Interim Results
Close Brothers Dev VCT PLC
23 September 2005
CLOSE BROTHERS DEVELOPMENT VCT PLC
INTERIM RESULTS
Close Brothers Development VCT PLC ('the Company'), today announces its interim
results for the six months to 30th June 2005.
Financial Highlights:
• NAV per Ordinary share of 96.8 pence (2004:77.3 pence (restated))
• Interim dividend on both Ordinary and C shares of 1.8 pence was paid in
June 2005
For further information, please contact
Patrick Reeve/Will Fraser-Allen
Close Venture Management Limited
Tel: 020 7422 7830
Clemmie Carr
Tavistock Communications
Tel: 020 7920 3150
Notes to Editors:
1) Close Brothers Development VCT PLC is managed by Close Venture Management
Limited
2) Close Venture Management Limited is a subsidiary of Close Brothers Group plc
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 30th June 2005 or 2004.
The financial information for the year ended 31st December 2004 is derived from
the statutory accounts delivered from 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 through the use of secured debt in such a way as to
reduce the risk normally associated with investment in these companies.
Investment progress
The results for the six months to 30 June 2005 show further good progress. The
net asset value per share ('NAV') for the Ordinary Shares has increased to 96.8
pence from 96.1 pence (restated) at the last year end, while the NAV for the C
Shares increased to 104.9 pence from 102.6 pence (restated)at the last year end.
The principal reason for the increase is the successful sale of Automotive
Technik, the manufacturer of military vehicles, which realised a gain of £1.4
million for the Ordinary Share portfolio, and a gain of £1.5 million for the C
Share portfolio.
The largest investment in the Ordinary Share portfolio is Careforce Group Plc,
the domiciliary care business; shareholders will recall that this was
successfully floated on AIM in November 2004. Due to the fact that we are
restricted on selling any of our holding until November this year, the shares
are valued at market price less a discount of fifteen per cent. The largest
holding in the C Share portfolio by value is Grosvenor Healthcare, which
provides healthcare services to large corporates. This company continues to
perform ahead of expectations and further amounts were invested during the
period to purchase a smaller competitor in Scotland.
The largest new investment during the period was of £300,000 with a further
£200,000 commitment from the Ordinary Shares and a commitment for £800,000 from
the C Shares as part of a larger fund raising to purchase a 30 acre freehold
site in Weybridge, Surrey, for development into a new health and fitness club.
The first interim dividend of 1.8 pence for both the Ordinary Shares and the C
Shares was declared in May and paid in June. As explained when we wrote to you
in May, this is the transition year for the introduction of the revised
Financial Reporting Standards, which changes the way we currently account for
the recording of dividends. We will therefore be announcing a second interim
dividend in November, based on the unaudited results to 31 October 2005 for
approval and payment in December, in place of a final dividend. Shareholders
will therefore be receiving three dividends in the current calendar year,
including the final for 2004, paid in March of this year.
The income generated from the C Share portfolio is strong and growing, and will
support a growing dividend in line with expectations. While the Ordinary Share
portfolio's successful disposal programme over the past twelve months has
greatly boosted asset value, however, it has depressed revenue as high-yielding
loan stock has been repaid. The current programme of investments will help to
restore this over time, although in the current year it is unlikely that the
previous years' dividend target of four pence will be met.
Results and dividends
As at 30 June 2005 the net asset value of the Ordinary Share portfolio was £13.1
million, (2004: £11.0 million (restated)), equivalent to 96.8 pence per share
(2004: 77.3 pence (restated)) for the Ordinary Shares, while the C Share
portfolio was £19.3 million, (2004: £17.8 million (restated)), or 104.9 pence
per share (2004: 95.0 pence (restated)). Net income after taxation for the
Ordinary Shares was £180,000 for the six months, (2004: £200,000). Net income
after taxation for the 'C' Share portfolio was £326,000 (2004: £201,000).
The following is the total return of the Company since launch in January 1999.
