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Quester VCT PLC (KAY)

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Wednesday 18 April, 2001

Quester VCT PLC

Final Results

Quester VCT PLC
18 April 2001

QUESTER VCT PLC ('The Company')

Summary of results

Year ended 31 January                           2001  2000  1999  1998     1997

Annual total return per share (pence)            50     32     4    13        5
Net asset value plus cumulative dividend per    201    150   118   113      100
share (pence)
Dividend per share (pence)                     28.0    5.8   2.4   2.8      2.5
Cumulative dividend per share (pence)          41.5   13.5   7.7   5.3      2.5
Shareholders' funds (£'000)                  49,766 42,213 34,181 32,715 13,238
Net asset value per share (pence)             159.3  136.5  110.1 107.6    97.2
Mid-market price per share (pence)              163    150    89   102       95

The net asset value per share as at 31 March 2001 was 130.9p.

Shareholder information

Annual General Meeting                                              22 May 2001
Final dividend for 2000/01                                                1.35p
Payment date                                                        1 June 2001
Associated record date                                               4 May 2001

Chairman's statement

Overview of the year

The year ended 31 January 2001 was an exciting year for Quester VCT and for

The performance of a number of key investments, helped by market conditions,
allowed the Company to achieve significant realisations during the period. As
a result, substantial tax free dividends have already been paid to
shareholders during the year. The realisations and a good overall performance
from the rest of the portfolio have together produced an excellent result for
the year.

Realisations and portfolio developments

During the year the Company made eight successful realisations from its
venture capital portfolio generating cash profits of £14 million. The most
significant gains arose from the sales of Surfcontrol plc and First Fibre
Limited, which generated cash profits of £5.7 million and £4.7 million

The remaining venture capital portfolio continued to show good potential with
six unquoted investments being valued upwards during the year, principally as
a result of further funding rounds at higher prices. During the year a total
of £3.2 million has been charged, covering the write-off of one investment and
provisions against the cost of five other investments that have fallen behind
plan. After taking account of these provisions, the venture capital portfolio
showed a net unrealised profit of some £14 million as at 31 January 2001.


Interim dividends totalling 26.65p per share have already been paid to
shareholders during the year, following the realisations referred to above.
The directors are now proposing a final dividend of 1.35p payable on 1 June
2001, making a total of 28p per share for the year. Aggregate dividends paid
over the life of the Company will thus amount to 41.5p per share which means
that those original shareholders who have taken advantage of all available tax
reliefs will have seen the cost of their initial investment more than

The Company's ability to pay dividends is broadly dependent on the realisation
of capital profits. The year ended 31 January 2001 was particularly favourable
in this respect, allowing substantial dividends to be paid. At the present
date, however, and in current market conditions, the realisation of capital
profits and the payment of future dividends is uncertain.

The Company operates a dividend reinvestment scheme. Further information
relating to this scheme can be found on page 52 of the statutory accounts.

Investment progress

Quester VCT is currently fully invested, as the majority of funds raised from
the offers for subscription made by the Company in 1996 and 1997 have been
committed to venture capital investment within the existing portfolio. The
Company is not currently seeking to make investments in new opportunities.


During the year shareholders have benefited from a maturing portfolio which
has continued to develop well allowing substantial tax free dividends to be
paid. This performance has marked Quester VCT plc as one of the more
successful VCTs.

Recent months have seen large falls in global stock markets from their peak
last year. These falls have impacted the valuations of the quoted venture
capital investments in the portfolio and accordingly the net asset value,
which had reached higher figures in mid-year, fell back to 159p per share as
at the year end. This fall in Quester VCT's net asset value has been
disappointing and, indeed, there have been further falls in the net asset
value since the year end - as at 31 March 2001, it stood at 130.9p per share.
Taking a longer view, the overall potential of the existing investment
portfolio gives reason for confidence.

