Final Results

Close Brothers Dev VCT PLC 24 February 2005 CLOSE BROTHERS DEVELOPMENT VCT PLC PRELIMINARY RESULTS 24 February 2005 Close Brothers Development VCT PLC ('the Company'), which provides equity and debt finance to growing unquoted and quoted 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 2004. This announcement has been approved by the Board of Directors on 23 February 2005. Financial Highlights: Ordinary Shares 'C' Shares Year ended Period ended 31 December 2004 31 December 2004 Dividends per share 4.00 pence 3.50 pence Net asset value per share 93.89 pence 100.19 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 - Total dividend for the year ended 31 December 2003 (iii) 4.00 1.65 Interim dividend for the period ended 30 June 2004 (iv) 1.80 1.10 Final dividend for the year ended 31 December 2004 2.20 2.40 ------- ------- Total dividends 22.75 5.15 Net asset value at 31 December 2004 93.89 100.19 ------- ------- Total 116.64 105.34 ======= ======= 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 Clemmie Carr / John West Close Venture Management Limited Tavistock Communications Tel: 020 7422 7831 Tel: 020 7920 3150 Notes 1) Close Brothers Development VCT PLC is managed by Close Venture Management Limited. 2) Close Venture Management Limited 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 2004 or 2003, but is derived from those accounts. The financial information for the year ended 31 December 2003 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The financial information for the year ended 31 December 2004 has been derived from the statutory accounts for the year which will be delivered to the Registrar of Companies shortly. The auditors reported on those accounts; their report was unqualified and did not contain statements under s237(2) or (3) Companies Act 1985. 4) This announcement is prepared on the basis of the accounting policies as stated in the previous year's financial statements. CHAIRMAN'S STATEMENT Introduction I am pleased to present the results of your Company for the year to 31 December 2004, being the sixth year following the launch of Close Brothers Development VCT PLC Ordinary Shares and the second full year of the 'C' Shares. The net asset value at the year end was 93.89 pence per Ordinary Share and 100.19 pence per 'C' Share after total dividends for the year of 4.00 pence and 3.50 pence respectively. This represents a substantial turnaround for the Ordinary shareholders, with a 23 per cent increase in NAV since the last year end, and a pleasing increase for the C shareholders, an 8 per cent increase in NAV. The dividend levels reflect our strategy of aiming to provide investors with a strong and predictable yield. Investment review and prospects The year has been an eventful one for the Company. There were four disposals. The investment in Leisure Links was sold at a loss of £375,000, while the investment in Dolphin Day Nurseries, the children's nursery business, was sold, realising a profit of £694,000. The investment in Odyssey Clubs Group, the owner and operator of health and fitness clubs, was also sold during the year; although this realised a loss of £381,000, the sale also released unpaid interest, which boosted income and enabled the Company to restore its ordinary share dividend to the 4.00 pence paid in 2003. In addition, Careforce Group was successfully floated on AIM in November of last year, with both the Ordinary Shares and the C Shares benefiting. On total cost of £1.8 million, the Ordinary Shares received proceeds from the float of £1.8 million and still hold shares valued at £2.5 million, while the C Shares realised £1.3 million against a cost of £1.3 million, and still own shares valued at £0.65 million. Overall, between the two classes of share, we have recorded a combined realised and unrealised profit of £2.5 million over cost on the investment in Careforce. Elsewhere in the portfolio, Automotive Technik, the military vehicle manufacturer, had a strong year, making a profit on greatly increased sales, mainly due to orders from the British and New Zealand armed forces. Grosvenor Healthcare, the occupational health provider to large corporates, was a new investment made during the early part of the year; its performance has been so strong, however, that its value has been written up at the year end. Against this, Q Gardens, the garden centre operator, continues to struggle, while City Centre Breweries, the freehold brewery in central Bristol and a C Share investment was placed into administration prior to the year end; following a restructuring in administration, however, we expect to realise value from our investment in due course, in excess of the level to which it has currently been written down. Further investments were made in The Bold Pub Company, which owns and manages an estate of twenty seven freehold pubs, principally