Final Results

HG Capital Trust PLC 11 March 2004 HgCapital Trust plc Preliminary announcement of results in respect of the year ended 31 December 2003 HIGHLIGHTS - Net asset value per share ('NAV') rose over the year by 15.7%, from 332.9p at the beginning of the year to 385.0p on 31 December 2003. - Over the same period the total return (NAV plus dividend) was 19.2% compared to the FTSE All-Share Index and the FTSE SmallCap Index which rose by 20.9% and 39.7% respectively. - The Company invested £29.6 million (2002: £24.0 million) in new and follow-on investments. - The Company realised £15.2 million in cash (2002: £20.2 million). - Revenue before taxation of £5.7 million (2002: £2.8 million). - Earnings per share of 15.8p (2002: 8.5p). - Increased dividend of 12.0p (2002: 8.0p). - The NAV was 388.3p at 31 January 2004 and 388.2p at 29 February 2004. New investments During the year, the Company invested a total of £29.6 million (2002: £24.0 million) and participated in five new investments. Three of these investments were public-to-private transactions: the €169 million buy-out of W.E.T. Automotive Systems AG, HgCapital's fifth deal in the German market; the £84 million buy-out of classical music publisher, Boosey & Hawkes; and the £17 million buy-out of Rolfe & Nolan, supplier of software to futures and options traders. The technology sector provided a further new investment in the form of the £110 million buy-out of Xyratex, its largest in 2003. In addition, self- catering holiday company, Hoseasons, was acquired via a £40 million secondary buy-out. Since the year-end HgCapital has exchanged on a €115 million management buy-out of Hirschmann Electronics GmbH & Co. KG, a world-leading supplier of electronics equipment. The transaction, which is subject to competition authority clearance, is expected to complete in March 2004. The increased deployment of capital necessitated the Company to draw £3.5 million of its £25 million borrowing facility. More funds are likely to be drawn as the Company takes advantage of the attractive environment for new investments. Realisations Realisation proceeds amounted to £15.2 million (2002: £20.2 million), principally from the sale of the Company's holding in Alizyme plc, the sale of 50% of the Company's holding in Paddy Power plc and from receipt of a deferred consideration following the sale of PII Group in 2002. These realisations produced a 119% uplift over carrying value at 31 December 2002 and a 138% uplift over cost. Portfolio At the end of 2003, the Company's portfolio consisted of 47 investments (2002: 49), of which the ten principal investments represented 66% of the portfolio valuation. The portfolio's valuation increased over the year to £95.4 million, benefiting from a number of the larger unquoted companies achieving profit growth and positive cash flow, which led to lower gearing, gains in quoted stock prices and also from favourable exchange rate movements. 65% of the portfolio by value is less than three years' old. The Board has adopted the BVCA's new valuation guidelines and this has not resulted in a material difference to the valuation of the portfolio. The Manager believes that the macro-economic environment during 2004 will be generally supportive of the companies within the portfolio. It should also offer an attractive climate for new investment, especially within the German market where larger corporations are restructuring their business portfolios. Other business Following the approval of the new management arrangements at the Extraordinary General Meeting in April 2003, the Company entered into a direct contractual relationship with HgCapital. Under the new arrangement, part of the Manager's remuneration is linked to the performance of the Company's net asset value. The name of the Company was changed to reflect this relationship and its life extended by a further period of six years to 2011. Two directors have indicated that they will be retiring from the Board during the current year: Mr Glover on 30 April 2004 and Mr Crook on 30 September 2004. The Board appointed Close Brothers Securities as corporate broker to the Company with effect from 1 February 2004. For further information please contact: David Bucks - Chairman, HgCapital Trust plc Tel: 020 7603 0466 Ian Armitage - Chief Executive, HgCapital Tel: 020 7089 7979 David Bick - Holborn Public Relations Tel: 020 7929 5599 REVENUE STATEMENT for the year ended 31 December 2003 Year ended Year ended 31 December 31 December 2003 2002 £'000 £'000 (audited) (audited) Income 7,106 3,528 Investment management fee (475) (396) Other expenses (925) (322) Net revenue before finance costs and taxation 5,706 2,810 Interest payable and similar charges (11) (22) Revenue on ordinary activities before taxation 5,695 2,788 Taxation on ordinary activities (1,726) (640) Revenue on ordinary activities after taxation 3,969 2,148 Dividend in respect of equity shares (3,022) (2,015) Transfer to reserves 947 133 TOTAL RETURN PER ORDINARY SHARE for the year ended 31 December 2003 Year ended Year ended 31 December 31 December 2003 2002 (audited) (audited) Earnings 15.76p 8.53p Capital return 48.36p (48.01p) Total return 64.12p (39.48p) Dividend per ordinary share 12.00p 8.00p BALANCE SHEET as at 31 December 2003 31 December 31 December 2003 2002 £'000 £'000 (audited) (audited) Fixed assets Investments - Listed at mid-market valuation 6,120 5,112 - Unquoted at directors' valuation 89,231 62,559 95,351 67,671 