Interim Results
Close Brothers Venture Cap Tst PLC
17 December 2002
17 December 2002
CLOSE BROTHERS VENTURE CAPITAL TRUST PLC
Interim results for the six months ended 30 September 2002
Close Brothers Venture Capital Trust PLC ('the Company'), managed by Close
Venture Management, today announces interim results for the six months ended 30
September 2002.
Financial Highlights:
Ordinary Shares 'C' Shares
Pence per share pence per share
Gross dividend for the year to 31 March 1997 5.00 -
Gross dividend for the year to 31 March 1998 6.00 5.00
Gross first and second interim dividends and net final dividend
for the year to 31 March 1999
7.75 6.25
Net dividend for the year to 31 March 2000 8.55 4.50
Net dividend for the year to 31 March 2001 7.50 7.50
Net dividend for the year to 31 March 2002 7.50 7.50
Net dividend for the six months to 30 September 2002 2.80 2.80
Net asset value per share at 30 September 2002 106.84 106.84
Total 151.94 140.39
Note 1: following the cessation of tax credits on 5 April 1999, dividends paid
by VCTs no longer benefit from tax-free tax credits for qualifying UK
shareholders.
Note 2: the above table does not take into account the income tax relief of 20%
nor the capital gains tax deferral relief of 40% upon subscription for shares in
the Company.
Commenting on the results, David Watkins, Chairman, said: 'It gives me great
pleasure to announce a further enhancement in performance during the period
under review. Against a background of falling stock markets worldwide, the
Company's Net Asset Value per share has shown a small increase together with a
7.7% increase in the interim dividend to 2.8 pence. The period under review
also witnessed a key milestone in the Company's history. At the annual general
meeting held in August, shareholders voted overwhelmingly for the Company to
continue as a VCT for a further five years. In addition, we instituted a tender
offer to purchase or procure purchases for up to 10% of the Company's shares in
order to provide liquidity for those who wished to realise their investment. In
the event, 9.3% of the Company's shares were tendered, meaning that all the
applications were satisfied in full.'
Patrick Reeve, Managing Director of Close Venture Management, added: 'We are
very pleased with the performance of the Company during the period, especially
given the current economic climate. Both the rise in net asset value and the
increased dividend are testament to the Company's successful strategy of
minimising risk to investors whilst maintaining an attractive yield.'
For further information, please contact:
Patrick Reeve/ Ole Bettum Justin Griffiths/ John West
Close Venture Management Tavistock Communications
Tel: 020 7426 4000 Tel: 020 7600 2288
www.closeventures.co.uk
Notes to Editors:
1) Close Brothers Venture Capital Trust PLC is managed by Close Venture
Management.
2) Close Venture Management is a subsidiary of Close Brothers Investment
Limited and is regulated by the FSA.
3) The financial information set out in the announcement does not constitute
the Company's statutory accounts for the six months ended 30 June 2002 or
2001. The financial information for the year ended 31 December 2001 is
derived from the statutory accounts delivered to the Registrar of
Companies. The auditors reported on those accounts; their report was
unqualified and did not contain a statement under s237 (2) or (3) of the
Companies Act 1985.
Chairman's Statement
Introduction
It gives me pleasure to announce a further enhancement in performance for the
six months to 30 September 2002. Against a background of falling stock markets
worldwide, the Company's net asset value per share has shown a small increase of
0.6 per cent. to 106.84 pence, while the interim dividend has increased by 7.7
per cent. to 2.8 pence. In the absence of unforeseen circumstances, it is the
board's intention to pay total dividends for the year of 8 pence per share,
compared to 7.5 pence last year, under the Company's strategy of a progressive
distribution policy. Total dividends paid or declared since launch for the
ordinary shares and the 'C' shares (now converted) amount to 45.10 pence and
33.55 pence per share respectively.
The period under review also witnessed a key milestone in the history of the
Company. At the annual general meeting held in August, 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 percent. of the company's shares at a price of £1 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
the applications were satisfied in full.
