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Chrysalis A VCT PLC (CAV)

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Wednesday 22 December, 2004

Chrysalis A VCT PLC

Final Results

Chrysalis A VCT PLC
22 December 2004



CHRYSALIS A VCT PLC


PRELIMINARY ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31 OCTOBER 2004


FINANCIAL HIGHLIGHTS

                                                                                   2004                  2003
                                                                                  pence                 pence

Net asset value per share                                                         53.30                 57.90

Total capital dividends per ordinary share for year                               10.00                     -
Total revenue dividends per ordinary share for year                                1.35                  0.50
Total dividends for the year                                                      11.35                  0.50

Cumulative dividends since launch                                                 14.05                  2.70

Total return                                                                      67.35                 60.60
(Net asset value per share plus cumulative dividends)

Net assets                                                                 £3.5 million         £3. 9 million



The statement to Shareholders by the Chairman, Robert Drummond, includes the
following comments:

I am pleased to announce that, for the year to 31 October 2004, your Company is
able to report an increase in its Total Return to Shareholders (Net Asset Value
plus cumulative dividends) to 67.35p per share.  This is an uplift of 6.75p per
share since the previous year-end.


Background

Following significant changes to your Board of Directors in late 2003, the
Company agreed the termination of the fund management contract held by Classic
Fund Management Ltd on 13 April 2004.  The Company became self-managed under the
leadership of Chris Kay and has subsequently changed its name to Chrysalis A VCT
plc.  These changes were replicated by three other VCTs formerly managed by
Classic Fund Management Ltd which all are now self-managed by the same team and
have identical boards.  They are Chrysalis VCT plc, Chrysalis B VCT plc and
Chrysalis C ('The Chrysalis VCTs').

The changes have made a significant impact on the performance of the Company
with no recent investments failing and no substantial new write-downs.  Costs
have been reduced and tightly controlled, although this has been achieved only
by sharing resources with the Chrysalis VCTs, a situation that cannot be
maintained indefinitely since the corporate costs of a fully listed company are
high and, at its current size, your Company cannot attract and retain quality
full-time executives.


Dividends

Your Board is proposing to pay a final dividend of 1.35p per share, which,
subject to shareholder approval, will be paid on 14 April 2005 to shareholders
on the register at 12 January 2005.  Shareholders will have, therefore, received
total dividends for the year of 11.35p per share.

Your Company also has a significant level of realised gains available for
distribution, however, your Board is not currently recommending a further
capital dividend as this would reduce your Company's net assets and even at its
current size it is too small to ensure it can support its cost structure even at
the lower levels achieved.  Moreover, the Company cannot be wound up without
having serious tax consequences for many of its shareholders.


The future

In September 2004, the Inland Revenue clarified and changed the tax rules on the
merger of VCTs making the process a realistic possibility.  Under the rules, all
tax breaks, including CGT reinvestment relief, can now be carried over from a
holding in one VCT into an acquiring VCT.

Your Board has commenced discussions with the other Chrysalis VCTs with a view
to merging them into one.  If this occurs, it will result in a number of
immediate improvements.  Firstly, the corporate costs of a public company will
be shared and thereby considerably reduced as a percentage of net assets.
Secondly, the size will enable us to continue to be self managed by our existing
team on a more full-time basis and will be able to recruit anew.  Thirdly, the
market for our shares will be wider and more liquid, enhanced by continuing
share buy-backs.  (It should be noted that your Company has had to suspend its
policy of buying in shares while these discussions take place.)

I will be in contact with you as soon as there is any firm proposal to put to
you.


Board changes

In accordance with maintaining the independence of the Board and establishing
good corporate governance during the merger discussions, Chris Kay and Nicholas
Lewis, both of whom have executive or contractual responsibilities to the
Company, have agreed to step down as Directors and will resign with effect from
31 December 2004. It is intended to appoint a new independent non-executive
director to the Board in due course, subject to the outcome of the merger
discussions described above.

