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Quester VCT PLC (KAY)

  Print      Mail a friend       Annual reports

Friday 13 May, 2005

Quester VCT PLC

Final Results


                                QUESTER VCT PLC                                

                              ANNUAL REPORT 2005                               

Summary of results for the 13 month period ended 28 February 2005

Per Ordinary Share  28 February 31 January  31 January
(pence)                                               
                           2005       2004        2003
                                                      
Capital Values                                        
                                                      
Net asset value            44.1       50.1        58.4
                                                      
Share price                44.0       45.0        54.0
                                                      
Return and                                            
Dividends                                             
                                                      
Dividend                      -          -           -
                                                      
Cumulative                 41.5       41.5        41.5
dividend                                              
                                                      
Total Return*              85.6       91.6        99.9
                                                      
*Net asset value plus cumulative dividend             

Composition of the fund                                
                                                       
Quoted venture capital investments      9.1%           
                                                       
Unquoted venture capital investments    43.0%          
                                                       
Listed fixed interest investments       18.4%          
                                                       
Listed equity investments               16.0%          
                                                       
Cash and other net assets               13.5%          

DIVIDENDS

The directors do not propose the payment of a dividend in respect of the period
ended 28 February 2005.

CHAIRMAN'S STATEMENT

OVERVIEW

As shareholders will be aware, it was announced on 31 January 2005 that the
Board of Quester VCT plc had entered into merger discussions with the Boards of
Quester VCT 2 plc and Quester VCT 3 plc. In order to align itself with these
two companies, the Company's reporting date has been moved from 31 January to
28 February. This has resulted in a thirteen month accounting period, which is
covered in this Annual Report.

During this period, the Company's net asset value per share reduced by 6.0p per
share to 44.1p.

After taking account of share buy-backs of £370,000, the net asset value fell
from £17.1 million to

£14.7 million over the period. The movement in the net asset value attributable
to the ordinary

shareholders can be summarised as follows:

                                                               £'000  Pence per
                                                                          share
                                                                               
Net asset value at 31 January 2004                            17,058       50.1
                                                                               
Income                                                           457        1.4
                                                                               
Operating costs including investment management fee            (616)      (1.8)
                                                                               
Net realised loss on investments                               (893)      (2.7)
                                                                               
Net unrealised loss on investments, including amount held      (985)      (2.9)
in debtors                                                                     
                                                                               
Share buy-backs*                                               (370)          -
                                                                               
Net asset value at 31 December 2004                           14,651       44.1

* Share buy-backs have enhanced the net asset value per share by 0.02 pence per
share

RESULTS AND DIVIDENDS

The profit and loss account shows a net loss for the period of £1.1 million.
This is made up of

investment income of £457,000, less net losses on realisation of investments of
£893,000, less

operating costs including the management fee of £616,000.

The statement of recognised gains and losses, which includes net unrealised
losses on investments

of £0.9million as well as the loss of £1.1 million reported in the profit and
loss account, shows an

aggregate loss for the period of £2.0 million. Against this background, your
directors do not propose a dividend in respect of the period ended 28 February
2005.

INVESTMENT PORTFOLIO

As at 28 February 2005, the Company's venture capital portfolio comprised
sixteen unquoted and

six quoted investments. The portfolio is diversified and includes companies
operating in a broad

range of markets with growth potential, principally within technology related
sectors.

The venture capital portfolio was valued at £7.6 million as at 28 February
2005, compared with

£9.0 million at the beginning of the period. Changes during the period
comprised purchases of

£864,000, which included one new investment in Allergy Therapeutics plc (£
182,000), disposals

with a carrying value of £860,000 and net realised and unrealised losses
recognised during the

period of £1.4million.

In addition, an earnout entitlement, which was previously valued at £841,000
and is recorded in the balance sheet under debtors, has been provided for in
full at the period end.

Within the venture capital portfolio, the quoted investments gave rise to an
unrealised net gain of

£225,000 on revaluation, and whilst net unrealised losses of £1.6 million arose
from a revaluation of the unquoted investments, including the earnout
entitlement provision referred to above.

The listed equity portfolio, which is focused on shares within the FTSE 350
index, performed

positively during the period rising from £2.0 million at the start of the 13
month period to close at a value of £2.3 million at 28 February 2005.

Further details of investment performance are provided in the Investment
Manager's report

below.

