Interim Results

Close Brothers Dev VCT PLC 26 September 2003 CLOSE BROTHERS DEVELOPMENT VCT PLC INTERIM RESULTS 26 September 2003 Close Brothers Development VCT PLC VCT PLC ('the Company'), which offers investors the opportunity to participate in a balanced portfolio of technology and non-technology businesses, today announces interim results for the six months to 30 June 2003. Financial Highlights: • NAV per Ordinary Share of 78.3 pence (2002: 92.0 pence) • NAV per C Share of 94.3 pence • Interim dividend of 1.8 pence per Ordinary Share (2002: 1.8 pence) • Interim dividend of 0.75 pence per C Share(1) (2002: 1.8 pence) (1) Dividend of 0.375 pence per C share for those shareholders registered after 31 December 2002. R. M. Davidson, Chairman, commented: 'The period under review saw the closing of the 'C' Share issue, in which the Company raised a total of £11.7 million for further investment. This issue accounted for approximately 25% of the VCT fundraising market as a whole for the 2003 season, and will enable the company to diversify and develop further its investment portfolio. Investment activity over the period for both the Ordinary and the 'C' Shares portfolios concentrated on providing further funds for growth in existing investee companies, though a number of interesting new opportunities are under review, some of which should complete this financial year. Overall, existing investee companies performed encouragingly in a slightly toughened economic climate, though partial provisions were made against two of our investments, Automotive Technik and Q Garden Centres. Following the half year, we sold our entire shareholding in Swetenhams Marketing Services, which has generated a return for the fund over the last four years of approximately 10 per cent. per annum.' For further information, please contact: Patrick Reeve/ Ole Bettum Justin Griffiths/ John West Close Venture Management Tavistock Communications Tel: 020 7426 4000 Tel: 020 7600 2288 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 and is regulated by the FSA. 3) Unaudited interim reports for the period will be sent to shareholders shortly. 4) The financial information set out in the announcement does not constitute the Company's statutory accounts for the six months ended 30 June 2003 or 2002. The financial information for the year ended 31 December 2002 is derived from the statutory accounts delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under s237 (2) or (3) of the Companies Act 1985. Chairman's statement Introduction The investment strategy of the Company is to establish a diversified portfolio of holdings in smaller, unquoted companies whilst at the same time selecting and structuring investments in such a way as to reduce the risk normally associated with investment in such companies. This is achieved as follows: • Qualifying Investments representing approximately 80 per cent. of net funds raised and comprise investments in businesses across a broad spread of industries. • Up to two thirds of Qualifying Investments comprising debt secured on 'bankable' assets. This debt generates a significant proportion of the total anticipated return from individual investments. • Up to 20 per cent. of net funds raised being in Non-Qualifying Investments comprising fixed and floating interest rate securities, financial instruments and short term money market deposits all issued by or with major banks with a Moody's credit rating of at least A. Chairman's statement Investment progress The period under review saw the closing of the 'C' Share issue, in which the Company raised a total of £11.7 million for further investment. This issue accounted for approximately 25% of the VCT fundraising market as a whole for the 2003 season, and will enable the company to diversify and develop further its investment portfolio. Investment activity over the period for both the Ordinary and the 'C' Shares portfolios concentrated on providing further funds for growth in existing investee companies, though a number of interesting new opportunities are under review, some of which should complete this financial year. Overall, existing investee companies performed encouragingly in a slightly