Final Results

Gresham House PLC 29 April 2002 Letter to: RNS This is to advise you that the Board of Directors of this Company have approved the attached Preliminary Final Statement and Dividend for the year ended 31st December 2001 for announcement to The Stock Exchange. The Record date for the final dividend will be 17th May 2002 and the dividend will be payable on 21st June 2002 with Warrants posted by first class mail on 20th June 2002. Letter from: Gresham House PLC CHAIRMAN'S STATEMENT We are pleased to report that the revenue result for the year ended 31st December 2001 reflect progressive improvement after excluding the exceptional share dealing profit of Â£4.9 million included last year. Rental income has remained steady, dividend and interest income has increased by 29% and property provisions have been reduced from Â£1.4 million last year to Â£251,000. Whilst revenue has remained strong, there has been a substantial drop in the value of our holding of Transense Technologies which we continue to hold anticipating that the longer term prospects remain attractive. After a share split Transense stood at an equivalent price of 606.75p at 31st December, 2000, 393p at the year end and stood at 205p as at close of business on 26th April, 2002. The net effect of this fall in value has cancelled out most of our revenue gain. As a result the basic Net Asset Value per ordinary share has fallen 1.52% whilst the FT 100 index for the same period fell from 6,222.5 to 5,242.4, representing a comparative drop of 15.75%. Shareholders will recall from a Circular dated 30th November, 2001 that the 2.5% Gresham House Finance Secured Loan Stock was due for redemption on 31st December, 2001. I can now report that Â£5.68 million of the Issue was redeemed at par and Â£2.36 million was maintained, of which Â£1.98 million is held by Security Change Limited, a wholly owned subsidiary. At the same time applications were received from subscribers for Â£5.66 million of 8% Secured Loan Stock 2006, of which Â£3.67 million was accepted and allotted. As a result the net effect was to reduce borrowings in Gresham House Finance plc by Â£2 million. In 1996 Gresham participated in the formation of Image Scan Holdings plc and at the year end held 1.75 million ordinary shares at a cost of Â£328,000. Image Scan's core technology relates to innovative imaging techniques, their interpretation and application. It has developed an expertise, supported by patent applications, in multi-view X-Ray imaging, where it is possible to extract three-dimensional information from objects under inspection. It has particular relevance in the field of security, such as airport baggage inspection, and in industrial inspection, evidenced by in-line and on-line 3D X-Ray inspection of assembled high value and safety critical components. I am pleased to report that Image Scan was introduced on the Alternative Investment Market ('AIM') on 25th April, 2002 raising approximately Â£750,000 before expenses at a price of 65p per share. Gresham increased its holding to 1.808 million shares which, at the issue price, values its holding at Â£1.175 million. Your Board proposes that the final dividend be doubled from 1.5p to 3.1p per share. We continue to seek out innovative early stage investments in companies that have a real prospect of high growth. As shareholders will appreciate this strategy, whilst producing substantial gains in those young companies that succeed, also carries with it a high risk of failure with those that fail to capitalise on their innovations or take advantage of their market opportunities. A P Stirling 29th April, 2002 Chairman GRESHAM HOUSE plc PRELIMINARY FINAL STATEMENT CONSOLIDATED STATEMENT OF TOTAL RETURN for the Year ended 31st December, 2001 2001 2000 Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£' 000 Â£'000 Â£'000 (Losses)/gains on Investments - (2,270) (2,270) - 10047 10,047 Income: Dividend and Interest Income 557 - 557 431 - 431 Rental Income 3,008 - 3,008 3,101 - 3,101 Other operating income 933 - 933 5,057 - 5,057 4,498 (2,270) 2,228 8,589 10,047 18,636 Other expenses (1,019) (1,019) (2,405) - (2,405) Net return before finance costs and taxation 