MERGER DISCUSSIONS

As mentioned above, discussions have been held with the boards of Quester VCT 2
plc and Quester VCT 3 plc to see whether a merger of the three funds might be
in the best interests of shareholders. Following these discussions, your Board
believes that the merged entity will benefit shareholders through, amongst
other things, a portfolio with greater spread and proportionately reduced
running costs. Your directors will be writing to shareholders with a full
explanation of these benefits and details of the proposed merger.

CHANGE OF CORPORATE BROKER AND MARKET MAKERS

In July 2004 the Company appointed Noble & Company Limited as its corporate
broker, replacing

Evolution Beeson Gregory Limited. Following this change, Winterflood Securities
Limited became market makers in the Company's shares.

OUTLOOK

Your Board's wish is to achieve realisations from the portfolio and pay
dividends to shareholders.

As you will see from the merger documentation, the merged company, if you and
the shareholders

of the other two VCT's approve the transaction, intends to continue the process
of selling investments and distributing part of the proceeds to shareholders,
while reinvesting the balance in

new venture capital opportunities.

Tom Scruby

Chairman

12 May 2005

INVESTMENT MANAGER'S REPORT

INTRODUCTION

The fall in the Company's net asset value during the period was caused
principally by provisions

made against the value of the unquoted venture capital portfolio. The quoted
venture capital

portfolio and the FTSE quoted portfolio, held as a reserve against investments
in the venture capital portfolio, achieved gains of 21.5% and 19.3%
respectively (total return). The performance of the unquoted portfolio was,
therefore, a disappointment compared with the quoted market

performance, as there were only two small unquoted investment valuation
increases to set against

the provisions made of £2.9million.

PROGRESS OF THE VENTURE CAPITAL PORTFOLIO

During the thirteen months to 28 February 2005, one new and six follow-on
investments were

completed at a cost of £864,000.

A new investment was made in Allergy Therapeutics plc, an established £18
million turnover

company with a range of allergy vaccines currently in the market and a
programme for development of novel vaccines offering the potential for
achievement of significant market expansion. Quester VCT invested £182,000 at
the time of Allergy Therapeutics's capital raising on AIM. At 28 February 2005,
this investment was showing an unrealised gain of £67,000.

The follow-on investments included additional commitments to Advanced Valve
Technologies

Limited (£125,000), Anadigm Limited (£80,000), The Casella Group Limited (£
141,000),

Linguaphone Group plc (£64,000), Nomad Software Limited (£263,000) and Opsys
Management

Limited (£9,000).

REALISATIONS

During the period, two unquoted investments were sold, one realising a profit
and the other a loss

while further cash proceeds have been generated either from repayments of
capital made by

companies in which Quester VCT has invested in, or from small amounts recovered
where investments had previously been written-off.

As reported at the interim stage, Chelsea Stores Limited was sold during the
period for £391,000

producing a gain of £109,000, being 39% over carrying value. The cumulative
gain over cost on this investment, combined with the earlier realisation of the
associated investment in HMV Media Group, was £183,000, equivalent to a 5.8%
gain over the cost of the two investments. As also previously reported, the
investment in Communication and Control Electronics Limited had been written
down to a value of £140,000. By the period end, £112,000 had been received in
cash from the process of administration, recovering some 20% of the original
cost, with the balance now fully written off. Further cash proceeds were
generated from other companies, including Bowman Power Systems Limited (£
51,000), Dycem Limited (£158,000), International Diagnostics Group plc (£
30,000) and Methuen Publishing Limited (£80,000).

VALUATION CHANGES APPLIED TO VENTURE CAPITAL INVESTMENTS

Holdings in the venture capital investments in companies whose shares are
either listed or traded

on AIM are valued on the basis of mid-market price on 28 February 2005, less a
discount, if

appropriate, to reflect any lock-up or orderly market arrangements. During the
period, these quoted investments showed a net appreciation in value of £
225,000. This was largely driven by gains in the investments in Crown Sports (£
146,000), Allergy Therapeutics (£67,000) and Surfcontrol (£50,000), offset by
an unrealised loss in XKO Group (£59,000).

The two unquoted companies to benefit from an uplift in their respective
valuations were Dycem

(an increase of £185,000), the manufacturer of specialist polymer flooring, and
International

Resources Group (£250,000), the executive search and selection firm. Both
companies have

enjoyed solid trading performance during 2004.

