Final Results

Gresham House PLC 30 April 2003 GRESHAM HOUSE plc 36 Elder Street, London E1 6BT Telephone: 020 7588 7352, Facsimile: 020 7377 2946 CHAIRMAN'S STATEMENT As all our shareholders will be aware 2002 has been a difficult year for virtually all Investment Trusts and all companies involved in unquoted investments or start up situations. The investment environment has been the most difficult since the traumatic period around 1974. The three years to 31st December 2002 has seen the FTSE All Share Index fall from 3125, which was close to its peak, to 1895, a drop of 39.4%. Our results for the year to 31st December 2002 show an increased loss per ordinary share from 1.5p, for the previous year, to 56.3p. This is largely a reflection of falling markets, combined with a 5.7% fall in income and an increase in other expenses. The basic net asset value per ordinary share however has been relatively resilient, having fallen 11.6% during the year to 488.3p as against the FTSE All Share Index, which in the same period fell from 2558 to 1895, a drop of 25.9%. Put in an overall three-year context your Company's net asset value per ordinary share increased over these same three years from 291.4p to 488.3p, an increase of 67.5%. The share price, despite its recent fall, has increased over the same three-year period by 364.3%. Your Company's share performance has in the past largely reflected that of its better known small company investments. A prime example is that of Transense Technologies, which in recent years has been our largest investment but now represents only 7.7% of the share portfolio, primarily as a result of the drop in its share value resulting from the delay in its flow of royalty income. Consequently Image Scan Holdings, which is also quoted on AIM, becomes our largest holding representing 17.5% of the portfolio. Image Scan's core technology relates to innovative imaging techniques, their interpretation and application. It has developed an expertise, supported by patent applications, in multi-view X-Ray imaging, where it is possible to extract three-dimensional information from objects under inspection. It has particular relevance in the field of security, such as airport baggage inspection, and in industrial inspection, evidenced by in-line and on-line 3D X-Ray inspection of assembled high value and safety critical components. Continuing our strategy of seeking innovative early stage investments we subscribed for an equity interest in the formation of SpaceandPeople Limited at the beginning of 2001. SpaceandPeople Limited specialises in the marketing of promotional areas of the UK's leading shopping centres. In its first two years of trading it increased the portfolio of shopping centres under its management to seventy leading centres addressing a weekly footfall of over fifteen million people. This new form of highly economic advertising and customer communication media shows every prospect of offering substantial potential growth. The performance of the property portfolio has remained steady. A number of renovations have been carried out to older buildings and in one case we have completely rebuilt one of our large warehouse units. The costs of these improvements, which have increased the value of the portfolio, have been reflected by a similar increase in the related borrowings. The performance of your Company will of course largely reflect that of the economy as a whole and in particular the general economic sentiment, in that it materially affects the fortunes of young companies. We continue to see a number of potentially attractive investments but we remain cautious as to growth in the short term. In consequence your Board proposes that the final dividend be maintained at its present level of 3.1p. A P Stirling 29th April, 2003 ----------- ------- ------- ------ ----- --- ------- ------ ------ ----- ---- ------ ------ -------- GRESHAM HOUSE plc ----------- ------- ------- ------ ----- ------------ ------ ----- ---- ------ ------ -------- PRELIMINARY FINAL STATEMENT ----------- ------- ------- ------ ----- ------------------ ---- ------ ------ -------- CONSOLIDATED STATEMENT OF TOTAL RETURN for the Year ended 31st December, 2002 2002 2001 Revenue Capital Total Revenue Capital Total Â£' 000 Â£' 000 Â£' 000 Â£' 000 Â£' 000 Â£' 000 Losses on Investments - (3,497) (3,497) - (2,270) (2,270) Income: Dividend and Interest Income 276 - 276 557 - 557 Rental Income 2,908 - 2,908 3,008 - 3,008 Other operating income 1,056 - 1,056 933 - 933 ------- ------ ------ ------ ------ ------ 4,240 (3,497) 743 4,498 (2,270) 2,228 Other expenses (1,767) (1,767) (1,019) - (1,019) ------- ------ ------ ------ ------ ------ Net return before finance costs and 2,473 (3,497) (1,024) 3,479 (2,270) 1,209 taxation Interest payable and similar charges (1,450) - (1,450) (1,277) - (1,277) ------- ------ ------ ------ ------ ------ Return on ordinary activities before 1,023 (3,497) (2,474) 2,202 (2,270) (68) taxation Taxation - - - - - ------- ------ ------ ------ ------ ------ Return on ordinary activities after taxation attributable to equity 1,023 (3,497) (2,474) 2,202 (2,270) (68) shareholders Dividend - Equity shares (141) - (141) (136) - (136) ------- ------ ------ ------ ------ ------ Transfer to 882 (3,497) (2,615) 2,066 (2,270) (204) reserves ======= ====== ====== ====== ====== ====== Basic return per Ordinary Share 23.2p (79.5) p (56.3) p 50.8p (52.3)p (1.5)p ======= ====== ====== ====== ====== ====== Diluted return per Ordinary Share 21.6p (73.9)p (52.3)p 47.8p (49.3)p (1.5)p ======= ====== ====== ====== ====== ====== Statement of Total Recognised Gains and Losses Group 2002 2001 Â£'000 Â£'000 Profit for the financial 1,023 2,202 year Net movement on capital reserves (3,497) (2,270) Revaluation of investment properties - 235 ------ ------ Total net (losses) / gains recognised in the (2,474) 167 year ====== ====== 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 Â£1,717 . (iii) Dividends - Ordinary 2002 2001 shares: Â£'000 Â£'000 - proposed final dividend of 3.1p per share (2001: 3.1p) payable on 25th June, 2003 to shareholders on the register at 16th 141 136 May, 2003. ----- ------ (iv) The summary of results for the year ended 31st December, 2002 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 16th May, 2003 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 31st December, 2001 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 Â£1,023,000 (2001: Â£2,202,000) and on the net capital return of Â£(3,497,000) (2001: Â£2,270,000) respectively, and on 4,396,526 (2001: 4,337,288) ordinary shares being the weighted average number of those in issue during the year. The diluted revenue per ordinary share is based on the net revenue return on ordinary activities before deduction of dividends of Â£1,023,000 (2001: Â£2,202,000) and on 4,729,490 (2001: 4,608,876) shares. The number of shares is based upon the weighted average number of shares in issue during the year together with 332,964 (2001: 271,588) shares deemed to have been issued at nil consideration pursuant to (i) options outstanding and (ii) the maximum number of shares that can be issued under the terms of the 8% Secured Loan Stock issued by Gresham House Finance plc. ------- ------- ------- ------ ----- --- ------- ------ ------ ----- ------ ------ ------ ------- GRESHAM HOUSE plc ------- ------- ------- ------ ----- ------------ ------ ----- ------ ------ ------ ------- PRELIMINARY FINAL STATEMENT ------- ------- ------- ------ ----- ------------------ ------ ------ ------ ------- CONSOLIDATED BALANCE SHEET as at 31st December, 2002 2002 2001 Â£'000 Â£'000 Investments Securities 6,649 10,203 Properties 30,976 28,883 Tangible assets 382 406 ------ ------ 38,007 39,492 ------ ------ Current assets 7,087 7,315 Creditors - amounts falling due within one year (5,346) (3,771) ------ ------ ----- Net current assets 1,741 3,544 ------ ----- ----- Total assets less current liabilities 39,748 43,036 Creditors - amounts falling due after more than one year (17,860) (18,671) Deferred income (245) (245) ------ ------ 21,643 24,120 ====== ------ ------ Capital and reserves Called up share capital 1,108 1,092 Share premium account 364 242 Other reserves Revaluation reserve 8,064 8,064 Capital reserve - realised 22,403 22,875 Capital reserve - (57) 2,968 unrealised Revenue reserves (10,239) (11,121) ------ ------ ------ Equity shareholders' funds 21,643 24,120 ====== ------ ------ Basic Net Asset Value per ordinary share 488.3p 552.2p ====== ------ ------ Diluted Net Asset Value per ordinary share 454.2p 519.9p ====== ===== Notes Basic net asset value per ordinary share is based on the net assets at 31st December, 2002 of Â£21,643,000 (2001: Â£24,120,000) and 4,432,700 (2001: 4,368,000) ordinary shares being the number of ordinary shares in issue at the year end. Diluted net asset value per ordinary share is based on the net assets at the year end of Â£21,643,000 (2001: Â£24,120,000) and 4,765,644 (2001: 4,639,589) ordinary shares. The number of shares is based upon the number of shares in issue at the year end together with 332,964 (2001:271,588) shares deemed to have been issued at nil consideration pursuant to (i) the options outstanding at the year end and (ii) the maximum number of shares that can be issued under the terms of the 8% Secured Loan Stock issued by Gresham House Finance plc in accordance with Financial Reporting Standard No. 14. GRESHAM HOUSE plc ------- ------- ------- ------ ----- --- ------- ------ ------ ----- ------ ------ ------ ------- GRESHAM HOUSE plc ------- ------- ------- ------ ----- ------------ ------ ----- ------ ------ ------ ------- PRELIMINARY FINAL STATEMENT ------- ------- ------- ------ ----- ------------------ ------ ------ ------ ------- CONSOLIDATED CASH FLOW STATEMENT for the Year ended 31st December, 2002 2002 2001 Notes Â£'000 Â£'000 Cashflow from operating activities Investment income received 106 92 Interest received 166 464 Rental income received 3,479 2,742 Other cash (743) (656) payments ----- ------ Net cash inflow from operating 1 3,008 2,642 activities ====== ====== Returns on investment and servicing of finance Interest paid on 2.5% Secured Redeemable Loan Stock, 2001 (6) (177) Interest paid on 8% Secured Redeemable Loan Stock, 2006 (243) - Interest paid on property (1,183) (1,246) loans Net cash outflow from Investments ------ ------ and servicing of finance (1,432) (1,423) ====== ====== Capital expenditure and financial investment Sale of tangible fixed 10 63 assets Purchase of investments (1,633) (6,244) Sales of 1,690 2,426 investments Net loans repaid 483 192 Purchase of investment properties (2,093) (1,477) Government grants received - 245 Sale of investment - 560 properties Purchase of developments in hand (822) (46) Net cash outflow from capital ------ ------ expenditure and financial (2,365) (4,281) investment ====== ====== ====== ====== Corporation tax paid - - ====== ====== Equity dividends paid (136) (64) ====== ====== Cash outflow before use of liquid resources and financing (925) (3,126) ====== ====== Management of liquid resources Acquisition of listed securities held for (36) (181) dealing Financing Repayment of loans (1,238) (6,367) Receipt of loans 1,929 3,662 Share capital issued at par 138 19 ------ ------ Net cash inflow/(outflow) from 829 (2,686) financing ====== ====== Decrease in cash 3 (132) (5,993) ====== ====== GRESHAM HOUSE plc ------- ------- ------- ------ ----- ------------ ------ ----- ------ ------ ------ ------- PRELIMINARY FINAL STATEMENT ------- ------- ------- ------ ----- ------------------ ------ ------ ------ ------- ------- ------- ------- ------ ----- -------------------------- ------ ------- RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS ------- ------- ------- ------ ----- -------------------------- ------ ------- 2002 2001 Â£'000 Â£'000 Issue of ordinary shares at 138 19 par Retained profit for the 882 2,066 year Revaluation - 235 surplus Net movement on capital reserves (3,497) (2,270) ------ ------ (2,477) 50 Shareholders' funds at 1st January 24,120 24,070 ------ ------ Shareholders' funds at 31st 21,643 24,120 December ====== ====== NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT for the Year ended 31st December, 2002 1 Reconciliation of operating profit to operating cash flows. 2002 2001 Â£'000 Â£'000 Return on ordinary activities before taxation 1,023 2,202 Interest 1,450 1,277 payable ------ ------ 2,473 3,479 Depreciation 14 17 Loan provision charged /(written 4 (130) back) Adjustment on disposal of - (24) subsidiary (Decrease)/increase in debtors 467 (103) Increase/(decrease) in 50 (597) creditors ------ ------ Net cash flow from operating 3,008 2,642 activities ====== ====== 2002 2001 Â£'000 Â£'000 2 Reconciliation of net cash flow to movement in net debt Decrease in cash for the year (132) (6,083) Cash outflow from repayment of 1,238 6,457 debt Cash inflow from loans (1,929) (3,662) received Cash outflow from increase in liquid 36 181 resources ------ ------ Change in net debt resulting from (787) (3,107) cash flows Net debt at 1st January (17,053) (13,946) ------ ------ Net debt at 31st (17,840) (17,053) December ====== ====== GRESHAM HOUSE plc ------- ------- ------- ------ ----- --- ------- ------ ------ ----- ------ ------ ------ ------- GRESHAM HOUSE plc ------- ------- ------- ------ ----- ------------ ------ ----- ------ ------ ------ ------- PRELIMINARY FINAL STATEMENT ------- ------- ------- ------ ----- ------------------ ------ ------ ------ ------- NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT Cont'd for the Year ended 31st December, 2002 3 Analysis of net debt At 1st Cash Other At 31st January flow non-cash December 2002 changes 2002 Â£'000 Â£'000 Â£'000 Â£'000 Cash in hand and at bank / 2,724 (132) 2,592 brokers Debt due within one (1,416) (691) (811) (2,918) year Debt due after one year (18,671) - 811 (17,860) ------- ------ ------ ------ (20,087) (691) - (20,778) Current asset 310 36 346 investments ------- ------ ------ ------ (17,053) (787) - (17,840) ======= ====== ====== ====== This information is provided by RNS The company news service from the London Stock Exchange

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