in the North West, while new investments were made in City Screen (Greenwich), which is developing an 'Art House' cinema in Greenwich, and two further small investments in additional pub operations. Finally, £700,000 was invested by the Ordinary Share portfolio in Evolutions Television, a television post production company operating from its own freehold premises North of Oxford Street, with a further £2.6 million invested, or reserved for investment, from the C Share portfolio. Overall, we are encouraged by the prospects for the portfolios. Results and dividends Ordinary Shares As at 31 December 2004 the net asset value of the Ordinary Shares of your Company was £13.1 million, compared to £11.1 million at 31 December 2003. This equates to a net asset value per share of 93.89 pence (2003: 76.3 pence). Net income after taxation for the year amounted to £675,000 (2003: £590,000) enabling the board to declare a net final dividend of 2.2 pence per Ordinary share (2003: 2.2 pence). This is in addition to the interim dividend of 1.8 pence per share (2003: 1.8 pence) and maintains the total dividend for the year at 4.0 pence (2003: 4.0 pence). The final dividend will be paid on 1 April 2005 to shareholders on the register on 4 March 2005. 'C' Shares As at 31 December 2004 the net asset value of the 'C' Shares of your Company was £18.6 million compared to £10.9 million at 31 December 2003; the main contributor to the increases was the further issue of £7 million in new C Shares during the year. This NAV equates to a net asset value of 100.19 pence (2003: 92.85 pence). Net income after taxation for the period amounted to £616,000 (2003: £168,000) enabling the board to declare a net final dividend of 2.40 pence per Ordinary share (2003: 0.9p). This is in addition to the interim dividend of 1.10 pence per share (2003: 0.75p) and brings the total dividend for the year to 3.50 pence (2003: 1.65p). The final dividend will be paid on 1 April 2005 to shareholders on the register on 4 March 2005. Roderick Davidson Chairman 23 February 2005 THE PORTFOLIO OF INVESTMENTS Ordinary Shares At 31 December 2004 At 31 December 2003 Equity Investments at Unrealised Total Unrealised Movement in owned cost appreciation/ value appreciation/ unrealised (depreciation) (depreciation) appreciation/ (depreciation) since 2003 £'000 £'000 £'000 £'000 £'000 Qualifying investments Automotive Technik ( Holdings) Limited 10% 819 437 1,256 (66) 503 Careforce Group Plc 14% 534 1,968 2,502 709 1,259 City Screen (Liverpool) Limited 5% 50 (6) 44 - (6) Consolidated Communications Management Limited 11% 1,000 5 1,005 90 (85) CS (Greenwich) Limited 2% 110 - 110 - - Evolutions Television Limited 12% 702 - 702 - - Grosvenor Health Limited 7% 325 190 515 - 190 Peakdale Molecular Limited 9% 1,064 (154) 910 (100) (54) The Bold Pub Company Limited 3% 320 14 334 - 14 The Independent Pub Company (VCT) Limited 3% 60 - 60 - - The Q Garden Company Limited 17% 682 (417) 265 (300) (117) Total qualifying investments 5,666 2,037 7,703 333 1,704 ===== ===== ===== ====== ====== 'C' Shares At 31 December 2004 At 31 December 2003 Equity Investments Unrealised Total Unrealised Movement in owned at cost appreciation/ value appreciation/ unrealised (depreciation) (depreciation appreciation/ (depreciation) since 2003 £'000 £'000 £'000 £'000 £'000 Qualifying investments Automotive Technik (Holdings) Limited 10% 839 469 1,308 - 469 Careforce Group Plc 4% 263 391 654 10 381 City Centres Breweries Limited 24% 804 (320) 484 - (320) CS (Greenwich) Limited 13% 650 - 650 - - Evolution Television Limited 22% 305 - 305 - - Grosvenor Health Limited 29% 1,430 788 2,218 - 788 Peakdale Molecular Limited 3% 133 (100) 33 (67) (33) The Bold Pub Company Limited 13% 1,350 65 1,415 - 65 The Independent Pub Company (VCT) Limited 7% 230 - 230 - - --- --- --- --- --- Total qualifying investments 6,004 1,293 7,297 (57) 1,350 ----- ----- ----- ------ ----- Non-qualifying investments Barclays FRN 2,003 - 2,003 1 (1) Bradford & Bingley FRN 1,997 2 1,999 2 - Citigroup FRN 2,999 - 2,999 - - Total non-qualifying investments 6,999 2 7,001 3 (1) ----- ----- ----- ------ ----- Total investments 13,003 1,295 14,298 (54) 1,349 ------ ----- ------ ------ ----- Close Brothers Development VCT PLC 'C' Shares has also committed funds of £2.3 million to a future investment in Evolutions Television Limited. Portfolio Companies 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. Growth has been strong and sales in the year to 31 December 2004 have more than doubled since the previous year. Latest audited results - Year to 31 December 2003 ------------------------------------------------- £'000 Turnover 9,847 PBIT (1,067) Basis of valuation: Multiple of maintainable earnings Careforce Group Plc =================== 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. The company floated on AIM in