Since the completion of the Tender Offer, the liquidity of the Company's shares
has increased markedly, with a corresponding rise in the share price to a level
where it currently trades at a premium to net asset value.
Review of Investments
We undertook no investments in new companies during the period, but invested
£2.4 million in existing businesses, as previously scheduled. As foreseen in my
statement in last year's annual report and accounts, we sold our investment in
Premier VCT (Bristol) Ltd, which owns the Express by Holiday Inn hotel in
Bristol City Centre, for a profit of £2 million on cost of £4.3 million. In
addition, subsequent to 30 September, we also completed the sale of our
investment in the Hawkwell VCT Ltd, which owned the Hawkwell House Hotel in
Oxford, for a profit of £840,000 on cost of £3.4 million. In both cases, our
investment had been providing the Company with an income yield of around 10 per
cent. per annum.
Subsequent to the half year end, we committed to invest up to £5 million in a
new 175 room Express by Holiday Inn Hotel at Stansted Airport. We have also
invested: a further £1 million in Fryers Walk VCT, to enable it to develop
further facilities for people with learning disabilities in Thetford; £200,000
in City Screen (Liverpool) Ltd in conjunction with investments by 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; and £175,000
in Lombardy Court VCT to provide additional accommodation for people with
learning disabilities in Ipswich.
Overall we are pleased with the progress being made in all of our investments,
and we are particularly pleased with the balance between what we believe to be
the more cyclical hotel, leisure and house building sectors and the contra
cyclical healthcare sector.
A summary of the Company's investments at 30 September 2002 is set out below:
Investee Company
Investment at Cost Revaluation Reserved for Total
investment
£ 000's £ 000's £ 000's £ 000's
Care Homes
Broadoaks VCT Ltd 1,865 - - 1,865
Churchcroft VCT Ltd 1,550 361 - 1,911
Drummond Court Ltd 1,500 287 - 1,787
Fryers Walk VCT Ltd 1,575 262 1,000 2,837
Hornchurch VCT Ltd 2,850 37 - 2,887
Lombardy Court VCT Ltd 1,275 25 175 1,475
Hotels
Hawkwell VCT Ltd 3,380 840 - 4,220
Premier VCT (Mailbox) Ltd 4,000 (210) 852 4,642
Kew Green VCT (Stansted) Ltd - - 5,000 5,000
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
City Screen (Cambridge) Ltd 1,210 (48) - 1,162
Odyssey Glory Mill Ltd 4,000 1,188 435 5,623
City Screen (Liverpool) Ltd - - 200 200
Total at 30 September 2002 31,205 2,742 7,662 41,609
Total at 31 March 2002 28,790 2,683 2,135 33,608
Results and Dividend
As at 30 September 2002 the net asset value of the Company was £38.4 million or
106.8 pence per share, which compares with a net asset value at 31 March 2002
(prior to the Tender Offer) of £41.5 million or 106.2 pence per share. Net
income before taxation was £1.5 million (2001: £1.5 million), enabling the board
to declare a net interim dividend of 2.8 pence per share for the six months to
30 September 2002 (2001: 2.6 pence per share). The interim dividend will be
paid on 29 January 2003 to shareholders registered on 31 December 2002.
The following is an analysis of dividends paid in respect of each class of share
since their respective launches, together with net asset value.
Ordinary Shares 'C' Shares
Pence per share pence per share
Gross dividend for the year to 31 March 1997 5.00 -
Gross dividend for the year to 31 March 1998 6.00 5.00
Gross first and second interim dividends and net final dividend
for the year to 31 March 1999
7.75 6.25
Net dividend for the year to 31 March 2000 8.55 4.50
Net dividend for the year to 31 March 2001 7.50 7.50
Net dividend for the year to 31 March 2002 7.50 7.50
Net dividend for the six months to 30 September 2002 2.80 2.80
Net asset value per share at 30 September 2002 106.84 106.84
Total 151.94 140.39
Note 1: following the cessation of tax credits on 5 April 1999, dividends paid by VCTs no longer benefit
from tax-free tax credits for qualifying UK shareholders.