Chris Kay and his team remain responsible for the management of the Company's
funds and investments, whilst Downing Management Services Limited continues to
act as administrator and Grant Whitehouse will remain as Company Secretary.

I would like to thank Nicholas Lewis for his commitment to your Company and for
the major role he has played in effecting the necessary changes in order to
establish a sound base for the future.


Conclusion

I would also like to thank my colleagues on the Board, our administrators and
the executives of the Company for all the determination and hard work carried
out to ensure a successful series of changes to the structure of this company.
Furthermore their good judgement and investment management has contributed to a
turn-round in your Company's financial performance.


Annual General Meeting

The next Annual General Meeting of the Company will be held at 69 Eccleston
Square, London SW1V 1PJ at 11:30 am on 12 April 2005.  I welcome Shareholders
attendance at that meeting, when I expect to be able to provide an update on the
latest developments.


Robert Drummond

Chairman



INVESTMENT MANAGEMENT REPORT

The interim management team took over managing the portfolio on 15 April 2004
when I was appointed part time managing director.  Due to the historic poor
performance and due to the 10p per share capital dividend paid on 17 April 2004,
the net assets of the VCT had fallen to £3.2 million by 30 April 2004.  This
means that in order to keep the costs to net assets percentage to within 3.5%,
management costs have been kept to an absolute minimum.  Although this has
worked as an interim arrangement, it is not sustainable for any length of time.

Since we took over the portfolio it has performed satisfactorily with the
valuation of the venture capital investments rising to £3.0 million from £2.7
million at the half year, a rise of more than 11%.  In addition, income
generated has almost doubled to £148,000 in the second half of the year,
compared with £72,000 in the first half and £155,000 for the whole of the
previous year.

The major highlight for the portfolio, namely the AIM flotation of Berkeley
Scott, actually took place just after the year-end but was the culmination of
much effort throughout the year.  Since the VCT invested in April 1999 the
company has endured a tough trading environment and has not always performed
according to expectations.  However, we believe it is now on an upward trend and
hope that the proceeds of the float will enable it to deliver strong value
growth.  As part of the float the VCT's £260,000 loan stock was fully repaid.

Both Henry J Beans and Wessex Advanced Switching Products have delivered
improved trading results over the course of the year and consequently their
valuations have been increased by £104,000 and £101,000 respectively.

The VCTs largest investment, by value, Precision Dental Laboratories has also
had a satisfactory year but since trading has been broadly similar to last year,
its valuation is only very slightly changed.

The VCT had £468,000 of cash as at the year end and this has been boosted by the
repayment of the Berkeley Scott loan stock.  We believe that is prudent to keep
a cash balance of this size in order to be in a position to provide follow on
investments to the portfolio.  However, this position would, of course, change
if the merger discussions mentioned in the Chairman's Statement progress and
ultimately lead to your Company merging.


Chris Kay
Managing Director


PORTFOLIO OF INVESTMENTS

The following investments were held at 31 October 2004:
                                                                                                  Valuation
                                                                                                   Movement
                                                                                                    in year         % of
                                                                                                      £'000    portfolio
                                                                            Cost    Valuation                   by value
                                                                           £'000        £'000
Top performing venture capital investments
Precision Dental Laboratories Group Limited                                  598        1,412             -        40.3%
Wessex Advanced Switching Products Limited                                    51          694           101        19.8%
Berkeley Scott Group plc                                                     600          451           112        12.9%
Henry J Bean's Group plc                                                     587          443           104        12.7%
Blooms of Bressingham Holdings plc *                                          89           27           (1)         0.8%
Travelstore.com Group plc                                                     83            5             -         0.1%

                                                                           2,008        3,032           316        86.6%

Other venture capital investments                                            878            -             -            -


Other investments                                                              8            -           (8)            -


Subtotal                                                                   2,894        3,032           308        86.6%


Cash at bank and in hand                                                                  468                      13.4%


Total investments                                                                       3,500                     100.0%



All investments are unquoted unless otherwise stated.

