Final Results - Year Ended 31 March 2000

Close Brothers Venture Cap Tst PLC 12 May 2000 CLOSE BROTHERS VENTURE CAPITAL TRUST PLC 'The board of Close Brothers Venture Capital Trust are pleased to announce the results for the year to 31 March 2000, being the fourth anniversary of launch. * Total return up 42% for Ordinary Shares and 121% for C Shares. * Total dividends for year at 8.55p per Ordinary Share (including special dividend payable out of capital) and 4.5p per C Share. * NAV for both classes of share at 100.5p per share. * Each C Share to convert to one Ordinary Share. * Investment levels comfortably in excess of Inland Revenue targets.' CHAIRMAN'S STATEMENT Introduction The year has been a successful one for Close Brothers Venture Capital Trust, seeing a continued uplift in the aggregate value of investments. The Ordinary Shares have already exceeded their minimum performance target of a total return of 125 pence per share (comprising net asset value and dividends) one year earlier than promised in the prospectus while the C Share portfolio continues to make strong progress. The close of the financial period also marks an important point in the Company's history. This is because 31 March 2000, being the fourth anniversary of the commencement of trading of the Ordinary Shares and the third anniversary of the C Shares, marks the point at which the two classes of shares merge. Following the declaration of a special dividend from realised capital profits payable to the Ordinary shareholders, which is being paid in addition to the normal final revenue dividend, the net asset value of both classes of share is 100.5 pence. This will result in a merger of the two classes of share on an equal basis and each C Share, therefore, will convert to one Ordinary Share. A total of £7.13 million was invested in qualifying unquoted companies during the year (net of disposals or transfers to non-qualifying investments pending disposal). At 31 March 2000 a further £8.75 million was scheduled for investment in subsequent years which brings the total invested or scheduled for investment to £38.25 million in 18 separate investee companies. Of this amount £23.73 million has been allocated to the Ordinary Share pool and £14.52 million to the 'C' Share pool. This represents some 97% of each of the Ordinary Shares' and the 'C' Shares' total investments. While this level is higher than originally anticipated, it will give the opportunity to make selective disposals of investments during the year, whilst still providing the comfort of remaining comfortably above the minimum 70 per cent. investment level required by Inland Revenue. Dividends paid and proposed for the year, including the 2.55 pence dividend payable out of capital profits for the Ordinary Shares referred to above, amount to 8.55 pence and 4.5 pence per Ordinary Shares and C Share respectively. The level of dividend for the C Shares was slightly disappointing, and reflects the fact that lower income than anticipated was received from investments in residential development companies. Nevertheless, had tax credits on dividends not ceased in April of last year, C Share dividends for the year would have comfortably exceeded the Company's minimum performance criteria of 5 pence per annum. In order for your company to pay dividends to shareholders out of realised capital profits the VCT has now renounced its investment company status. The principal source of these capital profits to date has been the investment in non-qualifying irredeemable preference shares in major banks and other financial institutions made in 1996 and 1997, which were subsequently sold at a substantial profit. Net asset value per share at 31 March 2000 was 100.5 pence for each of the Ordinary Shares and 'C' Shares, against 99.6 pence and 95.5 pence respectively for the previous year. For the purpose of the merger of the two classes of share, the assets owned by qualifying investee companies have been valued by independent professional valuers, other than the residential development companies. These companies, which typically distribute their profits at the end of each development, have been valued at cost unless there was an undistributed profit or a realised loss carried forward from the most recently completed development, in which case the carrying value of the investment is adjusted accordingly. Review of Investments Our key investment areas