Final Results
Crown Place VCT PLC
10 October 2007
10 October 2007
CROWN PLACE VCT PLC
Preliminary announcement of final results for the sixteen months ended 30 June
2007.
Crown Place VCT PLC ('the Company'), managed by Close Ventures Limited, today
announces the preliminary results for the sixteen months ended 30 June 2007. The
announcement has been approved by the Board of Directors on 9 October 2007.
Financial Highlights
Shareholder value since launch
Proforma (i) Proforma (i)
Murray VCT Murray VCT 2 Crown Place
PLC PLC VCT PLC*
Previous holders of shares in:
Dividends per share paid to 30 June 2007 (pence per share) (ii) 33.71 34.72 29.23
Net asset value (pence per share) as at 30 June 31.91 38.15 44.84
2007 (i)
65.62 72.87 74.07
(i) The proforma shareholder value is based on the dividends paid to 30
June 2007 per share, with a pro-rata net asset value per share based upon
the proportion of shares received by Murray VCT PLC (now renamed CP1
VCT PLC) and Murray VCT 2 PLC (now renamed CP2 VCT PLC) shareholders at the
time of the merger with Crown Place VCT PLC on 13 January 2006.
(ii) Prior to 6 April 1999, venture capital trusts were able to add 20% to
dividends, and figures for the period until 6 April 1999 are included at
the gross equivalent rate actually paid to shareholders.
* Formerly Murray VCT 3 PLC
In addition to the dividends paid above, the Directors have declared a first
dividend for the period ending 30 June 2008 out of 1.25 pence per Crown Place
VCT PLC share (0.8 pence to be paid out of revenue profits and 0.45 pence out of
realised capital gains), subject to approval from HM Revenue & Customs. The
record date and payment date for this dividend will be announced on the London
Stock Exchange RNS Service.
Reference to the 'Group' in this announcement is reference to Crown Place VCT
PLC and its subsidiaries CP1 VCT PLC and CP2 VCT PLC.
For further information, please contact:
Patrick Reeve/ Emil Gigov Roddi Vaughan-Thomas
Close Ventures Limited Peregrine Communications Group
Tel: 020 7422 7830 Tel: 020 7223 1552
www.closeventures.co.uk
Chairman's statement
Overview
I am pleased to present the results for the 16 month period to 30 June 2007.
During this period the Group made significant progress in transforming the
investment portfolio into a broadly based portfolio which combines a strong
income stream with protection of capital, as well as offering the prospect for
capital growth. The Company paid dividends totalling 3.3 pence per share in the
period, which are tax free to investors. The dividends were paid out of income
and realised capital profits and are in line with the Group's strategy to pay
regular and predictable dividends to shareholders. At the same time the net
asset value per share increased from 43.0 pence at the start of the period to
44.8 pence as at 30 June 2007. Total shareholder value created in the 16 month
period was 5.1 pence per share, or 11.9%.
Results
In the 16 months to 30 June 2007, the Group made a revenue profit after tax of
£1.4 million and a total profit after tax of £3.8 million. Total annualised
expenses as a percentage of net assets, excluding non-recurring items and
management performance fees, were 3.1% compared with 4.8% for the year to 28
February 2006. Cost savings from the merger in January 2006 are in line with
the forecasts made at that time.
The net asset value per share increased to 44.8 pence compared to 43.0 pence at
the beginning of the period and 44.3 pence at 31 December 2006, the latest
interim report date.
The Company has now utilised in full the tax losses carried forward from
previous years and therefore it is expected that the tax charge will increase in
future years.
Portfolio review
During the period the Group made considerable progress in realising the older
investments and reinvesting the proceeds in investments that are more suited to
the overall portfolio investment policy. Full or partial realisations were made
from seven unquoted investments, the proceeds of which were at or above book
value. The total consideration received was £4.8 million. Following the period
end the Group realised a further £3.4 million from the sale of RMS Europe Group
Limited and The Bold Pub Company Limited and the repayment of outstanding loan
stock by Palgrave Brown (Holdings) Limited. These proceeds are reflected in the
valuations.