Pence per Pence per C
Ordinary Share* Share*
Dividends paid during the
period ended 31 December 1999 1.00 -
Dividends paid during the
year to 31 December 2000 3.65 -
Dividends paid during the
year to 31 December 2001 3.20 -
Dividends paid during the
year to 31 December 2002 4.20 -
Dividends paid during the
year to 31 December 2003 4.50 -
Dividends paid during the
year to 31 December 2004 4.00 2.75
Dividends paid during
the six months to 4.00 4.20
30 June 2005
24.55 6.95
Net asset value at 30 June
2005 96.83 104.86
Total return at 30 June 2005 121.38 111.81
*The change in presentation of the above table in comparison to prior periods
reflects the adoption of FRS21 which requires only approved dividends to be
disclosed in each period.
The directors have noted a number of typographical errors in the Company's
annual report for the year ended 31 December 2004, sent to shareholders in
February 2005 and published on Close Venture Management Limited's website ('the
published accounts'), that did not appear in the Company's audited financial
statements for the year ended 31 December 2004 as filed with the Registrar at
Companies House ('the filed accounts').
Any shareholders wishing to receive copies of the filed accounts are invited to
contact the Company Secretary by telephone or in writing..
The directors have also noted two errors which appeared in the detailed notes of
both the published accounts and the filed accounts and, as a consequence, the
interim accounts include additional information in notes 9 and 10.
R M Davidson
Chairman 23 September 2005
Statement of Total Return
for the six months to 30 June 2005
Ordinary Shares
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 2005 30 June 2004 31 December 2004
(Restated)* (Restated)*
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains on
investments - 657 657 - 2 2 - 2,463 2,463
Investment
income 343 - 343 361 - 361 1,121 - 1,121
Investment
management fee (44) (131) (175) (36) (108) (144) (76) (229) (305)
Other expenses (42) - (42) (43) - (43) (81) - (81)
Return/(loss) on
ordinary activities
before tax 257 526 783 282 (106) 176 964 2,234 3,198
Tax on ordinary
activities (77) 42 (35) (82) 35 (47) (289) 72 (217)
Return/(loss)
attributable to
equity
shareholders 180 568 748 200 (71) 129 675 2,306 2,981
Amounts recognised
as distributions
to equity
shareholders
in the period (552) - (552) (320) - (320) (577) - (577)
Transfer (from)/
to reserves (372) 568 196 (120) (71) (191) 98 2,306 2,404
Basic & diluted
return/(loss) per
share(pence) 1.3 4.1 5.4 1.4 (0.5) 0.9 4.7 16.1 20.8
All revenue and capital items in the above statement derive from continuing
operations.
No operations were acquired or discontinued during the period.
*Comparative figures have been restated in accordance with FRS 21 in respect of
declared dividends.
Statement of total return
for the six months to 30 June 2005
C Shares
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 2005 30 June 2004 31 December 2004
(Restated)* (Restated)*
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains on
investments - 1,009 1,009 - 128 128 - 1,366 1,366
Investment
income 582 - 582 365 - 365 1,097 - 1,097
Investment
management fee (64) (191) (255) (36) (108) (144) (101) (303) (404)
Other expenses (55) - (55) (45) - (45) (116) - (116)
Return on
ordinary activities
before tax 463 818 1,281 284 20 304 880 1,063 1,943
Tax on ordinary
activities (137) 63 (74) (83) 36 (47) (264) 93 (171)
Return
attributable to
equity
shareholders 326 881 1,207 201 56 257 616 1,156 1,772
Amounts recognised
as distributions
to equity
shareholders
in the period (593) (185) (778) (104) - (104) (233) - (233)
Transfer (from)/
to reserves (267) 696 429 97 56 153 383 1,156 1,539
Basic & diluted
return per
share 1.8 4.8 6.6 1.3 0.4 1.7 3.6 6.8 10.4
(pence)
*Comparative figures have been restated in accordance FRS 21 in respect of
declared dividends.