3,479 (2,270) 1,209 6,184 10,047 16,231 Interest payable and similar charges (1,277) - (1,277) (1,513) - (1,513) Discount on loan acquired - - - 525 - 525 Return on ordinary activities before taxation 2,202 (2,270) (68) 5,196 10,047 15,243 Taxation - - (6) - (6) Return on ordinary activities after taxation attributable to equity shareholders 2,202 (2,270) (68) 5,190 10,047 15,237 Dividend - Equity shares (136) - (136) (64) - (64) Transfer to reserves 2,066 (2,270) (204) 5,126 10,047 15,173 Basic return per Ordinary Share 50.8p (52.3)p (1.5)p 122.4p 237.0p 359.4p Diluted return per Ordinary Share 47.8p (52.3)p (4.5)p 115.1p 222.9p 338.0p Statement of Total Recognised Gains and Losses Group 2001 2000 Â£'000 Â£'000 Profit for the financial year 2,202 5,190 Net movement on capital reserves (2,270) 10,047 Revaluation of investment properties 235 - 167 15,237 Notes (i) The revenue column of this statement is the consolidated profit and loss account of the group. (ii) In accordance with the Company's accounting policies the above figures take into account the results of significant investments only to the extent of dividends received amounting to Â£29,716 . (iii) Dividends - Ordinary shares: - proposed final dividend of 3.1p per share (2000: 1.5p) payable on 21st June, 2002 to shareholders on the register at 17th May, 2002. 136 64 (iv) The summary of results for the year ended 31st December, 2001 does not constitute statutory accounts within the meaning of s240 of the Companies Act 1985. The full statutory accounts which will be available to shareholders by 15th May, 2002 have not been reported on by the Company's auditors and have not been delivered to the Registrar of Companies. Full accounts in respect of the year ended 31st December, 2000 have been delivered to the Registrar of Companies and the Auditor's Report on those accounts was unqualified. (v) Basic revenue and capital returns per ordinary share are based on the net revenue return on ordinary activities before deduction of dividends of Â£2,202,000 (2000: Â£5,190,000) and on the capital return of Â£(2,270,000) (2000: Â£10,047,000) respectively, and on 4,337,288 (2000: 4,239,712) ordinary shares being the weighted average of those in issue during the year. The diluted revenue per ordinary share is based on the net revenue return on ordinary activities before deduction of dividends of dividends of Â£2,202,000 (2000: Â£5,190,000) and on 4,608,876 (2000: 4,506,941) shares. The number of shares is based upon the weighted average number of shares in issue during the year together with 271,588 (2000: 267,229) shares deemed to have been issued at nil consideration pursuant to (i) options outstanding and (ii) the maximum number of shares that can be issued under the terms of the 8% Secured Loan Stock issued by Gresham House Finance plc. Since the capital return for the year ended 31st December, 2001 was a loss, there is no dilution applicable to the capital return per share for the year. GRESHAM HOUSE plc PRELIMINARY FINAL STATEMENT CONSOLIDATED BALANCE SHEET as at 31st December, 2001 2001 2000 Â£'000 Â£'000 Investments Securities 10,203 8,631 Properties 28,883 27,731 Tangible assets 406 485 39,492 36,847 Current assets 7,315 13,131 Creditors - amounts falling due within one year 3,771 10,086 Net current assets 3,544 3,045 Total assets less current liabilities 43,036 39,892 Creditors - amounts falling due after more than one year 18,671 15,822 Deferred income 245 - 24,120 24,070 Capital and reserves Called up share capital 1,092 1,073 Share premium account 242 242 Other reserves Revaluation reserve 8,064 7,829 Capital reserve - realised 22,875 22,918 Capital reserve - unrealised 2,968 5,195 Revenue reserves (11,121) (13,187) Equity shareholders' funds 24,120 24,070 Basic Net Asset Value per ordinary share 552.2p 560.7p Diluted Net Asset Value per ordinary share 519.9p 527.8p Notes The basic net asset value per ordinary share is calculated by reference to the group net assets as at 31st December, 2001 of Â£24,120,000 (2000: Â£24,070,000) and 4,368,000 (2000: 4,293,000) ordinary shares being the number of ordinary shares in issue at the year end. The diluted net asset value per ordinary