Final Results

Finsbury Technology Trust PLC 03 February 2006 Finsbury Technology Trust PLC Preliminary results for the year ended 30 November 2005 Finsbury Technology Trust PLC today announces preliminary results for the year ended 30 November 2005. Financial Summary (unaudited) (audited) % Change 30 November 30 November 2005 2004 *Net Assets £62.0m £61.1m +1.5 Net Asset Value per share 237.2p 221.1p +7.3 Share Price 220.3p 200.5p +9.9 Discount 7.1% 9.3% - MSCI World Index (sterling adjusted without dividends reinvested) 1,708 1,415 +20.7 Dow Jones World Technology Index (sterling adjusted, calculated on a total return basis) 235.4 195.8 +20.2 *As reduced by the share buy-backs made during the year under review which amounted to £3,166,000. The Company has not generated significant income and the Directors are not proposing a dividend for the year (2004: nil). For and on behalf of Close Finsbury Asset Management Limited - Company Secretary 3 February 2006 The following are attached: • Chairman's Statement • Statement of Total Return • Balance Sheet • Cash Flow Statement • Notes to the Financial Statements For further information please contact: Alastair Smith, Close Finsbury Asset 020 7426 6240 Management Ltd Tracey Lago, Close Finsbury Asset Management 020 7426 6219 Ltd Michael Bourne, Reabourne Technology 020 7422 7801 Investment Management Ltd Jo Stonier, Quill Communications 020 7758 2236 Chairman's Statement Performance In the year to 30 November 2005 the Company's net asset value ("NAV") per share increased by 7.3% from 221.1p to 237.2p. In the same period, the Company's share price rose by 9.9% from 200.5p to 220.3p and the share price discount to NAV per share narrowed from 9.3% to 7.1%. The Company's net assets increased by 1.5% from £61.1 million to £62.0 million. However, the year-end net assets are stated after a reduction of £3.2 million arising from the buy-in of 1,460,000 shares during the period. The buy-in, which was effected at a discount to NAV per share, resulted in a small increase in NAV per share for the remaining shareholders. With effect from 1 December 2005 the Company has adopted the Dow Jones World Technology Index (sterling adjusted, total return) as its performance benchmark. In the year to November 2005, this index increased by 20.2%. This compares with an increase of 20.7% in the MSCI World Index (sterling adjusted without dividends reinvested), which, to the end of the period under review was the Company's benchmark index. The Company's investment performance compared with these benchmarks was disappointing. During the year, however, a number of measures were taken by the Board and the Manager, including a refinement of the investment mandate that we believe will impact favourably on performance in the future. A detailed commentary on the performance of the investment portfolio is contained in the Investment Manager's Review within the Annual Report. Results and Dividend The total return per share for the year was 15.1p (2004: loss of 25.7p per share). This was made up of a revenue deficit of 4.5p per share (2004: deficit of 3.2p per share) and a capital gain of 19.6p per share (2004: loss of 22.5p per share). The investments making up the Company's investment portfolio typically provide a very low yield. No dividend has been declared in respect of the year ended 30 November 2005 (2004: nil) and it is unlikely that a dividend will be paid for the foreseeable future. Continuation Vote and Extraordinary General Meeting At the time of launch in 1995, the Company adopted Articles of Association that required a vote to be held in 2006 to decide whether or not the Company should continue as an investment trust for a further five-year period. During 2005, the Board conducted a thorough review of all aspects of the Company's affairs in order to be in a position to make an appropriate recommendation to shareholders. Following completion of this review, it was announced in November 2005 that the Board would be recommending approval of the continuation vote. The Board also announced a number of other proposals, including the introduction of a discount management policy and a revised basis of remuneration for the Manager and Investment Manager. Following this announcement, the Company's brokers held discussions with existing and prospective shareholders. As a result, a number of significant new institutions invested in the Company, for the most part replacing shareholders who did not wish to participate in its longer term future. The Board believes that a stable and committed shareholder base is important and welcomes these new shareholders. A circular, setting out details of the Board's proposals and convening an Extraordinary General Meeting to seek approval for