Final Results

Close Brothers Dev VCT PLC 26 February 2004 CLOSE BROTHERS DEVELOPMENT VCT PLC PRELIMINARY RESULTS 26 February 2004 Close Brothers Development VCT PLC ('the Company'), which provides equity and debt finance to growing unquoted companies across a variety of sectors, with investments ranging from service to asset-backed businesses, today announces preliminary results for the year ended 31 December 2003. Financial Highlights: Ordinary Shares 'C' Shares Year ended Period ended 31 December 31 December 2003 2003 Dividends per share 4.00 pence 1.65 pence Net asset value per share 76.30 pence 92.85 pence Shareholder value per share since launch: Pence per share Pence per share (ii) (ii) Total dividends for the period ended 31 December 1999 (i) 2.50 - Total dividends for the year ended 31 December 2000 3.75 - Total dividends for the year ended 31 December 2001 4.00 - Total dividend for the year ended 31 December 2002 4.50 - Interim dividend for the year ended 31 December 2003 1.80 0.75 Final dividend for the year ended 31 December 2003(iii) (iv) 2.20 0.90 ----- ----- Total dividends 18.75 1.65 Net asset value at 31 December 2003 76.30 92.85 ----- ------ Total 95.05 94.50 ===== ====== Notes (i) assuming subscription for Ordinary Shares by the First Closing on 26 January 1999. (ii) excluding tax benefits received upon subscription. (iii) assuming subscription for C Shares by the First Closing on 31 December 2002. (iv) those subscribing for C Shares after 30 June 2003 were not entitled to the interim dividend. For further information, please contact: Patrick Reeve / Ole Bettum Justin Griffiths / John West Close Venture Management Tavistock Communications Tel: 020 7422 7831 Tel: 020 7920 3150 Notes to Editors: 1) Close Brothers Development VCT PLC is managed by Close Venture Management. 2) Close Venture Management is a subsidiary of Close Brothers Investment Limited which is authorised and regulated by the Financial Services Authority. 3) The financial information set out in this announcement does not constitute the company's statutory accounts for the years ended 31 December 2003 or 2002, but is derived from those accounts. Statutory accounts for 2002 have been delivered to the Registrar of Companies and those for 2003 will be delivered shortly. The auditors have reported on these accounts; their report was unqualified and did not contain statements under s237(2) or (3) Companies Act 1985. CHAIRMAN'S STATEMENT Introduction I present the results of the Company for the year to 31 December 2003, being the fifth year following the launch of Close Brothers Development VCT PLC Ordinary Shares and the first full year of the 'C' Shares. The net asset value at the year end, after proposing the final dividends of 2.20 pence per Ordinary Share and 0.90 pence per 'C' Share was 76.3 pence per Ordinary Share and 92.85 pence per 'C' Share (or 78.5 pence per Ordinary Share and 93.75 pence per 'C' Share before providing for such dividends). While this represents a small decline from the respective NAV for the two classes of share of 80.3 pence and 94.6 pence at the previous year end, the total return performance of the Ordinary Shares in terms of asset value and dividend has outperformed the FTSE100 Index since the Company's launch. Investment review Despite the slight fall in the NAV, the year has seen a number of positive developments in building longer term shareholder value. Further funding across both share portfolios has been provided to support growth in three investee companies. These are Peakdale Molecular, which has seen a 50 per cent. annual growth in sales since our original investment and which required finance for an attractive collaboration with DeNovo Pharmaceuticals for a development of a library of screening compounds; Careforce Group, which has now made its seventh acquisition in the fast consolidating domiciliary care sector; and Automotive Technik, which needed working capital to secure its intellectual property and fund its order book which now stands at £20 million. Funding has also been provided to two new companies, both involved in the pub and brewery sector. City Centres Breweries has purchased the Smiles Brewery in central Bristol, as the first step in building up an integrated freehold pub and brewing business based in the South West, and, since the year end, the Bold Pub Company acquired 10 freehold and long leasehold pubs in the North West. The equity in Peakdale, despite its continued strong growth, was written down in line with the fall in value of its quoted competitors. The Q Garden Company also saw a further fall in value as it continues to find the trading climate difficult. Both The Q Garden Company and Odyssey Clubs