Final Results

Close Brothers Venture Cap Tst PLC 20 June 2003 20 June 2003 CLOSE BROTHERS VENTURE CAPITAL TRUST PLC ('the Company') Preliminary results for the year ended 31 March 2003 Financial Highlights: Year ended Year ended 31 March 31 March 2003 2002 Total return per share 9.9 pence 11.7 pence Net dividends per share 8.00 pence 7.50 pence Net asset value per share 108.91 pence 106.24 pence Shareholder value created for each class of share since launch: Ordinary 'C' Shares Shares Note pence per pence per share share Gross dividends for the year ended 31 March 1997 5.00 - Gross dividends for the year ended 31 March 1998 6.00 5.00 Gross first and second interim dividends and net final dividend for the year ended 31 March 1999 (i) 7.75 6.25 Net revenue and capital dividends for the year ended 31 March 2000 (ii) 8.55 4.50 Net revenue and capital dividends for the year ended 31 March 2001 7.50 7.50 Net revenue dividends for the year ended 31 March 2002 7.50 7.50 Net revenue and capital dividends for the year ended 31 March 2003 8.00 8.00 ---------- ---------- Total dividends to 31 March 2003 50.30 38.75 Net asset value at 31 March 2003 108.91 108.91 --------- -------- Total return to 31 March 2003 159.21 147.66 -------- -------- Notes: i) Dividends paid before 5 April 1999 were paid to qualifying shareholders inclusive of the associated tax credit. The dividends for the year to 31 March 1999 were maximised in order to take advantage of this tax credit. ii) The capital dividend of 2.55 pence in the year to 31 March 2000 enabled the Ordinary Shares and the C Shares to merge on an equal basis. David Watkins, Chairman, commented: 'The progress of the Company's investment portfolio during the year has continued to be encouraging. As the portfolio has matured we have taken the opportunity to dispose of three of our investments. This has meant that, by continuing its strategy of a progressive dividend policy and of building on the current level of pay out by utilising profits generated both from revenue and from profits on disposal of investments, the Company's total dividend has increased from last year's 7.50 pence per share to 8.00 pence per share for the year to 31 March 2003. This builds on strong returns over the previous years and the Company has now paid or declared total dividends since launch for the Ordinary Shares and 'C' Shares (now converted) amounting to 50.30 pence and 38.75 pence per share respectively'. For further information, please contact: Patrick Reeve Justin Griffiths/John West Close Venture Management Tavistock Communications Tel: 020 7426 4000 Tel: 020 7600 2288 Notes to Editors: 1) Close Venture Management is a division of Close Brothers Investment Limited, which is a subsidiary of Close Brothers Group plc and is regulated by the FSA. 2) The financial information set out in this announcement does not constitute the company's statutory accounts for the years ended 31 March 2003 or 2002, but is derived from those accounts. The financial information for the year ended 31 March 2002 is derived from the statutory accounts for that year and have been delivered to the Registrar of Companies and those for 2003 will be delivered shortly. The auditors reported on those accounts; their report was unqualified and did not contain statements under s237(2) or (3) Companies Act 1985. The statutory accounts for the year ended 31 March 2003 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies shortly. 3) Audited Financial Statements for the year will be sent to shareholders shortly. CHAIRMAN'S STATEMENT Introduction The progress of the Company's investment portfolio during the year has continued to be encouraging. As the portfolio has matured we have taken the opportunity to dispose of three of our investments. This has meant that, by continuing its strategy of a progressive dividend policy and of building on the current level of pay out by utilising profits generated both from revenue and from profits on disposal of investments, the Company's total dividend has increased from last year's 7.50 pence per share to 8.00 pence per share for the year to 31 March 2003. The three investments sold realised profits of £3 million on a cost of £10.7 million, while the provision for unrealised appreciation increased by £1.3 million over the year. This in turn means that, in market conditions that have not been easy, the Company's net asset value per share has risen by a further 2.5 per cent. to 108.9 pence per share which, when combined with the revenue return, has resulted in an overall return of 9.9 pence per share for the year. This builds on strong returns over the previous years and the Company has now paid or declared total dividends since launch for the Ordinary Shares and 'C' Shares (now converted) amounting to 50.30 pence and 38.75 pence per share respectively. As mentioned in the interim report the year under review also witnessed a key milestone in the history of the Company. At the AGM held in August of last year, shareholders voted overwhelmingly for the Company to continue