Final Results

Gresham House PLC 29 April 2004 GRESHAM HOUSE plc 36 Elder Street, London E1 6BT Telephone: 020 7588 7352, Facsimile 020 7377 2946 CHAIRMAN'S STATEMENT I am pleased to record an improved performance for this financial year which has benefited from a more settled economic environment than that highlighted in last years report. Our results for the year to 31st December 2003 show a return attributable to equity shareholders for the Revenue Account of £1,153,000 compared with £1,023,000 for last year and a £2,000 gain on the Capital Account compared with a loss of £3,497,000 for last year. Overall the basic return per ordinary share was 25.1p against a loss of 56.3p for the previous year. The performance of the property portfolio has improved with rental income increasing by £285,000. However income from construction activities fell by £486,000 to £267,000. Dividend income for the year increased by £27,000 whilst other operating income and interest received fell by £195,000 The charge for interest payable remained stable. The Group's property portfolio has been re-valued in accordance with accounting standards and this has resulted in an increase in value of £5.298 million. This revaluation is largely responsible for the increase in your Group's basic net asset value per Ordinary Share from 488.3p last year to 572.3p as at 31st December 2003 - an increase of 17.2% against a comparable rise in the FTSE All Share Index of 16.4%. Your Company's small company investments have continued to expand. Transense Technologies, which represents 5.73% of the share portfolio, has reported an increase in its portfolio of intellectual property but still awaits the commencement of its anticipated flow of royalty income. Image Scan Holdings, which is also quoted on AIM, remains one of our largest holdings at 9.93% of the portfolio. Image Scan's core technology relates to innovative imaging techniques, their interpretation and application. The company has completed an intensive development programme and now has a range of products consisting of X-ray cameras, image acquisition and processing software. Initial focus will be sales into the security sector but the company believes that significant opportunities exist within the industrial inspection market. SpaceandPeople Limited which specialises in the marketing of promotional areas of the UK's leading shopping centres, has now reported moving into profit and we expect steady improvement as it passes into phase two of its growth plan. During the year your Company made investments in:- (i) Hallin Marine Group which is a rapidly growing specialist services company in subsea support. Primarily operating in SE Asia its main expertise relates to the subsea oil and gas industry. The outlook for this company is extremely positive against the background of a strong oil price; (ii) Wheelsure Holdings plc which has developed a novel method of locking the wheel nuts of vehicles, particularly on commercial vehicles. The company intends to market their patented device initially through major fleet operators in the passenger transport and dangerous goods haulage industries in the UK and Europe but are aware that opportunities do exist for other applications. Initial indications appear to be very positive; and (iii) we have increased our stake in Mount Burgess Mining NL which has gold reserves in Australia and is prospecting for diamonds in Namibia and other base metals in Botswana and Namibia. We continue to see a number of potentially attractive investments but as always the success of this type of venture is particularly dependent upon the stability of the economic climate. We do however believe that the prospects for 2004 are encouraging. It is the intention of your Board to selectively dispose of part of the property portfolio this year in order to improve the Group's liquidity to allow further investment and to reduce gearing. In consequence your Board proposes that the final dividend be maintained at its present level of 3.1p. A P Stirling 29th April, 2004 GRESHAM HOUSE plc PRELIMINARY FINAL STATEMENT CONSOLIDATED STATEMENT OF TOTAL RETURN For the year ended 31st December, 2003 2003 2002 Revenue Capital Total Revenue Capital Total £' 000 £' 000 £' 000 £' 000 £' 000 £' 000 