Preliminary Results

Close Brothers Aim Vct PLC 25 May 2007 Close Brothers AIM VCT PLC ANNUAL RESULTS 25 May 2007 Close Brothers AIM VCT PLC ('the Company'), which invests in companies listed on the Alternative Investment Market and PLUS, across a variety of sectors, today announces annual results for the year ended 28 February 2007. This announcement was approved by the Board of Directors on 25 May 2007. Chairman's statement I am pleased to report that after a disappointing first six months when the net asset value of the Ordinary and D Shares fell by 7.1% and 2.5% respectively (after adding back the second interim dividend) there was a recovery in the second half of the year with the result that there was a small increase in the net asset value of both classes of share in the full year. As at 28 February 2007 the total cumulative return in respect of the Ordinary and D Shares was 147.37 pence and 131.48 pence per share respectively. The total cumulative return in respect of the C Shares (now converted into Ordinary Shares) would have been 106.05 pence per share as adjusted for the conversion factor. The mid market price of the Ordinary and D Shares increased by 2.5% and 2.7% during the year. Although stock markets in general became more stable towards the end of the year compared with their previous volatility, our Investment Manager continued to find decent new investments in short supply with the result that the rate of new investment was slower than would otherwise have been the case. At the year end the Ordinary Share Portfolio was 80% and the D Share Portfolio 50 % invested in qualifying investments. Performance The total return was 4.88 pence per Ordinary Share and 7.99 pence per D Share. Dividends Ordinary Shares Dividends paid during the financial year to 28 February 2007 totalled 4.20 pence per Ordinary Share. In addition, the Board has declared a first dividend out of realised capital profits of 2.50 pence per Ordinary Share (2006: 1.7 pence per share). This dividend is subject to HM Revenue & Customs' approval and the record date and payment date of this dividend will be announced on the London Stock Exchange RNS service. D Shares Dividends paid during the financial year to 28 February 2007 totalled 3.30 pence per D Share. In addition, the Board has declared a first dividend of 2.50 pence per D Share comprising 0.75 pence out of revenue profits and 1.75 pence out of realised capital gains (2006: 2.00 pence per share). This dividend is subject to H M Revenue & Customs approval and the record date and payment date of this dividend will be announced on the London Stock Exchange RNS service. Cancellation of shares and management of the discount Your Board continues to believe that it is in the best interest of all shareholders for it to manage the discount to net asset value at which the shares trade with a view to maintaining it as close to 8% as possible. During the year under review your Board exercised its power to buy back for cancellation 1,167,399 Ordinary Shares and 63,645 D Shares. I would like again to remind shareholders who wish to sell to contact the Investment Manager at Close Investments Limited, in the interests of achieving a reasonable price. New VCT Tax Rules Shareholders may have read about the changes in tax rules relating to Venture Capital Trusts announced in this year's Budget. The changes fall into two categories, those which affect existing VCTs directly, which were broadly positive for your fund, and those relating to money invested from new fundraisings which will have no direct impact on your fund as it is now, but may effect its further development in the future. The tax changes for existing funds relate to the 70% rule which states that in order to achieve and maintain VCT status, a VCT has to be 70% invested in qualifying investments by the end of the third year and keep to this rule thereafter. In the past, in order to avoid falling foul of this rule, VCTs had used non-interest bearing deposits, which are no longer allowable for this purpose. However, as a result of the Budget, VCTs will be given more flexibility in holding cash from a realised investment ahead of a dividend payment or investment in new qualifying companies. In addition, the new rules contain provisions that enable HM Revenue & Customs to determine not to withdraw approval for those VCTs that have breached the VCT conditions through