Provisions to reflect trading behind plan during the period have been made
against Advanced Valve Technologies Limited (£349,000), Anadigm Limited (£
224,000), The Casella Group Limited (£72,000), HTC Healthcare Group plc (£
543,000), Linguaphone Group plc (£356,000), Opsys Management Limited (£294,000)
and Nomad Software Limited (£181,000). Some of these

downwards revaluations are considered permanent and, as such, these elements
have been treated

as realised. In addition, the earnout entitlement held in connection with the
sale of CDC Solutions

Limited in 2003 has been valued at £nil, a reduction of £841,000. It is still
possible that some value will be derived from this entitlement based on 2005
and 2006 performance but, based on 2004 performance, it has been appropriate to
reduce its carrying value.

SECTOR ANALYSIS OF THE VENTURE CAPITAL PORTFOLIO

The portfolio is balanced by sector and is well spread. A summary of the
sectors covered by the

portfolio at 28 February 2005 is provided in the table below:

Industry sector                   Percentage of       Valuation       Number of
                                      portfolio                     investments
                                                 at 28 February                
                                   at valuation            2005                
                                                                               
                                              %           £'000                
                                                                               
Software                                  30.9%           2,361               8
                                                                               
Industrial products & services            23.1%           1,766               4
                                                                               
Internet                                  11.2%             856               2
                                                                               
Publishing                                 8.8%             671               1
                                                                               
Healthcare & life sciences                 8.7%             663               2
                                                                               
Consumer services                          6.0%             457               1
                                                                               
Leisure                                    5.0%             384               1
                                                                               
Semiconductors                             3.3%             252               1
                                                                               
Consumer goods                             1.7%             128               1
                                                                               
Electronics                                1.3%              98               1
                                                                               
                                          100.0           7,636              22

RESERVES FOR FOLLOW-ON INVESTMENT

The overall reserves requirement to support the existing venture capital
portfolio has reduced

during the year. This has freed up liquid resources for investment in new
venture capital

opportunities: the new investment in Allergy Therapeutics reflects this change
of emphasis for

Quester VCT and the opportunity to make new investments. A further small
investment has been

made since the year end and there are others in the pipeline.

LISTED EQUITY AND FIXED INTEREST PORTFOLIOS

At the period end, the values of the listed equity and fixed interest (bond)
portfolios were

£2,348,000 and £2,693,000 respectively. As at this date, the listed equity
portfolio was comprised

of 25 investments and during the thirteen months to 28 February 2005 it
generated a total return of 19.3% being comprised of realised and unrealised
gains of £319,000 and a dividend yield of

£92,000.

OUTLOOK

The proposed merger with Quester VCT 2 and Quester VCT 3 is designed to produce
operating

efficiency, reduced costs and a fundamental change to the shape and spread of
the venture capital

portfolio. If market conditions for exits remain favourable, there is potential
for an enlarged portfolio to achieve exits across a wider spread of companies.
Our objective is to continue to focus on the exit process in order to deliver
cash for dividend payments and continued re-investment in new venture capital
opportunities.

Quester Capital Management Limited

Manager

12 May 2005

FUND SUMMARY AS AT 28 FEBRUARY 2004

                          Industry sector    Original Valuation Equity  % of   
                                                                               
                                             Cost     £'000     % held  fund by
                                                                        value  
                                             £'000                             
                                                                               
Quoted venture capital investments                                             
                                                                               
Allergy Therapeutics    Healthcare & life    182      249       0.4%       1.7%
plc                     sciences                                               
                                                                               
Crown Sports plc        Leisure              475      384       1.4%       2.6%
                                                                               
Sirius Financial        Software             144      71        0.5%       0.5%
Solutions plc                                                                  
                                                                               
Sopheon plc             Software             150      36        0.3%       0.2%
                                                                               
Surfcontrol plc         Software             91       258       0.3%       1.8%
                                                                               
XKO Group plc           Software             506      341       1.5%       2.3%
                                                                               
Total quoted venture capital investments     1,548    1,339             9.1%   
                                                                               
Unquoted venture capital investments                                           
                                                                               
Advanced Valve          Industrial products  2,491    349       11.1%      2.4%
Technologies Limited    & services                                             
                                                                               
Anadigm Limited         Semiconductors       1,588    252       5.1%       1.7%
                                                                               
Artisan Software Tools  Software             1,377    450       9.3%       3.1%
Limited                                                                        
                                                                               
Casella Group Limited,  Industrial products  1,206    645       6.7%       4.4%
The                     & services                                             
                                                                               
Community Internet      Internet             508      127       3.5%       0.9%
Europe Limited                                                                 
                                                                               
