Final Results

Gresham House PLC 26 April 2001 The Board of Directors of this Company have this evening approved the Preliminary Final Statement and Dividend for the year ended 31st December 2000. The Record date for the final dividend will be 18th May 2001 and the dividend will be payable on 22nd June 2001 with Warrants posted by first class mail on 21st June 2001. GRESHAM HOUSE plc 36 Elder Street, London E1 6BT Telephone: 020-7588 7352 Facsimile: 020-7377 2946 CHAIRMAN'S STATEMENT The results for the year ended 31st December, 2000 show a substantially increased return on ordinary activities after taxation for the combined Revenue and Capital Accounts of £15.2m against £1m last year. Two thirds of this increase is due to the gains on investments, the majority of which is as a result of the improvement in the market value of our holding in Transense Technologies. At the year end Gresham held (and still holds today) 210,000 shares in Transense at a mid-market price of £24.27 against a price of £20.25 yesterday. The diluted net asset value per Gresham ordinary share increased from 202.3p last year to 527.8p as at the year end, an increase of approximately 160% against the previous year. Total Revenue income has increased from £2.2m to £8.6m. Of this figure share dealing profits accounted for £4.9m and whilst dividend income dropped from £108,000 to £55,000 the underlying property rental stream has, as previously predicted, almost doubled to £3.l m. The increase in rental income reflects the continuing growth in our subsidiary property companies which now between them hold 68 individual property units. Shareholders will note that Other expenses have increased significantly over the previous year. The major part of this increase is due to provisions made for essential works to investment properties and against a development in hand. Some shareholders have requested for more information on the investment property subsidiaries and therefore an analysis of these properties will be shown in the Annual Report and Accounts. Shareholders will be interested to know that during the last two decades these property companies have operated successfully without any financial injection by Gresham House plc itself. As at the year end the cost of our investment in the property sub-group, which has now accumulated net assets of approximately £7.0m, prior to capital gains, was £71,500. As reported last year and in the interim statement we continue to consider proposals to re-finance the 2.5% Gresham House Finance plc Secured Loan Stock which is due for repayment on 31st December, 2001. We are pleased that the significant efforts of the management team over the last five years have now been reflected in these results and we continue to seek new opportunities to ensure our continued growth for the future. As a result of the continued improvement in the position of the Group your Board proposes that the final dividend be increased from lp to 1.5p per share. A P Stirling 26th April, 2001 GRESHAM HOUSE plc PRELIMINARY FINAL STATEMENT CONSOLIDATED STATEMENT OF TOTAL RETURN for the Year ended 31 st December, 2000 2000 1999 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains on Investments - 10,047 10,047 - 313 313 Income: Dividend and Interest Income 431 - 431 388 - 388 Rental Income 3,101 - 3,101 1,659 - 1,659 Other operating income 5,057 - 5,057 195 - 195 8,589 10,047 18,636 2,242 313 2,555 Other expenses (2,405) (2,405) (694) - (694) Net return before finance costs and taxation 6,184 10,047 16,231 1,548 313 1,861 Interest payable and similar charges (1,513) - (1,513) (822) - (822) Discount on loan acquired 525 - 525 - - - Return on ordinary activities before taxation 5,196 10,047 15,243 726 313 1,039 Taxation (6) (6) 1 - 1 Return on ordinary activities after taxation attributable to equity shareholders 5,190 10,047 15,237 727 313 1,040 Dividend - Equity shares (64) - (64) (42) - (42) Transfer to reserves 5,126 10,047 15,173 685 313 998 Basic return per Ordinary Share 122.4p 237.0p 359.4p 17.2p 7.4p 24.6p Diluted return per Ordinary Share 115.1p 222.9p 338.0p 16.6p 7.1p 23.7p Notes (i) The revenue column of this statement is the consolidated profit and loss account of the group. (ii) In accordance with the Company's accounting policies the above figures take into account the results of significant investments only to the extent of dividends received amounting to £45,520. (iii) Dividends - Ordinary shares: - proposed final dividend of 1.5p per share (1999: 1.0p) payable on 22nd June, 2001 to shareholders on the register at 18th May, 2001. 64 42 (iv) The summary of results for the year ended 31 st December, 2000 does not constitute statutory accounts within the meaning of s240 of the Companies Act 1985. The full statutory accounts which will be available to shareholders by 18th May, 2001 have not been reported on by the Company's auditors and have not been delivered to the Registrar of Companies . Full accounts in respect of the year ended 31 st December, 1999 have been delivered to the Registrar of Companies and the Auditor's Report on those accounts was unqualified. (v) Basic revenue and capital returns per ordinary share are based on the net revenue return on ordinary activities before deduction of dividends of £5,190,000 (1999:£727,000) and on the capital return of £10,047,000 (1999: £313,000) respectively, and on 4,239,712 (1999: 4,238,000) ordinary shares being the weighted average of those in issue during the year. The diluted revenue and capital returns per ordinary share are based