Current assets Debtors 9,393 3,881 Government securities 17 13,843 Cash 546 1,031 9,956 18,755 Creditors - amounts falling due within one year (8,342) (2,589) Net current assets 1,614 16,166 Net assets 96,965 83,837 Capital and reserves Called up share capital 6,296 6,296 Share premium account 14,123 14,123 Capital redemption reserve 1,248 1,248 Capital reserve - realised 85,734 78,079 Capital reserve - unrealised (14,533) (19,059) Revenue reserve 4,097 3,150 Total equity shareholders' funds 96,965 83,837 Net asset value per ordinary share 385.0p 332.9p CASH FLOW STATEMENT for the year ended 31 December 2003 Year ended Year ended 31 December 31 December 2003 2002 £'000 £'000 (audited) (audited) Net cash (outflow)/inflow from operating activities (1,269) 2,176 Returns on investment and servicing of finance (11) (22) Taxation received 355 383 Capital expenditure and financial investment Purchase of fixed asset investments (29,637) (24,033) Proceeds from the sale of fixed asset investments 15,006 20,246 Net cash outflow for capital expenditure and financial investment (14,631) (3,787) Equity dividends paid (2,015) (2,015) Net cash outflow before management of liquid resources (17,571) (3,265) Management of liquid resources Purchase of Government securities (14,784) (53,996) Sale/redemption of Government securities 28,370 57,979 Net cash inflow from management of liquid resources 13,586 3,983 Net cash inflow from drawdown of loans 3,500 - (Decrease)/increase in cash in the period (485) 718 RECONCILIATION OF NET REVENUE RETURN BEFORE FINANCE COSTS AND TAXATION TO NET CASH FLOW FROM OPERATING ACTIVITIES Year ended Year ended 31 December 31 December 2003 2002 £'000 £'000 (audited) (audited) Net revenue return before finance costs and taxation 5,706 2,810 Investment management fee and finance costs charged to capital (1,458) (1,253) (Increase)/decrease in accrued income (5,785) 357 Increase/(decrease) in creditors 98 (56) Effective yield adjustment 225 832 Tax on investment income included within gross income (55) (514) Net cash flow from operating activities (1,269) 2,176 GEARING The Company had £3,500,000 of outstanding borrowings at 31 December 2003 (2002: nil). NOTES ON THE PRELIMINARY RESULTS 1. Principal activity The principal activity of the Company is that of an investment trust within the meaning of section 842 of the Income and Corporation Taxes Act 1988. 2. Basis of preparation The preliminary financial statements have been prepared on the basis of the accounting policies set out in the Company's financial statements as at 31 December 2003. Income and operating expenses have been accrued in accordance with the same principles used in the preparation of the previous year's financial statements. The taxation charge has been calculated by applying an estimate of the annual effective tax rate to the profit for the period. 3. Income 2003 2002 £'000 £'000 Income from investments UK dividends from listed companies - 193 UK unquoted investment income 6,730 2,209 Overseas dividends 46 26 6,776 2,428 Other income Gilt interest 276 1,060 Deposit interest 54 15 Other fees - 25 330 1,100 Total income 7,106 3,528 Total income comprises: Dividends 46 219 Interest 7,060 3,284 Other fees - 25 7,106 3,528 4. Dividend The directors have proposed a final dividend of 12.00p per share (2002: 8.00p). The dividend will be paid on 30 April 2004 to shareholders on the register of members at the close of business on 19 March 2004. The shares will be quoted ex-dividend on 17 March 2004. 5. Investment management fee Revenue Capital Total 2003 2002 2003 2002 2003 2002 £'000 £'000 £'000 £'000 £'000 £'000 Investment management fee 404 337 1,214 1,010 1,618 1,347 Irrecoverable VAT thereon 71 59 212 177 283 236 475 396 1,426 1,187 1,901 1,583 The investment management fee is levied quarterly in arrears and is charged 25% to the revenue account and 75% to capital reserve - realised. 6. Ordinary shares 31 December 2003 31 December 2002 The number of ordinary shares in issue at the end of the period on which net asset value per share was calculated was: 25,186,755 25,186,755 Share price 289.5p 219.5p 7. Publication of non-statutory accounts The financial information contained in this preliminary statement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. 8. The figures set out above have been reported upon by the independent auditor. The comparative figures are derived from the audited financial statements of HgCapital Trust plc for the year ended 31 December 2002 which have been filed with the Registrar of Companies. The report of the independent auditor for the years ended 31 December 2002 and 2003 contain no qualification or statement under section 237(2) or (3) of the Companies Act 1985. 9. The full annual report and financial statements for the year ended 31 December 2003 will be filed with the Registrar of Companies after the Annual General Meeting. 10. The Annual General Meeting of the Company will be held at the offices of HgCapital Trust plc, Minerva House, 3-5 Montague Close, London SE1 9BB on Tuesday 20 April 2004 at 12.00 noon. 11. Copies of the annual report will be sent to members shortly and will be available from c/o The Company Secretary, HgCapital Trust plc, 33 King William Street, London EC4R 9AS. 10 March 2004 Minerva House, 3-5 Montague Close, London SE1 9BB This information is provided by RNS The company news service from the London Stock Exchange

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