share is calculated by reference to the group net assets as at the year end of Â£24,120,000 (2000: Â£24,070,000) and 4,639,589 (2000: 4,560,229) ordinary shares in issue. The number of shares is based upon the number of shares in issue at the year end together with 271,588 (2000:267,229) shares deemed to have been issued at nil consideration pursuant to (i) the options outstanding at the year end and (ii) the maximum number of shares that can be issued under the terms of the 8% Secured Loan Stock issued by Gresham House Finance plc, in accordance with Financial Reporting Standard No. 14. GRESHAM HOUSE plc PRELIMINARY FINAL STATEMENT CONSOLIDATED CASH FLOW STATEMENT for the Year ended 31st December, 2001 2001 2000 Notes Â£'000 Â£'000 Cashflow from operating activities Investment income received 92 55 Interest received 464 370 Rental income received 2,742 3,113 Other cash payments/(receipts) (656) 3,456 Net cash inflow from operating activities 1 2,642 6,994 Returns on investment and servicing of finance Interest paid on 2.5% Secured Redeemable Loan Stock, 2001 (177) (152) Interest paid on property loans (1,246) (1,061) Net cash outflow from Investments and servicing of finance (1,423) (1,213) Capital expenditure and financial investment Sale/(purchase) of tangible fixed assets 63 (32) Purchase of investments (6,244) (1,814) Sales of investments 2,426 5,810 Net loans repaid/(advanced) 192 (435) Purchase of investment properties (1,477) (686) Government grants received 245 - Sale of investment properties 560 - Purchase of developments in hand (46) (1,706) Net cash inflow/(outflow) from capital expenditure and financial investment (4,281) 1,137 Corporation tax paid - - Equity dividends paid (64) (42) Cash outflow/(inflow) before use of liquid resources and financing (3,126) 6,876 Management of liquid resources Acquisition/(sale) of listed securities held for dealing (181) 180 Financing Repayment of loans (6,367) (2,823) Receipt of loans 3,662 - Share capital issued as a result of the exercise of options 19 13 Net cash outflow from financing (2,686) (2,810) (Decrease)/increase in cash 3 (5,993) 4,246 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS 2001 2000 Â£'000 Â£'000 Issue of ordinary shares at par 19 13 Retained profit for the year 2,066 5,126 Revaluation surplus 235 - Net movement on capital reserves (2,270) 10,047 50 15,186 Shareholders' funds at 1st January 24,070 8,884 Shareholders' funds at 31st December 24,120 24,070 GRESHAM HOUSE plc PRELIMINARY FINAL STATEMENT NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT for the Year ended 31st December, 2001 1 Reconciliation of operating profit to operating cash flows. 2001 2000 Â£'000 Â£'000 Return on ordinary activities before taxation 2,202 5,196 Interest payable 1,277 1,513 3,479 6,709 Depreciation 17 32 Discount on acquisition of loan issued by group undertaking - (525) Loan provision written back (130) - Adjustment on disposal of subsidiary (24) - Corporation tax adjustment - (6) Increase in debtors (103) (31) (Decrease)/increase in creditors (597) 815 Net cash flow from operating activities 2,642 6,994 2 Reconciliation of net cash flow to movement in net debt (Decrease)/increase in cash for the year (6,083) 4,246 Cash outflow from repayment of debt 6,457 2,823 Cash inflow from loans received (3,662) - Cash outflow/(inflow) from increase/(decrease) in liquid resources 181 (180) Change in net debt resulting from cash flows (3,107) 6,889 Discount on acquisition of loan issued by a group undertaking - 525 Movement in net debt in the year (3,107) 7,414 Net debt at beginning of year (13,946) (21,360) Balance at end of year (17,053) (13,946) 3 Analysis of net debt At 1st Cash Other At 31st January flow non-cash December 2001 changes 2001 Â£'000 Â£'000 Â£'000 Â£'000 Cash in hand and at bank / brokers 8,807 (6,083) 2,724 Overdrafts (90) 90 - (5,993) Debt due within one year (6,970) 6,367 (813) (1,416) Debt due after one year (15,822) (3,662) 813 (18,671) (3,288) Current asset investments 129 181 310 (13,946) (3,107) - (17,053) This information is provided by RNS The company news service from the London Stock Exchange

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