Note 2: the above table does not take into account the income tax relief of 20% nor the capital gains tax
deferral relief of 40% upon subscription for shares in the Company.
David Watkins
Chairman 17 December 2002
Unaudited Statement of Total Return
(incorporating the profit and loss account)
for the six months to 30 September 2002
Six months to Six months to Year to
30 September 2002 30 September 2001 31 March 2002
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains on investments - 253 253 - 344 344 - 2,306 2,306
Income 1,935 - 1,935 1,799 - 1,799 4,018 - 4,018
Investment
management fees (302) (274) (576) (241) (343) (584) (519) (787) (1,306)
Other expenses (73) (62) (135) (43) (43) (86) (85) (85) (170)
Return on ordinary
activities before tax 1,560 (83) 1,477 1,515 (42) 1,473 3,414 1,434 4,848
Tax on ordinary
activities (521) 91 (430) (416) 107 (309) (469) 214 (255)
Return attributable to
Shareholders 1,039 8 1,047 1,099 65 1,164 2,945 1,648 4,593
Dividends (1,007) - (1,007) (1,015) - (1,015) (2,930) - (2,930)
Transfer to reserves 32 8 40 84 65 149 15 1,648 1,663
Return per
ordinary share 2.7p 0.0p 2.7p 2.8p 0.2p 3.0p 7.5p 4.2p 11.7p
All revenue and capital items in the above statement derive from continuing
operations.
Unaudited Summary Balance Sheet
At 30 September 2002
30 September 2002 30 September 2001 31 March 2002
£'000 £'000 £'000
Fixed asset investments
Qualifying investments 33,947 35,575 31,473
Non-qualifying investments 114 2,041 6,145
Total fixed asset investments 34,061 37,616 37,618
Current assets
Debtors 360 292 700
Cash at bank and in hand 7,266 3,984 6,250
7,626 4,276 6,950
Creditors: due within one year (2,252) (1,871) (3,051)
Net current assets 5,374 2,405 3,899
Creditors: due greater than one year (1,000) - -
Net assets 38,435 40,021 41,517
Represented by:
Called up share capital 17,987 19,549 19,539
Special reserve 14,203 17,342 17,324
Capital redemption reserve 1,865 304 314
Capital reserve
realised 1,821 176 27
unrealised 2,323 2,377 4,109
Revenue reserve 236 273 204
Total equity shareholders' funds 38,435 40,021 41,517
Net asset value per ordinary share 106.8 pence 102.4 pence 106.2 pence
This interim report was approved by the Board of Directors on 17 December 2002.
Signed on behalf of the Board of Directors by
David Watkins
Chairman
Unaudited Cash Flow Statement
for the six months to 30 September 2002
Six months to Six months to Year to
30 September 30 September 31 March
2002 2001 2002
£'000 £'000 £'000
Operating activities
Investment income received 2,027 1,496 3,102
Dividend income received - 93 297
Deposit interest received 84 140 221
Other income received - - 250
Investment management fees paid (369) (373) (767)
Management performance fee paid (184) - -
Other cash payments (170) (92) (175)
Net cash inflow from operating activities 1,388 1,264 2,928
Taxation
UK corporation tax paid (118) (249) (569)
Investing activities
Purchase of investments (2,528) (3,785) (4,646)
Disposals of investments - 1,200 2,021
Disposals of non-qualifying investments 6,310 - 2,000
Net cash (outflow)/inflow from/(to) investing
activities 3,782 (2,585) (625)
Dividends paid
Equity dividends paid on ordinary shares (1,915) (1,469) (2,489)
Capital dividends paid on ordinary shares - (489) (489)
Net cash (outflow)/inflow before financing 3,137 (3,528) (1,244)
Financing
Redemption of own shares (3,121) (65) (83)
Loan drawdown 1,000
Increase/(decrease) in cash and cash equivalents 1,016 (3,593) (1,327)
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