Final Results
Close Brothers Aim Vct PLC
12 May 2003
12 May 2003
CLOSE BROTHERS AIM VCT PLC PRELIMINARY RESULTS
Close Brothers AIM VCT PLC ('the Company'), which invests in companies listed on
the Alternative Investment Market, across a variety of sectors, today announces
preliminary results for the year ended 28 February 2003.
Financial Highlights:
Ordinary Shares 'C' Shares
Year to Year to
28 February 2003 28 February 2003
Total return per share (29.76) pence (15.06) pence
Net dividends per share 0.50 pence 1.00 pence
Net asset value per share 56.73 pence 70.46 pence
Net assets £5.68 million £14.07 million
Shareholder value per share since launch
(per £1 paid per share excluding tax benefits):
Pence per share Pence per share
Gross dividends for the period to 28 February 1999* 3.75 -
Net dividends for the year to 29 February 2000 12.25 -
Net dividends for the year/period to 28 February 2001 32.25 1.25
Net dividends for the year to 28 February 2002 4.00 2.00
Net dividends for the year to 28 February 2003 0.50 1.00
Total dividends (capital and revenue) 52.75 4.25
Net asset value at 28 February 2003 56.73 70.46
Total return 109.48 74.71
*Dividends paid before 5 April 1999 were paid to qualifying shareholders inclusive of the associated tax
credit.
Commenting on the results, Michael Reeve, Chairman of the Company, said: 'We
have now experience of a bear market for three years. Pundits tell us that we
are unlikely to see a repeat of the increases in values we saw in the 1990s for
many years. Admittedly the type of huge bubble which burst two years ago is not
witnessed by many generations. However, from little acorns do big trees grow
and we invest in 'little acorns' which can grow much faster than mature trees.
Increasingly companies in our portfolio are declaring dividends and a good
proportion of them are making sound progress. In due course this will be
recognised in their share price ratings. In my statement last year I said that
in the next year or so they and other investments should realise the potential
which vindicates our original investment decision. Perhaps the emphasis should
now be on that word 'so'. Generally we have a promising portfolio and I see no
reason why in due course such promise should not be realised.'
For further information, please contact:
Andrew Buchanan / Patrick Reeve Justin Griffiths / John West
Close Investment Limited Tavistock Communications
Tel: 020 7426 4000 Tel: 020 7600 2288
Notes to Editors:
1) Close Brothers AIM VCT PLC is managed by Close Investment Limited.
2) Close Investment Limited is a subsidiary of Close Brothers Asset
Management Limited which 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 28 February 2003
or 2002, but is derived from those accounts. Statutory accounts for 2002 have
been delivered to the Registrar of Companies and those for 2003 will be
delivered shortly. The auditors have reported on these accounts, their reports
were unqualified and did not contain statements under s237(2) or (3) Companies
Act 1985.
CHAIRMAN'S STATEMENT
In my statement this time last year I said that despite the difficult trading
conditions of the last two years and the very poor level of investor sentiment
many companies in the portfolio have continued to make good progress. That
continued to be the case with a few exceptions over the last year. However, I
am afraid that this still remains to be recognised in their share prices. This
is not surprising as the market registered further lows as the build up to the
war in Iraq gathered strength at the end of our financial year in February and
created further fear and uncertainty in the stock market. Since then things
have started to improve in the market generally, with the FTSE 100 now just up
on the year, a turnaround of 20% from its low point on 12 March. With the war
in Iraq now over, the market is ignoring the potential pitfalls of the peace
process and returning to the fundamental economic outlook. This is mixed, much
still hangs on the pace of recovery of the US economy and the outlook would seem
to be one of low growth.
In the period under review the value of the Ordinary Share and 'C' Share
portfolio declined by 34.8% and 18.5% respectively if dividends are added back.
This may be compared with an overall decline in the AIM index (dividends
reinvested) of 32.6%. While as a single year this is a disappointing
performance, it is worth reiterating that VCT portfolios can only invest in a
subset (new issues by qualifying companies), of all the companies comprising the
AIM index. Over its life to date, the ordinary share portfolio, again adding
back dividends to produce comparable figures, has outperformed the AIM index
with dividends reinvested. The Ordinary Share's portfolio is up by 15% compared
to the index's fall of 43.6%. The 'C' Share's portfolio has fallen by 22.4%
since its start in October 2000, while the AIM index is down by 66.2% in the
same period. It is not therefore surprising that the company appears at the top
of many independent performance tables.