Group required additional small investments within the Ordinary Share portfolio. Dolphin Nurseries, by contrast, where trading is strong, has commenced work on its seventh freehold day nursery and a third party professional valuation has led to a strong write up in the value of our holding. Results, dividends and prospects Ordinary Shares As at 31 December 2003 the net asset value of the Ordinary Shares of the Company was £11.1 million, compared to £11.8 million at 31 December 2002. This equates to a net asset value per share of 76.3 pence (2002: 80.3 pence). Net income after taxation for the year amounted to £590,000 (2002: £642,000) enabling the board to declare a net final dividend of 2.2 pence per Ordinary share (2002: 2.7 pence). This is in addition to the interim dividend of 1.8 pence per share (2002: 1.8 pence) and brings the total dividend for the year to 4.0 pence (2002: 4.5 pence). The final dividend will be paid on 5 April 2004 to shareholders on the register on 12 March 2004. 'C' Shares As at 31 December 2003 the net asset value of the 'C' Shares of the Company was £10.9 million compared to £2.3 million at 31 December 2002, before the allotment of £9.2 million of new funds. This equates to a net asset value per share of 92.85 pence (2002: 94.6 pence). Net income after taxation for the period amounted to £168,000 (2002: a loss of £3,000) enabling the board to declare a net final dividend of 0.9 pence per Ordinary share (2002: nil). This is in addition to the interim dividend of 0.75 pence per share (2002: nil) and brings the total dividend for the year to 1.65 pence (2002: nil). The final dividend will be paid on 5 April 2004 to shareholders on the register on 12 March 2004. Overall, the dividends were slightly lower than we anticipated, caused partly by lower interest rates and also, in the case of the 'C' Shares, through an investment programme that was weighted more towards the end of the year. In the current year, we expect the investment portfolios of both classes of share to support the Company's core strategy of providing a relatively low risk investment profile, a strong dividend yield and the prospects of capital growth. New 'C' Share issue Following the successful 'C' Share issue which raised £11.7 million over the years 2002 and 2003, we are issuing up to a further £13.2 million New 'C' Shares in the period to 5 April 2004 for those who wish to take advantage of the existing VCT rules before they change at the end of this tax year. As announced by the Chancellor of the Exchequer on 10 December 2003, in return for greater income tax relief, investors will not be able to use investment in a VCT to defer chargeable capital gains from 6 April 2004. Roderick Davidson Chairman 26 February 2004 THE PORTFOLIO OF INVESTMENTS Ordinary Shares At 31 December 2003 At 31 December 2002 Equity Invested Unrealised Total Unrealised Movement in owned at cost appreciation/ value appreciation/ unrealised (depreciation) (depreciation) appreciation/ (depreciation) £'000 £'000 £'000 £'000 £'000 Qualifying investments Automotive Technik (Holdings) Limited 11% 770 (66) 704 6 (72) Careforce Group Limited 32% 1,740 709 2,449 602 107 City Screen (Liverpool) Limited 5% 50 - 50 - - Consolidated Communications Management Limited 11% 1,000 90 1,090 69 21 Dolphin Nurseries Limited 20% 1,049 297 1,346 145 152 Leisure Links International Limited 26% 1,100 (238) 862 (290) 52 Odyssey Clubs Group Limited 16% 1,737 (306) 1,431 (352) 46 Peakdale Molecular Limited 8% 1,064 (100) 964 - (100) The Q Garden Company Limited 17% 566 (299) 267 (23) (276) ----- ----- ----- ----- ------ Total qualifying investments 9,076 87 9,163 157 (70) ----- ----- ------ ----- ------ Non-qualifying investments - - - - - ----- ----- ----- ----- ------ Total investments 9,076 87 9,163 157 (70) ===== ===== ===== ===== ====== 'C' Shares At 31 December 2003 Percentage Invested Unrealised Total of equity at cost appreciation/ owned (depreciation) £'000 £'000 £'000 Qualifying investments Automotive Technik (Holdings) Limited 9% 650 - 650 Careforce Group Limited 6% 910 10 920 City Centre Breweries Limited 21% 600 - 600 Peakdale Molecular Limited 3% 133 (67) 66 ---- ----- ---- Total qualifying investments 2,293 (57) 2,236 ----- ----- ----- Non-qualifying investments Barclays FRN 2,003 1 2,004 Bradford & Bingley FRN 1,997 2 1,999 Nationwide FRN 1,998 1 1,999 ----- ----- ----- Total non-qualifying investments 5,998 4 6,002 ----- ----- ----- Total investments 8,291 (53) 8,238 ===== ===== ===== Automotive Technik (Holdings) Limited The company manufactures the Pinzgauer off-road vehicle, whose main clients are the UK Ministry of Defence and overseas armed forces. Careforce Group Limited Careforce