Tom Scruby


17 April 2001


                                                                           % of
                                   Industry Sector  Cost Valuation £  portfolio
Quoted venture capital investments                              '000
                                                   £'000               by value

Orchestream Holdings plc           Software          985       8,829      18.8%
Adva AG Optical Networking*        Telecoms          682       2,644       5.6%
Surfcontrol plc                    Software          274       1,491       3.2%
Crown Sports plc**                 Leisure           475       1,094       2.3%
XKO Group plc                      Software          505       1,084       2.3%
Policy Master Group plc            Software          144         249       0.5%
Shalibane plc                      Specialist      1,205         195       0.4%
Sopheon plc                        Software          150         167       0.4%
Deep Sea Leisure plc               Leisure           200          42       0.1%

                                                   4,620      15,795      33.6%

Ten largest unquoted venture
capital investments
Elateral Holdings Limited          Internet        1,505       3,292       7.0%
Power X Limited                    IT Hardware       900       2,287       4.9%
Purple Technologies Limited        Software        1,000       1,860       4.0%
CDC Solutions Limited              Software        1,020       1,770       3.7%
Artisan Software Tools Limited     Software        1,236       1,236       2.5%
Acedes Gear Tools Limited          Manufacturing     995         995       2.1%
Sift plc                           Internet          875         972       2.1%
Armagard Limited                   Manufacturing   1,450         875       1.9%
Advanced Valve Technology Limited  Manufacturing     845         845       1.8%
International Diagnostics Group    Healthcare        990         837       1.8%
                                                   10,816      14,969      31.8%

Other unquoted venture capital
investments                                        10,683       9,554      20.5%
Total venture capital investments                  26,119      40,318      85.9%
Listed fixed interest investments                   3,848       3,846       8.2%
Listed equity investments                           2,328       2,755       5.9%
Total investments                                  32,295      46,919     100.0%

* The shares in Adva AG Optical Networking, a company listed on Germany's
Neuer Markt, were received by Quester VCT following that company's acquisition
of First Fibre Limited in July 2000

** The shares in Crown Sports plc were issued to Quester VCT as part
consideration for the sale of its holding of Dragons Health Clubs plc to Crown
Sports in a transaction effected in January 2001. Crown Sports is quoted on
the Alternative Investment Market.


                                                                 2001      2000

                                                       Notes    £'000     £'000
Profit/(loss) on realisation of investments                     5,285    (1,395)
Income                                                     1    1,141       802
Investment management fee                                     (1,054)      (852)
Other expenses                                             2    (283)      (238)
Profit/(loss) on ordinary activities before taxation            5,089    (1,683)
Tax on ordinary activities                                 3     (22)       (43)
Profit/(loss) on ordinary activities after taxation             5,067    (1,726)
Dividends paid and proposed                                4  (8,662)    (1,778)
Transfer from reserves                                        (3,595)    (3,504)
Basic earnings/(loss) per share                            5    16.4p     (5.6p)
Diluted earnings per share                                 5    15.8p       n/a


The accompanying notes are an integral part of this statement.

All items in the above statement derive from continuing operations.

The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits.

In accordance with Financial Reporting Standard (FRS) 14, the outstanding
option (note 11 of the statutory accounts) gives rise to a dilution of the
return per share of 3.7%.


                                                            2001           2000

                                                           £'000          £'000

Profit/(loss) on ordinary activities after taxation        5,067         (1,726)

Unrealised gain on revaluation of investments             10,509         11,664

Total gains and losses recognised during the period       15,576          9,938

Total recognised gains per share                           50.3p          32.1p


                                                                   2001    2000

                                                                  £'000   £'000

Reported profit on ordinary activities before taxation            5,089  (1,683)

Realisation of investment revaluation gains of previous years     6,677     809

Historical cost profit/(loss) on ordinary activities before       11,766   (874)

Historical cost profit/(loss) for the year retained after         3,082  (2,695)
taxation and dividends


                                                           2001            2000
                                                          £'000           £'000
Fixed assets
     Investments                                         46,919          40,606
Current assets
     Debtors                                                577             870
     Cash at bank                                         3,088           1,094
                                                          3,665           1,964
Creditors (amounts falling due within one year)           (818)           (357)
Net current assets                                        2,847           1,607
Net assets                                               49,766          42,213

Capital and reserves
     Called-up equity share capital                       1,562           1,546
     Share premium account                                    -          28,833
     Special Reserve                                     29,456               -
     Revaluation reserve                                 16,369          12,537
     Profit and loss account                              2,379           (703)
Total equity shareholders' funds                         49,766          42,213
Net asset value per share                           6    159.3p          136.5p
Diluted net asset value per share                   6    153.6p             n/a