At the end of the year the Ordinary Share portfolio was 89% invested in
qualifying investments and the first tranche of the 'C' Share portfolio was
fully invested. The 'C' Share portfolio as a whole was 59% invested in
qualifying investments. We have a further 8 months to invest the balance.
Although the pipeline of new qualifying investments is currently not flowing
very freely, I am confident that we shall achieve within that period the
necessary 70% invested in qualifying investments if not our target of 80%.
Dividends
Shareholders will recall that the prospectuses issued in connection with both
the Ordinary and 'C' Share issues stated that as the portfolio became fully
invested revenue income would decline thus limiting the scope for revenue
dividends. Last October the board declared no interim revenue dividend in
respect of the Ordinary Shares and an interim dividend of 0.5 pence per share in
respect of the 'C' Shares. At that time I also stated that it was unlikely that
there would be a capital dividend in respect of either the Ordinary or 'C'
shares in respect of the current financial year unless there was a turnaround in
stock market sentiment. By the end of the financial year not only had there
been no such turnaround but market sentiment had declined further.
However the board is recommending a final revenue dividend of 0.50 pence per
share in respect of both the Ordinary and 'C' Shares which make a total revenue
distribution for the year of 0.50 pence per ordinary share (2002: 0.50 pence)
and 1.00 pence per 'C' Share (2002: 2.00 pence). The final dividends will be
paid on 27 June 2003 to shareholders on the register on 23 May 2003.
Cancellation of shares
During the year under review the board exercised its power to buy 32,000
Ordinary Shares at an average price of 63 pence per share and 38,000 'C' Shares
at an average price of 65 pence per share. The prices paid represented a
discount of approximately 12% and 19% respectively for Ordinary Shares and 'C'
Shares on the net asset value per share. At the forthcoming Annual General
Meeting shareholders' consent will again be sought to renew the board's power to
make such purchases should it deem it appropriate to do so.
The Alternative Investment Market - AIM
In December last year AIM celebrated the enrolment of the 700th company since it
was founded in 1995. There are now 705 companies traded on AIM which have a
total market capitalisation of £9.6 billion. Despite a slowdown in the number
of new companies listing on AIM in 2002, the market was still responsible for
40% of all flotations by number across Europe during the year. It is in
difficult market conditions such as those of the past year that the strengths of
AIM with its tax breaks become apparent. Its relative resilience also reflects
the fact that it caters for the very small niche businesses that are not so
reliant on the economic environment and not so affected by big geopolitical
events.
There has been much recent press coverage about the future of AIM under the
proposed new European Directives. The fear is that several of these directives
will remove the main distinctions between AIM and the Full List, leaving OFEX as
the only flexible market with AIM-type flexible rules and tax breaks. This
could potentially have a serious impact on the future availability of qualifying
investments and as such it is something that the board and the manager are
watching keenly. A number of potential ways around this problem are currently
being aired. AIM's very success should make its future of some importance to
the London Stock Exchange as it plainly is to the UK's economic growth prospects
and the companies which have been able to raise capital on the market. All this
makes the likelihood of an acceptable solution greater. Meanwhile, the
legislation seems at present to have a five year phasing in period from its
enactment, so the fund should have plenty of time to react to any changes that
do occur.
Outlook
We have now experience of a bear market for three years. Pundits tell us that
we are unlikely to see a repeat of the increases in values we saw in the 1990s
for many years. Admittedly the type of huge bubble which burst two years ago is
not witnessed by many generations. However, from little acorns do big trees
grow and we invest in 'little acorns' which can grow much faster than mature
trees. Increasingly companies in our portfolio are declaring dividends and a
good proportion of them are making sound progress. In due course this will be
recognised in their share price ratings. In my statement last year I said that
in the next year or so they and other investments should realise the potential
which vindicates our original investment decision. Perhaps the emphasis should
now be on that word 'so'. Generally we have a promising portfolio and I see no
reason why in due course such promise should not be realised.
Michael Reeve
Chairman 12 May 2003
DETAILS OF THE PORTFOLIO OF INVESTMENTS
The following are the details of qualifying investments at 28 February 2003.