The value of the investment portfolio increased during the period. In the
unquoted portfolio, RMS Europe Group Limited, House of Dorchester Limited, PSCA
International Limited and Tower Bridge Health Clubs Limited performed strongly
and this has been reflected in the valuations. Against this, we have reduced
the valuation of Unique Communications Group Limited, J&S Marine Limited and the
Crown Hotel Harrogate Limited. The prospects for many of the companies in the
unquoted portfolio are promising, although this is yet to be translated in
increased financial performance and hence valuations. Xceleron Limited, which
is well positioned to deliver strong growth and profitability in the coming
year, is an example of a company in this category.
The AIM portfolio also performed well during the period and the Group realised
substantial gains from the sale of its holdings in Tanfield Group plc, Dobbies
Garden Centres plc, Careforce Group plc, Cello Group plc, Synexus Clinical
Research plc and Talarius plc. The total proceeds from such realisations during
the period were £6.9 million against cost of £2.6 million. Following the period
end, the Group realised a further £0.8 million by selling its remaining holdings
in Dobbies Garden Centres plc and Zetar plc, and further reducing its investment
in Cello Group plc.
The split of the existing unquoted portfolio value by broad investment category
is depicted below:
http://www.rns-pdf.londonstockexchange.com/rns/4672f_-2007-10-10.pdf
The proportion of asset-based investments, representing those companies with
freehold or long leasehold property assets, increased from 22% at the beginning
of the period, to 50% as at 30 June 2007. At the same time, the proportion of
development capital investments decreased from 73% to 39%.
Since the appointment of Close Ventures Limited as managers of the fund in April
2005, investment in asset-backed companies has increased as a proportion of the
portfolio, providing greater security to the Group. Over the period since Close
Ventures' appointment, the annualised return to shareholders (excluding merger
costs and shareholder action costs ) has been 7.2%.
New investments
The Group made 16 new investments in the period for a total cost of £5.3
million. These include the £1 million investment in Kew Green VCT (Stansted)
Limited, the owner and operator of the Express by Holiday Inn hotel at Stansted
Airport, the £1 million investment in Kensington Health Clubs Limited, a new
freehold health and fitness club development in Olympia, London and the £0.6
million investment in Chichester (Holdings) Limited to fund the Management
Buyout of this profitable drinks distribution business. A list of the
investments in the unquoted portfolio is given in the financial statements.
In addition to the above, £2.2 million was invested in existing portfolio
companies including The Crown Hotel Harrogate Limited, Tower Bridge Health Clubs
Limited, Grosvenor Health Limited, The Dunedin Pub Company VCT Limited and
Novello Pub Limited.
The Group is one of a small number of venture capital trusts that are able to
invest in hotels and care home companies. These two sectors, which provide a
good fit with the portfolio investment strategy, are not permitted investments
for venture capital trusts raised after 1997, thus differentiating the Group
from other VCTs.
Dividends
The Group paid three dividends during the period totalling 3.3 pence per share
(2.5 pence annualised), which is significantly higher than the annual dividend
of 1.0 pence per share suggested at the time of the merger. The first dividend
of 1.25 pence per share was paid on 22 September 2006; a second dividend of 1.25
pence per share was paid on 19 January 2007; and a third dividend of 0.8 pence
per share was paid on 15 June 2007. These dividends are free of tax to
shareholders. The Group's policy is to pay regular and predictable dividends to
investors out of revenue income and realised capital gains. Subject to the
performance of the investment portfolio, the Board will aim to maintain an
annualised dividend distribution of 2.5 pence per share, representing a tax free
yield of 5.6% based on net asset value as at 30 June 2007.
Share buy backs
As set out in the interim report to 31 December 2006, it is the Company's policy
to continue to buy back shares in the market, subject to the overall constraint
that such purchases are in the Company's interest, including the maintenance of
sufficient resources for investment in existing and new investee companies. The
Company bought back 4,684,265 shares in the period under review, at prices
ranging from 35 pence per share to 40 pence per share. As at the period end,
the Group held 7,260,410 Ordinary Shares in Treasury, representing 9.5% of the
issued share capital (excluding Treasury shares). These shares may be re-issued
at a future date.
Outlook
The investment portfolio performed well during the 16 month period to 30 June
2007 and the performance since that date has been in line with the Board's
expectations. Compared with the beginning of the period, the portfolio has a
broader base, with a larger proportion of asset backed investments. While your
Board is cautious on the outlook of the broader UK economy, the majority of the
investee companies have little or no bank debt and therefore are not directly
exposed to the recent volatility of the credit markets. In addition, the Group
has substantial cash balances enabling it to take advantage of investment
opportunities as they arise. As a result, your Board believes that the Group is
well positioned for the future.