                                                              2001         2000

                                                             £'000        £'000
Reconciliation of operating profit to net cash inflow from
operating activities
     Net revenue from ordinary activities before tax         5,089       (1,683)
     Decrease in debtors                                       323          347
     Increase in creditors                                      39           25
     Tax withheld at source on dividend income                 (22)         (40)
     Repayment of income tax suffered at source                132          261
     Income tax suffered at source                            (162)         (67)
     (Profit)/loss on realisation of investments            (5,285)       1,395
Cash inflow from operating activities                          114          238

     Advance corporation tax paid                                -          (69)
     Corporation tax refunded                                    -          (84)
                                                               114           85

Capital expenditure and financial investment

     Purchase of investments                               (18,393)     (17,914)
     Sale/redemption of investments                         27,874       10,583
                                                             9,595       (7,246)

Equity dividends paid                                       (8,240)      (2,115)


      Issue of ordinary shares under the dividend              639            -
      reinvestment scheme

      Buy back of shares                                          -        (128)
Increase/(decrease) in cash for the year                     1,994       (9,489)

Reconciliation of net cash flow to movement in net funds
Increase/(decrease) in cash for the year                     1,994       (9,489)
Net funds at the start of the year                           1,094       10,583
Net funds at the end of the year                             3,088        1,094

 1. Income

                                                             2001          2000

                                                            £'000         £'000
    Franked investment income
    Unlisted companies                                         96           144
    Listed companies                                          125           234
    Interest receivable
    Fixed interest securities                                 160           232
    Bank deposits                                              74            95
    Loans to unquoted companies                               680            96
    Sundry income                                               6             1
                                                            1,141           802

 2. Other expenses
                                                             2001          2000

                                                            £'000         £'000
    Administrative and secretarial services                    39            38
    Directors' remuneration (Note 4)                           43            48
    Auditors' remuneration     - audit services                17            17
                   - non-audit services                        14            19
    Legal and professional expenses                            45            20
    Irrecoverable VAT                                          74            59
    Other expenses                                             51            37
                                                              283           238

 3. Tax on ordinary activities

                                                               2001        2000

                                                              £'000       £'000

    Tax attributable to dividend income                          22          40
    ACT written off                                               -           3
                                                                 22          43

 4. Dividends paid and proposed
                                                               2001        2000

                                                              £'000       £'000

    Interim paid - 10p per share (2000: 5.75p)                3,092       1,778
    Second interim proposed - 16.65p per share (2000: 0p)     5,148           -
    Final dividend proposed - 1.35p per share (2000: 0p)        422           -
                                                              8,662       1,778

    The shares to be allotted under the Subscription Share Option Agreement
    detailed in note 11 to the statutory accounts are to rank for the final
    dividend thus increasing the total distribution on 1 June 2001 to £

 5. Earnings per share

    The 16.4p earnings per share (2000: 5.6p loss per share) is based on the
    profit on ordinary activities after taxation of £5,067,000 (2000: loss of
    £1,726,000) and on shares of 30,982,686 (2000: 30,954,344), being the
    weighted average number of shares in issue during the year. The diluted
    earnings per share of 15.8p is based on the profit on ordinary activities
    after taxation of £5,067,000 and on shares of 32,094,399, being the
    weighted average number of shares in issue during the year adjusted to
    reflect the dilution effect detailed in note 11 to the statutory accounts.

    The total recognised gains per share of 50.3p (2000:32.1p) is based on the
    total gains and losses recognised for the year of £15,576,000 (2000: £
    9,938,000) and on 30,982,686 ordinary shares (2000: 30,954,344), being the
    weighted average number of shares in issue during the year.

 6. Net asset value per share

The calculation of net asset value per share as at 31 January 2001 is based on
net assets of £49,766,463 (2000: £42,213,724) divided by the 31,239,758
ordinary shares in issue at that date (2000: 30,918,637).

The calculation of the diluted net asset value per share as at 31 January 2001
is based on the net assets of £49,826,544 divided by the 32,441,387 ordinary
shares that will be in issue following the allotment of 1,207,879 ordinary
shares of 5p each under the terms of the share option agreement detailed in
note 11 to the statutory accounts.

The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 January 2001. The statutory accounts
for the year ended 31 January 2001 will be finalised on the basis of the
financial information presented by the directors in the preliminary
announcement and will be delivered to the Registrar of Companies following the
Company's Annual General Meeting.

Copies of the full financial statements for the year ended 31 January 2001 are
expected to be posted to shareholders on 19 April 2001 and will be available
to the public at the registered office of the Company at 29 Queen Anne's Gate,
London, SW1H 9BU.