circumstances outside their control. For money raised by future VCTs, that is those launched after 6th April 2007, only companies with 50 full time employees or less will be eligible for investment, and the amount of money raised by each individual company from this class of funds (which includes EIS) must not exceed £2m in the preceding 12 months. These changes are not retrospective and so do not apply to the investment or re-investment of any money already raised in previous years. The amount of income tax relief has not been changed this year and remains at 30% and the holding period to achieve this tax break remains at five years. These changes have no direct affect on your Company, but they increase the restrictions on future share issues, and make it likely that it will be increasingly difficult to raise new AIM VCTs. This is something that the Board will bear in mind when reviewing the future of the whole fund after the D shares convert into Ordinary shares in 2008. Outlook There is a definite cooling in the new issue market for decent new investments. However, your Investment Manager is confident that it will be possible to invest the balance of 20% of the D Share Portfolio to achieve more than the 70% qualifying investment threshold prior to the February 2008 deadline. With the four further investments made in the D Share Portfolio since 28 February 2007, the qualifying level now exceeds 55%. Frank Malcolm It is with very deep regret that I record the sudden death of Frank last March at the early age of 63. Frank was head of corporate broking at Brewin Dolphin Securities and was much engaged in the raising of finance for small quoted and unquoted companies. He was a director of a number of investment companies. He was an invaluable member of our Board to which he brought the benefit of his very considerable experience, incisive intellect and infectious enthusiasm. We shall miss him very much. Michael Reeve Chairman 25 May 2007 Income Statement for the year ended 28 February 2007 D Shares 28 February 2007 Total Ordinary Shares 28 February 2007 28 February 2007 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on - 1,828 1,828 - 1,335 1,335 - 3,163 3,163 investments Investment Income 387 - 387 493 - 493 880 - 880 Investment (149) (448) (597) (113) (338) (451) (262) (786) (1,048) management fee Performance fee - - - - - - - - - Other expenses (128) - (128) (89) - (89) (217) - (217) Return on ordinary 110 1,380 1,490 291 997 1,288 401 2,377 2,778 activities before tax Tax credit/ 6 - 6 (60) 54 (6) (54) 54 - (charge)on ordinary activities Return 116 1,380 1,496 231 1,051 1,282 347 2,431 2,778 attributable to equity shareholders Basic and diluted 0.38 4.50 4.88 1.44 6.55 7.99 return per share (pence) All of the Company's activities derive from continuing operations. The Company has no recognised gains or losses other than the results for the year as set out above, accordingly a statement of total recognised gains or losses is not required. The total column of the Income Statement represents the profit and loss account of the Company. The supplementary revenue return and capital return columns have been prepared in accordance with the Association of Investment Companies' Statement of Recommended Practice. Income Statement for the year ended 28 February 2006 D Shares 28 February 2006 Total Ordinary Shares 28 February 2006 28 February 2006 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on - 2,331 2,331 - 1,544 1,544 - 3,875 3,875 investments Investment Income 406 - 406 556 - 556 962 - 962 Investment (156) (469) (625) (90) (271) (361) (246) (740) (986) management fee Performance fee - (9) (9) - (50) (50) - (59) (59) Other expenses (142) - (142) (80) - (80) (222) - (222) Return on ordinary 108 1,853 1,961 386 1,223 1,609 494 3,076 3,570 activities before tax Tax credit/ 1 13 14 (93) 79 (14) (92) 92 - (charge) on ordinary activities Return 109 1,866 1,975 293 1,302 1,595 402 3,168 3,570 attributable to equity shareholders Basic and diluted 0.34 5.82 6.16 1.93 8.58 10.51 return per share (pence) All of the Company's activities derive from continuing operations. The Company has no recognised gains or losses other than the results for the year as set out above, accordingly a statement of total recognised gains or losses is not required. The total column of the Income Statement represents the profit and loss account of the Company. The