Patrick Crosthwaite
Chairman
9 October 2007
Consolidated Income Statement
Audited Audited
Sixteen months to 30 June 2007 Year to 28 February 2006
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Investment income and 2,519 - 2,519 1,073 - 1,073
deposit interest
Investment management fees (291) (872) (1,163) (160) (481) (641)
Other expenses (509) 23 (486) (351) (955) (1,306)
Non-recurring operating (4) - (4) (749) - (749)
expenses
Operating profit/(loss) 1,715 (849) 866 (187) (1,436) (1,623)
Gains on investments - 2,932 2,932 - 2,504 2,504
Profit/(loss) before 1,715 2,083 3,798 (187) 1,068 881
taxation
Taxation (294) 273 (21) 42 - 42
Profit/(loss) for the 1,421 2,356 3,777 (145) 1,068 923
period
Basic and diluted return 1.79 2.97 4.76 (0.32) 2.35 2.03
per Ordinary share (pence)
(excluding Treasury shares)
The total column of this statement represents the Group's income statement,
prepared in accordance with International Financial Reporting Standards ('
IFRS'). The supplementary revenue and capital reserve columns are prepared under
guidance published by the Association of Investment Companies.
The consolidated income statement for the sixteen months to 30 June 2007
includes the results of the subsidiaries CP1 VCT PLC and CP2 VCT PLC.
The (loss)/profit for the year ended 28 February 2006 includes results from the
subsidiaries CP1 VCT PLC and CP2 VCT PLC from the date of acquisition on 13
January 2006.
All revenue and capital items in the above statement derive from continuing
operations.
Consolidated Balance Sheet
Audited Audited
30 June 2007 28 February 2006
£'000 £'000
Non-current assets
Investments 26,237 30,969
Current assets
Trade and other receivables 322 1,496
Cash and cash equivalents 8,367 4,846
8,689 6,342
Total assets 34,926 37,311
Current liabilities
Trade and other payables (552) (694)
Total assets less current 34,374 36,617
liabilities
Non-current liabilities
Provision for bank guarantees - (1,662)
Total liabilities (552) (2,356)
Net assets 34,374 34,955
Equity attributable to
equityholders
Ordinary share capital 8,392 8,610
Share premium 14,422 14,422
Capital redemption reserve 468 250
Own shares held (2,849) (1,908)
Retained earnings 13,941 13,581
Total shareholders' funds 34,374 34,955
Net asset value per Ordinary
share (pence) (excluding
Treasury shares) 44.8 43.0
The consolidated balance sheets as at 30 June 2007 and at 28 February 2006
include the balance sheets of the subsidiaries CP1 VCT PLC and CP2 VCT PLC.
These financial statements were agreed by the Board of Directors, and authorised
for issue on 9 October 2007.
Company Balance Sheet
Audited Audited
30 June 2007 28 February 2006
£'000 £'000
Fixed assets
Fixed asset investments 26,237 30,969
Investment in subsidiary 17,978 17,506
undertakings
44,215 48,475
Current assets
Debtors 313 806
Cash at bank 3,900 1,327
4,213 2,133
Total assets 48,428 50,608
Creditors: amounts falling due (14,054) (15,066)
within one year
Total assets less current 34,374 35,542
liabilities
Provision for bank guarantees - (587)
Total liabilities (14,054) (15,653)
Net assets 34,374 34,955
Capital and reserves
Called up share capital 8,392 8,610
Share premium 14,422 14,422
Capital redemption reserve 468 250
Own shares held (2,849) (1,908)
Retained earnings 13,941 13,581
Total shareholders' funds 34,374 34,955
Net asset value per Ordinary
share (pence) (excluding
Treasury shares) 44.8 43.0
This Company balance sheet has been prepared in accordance with UK GAAP.
These financial statements were approved by the Board of Directors, and
authorised for issue on 9 October 2007.