as a VCT for a further five years. At the same time, we instituted a tender offer to purchase or procure purchasers for up to 10 per cent. of the Company's shares at a price of 100 pence per share in order to provide liquidity for those who wished to realise their investment. In the event 9.3 per cent. of the Company's shares were tendered, meaning that all applications were satisfied in full. Since the completion of the tender offer, the liquidity of the Company's shares has increased markedly. Following Shareholders' approval for the change in the Company's borrowing powers, £1 million has now been drawn down from the borrowing facility provided by the Royal Bank of Scotland of up to £5 million. Review of Investments Our key investment areas continue to be the hotel, residential property development and care home sectors, with other asset-based areas continuing to be reviewed, as characterised by our investment in our Cambridge cinema and Beaconsfield health and fitness club. In the hotel sector, we committed to invest up to £5 million in a new 175 room Express by Holiday Inn hotel at Stansted Airport. In addition, we sold our investment in Premier VCT (Bristol) Ltd, which owned the Express by Holiday Inn hotel in Bristol city centre, for a profit of £2 million on a cost of £4.3 million. We also completed the sale of our investment in Hawkwell VCT Ltd, which owned the Hawkwell House Hotel in Oxford, for a profit of £840,000 on cost of £3.4 million. The overall return was further enhanced by the fact that in both cases, our investment had been providing the Company with an income yield of around 10 per cent. on cost per annum. There are currently a variety of interesting potential new investments in the hotel sector which are under review, and the manager considers that, despite the challenging environment for hotels overall, carefully selected and well managed units can be a continuing source of profits for the Company. In the residential development sector, which is restricted to 20 per cent. of the portfolio, we currently have four companies established with separate developers. These have continued to be a useful source of income for the Company, with particularly good results from Country & Metropolitan VCT, which develops residential homes in and around Yorkshire. In the Care Home sector our principal area of investment during the year continued to be homes for people with learning disabilities in East Anglia. There are now five such homes in which we have invested, in Witham, Bury St. Edmunds, Thetford, Ipswich and March, all of which are performing well, and showing a substantial increase in value over the last year as the market has strengthened. We invested a further £2.75 million in the homes during the year to provide further facilities and capacity. Meanwhile we disposed of our remaining home for the frail and elderly, the 55 bed Hornchurch Nursing Home realising a profit of £250,000 on cost of £2.85 million; again, the investment also generated an income yield of 10 per. cent. per annum. We believe that the prospects for the care home sector, both in the generalist area of the frail and elderly and the specialist area of learning disabilities, continue to be positive and we are reviewing a number of new opportunities. As regards our other areas for investment, the Cambridge Picture House cinema continues to perform well, resulting in a decision to invest £200,000 in City Screen (Liverpool) Ltd in conjunction with Close Brothers Protected VCT, Close Brothers Development VCT and Close Technology & General VCT to develop a new art house cinema in the FACT Centre in Liverpool. The health club owned by Odyssey Glory Mill, which opened in April 2001, continues to perform strongly with a membership of over 4,000, although its value has again fallen, by £332,000 since last year, in line with a continued softening of values in the health and fitness market. Results and Dividend As at 31 March 2003 the net asset value was £39.07 million or 108.9 pence per share, which compares with a net asset value at 31 March 2002 of £41.5 million or 106.2 pence per ordinary share. Under the tender offer 3.1 million shares were bought in for cancellation, resulting in a reduction in net assets of £3.1 million. Net income before taxation was £3.3 million (2002: £3.4 million) enabling the board to declare a net final revenue dividend of 3.70 pence per share and a net final capital dividend of 1.50 pence per share, resulting in total revenue dividends of 6.50 pence and total capital dividends of 1.50 pence, or 8.0 pence per share in total, (2002: revenue dividends of 7.50 pence per share). The final dividends for the year ended 31 March 2003 will be paid on 29 July 2003 to shareholders registered on 4 July 2003. David Watkins Chairman 20 June 2003 THE PORTFOLIO OF INVESTMENTS The following is a summary of qualifying investments at 31 March 2003, comprising amounts invested and scheduled for investment, and after including the revaluations referred to in the Chairman's statement above: Investee Company Investment Investment at Revaluation Total Reserved for Cost investment £'000 £'000 £'000 £'000 Care Homes Broadoaks VCT Ltd 1,865 226 2,091 - Churchcroft VCT Ltd 1,550 516 2,066 - Drummond Court VCT Ltd 2,500 458 2,958 - Fryers Walk VCT Ltd 2,575 467 3,042 - Lombardy Court VCT Ltd 1,450 90 1,540 - Hotels Kew Green VCT (Stansted)Ltd 1,000 - 1,000 4,000 Premier VCT (Mailbox) Ltd 4,000 665 4,665 600 Residential Development Chase Midland VCT Ltd 1,600 - 1,600 - Country & Metropolitan VCT Ltd 3,000 - 3,000 - Saxon VCT Ltd 2,200 - 2,200 - Youngs VCT Ltd 1,200 - 1,200 - Other Investments City Screen (Cambridge)Ltd 1,210 (50) 1,160 - City Screen (Liverpool) Ltd 200 - 200 - Odyssey Glory Mill Ltd 4,000 858 4,858 500 ----- ---- ------ ----- Total 28,350 3,230 31,580 5,100 Note: All valuations, other than for the residential property development companies (which typically distribute profits upon completion of developments) and for Kew Green VCT (Stansted) Limited and City Screen (Liverpool) Limited (which have also both been held at cost) are based upon independent valuations. Close Brothers Venture Capital Trust PLC Statement of Total Return (incorporating the revenue account) for the year ended 31 March 2003 Year ended 31 March 2003 Year ended 31 March 2002 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains on - 1,843 1,843 - 2,306 2,306 investments Investment 3,941 - 3,941 4,018 - 4,018 income Investment (459) (605) (1,064) (519) (787) (1,306) management fees Other expenses (135) (122) (257) (85) (85) (170) ---------- ---------- --------- --------- --------- -------- Return on ordinary activities before interest and tax 3,347 1,116 4,463 3,414 1,434 4,848 Finance (36) - (36) - - - interest ------- ----- ------ ---- ---- ---- Return on ordinary activities before tax 3,311 1,116 4,427 3,414 1,434 4,848 Tax on ordinary (975) 191 (784) (469) 214 (255) activities --------- --------- --------- --------- ---------- --------- Return attributable to shareholders 2,336 1,307 3,643 2,945 1,648 4,593 Dividends (2,334) (538) (2,872) (2,930) - (2,930) ----------- ---------- ----------- ----------- ----------- ----------- Transfer to 2 769 771 15 1,648 1,663 reserves ============ ========== ======== ============ ========== ========== Return per share 6.3p 3.6p 9.9p 7.5p 4.2p 11.7p (pence) ------- ------ ------- ------- ------ ------- All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. The revenue column represents the profit and loss account of the Company. Close Brothers Venture Capital Trust PLC Balance Sheet at 31 March 2003 31 March 2003 31 March 2002 £'000 £'000 Fixed asset investments Qualifying: Scheduled for investment 36,680 33,608 less: uninvested (5,100) (2,135) ------ ------ Net investments to date 31,580 31,473 Non-qualifying investments: - 6,145 ------ ----- Total fixed asset investments 31,580 37,618 Current assets Debtors and accrued income 655 700 Cash at banks 10,651 6,250 ------ ----- 11,306 6,950 Creditors: due within one year (2,811) (3,051) ------ ------ Net current assets 8,495 3,899 ----- ----- Creditors: due after more than one year (1,000) - ----- ---- Total assets less liabilities 39,075 41,517 ====== ====== Capital and reserves Called up share capital 17,939 19,539 Special reserve 14,111 17,324 Capital redemption reserve 1,914 314 Realised capital reserve 2,165 27 Unrealised capital reserve 2,740 4,109 Revenue reserve 206 204 ---- ---- Equity shareholders' funds 39,075 41,517 ====== ====== Net asset value per share 108.9p 106.2p The financial statements were approved by the Board of Directors on 20 June 2003. Signed on behalf of the Board of Directors Roderick Davidson Director Close Brothers Venture Capital Trust PLC Cash Flow Statement for the year ended 31 March 2003 Year ended Year ended 31 March 2003 31 March 2002 £'000 £'000 Operating activities Investment income received 3,413 3,102 Dividend income received 220 297 Deposit interest received 272 221 Other income received 62 250 Investment management fees paid (1,098) (767) Other cash payments (373) (175) ------ ------ Net cash inflow from operating 2,496 2,928 activities Finance interest paid (27) - Taxation VAT paid (13) - UK corporation tax paid (822) (574) Investing activities Purchase of qualifying (5,790) (4,646) investments Disposals of qualifying 7,332 2,021 investments Disposals of non-qualifying 6,376 2,000 investments -------- ------- Net cash inflow/(outflow) from investing activities 7,918 (625) Equity dividends paid Revenue dividends paid on ordinary (2,922) (2,484) shares Capital dividends paid on ordinary - (489) shares ------- ------- Net cash inflow/(outflow) before 6,630 (1,244) financing Financing Loan drawdown 1,000 - Capital restructuring expenses (108) - Redemption of own shares (3,121) (83) ------- ------- Net cash outflow from financing (2,229) (83) -------- ------- Increase/(decrease) in cash 4,401 (1,327) ======= ======= This information is provided by RNS The company news service from the London Stock Exchange

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