on the net revenue return on ordinary activities before deduction of dividends of £5,190,000 (1999: £727,000) and on the net capital return of £10,047,000 (1999: £313,000) respectively, and on 4,506,941 (1999: 4,390,507) shares. The number of shares is based upon the weighted average number of shares in issue during the year together with 267,229 (1999: 152,507) shares deemed to have been issued at nil consideration pursuant to options outstanding. GRESHAM HOUSE plc PRELIMINARY FINAL STATEMENT CONSOLIDATED BALANCE SHEET as at 31 st December, 2000 2000 1999 £'000 £'000 Investments Securities 8,631 2,580 Properties 27,731 27,045 Tangible assets 485 485 36,847 30,110 Current assets 13,131 6,909 Creditors - amounts falling due within one year 10,086 2,796 Net current assets 3,045 4,113 Total assets less current liabilities 39,892 34,223 Creditors - amounts falling due after more than one year 15,822 25,339 24,070 8,884 Capital and reserves Called up share capital 1,073 1,060 Share premium account 242 242 Other reserves Revaluation reserve 7,829 7,829 Capital reserve - realised 22,918 17,569 Capital reserve - unrealised 5,195 497 Revenue reserves (13,187) (18,313) Equity shareholders' funds 24,070 8,884 Basic Net Asset Value per ordinary share 560.7p 209.6p Diluted Net Asset Value per ordinary share 527.8p 202.3p Notes The basic Net Asset Value per ordinary share is calculated by reference to the group net assets as at 31st December, 2000 of £24,070,000 (1999: £8,884,000) and 4,293,000 (1999: 4,238,000) ordinary shares being the number of ordinary shares in issue at the year end. The diluted Net Asset Value per ordinary share is calculated by reference to the group net assets as at the year end of £24,070,000 (1999: £8,884,000) and 4,560,229 (1999: 4,390,507) ordinary shares in issue. The number of shares is based upon the number of shares in issue at the year end together with 267,229 (1999:152,507) shares deemed to have been issued at nil consideration pursuant to the options outstanding at the year end in accordance with Financial Reporting Standard No. 14. GRESHAM HOUSE plc PRELIMINARY FINAL STATEMENT CONSOLIDATED CASH FLOW STATEMENT for the Year ended 31st December, 2000 2000 1999 Notes £'000 £'000 Cashflow from operating activities Investment income received 55 103 Interest received 370 259 Rental income received 3,113 1,541 Other cash receipts/(payments) 3,456 (766) Net cash inflow from operating activities 1 6,994 1,137 Returns on investment and servicing of finance Interest paid on 2.5% Secured Redeemable Loan Stock, 2001 (152) (153) Interest paid on property loans (1,061) (607) Net cash outflow from Investments and servicing of finance (1,213) (760) Capital expenditure and financial investment Purchase of tangible fixed assets (32) - Purchase of investments (1,814) (376) Sales of investments 5,810 251 Net loans (advanced) (435) (13) Purchase of investment properties (686) (12,785) Purchase of developments in hand (1,706) - Net cash inflow/(outflow) from capital expenditure and financial investment 1,137 12,923 Corporation tax paid - (64) Equity dividends paid (42) (21) Cash inflow before use of liquid resources and financing 6,876 12,631 Management of liquid resources Sale/(acquisition) of listed securities held for dealing 180 (202) Financing Acquisition of 2.5% Secured Redeemable Loan Stock by group company - (44) Repayment of loans (2,823) (2,014) Receipt of loans - 19,770 Share capital issued as a result of the exercise of options 13 Net cash out now from financing (2,810) 17,712 Increase/(decrease) in cash 3 4,246 4,879 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS 2000 1999 £'000 £'000 Issue of ordinary shares at par 13 - Retained profit for the year 5,126 685 Revaluation surplus - 3,840 Net movement on capital reserves 10,047 313 15,186 4,838 Shareholders' funds at 1st January 8,884 4,046 Shareholders' funds at 31st December 24,070 8,884 GRESHAM HOUSE plc PRELIMINARY FINAL STATEMENT NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT for the Year ended 31st December, 2000 1 Reconciliation of operating profit to operating cash flows. 2000 1999 £'000 £'000 Return on ordinary activities before taxation 5,196 726 Interest payable 1,513 822 6,709 1,548 Depreciation 31 11 Discount on acquisition of loan issued by group undertaking (525) - Taxation on franked investment income - (22) Corporation tax adjustment (6) 22 Increase in debtors (31) (850) Increase in creditors 816 428 Net cash flow from operating activities 6,994 1,137 2 Reconciliation of net cash flow to movement in net debt Increase in cash for the period 4,246 4,879 Cash outflow from repayment of debt 2,823 2,058 Cash inflow from loans received - (19,770) Cash outflow(inflow) from increase/(decrease) in liquid resources (180) 202 Change in net debt resulting from cash flows 6,889 (12,631) Discount on acquisition of loan issued by group undertaking 525 - Discount on acquisition of loan stock issued by group undertaking - 26 Movement in net debt in the year 7,414 (12,605) Net debt at beginning of year (21,360) (8,755) Balance at end of year (13,946) (21,360) 3 Analysis of net debt At 1st Cash Other At 31st January flow non-cash December 2000 changes 2000 £'000 £'000 £'000 £'000 Cash in hand and at bank/brokers 4,578 4,229 8,807 Overdrafts (107) 17 (90) 4,246 Debt due within one year (801) 603 (6,772) (6,970) Debt due after one year (25,339) 2,220 7,297 (15,822) 7,069 Current asset investments 309 (180) 129 (21,360) 6,889 525 (13,946)

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