Gain /(loss) on Investments - 2 2 - (3,497) (3,497) Income: Dividend and Interest Income 234 - 234 276 - 276 Rental 3,193 - 3,193 2,908 - 2,908 Income Other operating income 444 - 444 1,056 - 1,056 ------ ------ ------- ------ ------- ------- 3,871 2 3,873 4,240 (3,497) 743 Other expenses (1,204) - (1,204) (1,767) - (1,767) ------ ------ ------- ------ ------- ------- Net return before finance costs and taxation 2,667 2 2,669 2,473 (3,497) (1,024) Interest payable and similar charges (1,458) - (1,458) (1,450) - (1,450) ------ ------ ------- ------ ------- ------- Return on ordinary activities before taxation 1,209 2 1,211 1,023 (3,497) (2,474) Taxation - - - - - - ------ ------ ------- ------ ------- ------- Return on ordinary activities after Taxation 1,209 2 1,211 1,023 (3,497) (2,474) Minority interest (56) - (56) - - - ------ ------ ------- ------ ------- ------- Return attributable to equity shareholders 1,153 2 1,155 1,023 (3,497) (2,474) Dividend - Equity shares (149) - (149) (141) - (141) ------ ------ ------- ------ ------- ------- Transfer to reserves 1,004 2 1,006 882 (3,497) (2,615) ====== ====== ======= ====== ======= ======= Basic return per Ordinary Share 25.1p - 25.1p 23.2p (79.5) p (56.3) p ====== ====== ======= ====== ======= ======= Diluted return per Ordinary Share 24.9p - 24.9p 21.6p (73.9)p (52.3)p ====== ====== ======= ====== ======= ======= Statement of Total Recognised Gains and Losses Group 2003 2002 £'000 £'000 Profit for the financial year 1,153 1,023 Net movement on capital reserves 2 (3,497) Surplus and write back of impairment on property revaluation 5,298 - Minority interest in reserves (1,006) - ----- ------ Total net gains / (losses) recognised in the year 5,447 (2,474) ===== ====== 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 £23,767. (iii) Dividends - Ordinary shares: - proposed final dividend of 3.1p per share (2002: 3.1p) payable on 23rd June, 2004 to shareholders on the register at 14th May, 2004 149 141 (iv) The summary of results for the year ended 31st December, 2003 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 14th May, 2004 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, 2002 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 return attributable to equity shareholders of £1,153,000 (2002: £1,023,000) and on the net capital return of £2,000 (2002: £(3,497,000) ) respectively and on 4,597,976 (2002: 4,396,526) ordinary shares being the weighted average number in issue during the year. (vi) Diluted revenue and capital returns per ordinary share are based on the return attributable to equity shareholders of £1,153,000 (2002: £1,023,000) and on the net capital return of £2,000 (2002: £(3,497,000)) respectively. Both diluted revenue and capital returns are calculated on 4,631,941 (2002: 4,729,490) ordinary shares being the weighted average number of shares in issue during the year together with 33,965 (2002: 332,964) 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, 2003 2003 2002 £'000 £'000 Investments Securities 6,746 6,649 Properties 37,200 30,976 Tangible assets 539 382 ------ ------- 44,485 38,007 ------ ------- Current assets 8,397 7,087 Creditors amounts falling due within one year 6,350 5,346 ------ ------- Net current assets 2,047 1,741 ------ ------- Total assets less current liabilities 46,532 39,748 Creditors amounts falling due after more than one year 18,013 17,860 Deferred 245 245 income ------ ------- 28,274 21,643 ====== ======= Capital and reserves Called up share capital 1,189 1,108 Share premium account 554 364 Other reserves Revaluation 12,800 8,064 reserve Capital reserve - 22,671 22,403 realised Capital reserve - (170) (57) unrealised Revenue reserves (9,832) (10,239) ------ ------- Equity shareholders' funds 27,212 21,643 Minority Interests 1,062 - ------ ------- 28,274 21,643 ====== ======= Basic Net Asset Value per ordinary share 572.3p 488.3p ====== ======= Diluted Net Asset Value per ordinary share 568.3p 454.2p ====== ======= Notes Basic net asset value per ordinary share is based upon the net assets at 31st December, 2003 of £27,212,000 (2002: £21,643,000) and 4,754,641 (2002: 4,432,000) 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 £27,212,000 (2002: £21,643,000) and 4,788,606 (2002: 4,765,644) ordinary