RNS Number:7823P
Close IHT AIM VCT PLC
10 March 2008
CLOSE IHT AIM VCT PLC
ANNUAL RESULTS
10 March 2008
Preliminary announcement of the annual financial results for the twelve months
to 30 November 2007. Copies of the full Report and Financial Statements can be
found on www.closeventures.co.uk
Close IHT AIM VCT PLC (the "Company"), which invests in companies listed on the
Alternative Investment Market (AIM) or PLUS, across a variety of sectors, today
announces annual results for the year ended 30 November 2007. This announcement
was approved for release by the Board of Directors on 10 March 2008.
Financial Highlights
Year ended Period ended
30 November 2007 30 November 2006
Revenue return per A and B Ordinary share 1.91p 1.86p
Capital return per A and B Ordinary share (0.47)p (0.96)p
Dividends paid 2.00p 1.40p
Net asset value per A and B Ordinary share 94.15p 94.70p
Net assets �23,518,000 �23,675,000
Movement in FTSE AIM Total Return Index (Source: Close Investments 3.40% 5.79%
Ltd)
In addition to the above, the Directors have declared a revenue dividend of 1.00
pence per A and B ordinary share to be paid on 22 April 2008 to shareholders on
the register as at 25 March 2008.
Shareholder value per share since launch
Ordinary Shares
Pence per share
Total dividends paid during the period to 30 November 2006* 1.40
Total dividends paid during the year to 30 November 2007 2.00
Total dividends 3.40
Net asset value at 30 November 2007 94.15
Total cumulative return at 30 November 2007 97.55
* Investors subscribing by 17 January 2006 were entitled to this dividend.
Investors subscribing thereafter were not entitled to this first dividend.
Chairman's statement
I have pleasure in presenting the second annual accounts of your Company. This
set of accounts covers the year to 30 November 2007, which is the first complete
year of your Company's existence. It has been a busy time for our Investment
Manager and the Board believes that the portfolio being assembled will produce
good results in the years to come.
Dividends
Your Board has declared a revenue dividend of 1.00 pence per A and B share. This
will be paid on 22 April 2008 to shareholders on the register as at 25 March
2008. This dividend is derived from the income of the Company. Together with the
1.00 pence per share declared in July 2007, the total dividend for the year is
2.00 pence per share. As was explained in the prospectus, the income in the
first few years may fall as investments are made and the cash balance
correspondingly reduced. Your Company has realised some profits in the last
year, which are distributable as dividends in the case of VCTs, but your Board
has decided to carry forward this profit for the time being so that a dividend
can hopefully be maintained over the next few years when some of the Company's
investments may not be paying dividends themselves.
Performance
In my statement accompanying the interim results, I remarked that your Company's
Net Asset Value ("NAV") improvement had lagged behind the rise in the FTSE AIM
All-Share Index, not least as the Company still held a substantial cash balance.
However, this cash has stood the Company in good stead in the turbulent and
volatile conditions which have prevailed in the stockmarket more recently.
The result for the year to 30 November 2007 has been satisfactory, showing a NAV
rise of 1.5% (after adding back dividends). Although not an absolute
comparison, it is worth noting that the FTSE AIM All-Share Index rose by 3.4% in
the same period. Your Company has maintained a holding in the Close Special
Situations Fund, but this is expected to reduce as further qualifying
investments are made. However, this investment has been very worthwhile and has
contributed to the NAV growth over the life of your Company.
The discount at which the shares trade to the NAV has remained narrow and not
surprisingly, there has been little trade in the shares. However, your Company
will buy back shares should shareholders have to sell and will endeavour to do
so at a reasonable discount.
Shareholders intending to sell their shares might wish to contact the Investment
Manager, Close Investments Limited on 020 7426 4139.
The year covered by these accounts has seen significant stockmarket volatility.
Shareholders will not need me to remind them of the disturbing events in the
second half of your Company's year, which included a run on a UK bank and the
virtual freezing of UK bank lending. As this calendar year progresses, that
situation may in fact lead to smaller companies raising additional equity
instead of bank finance, a proportion of which should qualify for VCT
investment.
In the meantime, the second half of your Company's financial year saw a
reduction in the number of new issues, although those that did raise capital did
so at increasingly more attractive ratings. The Investment Manager's review
covers the portfolio and new purchases in detail, so I will not dwell on those
matters here. Suffice to say that your Board believes the Company is on track
to reach its minimum 70% qualifying investment level within the three years set
by HM Revenue & Customs.
Risks and uncertainties
As required under the new Listing Rules under which your Company operates, we
are required to comment on the potential risks and uncertainties which could
have a material impact over the VCTs performance. The key risk derives from the
need to meet HM Revenue & Customs regulations requiring 70% of your Company to
be invested in qualifying holdings within three years. Although the UK economy
may still be growing, it could be affected by the current unease in the
financial and property markets. While this could give rise to additional
investment opportunities for a cash rich Company such as yours, a downturn could
affect existing companies' trading prospects and share prices.
