Final Results
Close Brothers Dev VCT PLC
7 March 2002
CLOSE BROTHERS DEVELOPMENT VCT PLC
Revenue return enhanced
Total dividend for the year 4.00 pence
7 March 2002
Close Brothers Development VCT PLC ('the Company'), which provides equity and
debt finance to growing unquoted companies across a variety of sectors and is
managed by Close VCT Management, today announces preliminary results for the
year ended 31 December 2001:
Net Asset Value £13.6 million (2000: £14.2 million)
Net Asset Value per share 93.8 pence (2000: 96.8 pence)
Net final dividend 2.40 pence per share (2000: 2.35 pence)
Interim dividend 1.60 pence per share (2000: 1.40 pence)
Total dividend 4.00 pence per share (2000: 3.75 pence)
During the course of the last year, Close VCT Management on behalf of the
Company has invested £4.5 million in qualifying investments in addition to the
amounts previously reserved for investment. After allowing for a further
£400,000 which was invested subsequent to the year end, this represents a
qualifying investment level of 76%. The following investments were made during
the year:
* Dolphin Nurseries (children's nurseries)
* Leisure Links International (golf course)
* Consolidated Communications (public relations)
* Fastrack Resources Group (temporary and permanent staff recruitment)
* Peakdale molecular (chemical compounding)
* The Q Garden Company (garden centres)
Roderick Davidson, Chairman of the Close Development VCT, commented: 'We are
encouraged both by the strong investment progress made during the year and by
the continued enhancement in the dividend payable to shareholders, which we
consider to be a key element in a successful venture capital trust. The
underlying portfolio companies are conservatively financed, established
businesses, selected in line with our lower risk investment policy structured to
provide income generation. We look forward to the future with confidence.'
For further information, please contact:
Patrick Reeve, Managing Director John West
Ole Bettum, Director Justin Griffiths
Close VCT Management Tavistock Communications
Tel: 020 7426 4000 Tel: 020 7600 2288
Notes to Editors:
1. Close VCT Management is the specialist Venture Capital Trust division of
Close Brothers Investment Limited (CBIL) led by Patrick Reeve (Managing
Director) and Ole Bettum (Director). It was established in 1996 and currently
manages a portfolio of four VCTs which have to date raised a total of £96
million from private investors.
* Close Brothers Venture Capital Trust PLC invests in a broad range of unquoted
asset-backed businesses in the hotel, care home, residential property
development, health and fitness and cinema sectors. It is aimed at providing
investors with a lower risk investment profile whilst at the same time
generating a strong dividend yield
* Close Brothers Protected VCT PLC is similarly aimed at providing investors
with a lower risk investment opportunity, with 50% of net funds raised invested
in loans guaranteed by The Royal Bank of Scotland. The majority of the balance
is invested in a portfolio of 32 AIM stocks.
* Close Brothers Development VCT PLC provides equity and debt finance to growing
unquoted companies across a variety of sectors, with investments ranging from
technology-orientated to service and asset-backed businesses
* Close Technology & General VCT PLC offers investors the opportunity to
participate in a balanced portfolio of technology and non-technology businesses.
2. Close Brothers Investment limited is a subsidiary of Close Brothers
Group plc and is regulated by the FSA.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to present to you the preliminary results for the Company for the
year ended 31 December 2001, being the third year following the launch of Close
Brothers Development VCT PLC.
The year under review has been a volatile one on both a domestic and global
front. However, the expectations and targets that the Company set in the
original prospectus continue to be met and qualifying unquoted investments now
comfortably exceed the 70 per cent. level required by the Inland Revenue. The
Company has been largely unaffected by the impact of the events of 11 September
2001 and has managed to enhance its revenue return despite a small fall in net
asset value.
Investment progress
During the course of the year, the Manager on behalf of the Company has invested
a further £4.5 million in qualifying investments in addition to the amounts
previously reserved for investment. After allowing for a further £400,000 which
was invested subsequent to the year end, this represents a qualifying investment
level of 76%. The following were the investments made over the course of the
year:
£'000
Dolphin Nurseries (children's nurseries) 300
Leisure Links International (golf courses) 700
Consolidated Communications (public relations) 1,000
Fastrack Resources Group (temporary and permanent staff recruitment) 1,000
Peakdale Molecular (medicinal chemistry) 1,000
The Q Garden Company (garden centres) 500
4,500
Further details of individual investments can be found in the portfolio review.