Company and Description Market Value Book Cost Holding % of
at 28 February 2003 £'000 (shares) capital
£'000 owned
Ordinary 'C' Ordinary 'C' Ordinary 'C'
Shares Shares Shares Shares Shares Shares
Transport Systems. Supplier of traffic
management systems. 116 - 250 - 1,540,000 - 10.8
Clipper Ventures. Owners and organisers
of the Clipper Around Alone round the
world yacht races. 124 71 350 250 828,400 471,698 10.0
1st Dental Laboratories. Manufacturer of
dental equipment. - 292 - 350 - 1,296,296 9.6
Bank Restaurant Group. Restaurant chain
operator. 47 94 250 500 1,250,000 2,500,000 8.8
Conder Environmental. Manufacture of
oil spill recovery and pollution control
equipment, sewage treatment and
underground storage tanks. 122 243 212 423 1,060,000 2,115,000 8.5
Avionic Services. Systems and
consultancy services to the airport and
aviation sector. - 208 - 350 - 1,666,667 8.1
Deltex Medical Group. Developer of non
invasive heart monitoring devices. 81 163 239 478 956,896 1,913,796 7.7
Hearing Enhancement. Developer of the
mini-loop system for the hard of
hearing. 35 71 125 250 262,500 525,000 7.1
Vianet. Provider of remote monitoring
devices for the vending machine
industry. 10 130 400 200 308,000 4,000,000 7.0
Pilat Media Global. Software provider
for the global multi-channel
broadcasting market. 115 230 200 400 1,000,000 2,000,000 6.8
Stagecoach Theatre Arts. Operator of
part-time performing arts schools for
youngsters. 166 332 193 386 207,529 415,058 6.4
Adval. Design and delivery of bespoke
training courses for human resources
development for major corporations. 53 55 480 438 844,443 877,162 5.7
Capcon. Provider of audit, stock taking
and commercial investigation services. 75 203 108 292 135,000 365,000 5.5
Lloyds British Testing. Engineering and
support services to the construction
industry. - 324 - 332 - 1,620,759 5.1
Company and Description Market Value Book Cost Holding % of
at 28 February 2003 £'000 (shares) capital
£'000 owned
Ordinary 'C' Ordinary 'C' Ordinary 'C'
Shares Shares Shares Shares Shares Shares
Protec. Development and installation of
electronic security and information
systems. 132 195 149 195 1,886,101 2,783,000 3.8
Clarity Commerce Solutions. Supplier of
electronic point of sale software and
membership software solutions to the
leisure sector. - 316 - 386 - 514,522 3.7
PM Group. Design, manufacture and
service of weighing systems for the
haulage and waste management industries. - 635 - 410 - 410,000 3.3
InterLink Foods. Manufacturer of own
label cakes for supermarket groups. 461 444 168 391 153,140 147,467 3.2
Comeleon. Provider of advanced imaging
technologies. 18 35 263 525 159,252 318,504 3.1
Hartest. Manufacturer and distributor
of specialist laboratory equipment. - 186 - 298 - 3,719,576 3.1
Ideal Shopping Direct. Sales
organisation direct to consumer via
catalogue and TV channel. 168 212 269 200 395,000 500,000 3.1
Tepnel Life Science. Developer of
automated DNA technologies. 66 164 164 409 820,635 2,044,472 3.0
AIT Group. Provider of Web based
solutions for the retail financial
services sector. 66 132 200 400 228,572 457,143 2.8
Warthog. Developer of computer games 73 145 192 382 429,303 855,814 2.7
software.
Fitzhardinge. Provider of real estate
solutions to the UK and International
property sectors. 208 417 225 450 195,653 391,304 2.5
Advanced Medical Solutions Group.
Developer and manufacturer of woundcare
products. - 274 - 300 - 3,529,411 2.5
Hartford. London based restaurant and
bar operator. 122 - 325 - 12,187,500 - 2.3
GX networks. Provider of
telecommunications services. 110 250 450 500 4,908,947 11,095,000 2.2
Tandem. Manufacturer and distributor of
bicycles, golfing equipment and snooker
tables. 138 - 250 - 5,000,000 - 2.0
Blooms of Bressingham. Operator of
garden centres. 58 43 340 190 267,582 200,000 1.9
Honeycombe. Managed pub operator in
North West England. 279 - 293 - 532,000 - 1.8
Landround. Organiser of travel
promotions and incentives for corporate
clients. 150 - 205 - 100,000 - 1.8
Company and Description Market Value Book Cost Holding % of
at 28 February 2003 £'000 (shares) capital
£'000 owned
Ordinary 'C' Ordinary 'C' Ordinary 'C'
Shares Shares Shares Shares Shares Shares
Metnor Group. Hot dip galvaniser of
steel products. 343 - 208 - 207,865 - 1.4
Oasis Healthcare. Consolidator and
operator of dental practices throughout
the UK. - 170 - 419 - 1,047,535 1.3
Inventive Leisure. Bar and nightclub 271 - 261 - 275,000 - 1.2
operator.