Proposed change to the Company's Articles of Association
I draw shareholders attention to the proposed resolution to change the Articles
of Association described in the full Report and Financial Statements. The new
provisions of the Companies Act 2006 include the requirement for Directors to
avoid actual or potential conflicts of interest with effect from 1 October 2008.
The Directors are proposing a resolution to allow Directors to approve actual or
potential conflict situations, should it be in the Company's best interests to
do so, and to allow conflicts of interest to be dealt with in a similar way to
the current position.
Outlook
The end of 2007 will be remembered for the disturbing and quite extraordinary
events in financial markets worldwide. These have continued into 2008 and look
set to remain a serious threat to stockmarket stability for a while yet. In
addition there remain a number of other serious economic issues to resolve
globally and, as recent months have shown, it is not possible for smaller
companies to divorce themselves from the concerns prevailing in the wider market
as a whole. Thus, despite the generally good trading results from many smaller
companies, their share prices have been substantially derated compared to the
FTSE 100 companies and with the high level of risk aversion now paramount in
investment decisions, it is possible that small companies may stay out of favour
for a while. Certainly a slowing rate of UK growth is not a helpful background,
so it may be later this year before a material change in general sentiment is
apparent. All this implies that fundraising by small companies, which is
expected to continue, albeit at a subdued level compared to previous years, will
be at ratings which will look very attractive as the investments mature over the
next few years.
I look forward to seeing as many of you as possible at the AGM at 12.00 noon on
18 April 2008 in 10 Crown Place, London, EC2A 4FT.
Keith Mullins
Chairman
10 March 2008
Investment Manager's report
Market Overview
After a poor performance in 2006 relative to its larger company peers, AIM
recovered strongly in the first half of 2007 and outperformed all other UK
indices. However, it has been a classic tale of two halves, which has seen the
news dominated by the 'credit crisis', slowing global economic growth
(particularly in the US), and UK economic concerns relating to property market
weakness and inflation. Against this backdrop, market sentiment has turned
negative. The result has been a "flight to quality" and quality, in such
conditions, does not include small companies as they are seen as riskier assets.
As a result many institutional investors retained their position in larger
company stocks and sold down their smaller company holdings. As trading volumes
in smaller company shares became a casualty, smaller company shares lost their
premium ratings relative to larger companies. This has continued to be the case
since the end of November as concerns about the global economic environment
remain an issue.
Performance
Despite many companies within the portfolio reporting positive trading updates,
the performance of your Company's NAV has undoubtedly been affected by the rapid
change in market sentiment and falling smaller company valuations. It is fair to
say that share prices at the moment can sometimes bear little relation to
individual companies' trading performances and are not directly related to
supply and demand as liquidity has become poorer. During the period under
review, your NAV increased by 1.5% (after adding back dividends) against a 3.4%
rise in the AIM index. However, as highlighted earlier, the second half of the
financial year has been particularly weak since the credit crisis hit the
headlines in August. As a result, your Company's NAV has fallen by 7.1% against
a 3.4% fall in the AIM index on a total return basis in the second half of the
year.
This outperformance of AIM relative to the portfolio reflects the dominance of
oil and gas and mining stocks, which represent nearly a third of AIM by value.
Buoyancy in commodity markets and continued increases in the price of oil
provided an uplift to the share price performance of these stocks on AIM last
year. It is worth noting that these stocks do not qualify for VCT investment,
therefore your portfolio was unable to benefit from this uplift. However, we
have been encouraged by the good trading results reported by various companies
within the portfolio during the year under review.
Portfolio Activity
The portfolio consists of 23 qualifying holdings at a cost of �10.2m. At the end
of November 2007, the portfolio was 45.8% invested in qualifying holdings, which
is satisfactory.
During the year, 14 qualifying investments were made at a cost of �6.4m. In an
environment of increasing volatility and greater concerns, it is not surprising
that there have been few worthwhile investment opportunities. However, despite
slowing fundraising and IPO activity, particularly in the second half of the
year, the portfolio made six new investments in the second half out of a total
of 14 for the year. The new investments made in the second half of the year are
covered in more detail in the "New Investments" section.
Among the existing holdings, there was mainly good trading news. The
disappointments have been Telephonetics, Twenty and BGlobal. Telephonetics and
Twenty have suffered from a sharp rise in costs resulting in lower profit
margins. However, both companies have announced several contract wins over the
last few months which is encouraging. BGlobal has been affected by the
Government's consultation on smart metering which caused a delay in large scale
installations by a major energy supplier. However, we believe the company is
still well placed to benefit from future market growth. The company recently
announced that it is to supply end-to-end smart metering solutions to Scottish &
Southern Energy's largest electricity business customers.