shares. The number of shares is based upon the number of shares in issue at the year end together with 33,965 (2002: 332,964) 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. Minority Interests reflect the minority interest in both the revenue and revaluation reserves of the New Capital Holdings Limited sub-group. GRESHAM HOUSE plc PRELIMINARY FINAL STATEMENT CONSOLIDATED CASH FLOW STATEMENT For the year ended 31st December, 2003 2003 2002 Notes £'000 £'000 Cashflow from operating activities Investment income received 133 106 Interest received 101 166 Rental income received 2,990 3,479 Other cash payments (316) (743) -------- ------- Net cash inflow from operating activities 1 2,908 3,008 ======== ======= Returns on investment and servicing of finance Interest paid on 2.5% Secured Redeemable Loan Stock, 2001 - (6) Interest paid on 8% Secured Redeemable Loan Stock, 2006 (293) (243) Interest paid on property loans (1,148) (1,183) Net cash outflow from Investments -------- ------- and servicing of finance (1,441) (1,432) ======== ======= Capital expenditure and financial investment Sale of tangible fixed assets 6 10 Purchase of tangible fixed assets (19) - Purchase of investments (1,415) (1,633) Sales of investments 1,320 1,690 Net loans repaid - 483 Purchase of investment properties (1,039) (2,093) Purchase of developments in hand (2,392) (822) Net cash outflow from capital -------- ------- expenditure and financial investment (3,539) (2,365) ======== ======= Corporation tax paid - - ======== ======= Equity dividends paid (142) (136) ======== ======= Cash outflow before use of liquid resources and financing (2,214) (925) ======== ======= Management of liquid resources Acquisition of listed securities held for dealing (335) (36) Financing Repayment of loans (889) (1,238) Receipt of loans 1,797 1,929 Share capital issued 271 138 -------- ------- Net cash inflow from financing 1,179 829 ======== ======= Decrease in cash 3 (1,370) (132) ======== ======= GRESHAM HOUSE plc PRELIMINARY FINAL STATEMENT RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS As at 31st December, 2003 2003 2002 £'000 £'000 Retained profit for the year 1,004 882 Surplus and write back of impairment on property revaluations 5,298 - Net movement on capital reserves 2 (3,497) Exercise of options to subscribe for share capital 271 138 Minority interest in reserves (1,006) - -------- ------- 5,569 (2,477) Shareholders' funds at 1st January 21,643 24,120 -------- ------- Shareholders' funds at 31st December 27,212 21,643 ======= ======= GRESHAM HOUSE plc PRELIMINARY FINAL STATEMENT NOTES ON THE CONSOLIDATED CASH FLOW STATEMENT for the year ended 31st December, 2003 1. Reconciliation of operating profit to operating cash flows 2003 2002 £'000 £'000 Return on ordinary activities before taxation 1,209 1,023 Interest payable 1,458 1,450 ------- ------ 2,667 2,473 Depreciation 9 14 Write back of previous impairment (40) - Loan provision charged /(written back) - 4 Decrease in debtors 64 467 Increase in creditors 208 50 ------- ------ Net cash flow from operating activities 2,908 3,008 ======= ====== 2. Reconciliation of net cash flow to movement in net debt Decrease in cash for the year (1,370) (132) Cash outflow from repayment of debt 889 1,238 Cash inflow from loans received (1,797) (1,929) Cash outflow from increase in liquid resources 335 36 ------ ------ Change in net debt resulting from cash flows (1,943) (787) Net debt at 1st January (17,890) (17,103) ------- ------ Net debt at 31st December (19,833) (17,890) ======= ====== 3. Analysis of net debt At 1st Cash Other At 31st January flow non-cash December 2003 changes 2003 £'000 £'000 £'000 £'000 Cash in hand and at bank / brokers 2,542 (1,353) 1,189 Bank overdraft - (17) (17) ------ ------- ------ ------- 2,542 (1,370) - 1,172 Debt due within one year (2,918) (908) 153 (3,673) Debt due after one year (17,860) - (153) (18,013) ------- ------ ------- -------- (20,778) (908) - (21,686) ------ ------- ------ ------- Current asset investments 346 335 681 ------ ------- ------ ------- (17,890) (1,943) - (19,833) ====== ======= ====== ======= This information is provided by RNS The company news service from the London Stock Exchange

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