Statement of total return
for the six months to 30 June 2005
Total
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 2005 30 June 2004 31 December 2004
(Restated)* (Restated)*
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Gains on
investments - 1,666 1,666 - 130 130 - 3,829 3,829
Investment
income 925 - 925 726 - 726 2,218 - 2,218
Investment
management fee (108) (322) (430) (72) (216) (288) (177) (532) (709)
Other expenses (97) - (97) (88) - (88) (197) - (197)
Return/(loss)
on ordinary
activities
before tax 720 1,344 2,064 566 (86) 480 1,844 3,297 5,141
Tax on
ordinary
activities (214) 105 (109) (165) 71 (94) (553) 165 (388)
Return/(loss)
attributable
to equity
shareholders 506 1,449 1,955 401 (15) 386 1,291 3,462 4,753
Amounts
recognised as
distributions
to equity
shareholders
in the period (1,145) (185) (1,330) (424) - (424) (810) - (810)
Transfer
(from)/to
reserves (639) 1,264 625 (23) (15) (38) 481 3,462 3,943
*Comparative figures have been restated in accordance with FRS 21 in respect of
declared dividends.
Balance sheet
as at 30 June 2005
Ordinary Shares
Unaudited Unaudited Audited
30 June 2005 30 June 2004 31 December 2004
(Restated)* (Restated)*
£'000 £'000 £'000
Fixed asset investments
Qualifying investments 6,944 9,760 7,703
Non-qualifying investments 60 - -
Total fixed asset investments 7,004 9,760 7,703
Current assets
Debtors 68 78 186
Cash at bank 6,678 1,593 5,980
6,746 1,671 6,166
Creditors: amounts falling
due within one year (605) (387) (485)
Net current assets 6,141 1,284 5,681
Total assets
less current liabilities 13,145 11,044 13,384
Capital and reserves
Called up share capital 6,788 7,144 6,964
Share premium 48 48 48
Special reserve 5,671 6,245 5,991
Capital redemption reserve 596 241 420
Realised capital reserve (875) (2,240) (2,206)
Unrealised capital reserve 877 (664) 1,679
Revenue reserve 40 270 488
Total equity shareholders'
funds 13,145 11,044 13,384
Net asset value per share
(pence) 96.8 77.3 96.1
*Comparative figures have been restated in accordance with FRS 21 in respect of
declared dividends.
Balance sheet
as at 30 June 2005
C Shares
Unaudited Unaudited Audited
30 June 2005 30 June 2004 31 December 2004
(Restated)* (Restated)*
£'000 £'000 £'000
Fixed asset investments
Qualifying investments 6,768 3,756 7,297
Non-qualifying investments 7,762 6,003 7,000
Total fixed asset investments 14,530 9,759 14,297
Current assets
Debtors 130 52 110
Cash at bank 4,916 8,169 5,045
5,046 8,221 5,155
Creditors: amounts falling
due within one year (256) (181) (416)
Net current assets 4,790 8,040 4,739
Total assets
less current liabilities 19,320 17,799 19,036
Capital and reserves
Called up share capital 9,212 9,366 9,278
Share premium 3,160 3,160 3,160
Special reserve 4,976 5,251 5,100
Capital redemption reserve 159 5 93
Realised capital reserve 483 (255) (362)
Unrealised capital reserve 1,113 63 1,272
Revenue reserve 217 209 495
Total equity shareholders'
funds 19,320 17,799 19,036
Net asset value per share
(pence) 104.9 95.0 102.6
*Comparative figures have been restated in accordance with FRS 21 in respect of
declared dividends.
Balance sheet
as at 30 June 2005
Total
Unaudited Unaudited Audited
30 June 2005 30 June 2004 31 December 2004
(Restated)* (Restated)*
£'000 £'000 £'000
Fixed asset investments
Qualifying investments 13,712 13,516 15,000
Non-qualifying investments 7,822 6,003 7,000
Total fixed asset investments 21,534 19,519 22,000
Current assets
Debtors 198 130 296
Cash at bank 11,594 9,762 11,025
11,792 9,892 11,321
Creditors: amounts falling
due within one year (861) (568) (901)
Net current assets 10,931 9,324 10,420
Total assets
less current liabilities 32,465 28,843 32,420
Capital and reserves
Called up share capital 16,000 16,510 16,242
Share premium 3,208 3,208 3,208
Special reserve 10,647 11,496 11,091
Capital redemption reserve 755 246 513
Realised capital reserve (392) (2,495) (2,568)
Unrealised capital reserve 1,990 (601) 2,951
Revenue reserve 257 479 983
Total equity shareholders'
funds 32,465 28,843 32,420
*Comparative figures have been restated in accordance with FRS 21 in respect of
declared dividends.