Claimar Care Group continues to trade well despite ongoing local authority
budget constraints. The company has made several acquisitions over the last year
and the pipeline of opportunities remains strong. Hexagon Human Capital is now
the largest senior interim management provider in Europe following its last
acquisition. The company's latest results showed continued improvement in the
core interim management business. The company's share price fall over the last
few months, though in line with the recruitment sector in general, poorly
reflects the visibility of its income relative to its sector peers.
Neuropharm trials for autism appear to be on track and since float, the company
has signed two major collaborative agreements in the US. IDOX has fully
integrated CAPS Solution which it acquired in June 2007. The trading performance
of both IDOX and CAPS Solution has been strong and the installed base of its
systems continues to grow among local authorities. Both Vertu Motors and the
Individual Restaurant Company have issued positive trading statements despite
concerns about the UK consumer which resulted in both companies suffering
significant share price weakness.
New Investments
The following new investments were made during the six months to the end of
November 2007:
Clerkenwell Ventures
Clerkenwell Ventures is a cash shell formed for the purpose of acquiring
businesses in the restaurant sector.
Craneware
Craneware develops and supplies billing software analysis for the US healthcare
services sector.
Fishworks
Fishworks is a fish restaurant chain operator and fish/seafood retailer.
Melorio
Melorio floated on AIM in October and is a newly formed vehicle aimed at
consolidating the UK vocational training market.
Optimisa
Optimisa is a media consultancy and market research company specialising in
interpreting market data and forecasting business models for new and existing
product lines.
Plastics Capital
Plastics Capital is a manufacturer and supplier of high margin plastic mouldings
and extrusions to the industrial sector.
Outlook
Undoubtedly, the economic outlook, both global and domestic, remains uncertain.
Continued fears about a "fragile" UK consumer on the back of falling house
prices, rising energy and food prices and financial sector woes as a result of
the credit crisis, have resulted in downward revisions to UK GDP growth in 2008.
The Bank of England's decision to cut interest rates first in December and again
in February, appears to mark the beginning of efforts to alleviate some of these
difficulties. However, inflationary pressures remain high on their list of
concerns, but a global economic slowdown in 2008 should mitigate some of these
pressures.
Against this economic and market background, the rate of qualifying issues has
slowed down further over the last few months. However, since the year end, the
portfolio has invested in three new qualifying holdings and at the time of
writing was 49.9% invested for HM Revenue & Customs purposes. We believe this is
satisfactory with three months still to go to achieve the 70% level. It remains
our challenge as Investment Managers to find and invest in well managed, sound
companies which can grow steadily and we believe the current market environment
creates the opportunity to find such companies at sensible valuations.
Although the current economic environment and negative market sentiment is not
helpful to smaller companies, share prices may now discount most of the bad
news. Moreover, even though there may be more uncertainty that has yet to be
weathered, we believe that small companies operating in growing markets can
still prosper and this will be reflected in their share prices over time.
Close Investments Limited
10 March 2008
Statement of Directors' responsibilities
The Directors have chosen to prepare the financial statements for the Company in
accordance with the United Kingdom Generally Accepted Accounting Practice ("UK
GAAP").
Company law requires the Directors to prepare such financial statements for each
financial year which give a true and fair view in accordance with the UK GAAP of
the state of affairs of the Company and of the total return of the Company for
that year and comply with UK GAAP and the Companies Act 1985. In preparing those
financial statements, the Directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgements and estimates that are reasonable and prudent;
* state whether applicable accounting standards have been followed, subject
to any material departures disclosed and explained in the financial
statements; and
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and which enable them to ensure that the financial statements comply
with the Companies Act 1985. They are also responsible for the system of
internal control, for safeguarding the assets of the Company and hence for
taking reasonable steps for the prevention and detection of fraud and other
irregularities. The Directors confirm that applicable accounting standards have
been followed in the financial statements accompanying this report.
The Directors are responsible for ensuring that any electronic publication or
distribution of financial information properly presents the financial
information and any report by us thereon and for the controls over, and security
of, the website. The Directors are also responsible for establishing and
controlling the process for electronically distributing annual reports and other
information.