Group 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 an expanding branch network around the UK. City Centres Breweries Limited City Centres Breweries was formed to purchase the Smiles Brewery in central Bristol and thereafter to provide a base for building up an integrated brewery and pub business based in the South West. City Screen (Liverpool) Limited The company was formed to own and operate a three screen 'art house' cinema in the centre of Liverpool, which opened in February 2003. Consolidated Communications Management Limited Consolidated Communications is a management buy-out of an established public relations agency, formed in 1991, with a broad range of 'blue chip' clients. In 2001 the Company was named 'Consultancy of the Year' at the PR Week Awards. Dolphin Nurseries Limited Dolphin is building a group of private children's day nurseries in and around Greater London. The company currently operates four nurseries at Upminister, Chigwell, Bracknell and Tooting and has three new developments in the pipeline. Leisure Links International Limited Leisure Links owns and operates a golf course at Test Valley in Hampshire. Odyssey Clubs Group Limited 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. Peakdale Molecular Limited Peakdale Molecular is principally engaged in research, processing and the supply of chemical compounds to the major pharmaceutical companies. It operates from a substantial freehold site in Chapel-en-le-Frith, Derbyshire. 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 (Hampshire), Chinnor (Oxfordshire) and Stow-on-the-Wold (Gloucestershire). Statement of Total Return (incorporating the revenue account) for the year to 31 December 2003 Ordinary Shares 'C' Shares Total Year ended Year ended Year ended 31 December 2003 31 December 2003 31 December 2003 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 ------------------------------------------------------------------------------------------------------ Losses on investments - (443) (443) - (65) (65) - (508) (508) Income 976 - 976 347 - 347 1,323 - 1,323 Investment management fees (67) (201) (268) (65) (194) (259) (132) (395) (527) Other expenses (93) (26) (119) (75) (24) (99) (168) (50) (218) ------------------------------------------------------------------------------------------------------- Return on ordinary activities before tax 816 (670) 146 207 (283) (76) 1,023 (953) 70 Tax on ordinary activities (226) 74 (152) (39) 43 4 (265) 117 (148) ------------------------------------------------------------------------------------------------------- Return attributable to equity shareholders 590 (596) (6) 168 240) (72) 758 (836) (78) Dividends (583) - (583) (157) - (157) (740) - (740) ------------------------------------------------------------------------------------------------------- Transfer to/ (from) reserves 7 (596) (589) 11 (240) (229) 18 (836) (818) =======================================================================================================- Return per share 4.0p (4.0)p (0.0)p 1.8p (2.5)p (0.7)p 2.9p (3.2)p (0.3)p The revenue columns of this statement represent the profit and loss account of the Company. No operations were acquired or discontinued in the year. Statement of Total Return (incorporating the revenue account) for the year to 31 December 2002 Ordinary Shares 'C' Shares Total Year ended Period ended Year ended 31 December 2002 31 December 2002 31 December 2002 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Losses on investments - (1,771) (1,771) - - - - (1,771) (1,771) Income 1,059 - 1,059 4 - 4 1,063 - 1,063 Investment management fees (77) (231) (308) (3) (7) (10) (80) (238) (318) Other expenses (113) (29) (142) (4) (1) (5) (117) (30) (147) ----------------------------------------------------------------------------------------------------------- Return on ordinary activities before tax 869 (2,031) (1,162) (3) (8) (11) 866 (2,039) (1,173) Tax on ordinary activities (227) 68 (159) - 2 2 (227) 70 (157) ----------------------------------------------------------------------------------------------------------- Return attributable to equity shareholders 642 (1,963) (1,321) (3) (6) (9) 639 (1,969) (1,330) Dividends (660) - (660) - - - (660) - (660) ----------------------------------------------------------------------------------------------------------- Transfer from reserves (18) (1,963) (1,981) (3) (6) (9) (21) (1,969) (1,990) =========================================================================================================== Return per share 4.4p (13.4)p (9.0)p (0.2)p (0.4)p (0.6)p 3.7p (11.5)p (7.8)p The revenue columns of this statement represent the profit and loss account of the Company. The 'C' Share return covers the period from 25 October 2002 to 31 December 2002. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. Balance Sheet at 31 December 2003 Notes Ordinary Shares 'C' Shares Total 31 December 31 December 31 December 2003 2003 2003 £'000 £'000 £'000 Fixed asset investments Qualifying 9,163 2,236 11,399 Non-qualifying - 6,002 6,002 ------ ------ ------- Total fixed asset investments 10 9,163 8,238 17,401 Current assets Debtors 12 35 51 86 Cash 2,468 2,792 5,260 ------ ------ ------- 2,503 2,842 5,346 Creditors: due within one year 13 (580) (200) (763) ------ ------ ------- Net current assets 1,923 2,642 4,583 ------ ------ ------- Net assets 11,086 10,880 21,984 ======= ====== ======== Represented by: Called up share capital 14 7,264 5,859 13,123 Share premium 15 48 - 48 Special reserve 15 6,416 5,259 11,675 Capital redemption reserve 15 120 - 120 Capital reserve 15 realised (2,166) (182) (2,348) unrealised (666) (64) (730) Revenue reserve 15 70 8 96 ------ ------ ------- Total equity shareholders' funds 17 11,086 10,880 21,984 ======= ====== ======== Net asset value per share 16 76.3p 92.8p 83.8p The financial statements were approved by the Board of Directors on 26 February 2004. Signed on behalf of the Board of Directors. Roderick Davidson Chairman Balance Sheet at 31 December 2002 Ordinary Shares 'C' Shares Total 31 December 31 December 31 December 2002 2002 2002 £'000 £'000 £'000 Fixed asset investments Qualifying 10,193 - 10,193 Non-qualifying 1,499 - 1,499 ------ ------ ------- Total fixed asset investments 11,692 - 11,692 Current assets Debtors 48 862 910 Cash 694 1,487 2,181 ------ ------ ------- 742 2,349 3,091 Creditors: due within one year (663) (29) (692) ------ ------- ------- Net current assets 79 2,320 2,399 ------ ------- ------- Net assets 11,771 2,320 14,091 ======= ======= ======= Represented by: Called up share capital 7,333 1,226 8,559 Share premium 48 1,103 1,151 Special reserve 6,513 - 6,513 Capital redemption reserve 51 - 51 Capital reserve realised (779) (6) (785) unrealised (1,458) - (1,458) Revenue reserve 63 (3) 60 ------ ------- ------- Total equity shareholders' funds 11,771 2,320 14,091 ======= ======= ======= Net asset value per share 80.3p 94.6p 82.3p Cash flow Statement for the year ended 31 December 2003 Ordinary Shares 'C' Shares Total Year ended Period ended Year ended 31 December 31 December 31 December 2003 2003 2003 £'000 £'000 £'000 Operating activities Investment income received 860 118 978 Deposit interest received 67 173 240 Investment management fees paid (272) (205) (477) Other cash payments (128) (88) (216) ------ ------ ------ Net cash inflow from operating activities 527 (2) 525 Taxation UK corporation tax paid (155) - (155) Capital expenditure and financial investments Purchase of qualifying investments (698) (2,293) (2,991) Purchase of non-qualifying investments - (5,998) (5,998) Disposal of qualifying investments 1,500 - 1,500 Disposals of non-qualifying investments 1,355 - 1,355 ------ ------ ------ Net cash inflow from investing activities 2,145 (8,291) (6,146) Equity dividends paid Dividends paid on ordinary (658) (53) (711) shares ------ ------ ------ Net cash inflow before financing 1,871 (8,346) (6,475) Financing Issue of equity net of expenses - 9,665 9,665 Cancellation of shares (97) - (97) Cost of share premium cancellation - (14) (14) ------ ------ ------ Net cash (outflow)/ inflow from financing (97) 9,651 9,554 Increase in cash 1,774 1,305 3,079 ====== ====== ====== Cash flow Statement for the year ended 31 December 2002 Ordinary Shares 'C' Shares Total Year ended Period ended Year ended 31 December 31 December 31 December 2002 2002 2002 £'000 £'000 £'000 Operating activities Investment income received 713 - 713 Deposit interest received 25 4 29 Investment management fees paid (250) - (250) Other cash payments (152) - (152) ------- ------ ------ Net cash inflow from operating activities 336 4 340 Taxation UK corporation tax paid (108) - (108) Capital expenditure and financial investments Purchase of qualifying investments (1,269) - (1,269) Purchase of investments non-qualifying - - - Disposal of qualifying investments 300 - 300 Disposals of non-qualifying investments 1,500 - 1,500 ------- ------ ------ Net cash inflow from investing activities 531 - 531 Equity dividends paid Dividends paid on ordinary shares (614) - (614) ------- ------ ------ Net cash inflow before financing 145 4 149 Financing Issue of equity net of expenses 101 1,483 1,584 ------- ------ ------ Increase in cash 246 1,487 1,733 ======= ====== ====== This information is provided by RNS The company news service from the London Stock Exchange

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