supplementary revenue return and capital return columns have been prepared in accordance with the Association of Investment Companies' Statement of Recommended Practice. Balance Sheet As at 28 February 2007 Ordinary D Shares Total Shares As at As at As at 28 28 28 February February February 2007 2007 2007 £'000 £'000 £'000 Fixed asset investments Qualifying investments 20,875 10,100 30,975 Non- qualifying investments 4,156 7,077 11,233 25,031 17,177 42,208 Current assets Debtors 95 81 176 Cash at bank 1,211 2,895 4,106 1,306 2,976 4,282 Creditors: (49) (65) (114) amounts falling due within one year Net current assets 1,257 2,911 4,168 Net assets 26,288 20,088 46,376 Capital and reserves Called up share capital 14,978 8,008 22,986 Share premium 1,450 39 1,489 Special reserve 7,665 9,304 16,969 Capital redemption reserve 3,353 74 3,427 Realised capital reserve (4,055) 277 (3,778) Unrealised capital reserve 2,846 2,253 5,099 Revenue reserve 51 133 184 Equity shareholders' funds 26,288 20,088 46,376 Net asset value per share 87.76 125.43 (pence) Balance Sheet As at 28 February 2006 Ordinary Shares D Shares Total As at As at As at 28 February 28 February 28 February 2006 2006 2006 £'000 £'000 £'000 Fixed asset investments Qualifying investments 22,035 8,857 30,892 Non- qualifying investments 3,925 7,009 10,934 25,960 15,866 41,826 Current assets Debtors 1,100 5,071 6,171 Cash at bank 724 146 870 1,824 5,217 7,041 Creditors: (824) (1,678) (2,502) amounts falling due within one year Net current assets 1,000 3,539 4,539 Net assets 26,960 19,405 46,365 Capital and reserves Called up share capital 15,561 8,040 23,601 Share premium 1,450 39 1,489 Special reserve 8,547 9,373 17,920 Capital redemption reserve 2,770 42 2,812 Realised capital reserve (3,231) (277) (3,508) Unrealised capital reserve 1,806 1,965 3,771 Revenue reserve 57 223 280 Equity shareholders' funds 26,960 19,405 46,365 Net asset value per share (pence) 86.62 120.68 Reconciliation of movements in shareholders' funds For the year ended 28 February 2007 Ordinary Shares Called up Share Special Capital Realised Unrealised Revenue Total share premium reserve redemption capital capital reserve capital reserve reserve reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 As at 28 February 2006 15,561 1,450 8,547 2,770 (3,231) 1,806 57 26,960 Net return after taxation - - - - 340 1,040 116 1,496 Dividends - - - - (1,164) - (122) (1,286) Shares purchased for (583) - (882) 583 - - - (882) cancellation As at 28 February 2007 14,978 1,450 7,665 3,353 (4,055) 2,846 51 26,288 As at 28 February 2005 16,330 1,449 9,691 2,001 (1,220) (1,593) 158 26,816 Net return after taxation - - - - (1,533) 3,399 109 1,975 Dividends - - - - (478) - (210) (688) Issue of shares (net of - 1 2 - - - - 3 expenses) Shares purchased for (769) - (1,146) 769 - - - (1,146) cancellation As at 28 February 2006 15,561 1,450 8,547 2,770 (3,231) 1,806 57 26,960 Reconciliation of movements in shareholders' funds For the year ended 28 February 2007 D Shares Called up Share Special Capital Realised Unrealised Revenue Total share premium reserve redemption capital capital reserve capital reserve reserve reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 As at 28 February 2006 8,040 39 9,373 42 (277) 1,965 223 19,405 Net return after taxation - - - - 763 288 231 1,282 Dividends - - - - (209) - (321) (530) Shares purchased for (32) - (69) 32 - - - (69) cancellation As at 28 February 2007 8,008 39 9,304 74 277 2,253 133 20,088 As at 28 February 2005 2,324 2,112 (66) 38 130 497 19 5,054 Net return after taxation - - - - (166) 1468 293 1,595 Dividends - - - - (241) - (89) (330) Issue of shares (net of 5,720 7,388 - - - - - 13,108 expenses) Shares purchased for (4) - (9) 4 - - - (9) cancellation Transfer of reserves - (9,461) 9,461 - - - - - Costs of cancelling share - - (13) - - - - (13) premium As at 28 February 2006 8,040 39 9,373 42 (277) 1,965 223 19,405 Cash Flow Statement for the year ended 28 February 2007 Ordinary Shares D Shares Total 28 February 28 February 28 February 2007 2007 2007 £'000 £'000 £'000 Operating activities Dividend income received 126 27 153 Investment income received 200 340 540 Other income received 7 - 7 Deposit interest received 47 92 139 Investment management fees paid (598) (496) (1,094) Other cash payments (131) (89) (220) Net cash outflow from operating activities (349) (126) (475) Capital expenditure and