Dycem Limited           Industrial products  187      372       37.5%      2.5%
                        & services                                             
                                                                               
Elateral Holdings       Software             1,942    61        7.2%       0.4%
Limited                                                                        
                                                                               
HTC Healthcare Group    Consumer services    1,000    457       18.4%      3.1%
plc                                                                            
                                                                               
International           Healthcare & life    900      414       14.3%      2.8%
Diagnostics Group plc   sciences                                               
                                                                               
International Resources Industrial products  32       400       4.0%       2.7%
Group Limited           & services                                             
                                                                               
Linguaphone Limited     Consumer goods       904      128       5.7%       0.9%
                                                                               
Methuen Publishing      Publishing           671      671       26.2%      4.6%
Limited                                                                        
                                                                               
Nomad Software Limited  Software             1,374    444       8.1%       3.0%
                                                                               
Opsys Management        Electronics          1,392    98          --       0.7%
Limited*                                                                       
                                                                               
Sibelius Software       Software             700      700       6.0%       4.8%
Limited                                                                        
                                                                               
Sift Group Limited      Internet             875      729       5.0%       5.0%
                                                                               
Total unquoted venture capital investments   17,147   6,297             43.0%  
                                                                               
Total venture capital                        18,695   7,636             52.1%  
investments                                                                    
                                                                               
Listed fixed interest                        2,699    2,693             18.4%  
investments                                                                    
                                                                               
Listed equity investments                    2,230    2,348             16.0%  
                                                                               
Total investments                            23,624   12,677            86.5%  
                                                                               
Cash and other net                           1,974    1,974             13.5%  
current assets                                                                 
                                                                               
Net assets                                   25,598   14,651            100.0% 

*Formerly Opsys Limited

PROFIT AND LOSS ACCOUNT

FOR THE 13 MONTH PERIOD ENDED 28 FEBRUARY 2005

                                             Notes        2005             2004
                                                                               
                                                   (13 months)      (12 months)
                                                                               
                                                         £'000            £'000
                                                                               
Gain/(loss) on realisation of                1           (893)          (1,169)
investments                                                                    
                                                                               
Income                                       2             457              456
                                                                               
Investment management fee                    3           (331)            (387)
                                                                               
Other expenses                               4           (285)            (287)
                                                                               
Loss on ordinary activities                            (1,052)          (1,387)
before taxation                                                                
                                                                               
Tax on ordinary activities                   6               -                -
                                                                               
Loss on ordinary activities                            (1,052)          (1,387)
after taxation                                                                 
                                                                               
Dividends paid and proposed                                  -                -
                                                                               
Transfer from reserves                                 (1,052)          (1,387)
                                                                               
Basic and diluted loss per share             7          (3.1)p           (4.0)p

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 and securities and from bank deposits.

In accordance with Financial Reporting Standard (FRS) 14, the outstanding
option (note 11) gives rise to no dilution to the loss per share

The accompanying notes are an integral part of this statement.

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

FOR THE 13 MONTH PERIOD ENDED 28 FEBRUARY 2005

                                            Notes         2005             2004
                                                                               
                                                   (13 months)      (12 months)
                                                                               
                                                         £'000            £'000
                                                                               
Loss on ordinary activities after                      (1,052)          (1,387)
taxation                                                                       
                                                                               
Unrealised loss on revaluation of                        (235)          (1,550)
investments                                                                    
                                                                               
Unrealised loss on revaluation of                        (750)                -
debtors                                                                        
                                                                               
Total losses recognised during the                     (2,037)          (2,937)
period                                                                         
                                                                               
Total recognised losses per share          7            (6.0)p           (8.5)p

The accompanying notes are an integral part of this statement.

NOTE OF HISTORICAL COST PROFITS AND LOSSES

FOR THE 13 MONTH PERIOD ENDED 28 FEBRUARY 2005

                                            Notes         2005             2004
                                                                               
                                                   (13 months)      (12 months)
                                                                               
                                                         £'000            £'000
                                                                               
Reported loss on ordinary activities                   (1,052)          (1,387)
before taxation                                                                
                                                                               
Realisation of prior year's net                        (5,155)            (597)
unrealised gains/(losses) on                                                   
investments                                                                    
                                                                               
Historical cost loss on ordinary                       (6,207)          (1,984)
activities before taxation                                                     
                                                                               
Historical cost loss for the period                    (6,207)          (1,984)
retained after taxation and                                                    
dividends                                                                      

The accompanying notes are an integral part of this statement.