November 2004 and has since made three acquisitions. Latest audited results - Year to 31 July 2004 --------------------------------------------- £'000 Turnover 12,495 PBIT 493 Basis of valuation: Quoted share price less marketability discount City Centre Breweries Limited ============================== City Centre 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. The Company was placed into administration in November 2004. The business has since been restructured, continues to trade, and Close Brothers Development VCT PLC has increased its share holding in the business. Latest audited results - None produced as company in administration ------------------------------------------------------------------- Basis of valuation: Third party offer for business 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. Latest audited results - Year to 31 December 2003 ------------------------------------------------- £'000 Turnover 580 PBIT (107) Basis of valuation: Third party professional valuation 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. Latest audited results - Year to 28 February 2004 ------------------------------------------------- £'000 Turnover 4,846 PBIT 281 Basis of valuation: Multiple of maintainable earnings 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. CS (Greenwich) Limited ====================== CS (Greenwich) was established to own and operate a five screen art house cinema in Greenwich. This is scheduled to open in the autumn of 2005. Latest audited results - None produced to date ---------------------------------------------- Basis of valuation: Cost Evolutions Television Limited ============================= Evolutions Television is a television post production business, providing post production services, including video and sound editing and automation, to a broad range of TV production companies, including the BBC and the large independents. It operates from its own freehold premises North of Oxford Street, London. The investment was made in December 2004, and a further £2.3 million has been reserved for investment in the C share portfolio in future tax years. Latest audited results - Year to 31 March 2004 ---------------------------------------------- £'000 Turnover 3,563 PBIT (235) Basis of valuation: Cost Grosvenor Health Limited ======================== Grosvenor Health was formed to acquire the UK occupational healthcare business of Capio, which provides healthcare services to large corporates. Growth since investment in March 2004 has been strong. Latest audited results - None produced to date ---------------------------------------------- Basis of valuation: Multiple of maintainable earnings 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. Latest audited results - Year to 28 February 2004 ------------------------------------------------- £'000 Turnover 3,397 PBIT 363 Basis of valuation: Multiple of maintainable earnings The Bold Pub Company Limited ============================= The Bold Pub Company was formed in February 2004 to acquire a group of ten freehold and long leasehold pubs in the North West of England and has since acquired a further seven pubs. Latest audited results - None produced to date ---------------------------------------------- Basis of valuation: Third party professional valuation The Independent Pub Company (VCT) Limited ========================================= The Independent Pub Company (VCT) Limited has been set up to acquire edge of town freehold pubs in central and Southern England and it acquired its first site near Hungerford in December 2004. Latest audited results - None produced to date ---------------------------------------------- Basis of valuation: Cost 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). Latest audited results - Year to 31 January 2004 ------------------------------------------------ £'000 Turnover 2,675 PBIT (244) Basis of valuation: Third party professional valuation Statement of Total Return (incorporating the revenue account) for the year to 31 December 2004 Ordinary Shares 'C' Shares Total Year ended Year ended Year ended 31 December 2004 31 December 2004 31 December 2004 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 2,463 2,463 - 1,366 1,366 - 3,829 3,829 Income 1,121 - 1,121 1,097 - 1,097 2,218 - 2,218 Investment management fees (76) (229) (305) (101) (303) (404) (177) (532) (709) Other expenses (81) - (81) (116) - (116) (197) - (197) ---- ---- ---- ----- ---- ----- ----- ---- ----- Return on ordinary activities before tax 964 2,234 3,198 880 1,063 1,943 1,844 3,297 5,141 Tax on ordinary activities (289) 72 (217) (264) 93 (171) (553) 165 (388) ----- ---- ----- ----- ----- ----- ----- ----- ----- Return attributable to equity shareholders 675 2,306 2,981 616 1,156 1,772 1,291 3,462 4,753 Dividends (563) - (563) (574) - (574) (1,137) - (1,137) ----- ----- ----- ----- ------ ----- ------- ------ ------- Transfer to reserves 112 2,306 2,418 42 1,156 1,198 154 3,462 3,616 ===== ===== ===== ===== ===== ===== ===== ===== ===== Return per share 4.7p 16.1p 20.8p 3.6p 6.8p 10.4p All revenue and capital items in the above statement derive from continuing operations. There were no recognised gains and losses other than those disclosed above. Accordingly a statement of total recognised gains and losses is not required. No operations were acquired or discontinued in the year. Statement of Total Return (incorporating the revenue account) for the year to 31 December 2003 Ordinary Shares 'C' Shares Total Year ended Period 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 All revenue and capital items in the above statement derive from continuing operations. There were no recognised gains and losses other than those disclosed above. Accordingly a statement of total recognised gains and losses is not required. No operations were acquired or discontinued in the year. Balance Sheet as at 31 December 2004 Ordinary Shares 'C' Shares Total 31 December 2004 31 December 2004 31 December 2004 £'000 £'000 £'000 Fixed asset investments Qualifying 7,703 7,297 15,000 Non-qualifying - 7,000 7,000 ------ ----- ----- Total fixed asset investments 7,703 14,297 22,000 ----- ------ ------ Current assets Debtors 186 110 296 Cash 5,980 5,045 11,025 ----- ----- ------ 6,166 5,155 11,321 Creditors: amounts falling due within one year (791) (861) (1,652) ----- ----- ------- Net current assets 5,375 4,294 9,669 ----- ----- ----- Net assets 13,078 18,591 31,669 ====== ====== ====== Represented by: Called up share capital 6,964 9,278 16,242 Share premium 48 3,160 3,208 Special reserve 5,991 5,100 11,091 Capital redemption reserve 420 93 513 Capital reserve - realised (2,206) (362) (2,568) - unrealised 1,679 1,272 2,951 Revenue reserve 182 50 232 ----- ----- ------ Total equity shareholders' funds 13,078 18,591 31,669 ====== ====== ====== Net asset value per share 93.9p 100.2p Signed on behalf of the Board of Directors. Roderick Davidson Chairman Balance Sheet as at 31 December 2003 Ordinary Shares 'C' Shares Total 31 December 2003 31 December 2003 31 December 2003 £'000 £'000 £'000 Fixed asset investments Qualifying 9,163 2,236 11,399 Non-qualifying - 6,002 6,002 ----- ----- ----- Total fixed asset investments 9,163 8,238 17,401 ----- ----- ------ Current assets Debtors 35 51 86 Cash 2,468 2,792 5,260 ----- ----- ----- 2,503 2,842 5,346 Creditors: due within one year (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 7,264 5,859 13,123 Share premium 48 - 48 Special reserve 6,416 5,259 11,675 Capital redemption reserve 120 - 120 Capital reserve - realised (2,166) (182) (2,348) - unrealised (666) (64) (730) Revenue reserve 70 8 96 ------ ------ ------ Total equity shareholders' funds 11,086 10,880 21,984 ====== ====== ====== Net asset value per share 76.3p 92.8p Cash flow Statement for the year ended 31 December 2004 Ordinary Shares 'C' Shares Total Year ended Period ended Year ended 31 December 2004 31 December 2004 31 December 2004 £'000 £'000 £'000 Operating activities Investment income received 1,397 822 2,219 Other income 1 - 1 Deposit interest received 84 192 276 Investment management fees paid (366) (403) (769) Other cash (payments)/receipts (101) 27 (74) ----- ------ ------ Net cash inflow from operating activities 1,015 638 1,653 Taxation UK corporation tax paid - - - ------ ------ ------- Capital expenditure and financial investments Purchase of qualifying investments (1,741) (4,733) (6,474) Purchase of non-qualifying investments - (2,999) (2,999) Disposal of qualifying investments 5,240 1,056 6,296 Disposals of non-qualifying investments - 1,999 1,999 ------ ----- ----- Net cash inflow/(outflow) from investing activities 3,499 (4,677) (1,178) Equity dividends paid Dividends paid on ordinary shares (577) (233) (810) ----- ----- ----- Net cash inflow/(outflow) before financing 3,937 (4,272) (335) Financing Issue of equity net of expenses - 6,671 6,671 Cancellation of shares (425) (146) (571) Cost of share premium cancellation - - - ------ ----- ----- Net cash (outflow)/inflow from financing (425) 6,525 6,100 Increase in cash 3,512 2,253 5,765 Cash flow Statement for the year ended 31 December 2003 Ordinary Shares 'C' Shares Total Year ended Year ended Year ended 31 December 2003 31 December 2003 31 December 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/(outflow) 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/(outflow) from investing activities 2,157 (8,291) (6,134) Equity dividends paid Dividends paid on ordinary shares (658) (53) (711) ----- ------ ------ Net cash inflow/(outflow) 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 This information is provided by RNS The company news service from the London Stock Exchange

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