tougher economic climate, though partial provisions were made against two of our investments, Automotive Technik and Q Garden Centres. Following the half year, we sold our entire shareholding in Swetenhams Marketing Services, which has generated a return for the fund over the last four years of approximately 10 per cent. per annum. The Company remains committed to generating a strong and predictable dividend yield, where possible, and the interim dividend for the Ordinary Shares has been maintained at last year's 1.8 pence per share, along with the inaugural interim dividend for the 'C' Shares at 0.75 pence per share (or 0.375 pence for those who invested after 31 December 2002). Results and Dividend As at 30 June 2003 the net asset value of the Ordinary Share portfolio was £11.4 million, (2002: £13.5 million), equivalent to 78.3 pence per share (2002: 92.0 pence) for the Ordinary Shares, while the 'C' Shares portfolio was £11.0 million or 94.3 pence per share. Net income after taxation was £311,000 for the six months, (2002: £339,000) enabling the board to declare a maintained net interim dividend of 1.8 pence per ordinary share (2002: 1.8 pence per share). Net income after taxation for the 'C' Share portfolio was £60,000, enabling an interim dividend of 0.75 pence to be paid (or 0.375 pence for those shareholders who subscribed after 31 December 2002). Dividends are payable on 31 October 2003 to those shareholders registered on 10 October 2003. The following is the total return of the Company since launch in January 1999. Pence per Ordinary Pence per 'C' Share Share Dividends declared for the year to 31 December 1999 2.50 - Dividends declared for the year to 31 December 2000 3.75 - Dividends declared for the year to 31 December 2001 4.00 - Dividends declared for the year to 31 December 2002 4.50 - Interim dividend for the six months to 30 June 2003 1.80 0.75 16.55 0.75 Net asset value at 30 June 2003 78.30 94.30 Total return at 30 June 2003 94.85 95.05 R M Davidson Chairman 26 September 2003 Portfolio Summary Ordinary Share Portfolio Company % owned and Unrealised voting Invested appreciation/ rights to date (depreciation) Total £'000 £'000 £'000 Automotive Technik Ltd The company holds the exclusive world-wide licence to manufacture the Pinzgauer off-road vehicle. Automotive Technik's main clients include the UK Ministry of Defence and overseas armed forces. 9% 480 (72) 408 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 nine branches around the UK. 36% 1,740 676 2,416 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. 4% 50 - 50 Consolidated Communications Management Ltd Consolidated Communications is a management buy-out of an established public relations company, formed in 1991, with a broad range of 'blue chip' clients 10% 1,000 72 1,072 Dolphin Nurseries Ltd Dolphin aims at building a group of private children's day nurseries in and around Greater London. The Company currently operates four nurseries at Upminster, Chigwell, Bracknell, and Tooting, with a fifth under development in Kingston-upon-Thames. 20% 1,049 145 1,194 Leisure Links International Ltd Leisure Links was formed to own and operate golf courses with two courses now acquired at Test Valley in Hampshire and Chesfield Downs outside Stevenage. 26% 1,100 (290) 810 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. 16% 1,700 (318) 1,382 Peakdale Molecular Limited Peakdale Molecular is a Derbyshire based contract chemistry company, developing and providing pharmaceutical customers with novel compounds for use in later stage drug discovery. 