BALANCE SHEET

AS AT 28 FEBRUARY 2005

                                                               2005        2004
                                                                               
                                                        (13 months) (12 months)
                                                                               
                                           Note               £'000       £'000
                                                                               
Fixed assets                                                                   
                                                                               
Investments                                                  12,677      14,049
                                                                               
Current assets                                                                 
                                                                               
Debtors                                                         793       1,721
                                                                               
Cash at bank                                                  1,518       1,716
                                                                               
                                                              2,311       3,437
                                                                               
Creditors (amounts falling due within                         (337)       (428)
one year)                                                                      
                                                                               
Net current assets                                            1,974       3,009
                                                                               
Net assets                                                   14,651      17,058
                                                                               
Capital and reserves                                                           
                                                                               
Called-up equity share capital                                1,661       1,704
                                                                               
Share premium account                                         3,410       2,787
                                                                               
Special reserve                                               8,012      15,129
                                                                               
Revaluation reserve                                         (1,474)     (5,644)
                                                                               
Profit and loss account                                       3,042       3,082
                                                                               
Equity shareholders' funds                                   14,651      17,058
                                                                               
Net asset value per share                    8                44.1p       50.1p

The financial statements were approved by the directors on 12 May 2005 and were
signed on their behalf by:

Tom Sooke

Chairman

The accompanying notes are an integral part of this statement.

CASHFLOW STATEMENT

FOR THE 13 MONTH PERIOD ENDED 28 FEBRUARY 2005

                                                         2005     2004    
                                                                          
                                                  (13 months) (12 months) 
                                                                          
                                                        £'000    £'000    
                                                                          
Cash outflow from operating activities                   (92)        (936)
                                                                          
Financial investment                                                      
                                                                          
Purchase of venture capital investments                 (864)      (1,935)
                                                                          
Purchase of listed equities and fixed interest        (2,962)      (3,993)
securities                                                                
                                                                          
Sale/redemption of venture capital investments            799        3,257
                                                                          
Recoveries made in respect of investments                  51            -
previously written-off                                                    
                                                                          
Sale/redemption of listed equity and fixed              3,240        4,679
interest investments                                                      
                                                                          
Total financial investment                                264        2,008
                                                                          
Financing                                                                 
                                                                          
Buy back of shares                                      (370)        (300)
                                                                          
(Decrease)/increase in cash for the period              (198)          772
                                                                          
Reconciliation of net cash flow to movement                               
                                                                          
in net funds                                                              
                                                                          
(Decrease)/increase in cash for the period              (198)          772
                                                                          
Net funds at the start of the period                    1,716          944
                                                                          
Net funds at the end of the period                      1,518        1,716

The accompanying notes are an integral part of this statement.

NOTES TO THE FINANCIAL STATEMENTS

 1. Loss on realisation of investments
   
                                                               2005        2004
                                                                               
                                                        (13 months) (12 months)
                                                                               
                                                              £'000       £'000
                                                                               
Net (loss)/gain on disposal                                    (14)         176
                                                                               
Write-off of investments                                      (839)     (1,526)
                                                                               
Write-back of investments previously written-off                  -         181
                                                                               
Write-down of debtors (note 9)                                 (91)           -
                                                                               
Recoveries made in respect of investments previously             51           -
written-off                                                                    
                                                                               
                                                              (893)     (1,169)

 2. Income
   
 3. 
   
                                          2005        2004           
                                                                     
                                   (13 months) (12 months)           
                                                                     
                                         £'000       £'000           
                                                                     
Dividend income                                                      
                                                                     
Unlisted companies                                      37         37
                                                                     
Listed companies                                        92         89
                                                                     
Interest receivable                                                  
                                                                     
Fixed interest securities                              125        136
                                                                     
Loans to unquoted companies                            154        112
                                                                     
Bank deposits                                           39         31
                                                                     
Other income                                            10         51
                                                                     
                                                       457        456

 3. Investment Management fee
   
                                                               2005        2004
                                                                               
                                                        (13 months) (12 months)
                                                                               
                                                              £'000       £'000
                                                                               
Investment management fee                                       331         387
                                                                               
Irrecoverable VAT                                                37          50
                                                                               
                                                                368         437

Quester Capital Management Limited ('QCML') provides investment management
services to the Company under an agreement dated 22 February 1996 as amended by
a supplemental agreement dated 16 January 1997, a second supplemental agreement
dated 30 June 1998 and a third supplemental agreement dated 8 September 1998.
The agreement is terminable by written notice of not less than 12 months.