Results and dividend
As at 31 December 2001 the net asset value of the Company was £13.6 million,
compared to £14.2 million at 31 December 2000. This equates to net asset values
per share of 93.8 pence and 96.8 pence respectively. The main reason for the
fall in net asset value over the year is attributable to downward adjustments in
our investments in Swetenhams Marketing Services and Odyssey Clubs Group.
Net income after taxation for the year amounted to £635,000 (2000: £570,000)
enabling the board to declare a net final dividend of 2.40 pence per share
(2000: 2.35 pence). This is in addition to the interim dividend of 1.60 pence
per share (2000: 1.40 pence) and brings the total dividend for the year to 4.00
pence (2000: 3.75 pence). The final dividend will be paid on 17 April 2002 to
shareholders on the register on 15 March 2002.
Outlook
We are encouraged both by the strong investment progress made during the year
and by the continued enhancement in the dividend payable to shareholders, which
we consider to be a key element in a successful Venture Capital Trust. The
underlying portfolio companies are conservatively financed, established
businesses, selected in line with our lower risk investment policy structured to
provide income generation. We look forward to the future with confidence.
Roderick Davidson
Chairman
Close Brothers Development VCT PLC
Statement of Total Return
(incorporating the revenue account)
for the year to 31 December 2001
Year ended Year ended
Notes 31 December 2001 31 December 2000
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
(Losses)/gains
on investments 1 & 2 - (321) (321) - 652 652
Income 3 1,045 - 1,045 937 - 937
Investment
management fees 1 & 4 (80) (239) (319) (81) (244) (325)
Other expenses 1 & 5 (107) (30) (137) (99) (30) (129)
Return on
ordinary activities
before tax 858 (590) 268 757 378 1,135
Tax on ordinary
activities 6 (223) 70 (153) (187) 67 (120)
Return attributable
to equity
shareholders 635 (520) 115 570 445 1,015
Dividends 7 (581) - (581) (550) - (550)
Transfer to/(from)
reserves 54 (520) (466) 20 445 465
Return per share 8 4.3p (3.6)p 0.7p 3.9p 3.0p 6.9p
The revenue columns of this statement represent the profit and loss account of
the Company.
The accompanying notes are an integral part of this statement.
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued in the year.
Close Brothers Development VCT PLC
Balance Sheet
at 31 December 2001
31 December 31 December
2001 2000
Notes £'000 £'000
Fixed asset investments
Qualifying 10,630 3,566
Non-qualifying 3,001 8,983
Total fixed asset investments 9 13,631 12,549
Current assets
Debtors 10 86 87
Short term money market deposits 448 2,037
534 2,124
Creditors: due within one year 11 (514) (476)
Net current assets 20 1,648
Net assets 13,651 14,197
Represented by:
Called up share capital 12 7,280 7,331
Special reserve 13 6,513 6,593
Capital redemption reserve 13 51 -
Capital reserve 13
realised (589) (398)
unrealised 315 644
Revenue reserve 13 81 27
Total equity shareholders' funds 15 13,651 14,197
Net asset value per share 14 93.8p 96.8p
Close Brothers Development VCT PLC
Cash flow Statement
for the year ended 31 December 2001
Year ended Year ended
31 December 31 December
2001 2000
Notes £'000 £'000
Operating activities
Investment income received 668 560
Deposit interest received 86 206
Investment management fees paid (391) (322)
Other cash payments (150) (135)
Net cash inflow from
operating activities 17 213 309
Taxation
UK corporation tax paid - (18)
Capital expenditure and
financial investments
Purchase of qualifying investments (7,140) (2,100)
Purchase of non-qualifying investments - (4,494)
Disposals of non-qualifying investments 5,994 1,500
Net cash outflow from investing activities (1,146) (5,094)
Equity dividends paid
Dividends paid on ordinary shares 7 (576) (425)
Net cash outflow before financing (1,509) (5,228)
Financing
Redemption of own shares (80) (5)
Decrease in cash and
cash equivalents 16 (1,589) (5,233)
Close Brothers Development VCT PLC
Notes to the financial statements
For the year ended 31 December 2001
1. ACCOUNTING POLICIES
The financial statements are prepared in accordance with applicable
accounting standards and with the Statement of Recommended Practice
'Financial Statements of Investment Trust Companies' (SORP) in all material
aspects. The particular accounting policies adopted are described below.