continue to be the hotel, residential property development and care home sectors, though investments made during the year in a cinema and a health and fitness club have taken your Company into new asset- based areas. In the hotel sector, our two Holiday Inn Express hotels at Bristol and Dartford, where a 43 bedroom extension has recently been completed, are both performing well. During the period we invested in a project for a 90 room budget hotel operating under the 'Days Inn' brand at the Mailbox site in the centre of Birmingham; construction is well under way and the hotel is expected to open by the end of the year. The Hawkwell House hotel in Oxford is showing a strong performance while The Rose & Crown Hotel in Tring has now been disposed of, resulting in a loss of approximately £200,000 against cost, and a profit of approximately £100,000 against its written-down value. In the residential development sector, which is restricted to 20 per cent. of the portfolio, we currently have six companies established with separate developers, one of which was set up shortly before the year end, initially to undertake a scheme at Lee-on-Solent. Our investment in Badminton Homes has been disposed of at a small profit, following the successful completion of its first development. One particularly successful development completed during the year was Country & Metropolitan VCT's project for 25 houses in Meanwood, Leeds, which generated a profit well above budget. In the care home sector our principal area of investment during the year continues to be homes for people with learning disabilities in East Anglia. The first two of such homes in which we have invested, in Witham in Essex and in Bury St Edmunds, are performing above expectations. We have invested in two further homes, which are currently under construction, in Thetford in Norfolk and in Ipswich. Our two remaining investments in the sector are in homes for the frail and elderly. Of these, the Harnham Croft nursing home in Salisbury has been disappointing, with performance particularly hit by high staff costs. The nursing home in Hornchurch has finally begun to perform in accordance with our initial expectations, though it is too soon to increase the carrying value from its current level. During the year we broadened the Company's spread of asset based sectors by investing in an 'art-house' cinema in the centre of Cambridge, which has now been open for six months, while construction is due to commence shortly on the Glory Mill Health and Fitness Club in a five acre freehold site outside Beaconsfield. Results and Dividend As at 31 March 2000 the net asset value applicable to the Ordinary Shares was £24.11 million or 100.5 pence per share, which compares with a net asset value at 31 March 1999 of £24.06 million or 99.6 pence per share. Net income before taxation was £1.90 million (1999: £2.10 million) enabling the board to declare a net final revenue dividend of 3.5 pence per Ordinary Share plus a special capital dividend of 2.55 pence, making 8.55 pence (1999: 6.3 pence, or 7.75 pence inclusive of the tax credit) for the full year. The net asset value applicable to the 'C' Shares was £15.50 million (1999: £14.80 million), or 100.5 pence (1999: 95.5 pence) per share. Net income before taxation was £955,000 (1999: £1.10 million) enabling the board to declare a net final dividend of 2.3 pence per 'C' Share, making 4.5 pence (1999: 5.10 pence or 6.25 pence inclusive of the tax credit) for the full year. The final dividends for the year ended 31 March 2000 will be paid on 30 June 2000 to shareholders registered on 26 May 2000. Merger of Ordinary Shares and C Shares As mentioned above, and in accordance with the Company's articles of association and the terms of the C Share prospectus, issued in February 1997, the C Shares are due to convert to Ordinary Shares with effect from 31 May 2000 on the basis of their comparative net asset values at 31 March 2000. Following the payment of the special capital dividend of 2.55 pence to the Ordinary Shareholders, both classes of share have a net asset value of 100.5 pence. Consequently, with effect from 31 May 2000, each C Share will be deemed to be an Ordinary Share. New Ordinary share certificates will be sent to shareholders as soon as practicable, and by no later than 30 June 2000, after which existing C Share certificates will cease to be valid David Watkins Chairman 12 May 2000 Close Brothers Venture Capital Trust PLC Statement of Total Return (incorporating the revenue account) for the year ended 31 March 2000 Current Year Ordinary Shares 'C' Shares Total Year ended 31 Year ended 31 Year ended 31 March 2000 March 2000 March 2000 Rev. Cap. Total Rev. Cap. Total Rev. Cap. Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 1,078 1,098 - 894 894 - 1,972 1,972 Income 2,173 - 2,173 1,100 - 1,100 3,273 - 3,273 Investment mgmt fees (212) (212) (424) (108) (108) (216) (320) (320) (640) Other expenses (58) (58) (116) (37) (37) (74) (95) (95) (190) _____ ____ _____ _____ ___ _____ _____ ___ _____ Return on ordinary activities before tax 1,903 808 2,711 955 749 1,704 2,858 1,557 4,415 Tax on ordinary activities (518) 74 (444) (282) 43 (239) (800) 117 (863) ____ __ ___ ____ ___ ____ ____ ___ ___ Return attributable to shareholders 1,385 882 2,267 673 792 1,465 2,058 1,674 3,732 Dividends (1,442) (612) 2,054 (695) - (695)(2,137) (612) (2,749) ______ __ ______ ___ ___ ___ _____ ___ _____ Transfer to (from) reserves (57) 270 213 (22) 792 770 (79) 1,062 983 ====== ==== ==== ==== ==== ==== ===== ==== ===== Return per share 5.8p 3.7p 9.5p 4.4p 5.1p 9.5p 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 period. Close Brothers Venture Capital Trust PLC Statement of Total Return (incorporating the revenue account) for the year ended 31 March 1999 Prior Year (as restated) Ordinary Shares 'C' Shares Total Year ended 31 Year ended 31 Year ended 31 March 1999 March 1999 March 1999 Rev. Cap. Total Rev. Cap. Total Rev. Cap. Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Gains /(losses) on investments - 214 214 - (40) (40) - 174 174 Income 2,356 - 2,356 1,223 - 1,223 3,579 - 3,579 Investment mgmt fees (179) (179) (358) (77) (77) (154) (256) (256) (512) Other expenses (59) (59) (118) (38) (38) (76) (97) (97) (194) _____ ____ _____ _____ ___ _____ _____ ___ _____ Return on ordinary activities before tax 2,118 (24) 2,094 1,108 (155) 953 3,226 (179) 3,047 Tax on ordinary activities (555) 74 (481) (313) 36 (277) (868) 110 (758) ____ __ ___ ____ ___ ____ ____ ___ ___ Return attributable to shareholders 1,563 50 1,613 795 (119) 676 2,358 (69) 2,289 Dividends (1,522) - (1,522) (790) - (790)(2,312) - (2,312) ______ __ ______ ___ ___ ___ _____ ___ _____ Transfer to (from) reserves 41 50 91 5 (119) (114) 46 (69) (23) ====== ==== ==== ==== ==== ==== ===== ==== ===== Return per share 6.5p 0.2p 6.7p 5.1p (0.8)p 4.3p Close Brothers Venture Capital Trust PLC Balance sheet at 31 March 2000 Ord. 'C' Ord. 'C' Shares Shares Total Shares Shares Total 31 Mar. 31 Mar. 31 Mar. 31 Mar. 31 Mar. 31 Mar. 2000 2000 2000 1999 1999 1999 £'000 £'000 £'000 £'000 £'000 £'000 Fixed Asset Investments Qualifying: Scheduled for investment 25,056 15,439 40,495 18,967 9,764 28,581 less: uninvested (5,435) (3,315) (8,750) (1,283) (4,967) (6,100) ______ ______ ______ ______ ______ _____ Net investments to date 19,621 12,124 31,745 17,684 4,797 22,481 Non-qualifying: 1,170 2,125 3,295 5,003 8,441 13,444 ______ ____ ______ ______ ______ ______ Total fixed asset investments 20,791 14,249 35,040 22,687 13,238 35,925 ______ ______ ______ ______ ______ ______ Current Assets Debtors 158 157 315 500 277 777 Short term money market deposits 5,101 1,587 6,688 1,150 1,423 2,573 _____ _____ ______ ______ ______ _____ 5,259 1,744 7,003 1,650 1,700 3,350 Creditors: due within one year (1,935) (490) (2,425) (282) (141) (423) _____ ____ _____ _____ _____ _____ Net current assets 3,324 1,254 4,578 1,368 1,559 2,927 _____ _____ ______ _____ _____ ______ Net assets 24,115 15,503 39,618 24,055 14,797 38,852 ====== ====== ====== ====== ====== ====== Represented by: Called up share capital 11,995 7,712 19,707 12,080 7,749 19,829 Share premium account - - - 10,866 6,974 17,840 Special reserve 10,713 6,910 17,623 - - - Capital reserve realised 228 25 253 1,037 142 1,179 unrealised 966 760 1,726 (113) (149) (262) Other reserves 105 41 146 20 4 24 Profit and Loss account 108 55 163 165 77 242 _____ _____ ______ _____ _____ ____ Total Shareholders' funds 24,115 15,503 39,618 24,055 14,797 38,852 ====== ====== ====== ====== ====== ====== Net asset value per share 100.5p 100.5p 99.6p 95.5p Signed on behalf of the Board of Directors Roderick Davidson Director For further information, please contact: Patrick Reeve, Close VCT Management Tel: 020 7426 4000

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