8% 1,064 74 1,138 Swetenhams Marketing Services Ltd Swetenhams provides data-related marketing services to the direct marketing industry, comprising list broking and management services, hosting and market automation systems. The company has now been sold. 16% 1,500 181 1,681 The Q Garden Company Limited The company was formed to own and operate garden centres, and now has three sites in Fareham, Chinnor and Stow-on-the-Wold. 15% 500 (167) 333 Total Qualifying investments made at 30 June 2003 10,183 301 10,484 'C' Shares Portfolio Careforce Staffing Ltd Further financing 3% 260 - 260 Peakdale Molecular Limited Further financing 3% 133 - 133 Total Qualifying investments made at 30 June 2003 393 - 393 Statement of Total Return (incorporating the revenue account) for the six months to 30 June 2003 Ordinary Shares Unaudited Unaudited Audited Six months to Six months to Year to 30 June 2003 30 June 2002 31 December 2002 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Losses on - (255) (255) - (232) (232) - (1,771) (1,771) investments Income 515 - 515 563 - 563 1,059 - 1,059 Investment management fees (34) (102) (136) (40) (119) (159) (77) (231) (308) Other expenses (45) (13) (58) (53) (15) (68) (113) (29) (142) Return on ordinary activities before tax 436 (370) 66 470 (366) 104 869 (2,031) (1,162) Tax on ordinary activities (125) 30 (95) (131) 37 (94) (227) 68 (159) Return attributable to equity shareholders 311 (340) (29) 339 (329) 10 642 (1,963) (1,321) Dividends (262) - (262) (264) - (264) (660) - (660) Transfer to/ (from) reserves 49 (340) (291) 75 (329) (254) (18) (1,963) (1,981) Return per share 2.1p (2.3)p (0.2)p 2.3 p (2.2)p 0.1p 4.4p (13.4)p (9.0)p The revenue columns of this statement represent the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. Statement of Total Return (incorporating the revenue account) for the six months to 30 June 2003 'C' Shares Unaudited Unaudited Audited Six months to Six months to Year to 30 June 2003 30 June 2002 31 December 2002 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 2 2 - - - - - - Income 128 - 128 - - - 4 - 4 Investment management fees (33) (97) (130) - - - (3) (7) (10) Other expenses (35) (12) (47) - - - (4) (1) (5) Return on ordinary activities before tax 60 (107) (47) - - - (3) (8) (11) Tax on ordinary activities - 26 26 - - - - 2 2 Return attributable to equity shareholders 60 (81) (21) - - - (3) (6) (9) Dividends (53) - (53) - - - - - - Transfer to/(from) reserves 7 (81) (74) - - - (3) (6) (9) Return per share 0.8 p (1.1)p (0.3)p 0.0p 0.0p 0.0p (0.2)p (0.4)p (0.6)p The revenue columns of this statement represent the profit and loss account of the Company. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. Statement of Total Return (incorporating the revenue account) for the six months to 30 June 2003 Total Unaudited Unaudited Audited Six months to Six months to Year to 30 June 2003 30 June 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 - (253) (253) - (232) (232) - (1,771) (1,771) Income 643 - 643 563 - 563 1,063 - 1,063 Investment management fees (67) (199) (266) (40) (119) (159) (80) (238) (318) Other expenses (80) (25) (105) (53) (15) (68) (117) (30) (147) Return on ordinary activities before tax 496 (477) 19 470 (366) 104 866 (2,039) (1,173) Tax on ordinary activities (125) 56 (69) (131) 37 (94) (227) 70 (157) Return attributable to equity shareholders 371 (421) (50) 339 (329) 10 639 (1,969) (1,330) Dividends (315) - (315) (264) - (264) (660) - (660) Transfer to/(from) reserves 56 (421) (365) 75 (329) (254) (21) (1,969) (1,990) Balance Sheet at 30 June 2003 Ordinary Shares Unaudited Unaudited Audited 30 June 2003 30 June 2002 31 December 2002 £'000 £'000 £'000 Fixed asset investments Qualifying 10,484 11,015 10,193 Non-qualifying - 1,493 1,499 Total fixed asset investments 10,484 12,508 11,692 Current assets Debtors 347 174 48 Cash: short term money market deposits 1,195 1,411 694 1,542 1,585 742 Creditors: due within one year (611) (595) (663) Net current assets 931 990 79 Net assets 11,415 13,498 11,771 Represented by: Called up share capital 7,287 7,333 7,333 Share premium 48 48 48 Special reserve 6,447 6,513 6,513 Capital redemption reserve 97 51 51 Capital reserve realised (1,953) (684) (779) unrealised (623) 81 (1,458) Revenue reserve 112 156 63 Total equity shareholders' funds 11,415 13,498 11,771 Net asset value per share 78.3p 92.0p 80.3p Balance Sheet at 30 June 2003 'C' Shares Unaudited Unaudited Audited 30 June 2003 30 June 2002 31 December 2002 £'000 £'000 £'000 Fixed asset investments Qualifying 393 - - Non-qualifying 6,000 - - Total fixed asset investments 6,393 - - Current assets Debtors (71) - 862 Cash: Short term money market deposits 4,915 - 1,487 4,844 - 2,349 Creditors: due within one year (188) - (29) Net current assets 4,656 - 2,320 Net assets 