Accounting convention
The financial statements are prepared under the historical cost convention,
modified by the revaluation of certain investments.
Capital reserves
Realised reserves
The following are accounted for in this reserve:
- gains and losses on the realisation of investments;
- expenses and finance costs, together with the related taxation
effect; and
- realised gains and losses on transactions undertaken to hedge an
exposure of a capital nature.
Unrealised reserve
The following are accounted for in this reserve:
- increases and decreases in the valuation of investments held at the
year end; and
- unrealised gains and losses on transactions undertaken to hedge an
exposure of a capital nature.
Special reserve
This reserve is distributable and is primarily used for the cancellation of
the Company's share capital.
Investments
Listed investments are stated at market value based upon middle market prices at
the end of the accounting period. Unquoted investments are stated at a
valuation determined by the directors in accordance with the British Venture
Capital Trust Association guidelines. Other than amounts accrued under
redemption premium on secured loan stock, the unrealised depreciation or
appreciation on the valuation of investments is dealt with in the unrealised
capital reserve and gains and losses arising on the disposal of investments are
dealt with in the realised capital reserve.
It is not the Company's policy to exercise controlling or significant influences
over investee companies. Therefore the results of these companies are not
incorporated into the revenue account except to the extent of any income
accrued.
Income and expenses
All income and expenses are treated on the accruals basis and dividend income
(other than on non-equity shares) is included in revenue when the investment is
quoted ex-dividend. The fixed returns on non-equity shares and on debt
securities are recognised on a time apportionment basis.
Management expenses
75 per cent. of management expenses, representing the proportion of the
investment management fee and other expenses attributable to the enhancement of
the value of the investments of the Company, has been charged to capital
reserves, net of corporation tax. The balance of expenses is charged to the
revenue account.
Taxation
Taxation has been applied on the current basis in accordance with Financial
Reporting Standard No.16.
2. (Losses)/gains on investments
Year Year
ended ended
31 December 31 December
2001 2000
£'000 £'000
Realised gains 8 1
Unrealised (losses)/gains (329) 651
(321) 652
Unrealised losses of £247,000 (year ended 31 December 2000: £66,000) arise as a
result of the recognition of the earned portion of the ultimate redemption
premium on unlisted loan stock, which are carried at cost.
3. Income
Year Year
ended ended
31 December 31 December
2001 2000
£'000 £'000
Income from investments
UK franked investment income - 5
UK unfranked investment income 728 697
Other income 247 66
975 768
Other income
Deposit income 70 169
Total income 1,045 937
Total income comprises:
Interest 798 866
Dividends - 5
Other 247 66
Total 1,045 937
Income from investments:
Listed 332 584
Unlisted 643 184
Total 975 768
4. Investment management fee
Year Year
ended ended
31 December 31 December
2001 2000
£'000 £'000
Charged to Revenue 80 81
Charged to Capital 239 244
Total 319 325
5. Other expenses Year Year
Ended Ended
31 December 31 December
2001 2000
£'000 £'000
Secretarial and Administrative fee 40 40
Directors' fees 54 52
Auditors' remuneration - audit fees 13 12
Other 30 25
Less: charged to capital (30) (30)
107 99
6. Tax on ordinary activities
31 December 2001 31 December 2000
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
UK corporation
tax at 20% 153 - 153 62 (67) (5)
Tax attributable to
unfranked income 70 (70) - 125 - 125
223 (70) 153 187 (67) 120
7. Dividends and other appropriations Year ended Year ended
31 December 31 December
Dividends on equity shares: 2000 2000
£'000 £'000
Interim paid of 1.60p per share
(2000: 1.40p) 232 205
Final proposed of 2.40p per share
(2000: 2.35p) 349 345
Total dividends 581 550
8. Return per share Year Ended Year Ended
31 December 31 December
2001 2000
Revenue Capital Total Revenue Capital Total
4.3 pence (3.6) pence 0.7 pence 3.9 pence 3.0 pence 6.9 pence
Revenue return per share is based on the net revenue on ordinary activities
after taxation but before deduction of dividends and other appropriations of
£635,000 (2000: £570,000) in respect of the weighted number of shares in issue
during the period, being 14,611,142 shares (2000: 14,662,607 shares).
Capital return per ordinary share is based on net capital loss for the financial
year of £520,000 (2000: £445,000 profit) in respect of the Ordinary Shares and
based on the same weighted average number of shares as for revenue return shown
above.
