Ordinary share has risen from 94.6 pence at 31st December 2006 to 101.5 pence, a
rise of 7 pence. This increase was generated principally by the sale of two
investments. The first was the sale of Careforce in which the VCT had an 18%
shareholding, following the offer for the company by Mears Group PLC. The VCT
first backed Careforce in 2000 at a very early stage in its development and
realised 2.4 times its investment of £3.1 million. In addition, just after the
half year, your Company sold its investment in the Bold Pub Company Limited
realising a profit of just over £800,000. In both cases, the VCT also received a
strong running yield in its investment.
As a result of the realised capital profits arising from these sales, and in
line with the company's strategy providing a strong and predictable tax free
income stream to shareholders, your Board now intends to increase the annual
dividend to 5 pence per share. Subject to the continued availability of realised
capital profits, your Board would hope to increase this level over time. The
first dividend of 1.5 pence paid on 13 May 2007 of this year will therefore be
followed by a second dividend of 3.5 pence (comprising of 1 pence revenue and
2.5 pence realised capital profits) to be paid on 5th October 2007.
Investment activity has been strong over the period with just over £1.2 million
invested in six existing investee companies and £1.8 million invested in eight
new investee companies. Overall, the investment portfolio is performing to
expectations.
Board changes
Following the sad death of Frank Malcolm earlier in the year and the retirement
of Roderick Davidson due at the end of this year, there are two new Board
appointments. The first is Geoffrey Vero, who joined the Board on 2 July 2007
and will be taking over as Chairman following Roderick's retirement. Geoffrey
has spent much of his career in venture and development capital, principally at
Causeway Capital and ABN Amro Private Equity. The second appointment is Dr Andy
Phillipps who was the co-founder and chief executive of Active Hotels which was
successfully sold to Priceline.com in 2004. Andy will be joining the Board on
30th September 2007.
Results and dividends
As at 30th June 2007 the net asset value of the company's Ordinary shares was
101.5 pence (31st December 2006 94.6 pence per share). Net income after taxation
was £584,000. The second dividend of the year of 3.5 pence will be paid on 5
October 2007 to shareholders on the register on 7 September 2007.
Roderick Davidson
Chairman
30 August 2007
INCOME STATEMENT
Ordinary shares Ordinary shares C Shares Total
Unaudited Unaudited Unaudited Unaudited
Six Six Six Six
months months months months
to to to to
30 June 2007 30 June 2006 30 June 2006 30 June 2006
Revenue Capital Total Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains/(Losses)
on
investments - 2,126 2,126 - (987) (987) - (422) (422) - (1,409) (1,409)
Investment 1,043 1,043 371 - 371 556 - 556 927 - 927
income
Investment
management fee (102) (306) (408) (42) (127) (169) (59) (178) (237) (101) (305) (406)
Other expenses (103) - (103) (43) - (43) (60) - (60) (103) - (103)
Return/(loss)
on
ordinary
activities
before tax 838 1,820 2,658 286 (1,114) (828) 437 (600) (163) 723 (1,714) (991)
Tax on
ordinary
activities (254) 98 (156) (85) 32 (53) (133) 41 (92) (218) 73 (145)
Return/(loss)
attributable
to
equity 584 1,918 2,502 201 (1,082) (881) 304 (559) (255) 505 (1,641) (1,136)
shareholders
Basic and
diluted return
/(loss) per
share
(pence) 1.8 6.1 7.9 1.5 (8.3) (6.8) 1.7 (3.1) (1.4)
* Comparative figures have been extracted from the accounts for the period ended
30 June 2006 and the statutory accounts for the period ended 31 December 2006.
The total column of this Income Statement represents the profit and loss account
of the Company.
All of the Company's activities derive from continuing operations.
The Company has no recognised gains or losses other than those disclosed above.
Accordingly a statement of total recognised gains or losses is not required.
The Income Statement for the period to 30 June 2007 is in respect of only
Ordinary shares since C shares were converted into Ordinary shares on 31 March
2007.
INCOME STATEMENT
Ordinary shares C Shares Total
Audited Audited Audited
Year to Year to Year to
31 December 2006 31 December 2006 31 December 2006
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
(Losses)/Gains on
investments - (910) (910) - (766) (766) - (1,676) (1,676)
Investment income 733 - 733 1,160 - 1,160 1,893 - 1,893
Investment
management fee (84) (251) (335) (126) (377) (503) (210) (628) (838)
Other expenses (85) - (85) (106) - (106) (191) - (191)
Return/(loss) on
ordinary activities
before tax 564 (1,161) (597) 928 (1,143) (215) 1,492 (2,304) (812)
Tax on ordinary
activities (168) 73 (95) (271) 114 (157) (439) 187 (252)
Return/(loss)
attributable to
equity shareholders 396 (1,088) (692) 657 (1,029) (372) 1,053 (2,117) (1,064)
Basic and diluted
return/(loss) per
share
(pence) 3.0 (8.3) (5.3) 3.6 (5.7) (2.1) 6.6 (14.0) (7.4)
Comparative figures have been extracted from the accounts for the period ended
30 June 2006 and the statutory accounts for the period ended 31 December 2006.
The total column of this Income Statement represents the profit and loss account
of the Company.
All of the Company's activities derive from continuing operations.
The Company has no recognised gains or losses other than those disclosed above.
Accordingly a statement of total recognised gains or losses is not required.