the revised management contracts and for a number of changes in the Articles of Association was sent to shareholders in December 2005. I am pleased to report that all of the resolutions put to the meeting on 9 December 2005 were carried by an overwhelming majority. Summary of changes The principal changes resulting from adoption of the Board's proposals and the passing of the resolutions at the EGM may be summarised as follows: - • the next continuation vote is to be proposed at the AGM in 2011; - • the benchmark index has been changed, as noted above; - • the management fee remains at 1 per cent. but is to be based on the Company's market capitalisation rather than its NAV; - • a performance fee, calculated every three years, will be payable at 20% of the amount by which the NAV outperforms the benchmark or, if lower, exceeds the highest previous NAV. For the first time, there is a "high water mark" which must be exceeded before any further incentive fee is paid; - • the notice period under the relevant contract is reduced from 24 months to 12 months; - • the Company has adopted a discount management policy; and - • the investment mandate has been refined so that the Company will make no new investments in unquoted companies or in the biotechnology sector. The Company's portfolio of investments will also be more focused by number. Discount management policy and buy-back authority Under its newly adopted discount management policy, the Company intends to buy-back shares, for cancellation, at prices representing a discount greater than 7 per cent. to NAV where there is demand in the market for it to do so. In pursuance of this policy, in the period to 2 February 2006 the Company has bought back, and cancelled 2,075,000 shares representing 7.5 per cent. of the outstanding shares in issue as at the date of the original announcement dated 16 November 2005. In the event that the Board buys back the maximum permitted amount of 14.99 per cent. of its issued ordinary share capital the Board will seek shareholder approval to renew this authority. The Board will closely monitor the effect of the discount management policy and will review the Company's future if it deems that the effect of the policy has been to reduce the Company's market capitalisation to the significant detriment of Shareholders. Board of Directors David Potter, the Senior Independent Director, will not be seeking re-election at the Annual General Meeting. David has served the Company since launch and I would like to thank him for the significant contribution he has made over the past ten years. David will be replaced as Senior Independent Director by John Cornish. The Board is in the process of recruiting an additional independent Director with appropriate experience. Outlook Your Board continues to believe that there will be significant growth in the technology sector in the years ahead. The Board also believes that the extension of the Company's life for a further five year period, together with the other proposals that have been implemented, give the Company a stable basis from which to address the opportunities that will be available. Annual General Meeting The Annual General Meeting will be held at 10 Crown Place, London EC2A 4FT, on 6 April 2006 at 12 noon. I hope that as many shareholders as possible will be able to attend. Representatives of our Investment Manager, Reabourne Technology Investment Management Limited, will make a presentation to the meeting. David Quysner Chairman Statement of Total Return incorporating the revenue account for the year ended 30 November 2005 (unaudited) (audited) Revenue Capital Total Revenue Capital Total 2005 2005 2005 2004 2004 2004 £'000 £'000 £'000 £'000 £'000 £'000 ------------------ ------- ------- ------- ------- ------- ------- Gains/(losses) on investments - 5,543 5,543 - (6,099) (6,099) Exchange losses on currency balances - (147) (147) - (104) (104) Income (see note 2) 326 - 326 253 - 253 Investment management (658) - (658) (677) - (677) fee (see note 3) Other expenses (851) - (851) (417) - (417) ------------------ ------- ------- ------- ------- ------- ------- Net (loss)/return before finance costs (1,183) 5,396 4,213 (841) (6,203) (7,044) and taxation ------- ------------------ Interest payable (39) - (39) (37) - (37) and similar charges ------------------ ------- ------- ------- ------- ------- ------- (Loss)/return on ordinary activities before taxation (1,222) 5,396 4,174 (878) (6,203) (7,081) Taxation on ordinary (28) - (28) (23) - (23) activities ------------------ ------- ------- ------- ------- ------- ------- Transfer (from)/to reserves (1,250) 5,396 4,146 (901) (6,203) (7,104) ------------------ ------- ------- ------- ------- ------- ------- (Loss)/return per Ordinary