9. Investments 31 December 31 December
2001 2000
£'000 £'000
Investments listed on a recognised investment exchange 3,001 8,983
Qualifying unlisted investments 10,630 3,566
Total 13,631 12,549
Qualifying
unlisted Listed Total
Valuation basis £'000 £'000 £'000
Opening valuation: 1 January 2001 3,566 8,983 12,549
Purchases at cost 7,150 - 7,150
Disposal
- proceeds - (5,994) (5,994)
- realised profit - 8 8
Unrealised (depreciation)/appreciation (86) 4 (82)
Closing valuation: 31 December 2001 10,630 3,001 13,631
Opening unrealised appreciation 716 - 716
Change in unrealised (depreciation)/appreciation (86) 4 (82)
Closing unrealised appreciation 630 4 634
Historical cost basis
Opening book cost 2,850 8,983 11,833
Additions at cost 7,150 - 7,150
Disposals at cost - (5,986) (5,986)
Closing book cost 10,000 2,997 12,997
In addition Close Brothers Development VCT PLC holds 15,000 Warrants in
Consolidated Communications Management Ltd exercisable for 15,000 shares at £15
per share. The directors' valuation of the Warrants is nil.
10. Debtors
31 December 31 December
2001 2000
£'000 £'000
Prepayments and accrued income 86 87
11. Creditors: amounts falling due within one year
31 December 31 December
2001 2000
£'000 £'000
UK corporation tax payable 109 -
Proposed dividend 349 345
Other creditors 56 131
514 476
12. Share Capital
31 December 31 December
2001 2000
£'000 £'000
Authorised:
15,000,000 Ordinary Shares of 50p each 7,500 7,500
Allotted, called-up and fully-paid:
14,559,942 Ordinary Shares of 50p each 7,280 7,331
During the year the Company purchased for cancellation 102,665 shares for a
consideration of £79,451. This represents approximately 0.7% of the share
capital in issue at 31 December 2001.
13. Reserves
Capital Realised Unrealised
Redemption Special capital capital Revenue
reserve reserve reserve reserve reserve Total
Ordinary Shares £'000 £'000 £'000 £'000 £'000 £'000
Beginning of year - 6,593 (398) 644 27 6,866
Redemption of
own shares 51 (80) - - - (29)
Gains/(losses)
on investments - - 8 (329) - (321)
Capitalised
expenses
net of tax - - (199) - - (199)
Retained net
revenue - - - - 54 54
End of year 51 6,513 (589) 315 81 6,371
14. Net asset value per share
The net asset value per share and the net asset values at the year end
calculated in accordance with the Articles of Association were as follows:
31 December 31 December
2001 2000
Net asset value per share attributable 93.8 pence 96.8 pence
The movements during the period of the assets attributable were as
follows:
31 December 31 December
2001 2000
£'000 £'000
Total assets attributable at beginning of the year 14,197 13,737
Redemption of own shares (80) -
Total return for the year 115 1,015
Dividends appropriated in the year (581) (550)
Cost of share premium cancellation - (5)
Total net assets attributable at end of year 13,651 14,197
Net asset value per share is based on net assets at the year end.
15. Reconciliation of movements in shareholders' funds
31 December 31 December
2001 2000
£'000 £'000
Opening shareholders' funds 14,197 13,737
Decrease in share premium - (6,598)
Creation of special reserve - 6,593
Redemption of own shares (80) -
Total return to shareholders before dividends 115 1,015
Dividends (581) (550)
Closing shareholders' funds 13,651 14,197
16. Analysis of changes in cash during the year
31 December 31 December
2001 2000
£'000 £'000
Beginning of the year 2,037 7,270
Net cash outflow (1,589) (5,233)
End of the year 448 2,037
17. Reconciliation of net revenue before finance costs and taxation to net cash inflow from operating activities
31 December 31 December
2001 2000
£'000 £'000
Net revenue before finance costs and taxation 858 757
Investment management fee charged to capital (239) (244)
Other expenses charged to capital (30) (30)
Increase in debtors (251) (47)
Decrease in creditors (86) (2)
Tax on investment income (39) (125)
Net cash inflow from operating activities 213 309
18. Annual Report and Accounts
Copies of the Annual Report and Accounts will be sent to Close Brothers
Development VCT PLC's shareholders. Copies of this announcement and of the
Annual Report and Accounts will be made available to the public at Close
Brothers Development VCT PLC's registered office at Close Brothers Investment
Limited, 12 Appold Street, London, EC2A 2AW.