*    Quoted on the Alternative Investment Market ('AIM')



BALANCE SHEET
at 31 October 2004
                                                                31 October 2004           31 October 2003
                                                             £'000        £'000      £'000          £'000
Fixed Assets
Venture capital investments                                               3,032                     2,992

Current Assets
Debtors                                                        104                      63
Cash at bank and in hand                                       468                     906
                                                               572                     969

Creditors: amounts falling due within one year               (124)                    (60)

Net current assets                                                          448                       909

Net assets                                                                3,480                     3,901


Capital and reserves
Called up share capital                                                     326                       337
Capital redemption reserve                                                   13                         2
Special reserve                                                           2,109                     2,253
Capital reserve - realised                                                  824                     1,263
Capital reserve - unrealised                                                138                         -
Revenue reserve                                                              70                        46

Equity shareholders' funds                                                3,480                     3,901

Net asset value per share                                                53.30p                    57.90p


Dividends paid and proposed for the year                                 11.35p                     0.50p





STATEMENT OF TOTAL RETURN (incorporating the revenue Account)
for year ended 31 October 2004

                                                     Year ended 31 October 2004          Year ended 31 October 2003

                                                   Revenue     Capital       Total    Revenue      Capital        Total
                                                     £'000       £'000       £'000      £'000        £'000        £'000
Gains/(losses) on investments
- Realised                                               -          12          12          -          305          305
- Unrealised                                             -         308         308          -        (274)        (274)

Income                                                 220           -         220        155            -          155
                                                       220         320         540        155           31          186

Investment management fees                             (3)         (9)        (12)        (9)         (27)         (36)

Other expenses                                       (105)           -       (105)      (104)          (3)        (107)

Return on ordinary activities before tax               112         311         423         42            1           43

Tax on ordinary activities                               -           -           -          -            -            -

Return on ordinary activities after tax                112         311         423         42            1           43

Dividends                                             (88)       (674)       (762)       (34)            -         (34)

Transfer to/(from) reserves                             24       (363)       (339)          8            1            9


Return per ordinary share                             1.7p        4.6p        6.3p       0.6p            -       (0.6p)




The revenue column of this statement is the profit and loss account of the
Company.

All revenue and capital items in the above statement derive from continuing
operations.




CASHFLOW STATEMENT
for year ended 31 October 2004
                                                                Year ended                 Year ended
                                                           31 October 2004            31 October 2003
                                                        £'000        £'000         £'000        £'000
Net cash inflow from operating activities                               57                         87

Capital expenditure
Purchase of venture capital investments                   (8)                      (364)
Sale of venture capital investments                       288                      1,195
Net cash inflow from capital expenditure                               280                        831

Equity dividends paid                                                (708)                       (34)

Net cash (outflow)/inflow before financing                           (371)                        884

Financing
Repurchase of shares                                     (67)                       (23)
Net cash outflow from financing                                       (67)                       (23)

(Decrease)/increase in cash                                          (438)                        861

Reconciliation of net cash flow to movement in net
funds
(Decrease)/increase in cash during the year                          (438)                        861
Net funds at 1 November 2003                                           906                         45

Net funds at 31 October 2004                                           468                        906



Announcement based on draft accounts (unqualified audit report)

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 31
October 2003.

The financial information set out in the announcement does not constitute the
Company's statutory accounts for the year ended 31 October 2004.  The statutory
accounts for the year ended 31 October 2004 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 following the
Company's Annual General Meeting.

The financial information for the year ended 31 October 2003 is derived from the
statutory accounts for that year which have been delivered to the Registrar of
Companies.  The auditors reported on those accounts; this report was unqualified
and did not contain a statement under section 237(2) or (3) of the Companies Act
1985.

A copy of the full annual report and financial statements for the year ended 31
October 2004 will be printed and posted to shareholders. Copies will also be
available to the public at the registered office of the Company at 69 Eccleston
Square, London SW1V 1PJ.



                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                                                                       

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