Mears. Building maintenance contractor
to local authorities, the MOD and the
private sector. 409 - 79 - 606,062 - 1.1
MacLellan. Facilities management. 412 - 258 - 680,263 - 0.9
Transcomm. Operator of the Molsitex
mobile network used for data
communications. 47 - 288 - 721,000 - 0.7
XKO. Suppliers of business enterprise
and e-commerce software and systems
integration services. 62 - 251 - 209,000 - 0.7
Fulcrum Pharma. Provider of drug
development services. - 77 - 93 - 812,678 0.7
Giardino Group. Owner and operator of
cafes and restaurants. 68 - 149 - 119,149 - 0.6
Maelor. Developer of off-patent
medicines and medical devices. 23 - 139 - 102,777 - 0.5
NMT Group. Developer and manufacturer
of safety syringes. 23 - 350 - 2,333,333 - 0.3
Systems Union. Provision of accounting
software internationally. 22 - 46 - 35,471 - 0.1
Total qualifying investments at
28 February 2003 4,673 6,111 8,329 10,197
Close Brothers AIM VCT PLC
Statement of Total Return (incorporating the revenue account)
for the year ended 28 February 2003
Ordinary Shares 'C' Shares Total
28 February 2003 28 February 2003 28 February 2003
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Losses on investments - (2,872) (2,872) (2,931) (2,931) - (5,803) (5,803)
Investment income 110 - 110 392 - 392 502 - 502
Investment management (43) (129) (172) (93) (281) (374) (136) (410) (546)
fee
Other expenses (49) - (49) (95) - (95) (144) - (144)
Return/(loss) on
ordinary activities
before tax 18 (3,001) (2,983) 204 (3,212) (3,008) 222 (6,213) (5,991)
Tax on ordinary - - - - - - - - -
activities
Return/(loss)
attributable to equity
shareholders 18 (3,001) (2,983) 204 (3,212) (3,008) 222 (6,213) (5,991)
Equity Dividends (51) - (51) (200) - (200) (251) - (251)
Transfer (from)/to
reserves (33) (3,001) (3,034) 4 (3,212) (3,208) (29) (6,213) (6,242)
Return/(loss) per share
(pence) 0.2 (29.9) (29.7) 1.0 (16.1) (15.1) 0.7 (20.7) (20.0)
The revenue column of this statement represents 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.
Close Brothers AIM VCT PLC
Statement of Total Return (incorporating the revenue account)
for the prior year ended 28 February 2002
Ordinary Shares 'C' Shares Total
28 February 2002 28 February 2002 28 February 2002
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Losses on investments - (2,333) (2,333) - (1,358) (1,358) - (3,691) (3,691)
Investment income 156 - 156 716 - 716 872 - 872
Investment management fee (64) (178) (242) (112) (319) (431) (176) (497) (673)
Other expenses (45) - (45) (81) - (81) (126) - (126)
Return/(loss) on ordinary
activities before tax
47 (2,511) (2,464) 523 (1,677) (1,154) 570 (4,188) (3,618)
Tax on ordinary 52 - 52 (99) 60 (39) (47) 60 13
activities
Return/(loss)
attributable to equity
shareholders 99 (2,511) (2,412) 424 (1,617) (1,193) 523 (4,128) (3,605)
Equity Dividends (50) (351) (401) (400) - (400) (450) (351) (801)
Transfer to/(from)
reserves 49 (2,862) (2,813) 24 (1,617) (1,593) 73 (4,479) (4,406)
Return/(loss) per share
(pence) 1.0 (25.0) (24.0) 2.1 (8.1) (6.0) 1.7 (13.7) (12.0)
The revenue column of this statement represents 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.