THE PORTFOLIO OF INVESTMENTS
At 31 December 2001
Percentage Invested Unrealised Total
of equity at cost appreciation
owned
£'000 £'000 £'000
Qualifying investments
Careforce Staffing Limited 40.0% 1,500 28 1,528
Consolidated Communications
Management Limited 7.0% 1,000 21 1,021
Dolphin Nurseries Limited 20.0% 1,300 - 1,300
Fastrack Resources Group Limited 32.7% 1,000 10 1,010
Leisure Links International Limited 40.0% 700 16 716
Odyssey Clubs Group Limited 18.0% 1,500 446 1,946
Peakdale Molecular Limited 7.2% 1,000 5 1,005
Swetenhams Marketing
Services Limited 16.2% 1,500 104 1,604
The Q Garden Company Limited 15.0% 500 - 500
Total qualifying investments
by value 10,000 630 10,630
Non-qualifying investments
Northern Rock FRN due
January 2004 1,498 2 1,500
Royal Bank of Scotland
FRN due January 2003 1,499 2 1,501
Total non-qualifying investments 2,997 4 3,001
Total investments 12,997 634 13,631
Where otherwise stated, valuations are at cost, with adjustments made for the
accrued redemption premium on secured loan stock.
Careforce Staffing Ltd
Careforce Staffing was established in 1999 to build, both organically and
through acquisition, a group providing home care services to the elderly,
principally on behalf of local authorities. Careforce currently operates four
units, in Essex, Hertfordshire, Cambridge and Rotherham. The business is
peforming well and plans are underway for flotation on the Alternative
Investment Market.
Consolidated Communications Management Limited
Consolidated Communications is a management buy-out of an established public
relations company, formed in 1991, with a broad range of 'blue-chip' clients.
Although the public relations industry has been adversely affected following the
events of September 11th, Consolidated Communications has continued to win new
clients and was recently named 'Agency of the Year' by PR Week.
Dolphin Nurseries Limited (formerly First Start Children's Nurseries Ltd)
Dolphin aims at building a group of private children's day nurseries in and
around Greater London. An existing nursery in Upminister has been purchased and
sites in Chigwell and Tooting are being developed.
Fastrack Resources Group Limited
Fastrack provides recruitment services in respect of both temporary and
permanent staff, with a particular specialisation in the rail sector.
Leisure Links International Limited
Leisure Links was formed by an experienced management team to build up a group
owning and operating golf courses, with associated consultancy services. The
Company's first course is the Test Valley Golf Club in Hampshire. Subsequent to
the year end, a second course was acquired, Chesfield Downs, outside Stevenage
with the Company investing a further £400,000 to help fund the acquisition.
Odyssey Clubs Group Ltd
Odyssey owns a 30,000 sq.ft. health and fitness club on an 11 acre site outside
Stevenage, a 20,000 sq.ft. club in Henley and has a 50% stake in a company which
owns a 30,000 sq.ft. club on a 6 acre site outside Beaconsfield in
Buckinghamshire. Another venture capital trust managed by a third party, has
invested £600,000 to enhance further its facilities and the investment is valued
on the basis of the price of this new investment. This has increased the value
from the interim stage, though the investment is still below its valuation at 31
December 2000.
Peakdale Molecular Limited
Peakdale Molecular is a medicinal chemistry company founded in 1992. Its
business is that of providing chemical compounds to clients such as Glaxo
SmithKline and Pfizer for use in early stage drug discovery. The company
operates from a substantial freehold site in Derbyshire.
Swetenhams Marketing Services
Swetenhams provides data-related marketing services to the direct marketing
industry, comprising list broking and management services, hosting and market
automation systems. The Company was adversely affected by market conditions
affecting the software industry generally, but after a successful restructuring,
the Company is now performing once again to plan. The valuation, which was
written down to below cost at the interim stage, has now been increased to
original cost, though this is still below its valuation at 31 December 2000.
The Q Garden Company Limited
The Q Garden Company is a chain of garden centres based in the south of England.
It currently owns three centres in Fareham, Oxfordshire and Essex, two of
which are freehold properties.
This information is provided by RNS
The company news service from the London Stock Exchange
Monday, 13th May 2024
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