BALANCE SHEET
ORDINARY SHARES
Unaudited Unaudited Audited
30 June 2007 30 June 2006 31 December 2006
£'000 £'000 £'000
Fixed asset investments
Qualifying investments 24,958 20,102 21,875
Non-qualifying investments 4,004 3,598 3,892
Total fixed asset investments 28,962 23,700 25,767
Current assets
Debtors 63 434 409
Cash at bank 3,204 8,360 4,236
3,267 8,794 4,645
Creditors: amounts falling due (696) (1,068) (118)
within one year
Net current assets 2,571 7,726 4,527
Net assets 31,533 31,426 30,294
Capital and reserves
Called up share capital 16,219 15,581 15,581
Share premium 3,786 3,208 3,208
Special reserve 8,645 9,894 9,889
Capital redemption reserve 1,184 1,173 1,173
Realised capital reserve 1,657 (782) (1,144)
Unrealised capital reserve 766 1,918 1,652
Own treasury share reserve (1,189) - (388)
Revenue reserve 465 434 323
Equity shareholders' funds 31,533 31,426 30,294
Net asset value per share (pence) 101.5
(excluding treasury shares)
Comparative figures have been extracted from the accounts for the period ended
30 June 2006 and the statutory accounts for the period ended 31 December 2006.
The Balance Sheets as at 30 June 2006 and 31 December 2006 represents the
aggregate Balance Sheets of the Ordinary shares and C shares.
The Balance Sheet as at 30 June 2007 represents Ordinary shares which include C
shares which were converted into Ordinary shares on 31 March 2007.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
(UNAUDITED)
ORDINARY SHARES
Capital Un- Own
Called up redemp Realised realised treasury
share Share Special -tion capital capital shares Revenue
capital premium reserve reserve reserve reserve reserve reserve Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 1 January 2006 15,829 3,208 10,341 925 (548) 3,328 - 339 33,422
Net realised gains on investments in
the period - - - - 1 - - - 1
Capitalised investment management -
and performance fees - - - - (305) - - - (305)
Tax relief on costs charged to capital - - - - 73 - - - 73
Purchase of own treasury shares - - - - - - - - -
Share redemptions (248) (447) 248 - - - - (447)
Movement in unrealised appreciation - - - - - (1,410) - - (1,410)
Revenue return - - - - - - - 505 505
Dividends - - - - - - - (411) (411)
As at 1 July 2006 15,581 3,208 9,894 1,173 (782) 1,918 - 434 31,426
Net realised gains on investments in
the period - - - - - - - - -
Capitalised investment management
and performance fees - - - - (323) - - - (323)
Tax relief on costs charged to capital - - - - 114 - - - 114
Purchase of own treasury shares - - - - - - (388) - (388)
Share redemptions - - (5) - - - - - (5)
Movement in unrealised appreciation - - - - - (266) - - (266)
Revenue return - - - - - - - 548 548
Dividends - - - - (156) - - (658) (814)
As at 31 December 2006 15,581 3,208 9,889 1,173 (1,144) 1,652 (388) 323 30,294
Net realised gains on investments in
the year - - - - 3,013 - - - 3,013
Capitalised investment management
and performance fees - - - - (306) - - - (306)
Tax relief on costs charged to capital - - - - 98 - - - 98
Share redemptions (10) - (18) 10 - - - - (18)
Movement in unrealised appreciation - - - - - (887) - - (887)
C share conversion 648 578 (1,226) - - - - - -
Purchase of own treasury shares - - - - - - (802) - (802)
Revenue return - - - - - - - 584 584
Dividends - - - - - - - (443) (443)
As at 30 June 2007 16,219 3,786 8,645 1,184 1,657 766 (1,189) 465 31,533
CASH FLOW STATEMENT
ORDINARY SHARES
Unaudited Unaudited Audited
Six months to Six months to Year ended
30 June 2007 30 June 2006 31 December 2006
£'000 £'000 £'000
Operating activities
Investment income received 753 510 1,083
Deposit income received 84 301 528
Other income received 13 3 35
Investment management fees paid (193) (443) (1,066)
Other cash payments (128) (89) (555)
Net cash inflow/(outflow) from 529 282 25
operating activities
Taxation
UK corporation tax paid - - (412)
Capital expenditure and financial
investment
Purchase of qualifying (2,579) (2,907) (4,818)
investments
Purchase of non- qualifying - (68) (377)
investments
Disposals of qualifying 2,209 27 1
investments
Disposals of non-qualifying - 4,000 4,000
investments
Net cash (outflow)/inflow from (371) 1,052 (1,194)
investing activities
Equity dividends paid
Dividends paid on ordinary shares (453) (411) (1,225)
Net cash (outflow)/inflow before (295) 923 (2,806)
financing
Financing
Cancellation of shares (18) (445) (452)
Own treasury shares (720) (388)
Net cash outflow from financing (738) (445) (840)
(Decrease)/increase in cash in (1,032) 478 (3,646)
the period
Notes to the announcement
1. Details about the Investment Manager
Close Brothers Development VCT PLC is managed by Close Ventures Limited
which is authorised and regulated by the Financial Services Authority and
is a subsidiary of Close Brothers Group plc.
2. Statutory accounts
The financial information set out in this announcement does not constitute
the Company's statutory accounts for the period ended 31 December 2006 or
interim accounts for the period ended 30 June 2006 and 30 June 2007. The
financial information for the period ended 31 December 2006 is derived from
the statutory accounts delivered to the Registrar of Companies. This
interim announcement has not been audited.
3. Changes in Equity
There were no changes in equity other than those arising from capital
transactions with owners and distributions to owners.
4. Accounting policies
This financial information is prepared on the basis of the accounting
policies as stated in the latest statutory accounts.
Further enquiries:
Patrick Reeve Close Ventures Limited (Manager)
Tel. 020 7422 7830
This information is provided by RNS
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