Consolidated statement of changes in equity
Ordinary Capital Own
share Share Revaluation redemption shares Retained
capital premium reserve reserve held earnings Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 28 February 2006 8,610 14,422 - 250 (1,908) 13,581 34,955
Purchase of own shares for (218) - - 218 - (816) (816)
cancellation
(including costs)
Cost of ordinary shares - - - - (941) - (941)
purchased for Treasury
(including dealing costs)
Net profit for the period - - - - - 3,777 3,777
Dividends paid in period - - - - - (2,601) (2,601)
As at 30 June 2007 8,392 14,422 - 468 (2,849) 13,941 34,374
As at 28 February 2005 3,995 - (15,287) 250 - 28,389 17,347
Adjustment in respect of IAS - - - - - (44) (44)
39
Reclassification of - - 15,287 - - (15,287) -
revaluation reserve
As at 1 March 2005 (restated 3,995 - - 250 - 13,058 17,303
and adjusted)
Net profit for the year - - - - - 923 923
Cost of ordinary shares - - - - (1,908) - (1,908)
purchased for Treasury
Shares issued in year 4,615 14,422 - - - - 19,037
Dividends paid in year - - - - - (400) (400)
As at 28 February 2006 8,610 14,422 - 250 (1,908) 13,581 34,955
Consolidated cash flow statement
Audited Audited
Sixteen months Year to
to 30 June 2007 28 February
2006
£'000 £'000
Cash flows from operating activities
Investment income received 2,549 1,087
Deposit interest received 347 30
Secretarial fees paid (85) (91)
Investment management fees paid (1,242) (694)
Other cash payments (634) (1,324)
Cash generated/(expended) from operations 935 (992)
Tax recovered 1,431 90
Net cash flows from/(used in) operating 2,366 (902)
activites
Cash flows from investing activities
Purchases ofinvestments (7,773) (2,169)
Disposals ofinvestments 14,949 6,349
Payment re loan guarantee (1,662) -
Net cash flows from investing activities 5,514 4,180
Cash flows from financing activities
Equity dividends paid (2,601) (400)
Cash acquired from subsidiaries at date - 3,791
of acquisition
Repurchase of Ordinary shares (817) (140)
Purchase of Ordinary shares for (941) (1,897)
Treasury
Net cash flows (used in)/from financing
activities (4,359) 1,354
Increase in cash and cash equivalents 3,521 4,632
Cash and cash equivalents at start of 4,846 214
period
Cash and cash equivalents at end of 8,367 4,846
period
The consolidated cash flow statement for the sixteen months to 30 June 2007
includes the transactions of the subsidiaries CP1 VCT PLC and CP2 VCT PLC.
The consolidated cash flow statements for the year ended 28 February 2006
include the transactions of the subsidiaries CP1 VCT PLC and CP2 VCT PLC from
the date of the acquisition on 13 January 2006.
Notes to the announcement
1. Details about the Manager
Crown Place VCT PLC is managed by Close Ventures Limited. Close Ventures Limited
is a subsidiary of Close Brothers Group plc and is authorised and regulated by
the Financial Services Authority.
2. Statutory accounts
The financial information set out in the announcement does not constitute the
Company's statutory accounts for the periods ended 30 June 2007 or 28 February
2006, as defined in Section 240 of the Companies Act 1985, but is derived from
those accounts. Statutory accounts for the year ended 28 February 2006 have been
delivered to the Registrar of Companies and those for 30 June 2007 will be
delivered following the Company's Annual General Meeting. The Auditors have
reported on those accounts; their reports were unqualified and did not contain
statements under section 237(2) or (3) of the Companies Act 1985.
Whilst the financial information included in this preliminary announcement has
been computed in accordance with International Financial Reporting Standards
(IFRSs), this announcement does not itself contain sufficient information to
comply with IFRSs. The Company expects to publish full financial statements
that comply with IFRSs within the next two weeks.
3. Accounting policies
The accounts have been prepared on the basis of the accounting policies set out
in the previous year's financial statements for the year ended 28 February 2006.
4. Basic and diluted return per share
Return per share has been calculated on 79,277,922 Ordinary shares being the
weighted average number of shares in issue in the period (excluding Treasury
shares).
There are no convertible instruments, derivatives or contingent share agreements
in issue for the Company hence there are no dilution effects to the return per
share. The basic return per share is therefore the same as the diluted return
per share.
5. Net asset value
The net asset value per share is based on net assets of £34,374,000 and on
76,660,024 Ordinary shares being the number of Ordinary shares in issue
(excluding Treasury shares) at the period end.
This information is provided by RNS
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