financial investment Purchase of investments (2,330) (3,322) (5,652) Disposal of investments 4,641 7,793 12,434 Net cash inflow from investing activities 2,311 4,471 6,782 Equity dividends paid Revenue dividends paid (122) (321) (443) Capital dividends paid (1,164) (209) (1,373) (1,286) (530) (1,816) Net cash inflow before financing 676 3,815 4,491 Financing Intercompany account movement 997 (997) - Cancellation of shares (1,186) (69) (1,255) Net cash outflow from financing (189) (1,066) (1,255) Increase in cash in the year 487 2,749 3,236 . Cash Flow Statement for the year ended 28 February 2006 Ordinary Shares D Shares Total 28 February 28 February 28 February 2006 2006 2006 £'000 £'000 £'000 Operating activities Dividend income received 109 8 117 Investment income received 263 436 699 Deposit interest received 74 86 160 Investment management fees paid (635) (370) (1,005) Other cash payments (117) (62) (179) Net cash (outflow)/inflow from operating (306) 98 (208) activities Servicing of finance Interest paid (14) - (14) Capital expenditure and financial investment Purchase of investments (6,457) (15,102) (21,559) Disposal of investments 9,899 1,316 11,215 Net cash inflow/(outflow) from investing 3,442 (13,786) (10,344) activities Equity dividends paid Revenue dividends paid (210) (89) (299) Capital dividends paid (478) (241) (719) (688) (330) (1,018) Net cash inflow/(outflow) before financing 2,434 (14,018) (11,584) Financing Intercompany account movement (997) 997 - Issue of equity net of expenses (88) 13,070 12,982 Cancellation of shares (845) (22) (867) Net cash (outflow)/inflow from financing (1,930) 14,045 12,115 Increase in cash in the year 504 27 531 . Notes: 1. Details about the Manager Close Brothers AIM VCT PLC is managed by Close Investments Limited. Close Investments Limited 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 year ended 28 February 2007 or 28 February 2006 but is derived from those accounts. The financial information for the year ended 28 February 2006 is derived from the statutory accounts delivered to the Registrar of Companies. The financial information for the year ended 28 February 2007 has been derived from the statutory accounts for the year which will be delivered to the Registrar of Companies in due course. The auditors reported on both of these accounts; their reports were unqualified and did not contain statements under either section 237(2) or (3) of the Companies Act 1985. The financial information has been prepared on the basis of the accounting policies set out in the Company's financial statements for the year ended 28 February 2006. 3. Changes in Equity There were no changes in equity other than those arising from capital transactions with the owners and distributions to owners. 4. Basic and diluted return per share Ordinary shares The revenue return per Ordinary Share is based on the revenue return on ordinary activities after taxation of £116,000 (2006: £109,000) whilst the capital return is based on the capital return on ordinary activities after taxation of £1,380,000 (2006: £1,866,000). This is in respect of 30,655,972 Ordinary Shares (2006 32,030,767 Shares) being the weighted average number of shares in issue during the year. D shares The revenue return per D Share is based on the revenue return on ordinary activities after taxation of £231,000 (2006: £293,000) whilst the capital return is based on the capital return on ordinary activities after taxation of £1,051,000 (2006: £1,302,000). This is in respect of 16,051,466 D Shares (2006: 15,172,423 Shares) being the weighted average number of shares in issue during the year. 5. Net asset value per share Ordinary Shares The net asset value per share is based on net assets attributable to Ordinary shareholders of £26,288,000 (2006: £26,960,000) and 29,955,440 (2006: 31,122,839) Ordinary Shares in issue at the year end D Shares The net asset value per share is based on net assets attributable to D shareholders of £20,088,000 (2006: £19,405,000) and 16,015,188 (2006: 16,078,833) D Shares in issue at the year end. For further information, please contact: Andrew Buchanan / Kate Tidbury Karen Brunskill / Laura Cronin Close Investments Limited Lanson Tel: 020 7426 4000 Tel: 020 7294 3685 / 020 7294 3607 This information is provided by RNS The company news service from the London Stock Exchange

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