share (see note 4) (4.5p) 19.6p 15.1p (3.2p) (22.5p) (25.7p) The Revenue column of this statement is the revenue account of the Company. All revenue and capital items in the above statement derive from continuing operations. Balance Sheet as at 30 November 2005 (unaudited) (audited) 2005 2004 £'000 £'000 --------------------- --------- -------- Fixed asset investments 61,743 60,561 Current assets Debtors 3,080 1,687 Cash at bank 2,432 722 --------------------- --------- -------- 5,512 2,409 Creditors Amounts falling due within one (5,222) (1,917) year --------- -------- --------------------- Net current assets 290 492 --------------------- --------- -------- Net assets 62,033 61,053 --------------------- --------- -------- Capital and reserves Called up share capital 6,539 6,904 Share premium account 23,488 23,488 Capital redemption reserve 365 - Capital reserve - realised 40,053 43,555 Capital reserve - unrealised 391 (5,341) Revenue reserve (8,803) (7,553) --------------------- --------- -------- Total shareholders' funds 62,033 61,053 --------------------- --------- -------- --------------------- --------- -------- Net asset value per Ordinary 237.2p 221.1p share (see note 5) --------------------- --------- -------- Cash Flow Statement for the year ended 30 November 2005 (unaudited) (audited) 2005 2004 £'000 £'000 ---------------------- ---------- -------- Net cash outflow from operating (779) (2,528) activities Servicing of finance Bank overdraft and loan interest (39) (37) paid Taxation Tax recovered 8 12 Financial investment Purchases of investments (47,362) (26,054) Sales of investments 53,180 30,548 ---------------------- ---------- -------- Net cash inflow from financial 5,818 4,494 investments Financing Purchase of Ordinary shares (3,166) - Repayment of loans - (1,100) ---------------------- ---------- -------- Net cash outflow from financing (3,166) (1,100) ---------------------- ---------- -------- Increase in cash 1,842 841 ---------------------- ---------- -------- Reconciliation of net cash flow to movement in net funds Increase in cash as above 1,842 841 Cash outflow from loans - 1,100 Exchange movements (147) (104) ---------------------- ---------- -------- Movement in net funds 1,695 1,837 Net funds/(debt) at 1 December 722 (1,115) ---------------------- ---------- -------- Net funds at 30 November 2,417 722 ---------------------- ---------- -------- Notes to the Financial Statements 1. Accounting Policies The figures in this announcement have been prepared using accounting policies that are consistent with those adopted in the last published set of accounts. 2. Income Income for the year was derived from the following sources: 2005 2004 £'000 £'000 Income from investments 303 221 Interest receivable and other income 23 32 ------------------------- ---------- ---------- Total 326 253 ------------------------- ---------- ---------- 3. Investment Management Fees Revenue Capital Total Revenue Capital Total 2005 2005 2005 2004 2004 2004 £'000 £'000 £'000 £'000 £'000 £'000 Periodic fee 630 - 630 640 - 640 Irrecoverable 28 - 28 37 - 37 VAT thereon ----------- ------- ------- ------- ------- ------- ------- Total 658 - 658 677 - 677 ----------- ------- ------- ------- ------- ------- ------- 4. (Loss)/Return Per Ordinary Share The revenue loss per Ordinary share is based upon the loss attributable to ordinary shareholders of £1,250,000 (2004: £901,000) and 27,559,312 (2004: 27,615,312) Ordinary shares being the weighted average number of shares in issue during the year. Capital return per Ordinary share is based upon net capital gain attributable to ordinary shareholders of £5,396,000 (2004: loss of £6,203,000) and 27,559,312 (2004: 27,615,312) Ordinary shares being the weighted average number of shares in issue during the year. 5. Net Asset Value Per Ordinary Share The net asset value per Ordinary share is based on the net assets attributable to equity shareholders of £62,033,000 (2004: £61,053,000) and on 26,155,312 (2004: 27,615,312) Ordinary shares in issue at 30 November 2005. Notes to the Financial Statements (continued) 6. Comparative Information This preliminary statement is not the Company's statutory accounts. The statutory accounts for the year ended 30 November 2004 have been delivered to the Registrar of Companies and received an audit report which was unqualified and did not contain statements under s237 (2) and (3) of the Companies Act 1985. The statutory accounts for the year ended 30 November 2005 have not yet been approved, audited or filed. Close Finsbury Asset Management Limited Company Secretary 3 February 2006 This information is provided by RNS The company news service from the London Stock Exchange

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