11,049 - 2,320 Represented by: Called up share capital 5,859 - 1,226 Share premium 5,273 1,103 Special reserve - - - Capital redemption reserve - - - Capital reserve realised (89) - (6) unrealised 2 - - Revenue reserve 4 - (3) Total equity shareholders' funds 11,049 - 2,320 Net asset value per share 94.3p - 94.6 p Balance Sheet at 30 June 2003 Total Unaudited Unaudited Audited 30 June 2003 30 June 2002 31 December 2002 £'000 £'000 £'000 Fixed asset investments Qualifying 10,877 11,015 10,193 Non-qualifying 6,000 1,493 1,499 Total fixed asset investments 16,877 12,508 11,692 Current assets Debtors 276 174 910 Cash: Short term money market deposits 6,110 1,411 2,181 6,386 1,585 3,091 Creditors: due within one year (799) (595) (692) Net current assets 5,587 990 2,399 Net assets 22,464 13,498 14,091 Represented by: Called up share capital 13,146 7,333 8,559 Share premium 5,321 48 1,151 Special reserve 6,447 6,513 6,513 Capital redemption reserve 97 51 51 Capital reserve realised (2,042) (684) (785) unrealised (621) 81 (1,458) Revenue reserve 116 156 60 Total equity shareholders' funds 22,464 13,498 14,091 Cash flow Statement for the six months to 30 June 2003 Ordinary Shares Unaudited Unaudited Audited Six months to Six months to Year to 30 June 2003 30 June 2002 31 December 2002 £'000 £'000 £'000 Operating activities Investment income received 228 362 713 Deposit interest received 28 11 25 Investment management fees paid (138) (91) (250) Other cash payments (91) (65) (152) Net cash inflow from operating activities 27 217 336 Taxation UK corporation tax paid - 6 (108) Capital expenditure and financial investments Purchase of qualifying investments (564) (410) (1,269) Purchase of non-qualifying investments - - - Disposal of non-qualifying investments - - 300 Disposals of non-qualifying investments 1,500 1,500 1,500 Net cash inflow from investing activities 936 1,090 531 Equity dividends paid Dividends paid on ordinary shares (396) (350) (614) Net cash inflow before financing 567 963 145 Financing Issue of equity net of expenses - - 101 Purchase of own shares (66) - - Increase in cash 501 963 246 Cash flow Statement for the six months to 30 June 2003 'C' Shares Unaudited Unaudited Audited Six months to Six months to Year to 30 June 2003 30 June 2002 31 December 2002 £'000 £'000 £'000 Operating activities Investment income received (5) - - Deposit interest received 95 - 4 Investment management fees paid (10) - - Other cash payments (3) - - Net cash inflow from operating activities 77 - 4 Taxation UK corporation tax paid - - - Capital expenditure and financial investments Purchase of qualifying investments (6,131) - - Purchase of non-qualifying investments - - - Disposals of non-qualifying investments - - - Net cash outflow from investing activities (6,131) - - Equity dividends paid Dividends paid on ordinary shares - - - Net cash outflow before financing (6,054) - 4 Financing Issue of equity net of expenses 9,482 - 1,483 Purchase of own shares - - - Increase in cash 3,428 - 1,487 Cash flow Statement for the six months to 30 June 2003 Total Unaudited Unaudited Audited Six months to Six months to Year to 30 June 2003 30 June 2002 31 December 2002 £'000 £'000 £'000 Operating activities Investment income received 223 362 713 Deposit interest received 123 11 29 Investment management fees paid (148) (91) (250) Other cash payments (94) (65) (152) Net cash inflow from operating activities 104 217 340 Taxation UK corporation tax paid - 6 (108) Capital expenditure and financial investments Purchase of qualifying investments (6,695) (410) (1,269) Purchase of non-qualifying investments - - - Disposals of qualifying investments - - 300 Disposals of non-qualifying investments 1,500 1,500 1,500 Net cash (outflow)/ inflow from investing (5,195) 1,090 531 activities Equity dividends paid Dividends paid on ordinary shares (396) (350) (614) Net cash (outflow)/ inflow before financing (5,487) 963 149 Financing Issue of equity net of expenses 9,482 - 1,584 Purchase of own shares (66) - - Increase in cash 3,929 963 1,733 This information is provided by RNS The company news service from the London Stock Exchange

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