QCML is a wholly owned subsidiary of Querist Limited, a company in which APG
Holmes and JA Spooner are beneficial shareholders. APG Holmes and JA Spooner
are executive directors of QCML.

QCML receives a management fee, payable quarterly in arrears, at the rate of
2.5% on the value of the audited net assets of the Company as at the end of the
previous accounting period. This charge is capped to ensure that the Company's
Running Costs do not exceed 3.25% (pro-rated to reflect the current 13 month
period) of the closing net asset value. The management fee for the period
amounted to £331,000 (2004: £387,000) net of the amount recoverable from QCML
in respect of the cap, details of which are provided in note 9.

QCML also provides administrative and secretarial services to the Company for
which it is entitled to a fee of £43,000 per annum. This is based on an amount,
which is adjusted in line with the RPI. An amount of £46,000 is shown in other
expenses (note 4), reflecting the 13 month accounting period.

 4. Other expenses
   
                                                              2005         2004
                                                                               
                                                       (13 months)  (12 months)
                                                                               
                                                             £'000        £'000
                                                                               
Administration and secretarial services                         46           42
                                                                               
Directors' remuneration (note 4)                                42           39
                                                                               
Auditor's remuneration                                                         
                                                                               
Audit services                                                  18           20
                                                                               
Non audit services                                               8            9
                                                                               
Insurance                                                       17           11
                                                                               
Legal and professional                                          29           19
                                                                               
UKLA, LSE and registrar fees                                    19           19
                                                                               
Irrecoverable VAT                                               82           76
                                                                               
Other                                                           24           52
                                                                               
                                                               285          287

 5. Directors remuneration
   
                                                             2005          2004
                                                                               
                                                      (13 months)   (12 months)
                                                                               
                                                            £'000         £'000
                                                                               
Fees paid to directors                                         13            12
                                                                               
Amounts paid to third parties, excluding VAT, in               29            27
consideration of the services of directors                                     
                                                                               
                                                               42            39

The total fees paid or payable in respect of individual directors for the
period is detailed in the Directors' Remuneration Report.

 6. Tax on ordinary activities
   
                                                             2005          2004
                                                                               
                                                      (13 months)   (12 months)
                                                                               
                                                            £'000         £'000
                                                                               
Corporation tax payable                                         -             -
                                                                               
Reconciliation of loss on ordinary activities to                               
corporation tax payable                                                        
                                                                               
Loss on ordinary activities before tax                    (1,052)       (1,387)
                                                                               
Tax on profit on ordinary activities at standard UK         (316)         (416)
corporation tax rate of 30% (2004: 30%)                                        
                                                                               
Effects of:                                                                    
                                                                               
Non-taxable items                                             131           214
                                                                               
Unutilised expenses                                           185           202
                                                                               
Corporation tax payable                                         -             -

 7. Loss per share
   
The loss per share of 3.1p (2004: 4.0p) is based on the loss on ordinary
activities after tax of £1,052,000 (2004: £1,387,000) and on the weighted
average number of ordinary shares in issue during the period of 33,699,680
(2004: 34,471,086). There is no dilution effect in respect of the period ended
28 February 2005 (year ended 31 January 2004: nil).

The total recognised loss per share of 6.0p (2004: 8.5p) is based on the total
recognised losses for the period of £2,037,000 (2004: £2,937,000) and on the
weighted average number of ordinary shares in issue during the period of
33,699,680 (2004: 34,471,086).

 8. Net asset value
   
The calculation of net asset value per share as at 28 February 2005 of 44.1p
(2004: 50.1p) is based on net assets of £14,651,000 (2004: £17,058,000) divided
by the 33,227,610 ordinary shares in issue at that date (2004: 34,072,144).
There is no dilution effect in respect of either the period ended 28 February
2005 or the year ended 31 January 2004.

The financial information set out above does not constitute the Company's
statutory accounts for the period ended 28 February 2005. The statutory
accounts for the period ended 28 February 2005 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.

A copy of the above document will be submitted to the UK Listing Authority, and
will shortly be available for inspection at the UK Listing Authority's Document
Viewing Facility, which is situated at:

Financial Services Authority

25 The North Colonnade

Canary Wharf

London

E14 5HS

Copies of the full financial statements for the period ended 28 February 2005
are expected to be posted to shareholders on 19 May 2005 and will be available
to the public at the registered office of the Company at 29 Queen Anne's Gate,
London, SW1H 9BU.