Close Brothers AIM VCT PLC
Balance Sheet as at 28 February 2003
Ordinary 'C' Total
Shares Shares
28 February 28 February 28 February
2003 2003 2003
£'000 £'000 £'000
Fixed asset investments
Qualifying investments 4,673 6,111 10,784
Non-qualifying investments 997 6,000 6,997
Total fixed asset investments 5,670 12,111 17,781
Current assets
Debtors 43 441 484
Cash at bank and in hand 40 1,700 1,740
83 2,141 2,230
Creditors: amounts falling due
within one year (76) (186) (262)
Net current assets 7 1,955 1,962
Total assets less current liabilities 5,677 14,066 19,743
Capital and reserves
Called up share capital 5,004 9,981 14,985
Special reserve 4,460 8,953 13,413
Capital redemption reserve 46 24 70
Realised capital reserve (206) (864) (1,070)
Unrealised capital reserve (3,658) (4,075) (7,733)
Revenue Reserve 31 47 78
Total equity shareholders' funds 5,677 14,066 19,743
Net asset value per share (pence) 56.73 70.46 65.87
The financial statements were approved by the Board of Directors on 12 May 2003
and were signed on its behalf by
Michael Reeve
Chairman
Close Brothers AIM VCT PLC
Balance Sheet as at 28 February 2002
Ordinary 'C' Total
Shares Shares
28 February 2002 28 February 2002 28 February 2002
£'000 £'000 £'000
Fixed asset investments
Qualifying investments 7,387 6,607 13,994
Non-qualifying investments 995 8,992 9,987
Total fixed asset investments 8,382 15,599 23,981
Current assets
Debtors 195 82 277
Cash at bank and in hand 565 1,984 2,549
760 2,066 2,826
Creditors: amounts falling due
within one year (410) (367) (777)
Net current (liabilities)/assets 350 1,699 2,049
Total assets less current liabilities 8,732 17,298 26,030
Capital and reserves
Called up share capital 5,020 10,000 15,020
Special reserve 4,480 8,978 13,458
Capital redemption reserve 30 5 35
Realised capital reserve 16 (633) (617)
Unrealised capital reserve (878) (1,095) (1,973)
Revenue Reserve 64 43 107
Total equity shareholders' funds 8,732 17,298 26,030
Net asset value per share (pence) 86.97 86.49 86.65
Close Brothers AIM VCT PLC
Cash Flow Statement
for the year to 28 February 2003
Ordinary Shares 'C' Total
Year to Shares
28 February Year to Year to
2003 28 February 2003 28 February 2003
£'000 £'000 £'000
Operating activities
Dividend income received 57 28 85
Investment income received 54 316 370
Deposit interest received 10 66 76
Other income received - - -
Investment management fees paid (222) (469) (691)
Other cash payments (34) (62) (96)
Net cash outflow from operating activities (135) (121) (256)
Taxation
UK income tax repaid - -
Capital expenditure and financial investment
Purchase of qualifying investments (340) (2,965) (3,305)
Purchase of non-qualifying investments - - -
Disposals of qualifying investments 315 132 447
Disposals of non-qualifying investments - 3,001 3,001
Net cash (outflow)/inflow from investing activities (25) 168 143
Equity dividends paid
Revenue dividends paid on ordinary shares - (100) (100)
Capital dividends paid on ordinary shares (351) (200) (551)
Net cash outflow before financing (511) (253) (764)
Financing
Issue of equity net of expenses - - -
Redemption of shares net of expenses (14) (31) (45)
Net cash outflow from financing (14) (31) (45)
Decrease in cash in the year (525) (284) (809)
Close Brothers AIM VCT PLC
Cash Flow Statement
for the year to 28 February 2002
Ordinary Shares 'C' Total
Year to Shares
28 February Year to Year to
2002 28 February 2002 28 February 2002
£'000 £'000 £'000
Operating activities
Dividend income received 66 8 74
Investment income received 68 582 650
Deposit interest received 20 129 149
Other income received 5 7 12
Investment management fees paid (260) (402) (662)
Other cash payments (52) (78) (130)
Net cash (outflow)/inflow from operating activities (153) 246 93
Taxation
UK corporation tax paid 151 2 153
Capital expenditure and financial investment
Purchase of qualifying investments (1,797) (5,715) (7,512)
Purchase of non-qualifying investments - (5,998) (5,998)
Disposals of qualifying investments 1,543 16 1,559
Disposals of non-qualifying investments 1,001 5,994 6,995
Net cash inflow/(outflow) from investing activities 747 (5,703) (4,956)
Equity dividends paid
Revenue dividends paid on ordinary shares (150) (356) (506)
Capital dividends paid on ordinary shares (504) - (504)
Net cash inflow/(outflow) before financing 91 (5,811) (5,720)
Financing
Issue of equity net of expenses - 7,134 7,134
Redemption of shares net of expenses (28) (8) (36)
Cancellation of share premium - (18) (18)
Net cash (outflow)/inflow from financing (28) 7,108 7,080
Increase in cash in the year 63 1,297 1,360
This information is provided by RNS
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