The interim information was approved by the Board of Directors on 23 September
2005.
Signed on behalf of the Board of Directors
Roderick Davidson
Chairman
Cash flow statement
for the six months to 30 June 2005
Ordinary Shares
Unaudited Unaudited Audited
Six months to Six months to Six months to
30 June 2005 30 June 2004 31 December
2004
£'000 £'000 £'000
Operating activities
Investment income received 122 193 1,397
Deposit income received 70 40 84
Other income received - - 1
Investment management fees
paid (126) (147) (366)
Other cash payments (79) (74) (101)
Net cash (outflow)/inflow
from (13) 12 1,015
operating activities
Taxation
UK corporation tax paid (148) - -
Capital expenditure and
financial investment
Purchase of qualifying
investments (660) (472) (1,741)
Disposals of qualifying
investments 2,388 - 5,240
Net cash inflow/(outflow)
from investing activities 1,728 (472) 3,499
Equity dividends paid
Dividends paid on
ordinary shares (551) (319) (577)
Net cash inflow/(outflow)
before financing 1,016 (779) 3,937
Financing
Cancellation of shares (318) (96) (425)
Net cash outflow from
financing (318) (96) (425)
Increase/(decrease) in cash
in the period 698 (875) 3,512
Cash flow statement
for the six months to 30 June 2005
C Shares
Unaudited Unaudited Audited
Six months to Six months to Six months to
30 June 2005 30 June 2004 31 December
2004
£'000 £'000 £'000
Operating activities
Investment income received 327 241 822
Deposit income received 114 89 192
Investment management fees
paid (175) (144) (403)
Other cash
(payments)/receipts (18) (5) 27
Net cash inflow from
operating activities 248 181 638
Capital expenditure and
financial investment
Purchase of qualifying
investments (1,685) (1,362) (4,733)
Purchase of non-qualifying
investments (92) - (2,999)
Disposals of qualifying
investments 2,316 - 1,056
Disposals of non-qualifying
investments - - 1,999
Net cash inflow/(outflow)
from investing activities 539 (1,362) (4,677)
Equity dividends paid
Dividends paid on
C shares (779) (105) (233)
Net cash inflow/(outflow)
before financing 8 (1,286) (4,272)
Financing
Issue of equity net of
expenses - 6,672 6,671
Cancellation of shares (137) (9) (146)
Net cash (outflow)/inflow
from financing (137) 6,663 6,525
(Decrease)/increase in cash
in the period (129) 5,377 2,253
Cash flow statement
for the six months to 30 June 2005
Total
Unaudited Unaudited Audited
Six months to Six months to Six months to
30 June 2005 30 June 2004 31 December
2004
£'000 £'000 £'000
Operating activities
Investment income received 449 434 2,219
Deposit income received 184 129 276
Other income received - - 1
Investment management fees
paid (301) (291) (769)
Other cash payments (97) (79) (74)
Net cash inflow from
operating activities 235 193 1,653
Taxation
UK corporation tax paid (148) - -
Capital expenditure and
financial investment
Purchase of qualifying
investments (2,345) (1,834) (6,474)
Purchase of non-qualifying
investments (92) - (2,999)
Disposals of qualifying
investments 4,704 - 6,296
Disposals of non-qualifying
investments - - 1,999
Net cash inflow/(outflow)
from investing activities 2,267 (1,834) (1,178)
Equity dividends paid
Dividends paid on
ordinary and C shares (1,330) (424) (810)
Net cash inflow/(outflow)
before financing 1,024 (2,065) (335)
Financing
Issue of equity net of
expenses - 6,672 6,671
Cancellation of shares (455) (105) (571)
Net cash (outflow)/inflow
from financing (455) 6,567 6,100
Increase in cash in the
period 569 4,502 5,765
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