Income statement
Year ended 30 November 2007 4 August 2005 to 30 November 2006
Revenue Capital Total Revenue Capital Total
Note �'000 �'000 �'000 �'000 �'000 �'000
Gains on investments at fair - 230 230 - 56 56
value 4
Investment income 5 858 - 858 760 - 760
Investment management fees (144) (432) (576) (114) (342) (456)
Other expenses (138) - (138) (119) - (119)
Return/(loss) on ordinary
activities before finance costs
and tax 576 (202) 374 527 (286) 241
Finance costs - - - (4) - (4)
Return/(loss) on ordinary 576 (202) 374 523 (286) 237
activities before tax
Tax (charge)/credit on ordinary
activities 6 (97) 85 (12) (95) 65 (30)
Return/(loss) attributable to
equity shareholders 479 (117) 362 428 (221) 207
Basic and diluted return/(loss)
per A and B Ordinary share
(pence) 8 1.91p (0.47)p 1.44p 1.86p (0.96)p 0.90p
All of the Company's activities derive from continuing operations.
The Company has no recognised gains or losses other than the results for the
year as disclosed above. Accordingly a statement of total recognised gains and
losses is not required.
The total column of the Income Statement represents the profit and loss of the
Company. The supplementary revenue return and capital return columns have been
prepared in accordance with the AITC Statement of Recommended Practice.
Balance sheet
As at As at
Note 30 November 30 November 2006
2007
�'000 �'000
Fixed Assets
Investments at fair value through profit or 22,531 22,342
loss
Current assets
Debtors 123 139
Cash at bank 1,754 1,551
1,877 1,690
Creditors: amounts falling due
within one year (890) (357)
Net current assets 987 1,333
Net assets 23,518 23,675
Capital and reserves:
Called up share capital 9 3 3
Special reserve 23,604 23,623
Realised capital reserve (418) (209)
Unrealised capital reserve 80 (12)
Revenue reserve 249 270
Equity shareholders' funds 23,518 23,675
Net asset value per Ordinary share (pence) 10 94.15p 94.70p
Reconciliation of movements in shareholders' funds
Called Share Realised Unrealised Revenue Total
up share premium Special capital capital reserve
capital reserve reserve reserve
Note �'000 �'000 �'000 �'000 �'000 �'000 �'000
As at 30 November 2006 3 - 23,623 (209) (12) 270 23,675
Net return after taxation - - - (209) 92 479 362
Shares purchased for - - (19) - - - (19)
cancellation
Dividends paid to equity 7 - - - - - (500) (500)
holders
As at 30 November 2007 3 - 23,604 (418) 80 249 23,518
As at 4 August 2005 - - - - - - -
Net return after taxation - - - (209) (12) 428 207
Issue of equity 3 24,998 - - - - 25,001
Issue costs of equity - (1,375) - - - - (1,375)
Transfer to special reserve - (23,623) 23,623 - - - -
Dividends paid to equity 7 - - - - - (158) (158)
holders
As at 30 November 2006 3 - 23,623 (209) (12) 270 23,675
Cash flow statement
Year ended 4 August 2005 to
30 November 2007 30 November 2006
Note �'000 �'000
Operating activities
Investment income 808 192
Interest received 79 438
Investment management fees paid (631) (409)
Other cash payments (138) (66)
Net cash inflow from operating activities 11 118 155
Return on investments and servicing of finance
Interest paid (1) (4)
Taxation (29) -
Capital expenditure and financial investment
Purchase of qualifying investments (5,770) (4,176)
Purchase of non-qualifying investments (16) (18,272)
Disposal of qualifying investments 419 380
Disposal of non-qualifying investments 6,001 -
Net cash inflow/(outflow) from investing activities 634 (22,068)
Equity dividends paid (500) (158)
Revenue dividends paid
Net cash inflow/(outflow) before financing 222 (22,075)
Financing
Issue of Ordinary share capital - 23,626
Cancellation of shares (19) -
Net cash (outflow)/inflow from financing (19) 23,626
Increase in cash 203 1,551
Opening cash balance 1,551 -
Closing cash balance 1,754 1,551
Notes to the financial statements
for the year ended 30 November 2007
The principal activity of the Company is that of a Venture Capital Trust. It has
been approved by HM Revenue & Customs as a Venture Capital Trust under section
842AA of the Income Taxes Act 1988.
1. About the Investment Manager
Close IHT AIM VCT PLC is managed by Close Investments Limited. Close Investments
Limited which is authorised and regulated by the Financial Services Authority
and is a subsidiary of Close Brothers Group plc.
2. Accounting convention
The financial statements have been prepared under the historical cost
convention, modified by the revaluation of certain investments, in accordance
with applicable United Kingdom law and Accounting Standards, and with the
Statement of Recommended Practice "Financial Statements of Investment Trust
Companies" ("SORP") issued by the Association of Investment Trust Companies ("
AITC") in January 2003 and revised in December 2005. Accounting policies have
been applied consistently in current and prior periods.
3. Accounting policies
The financial statements are prepared in accordance with United Kingdom
applicable accounting standards. The particular accounting policies are
described below:
Investments
In accordance with Financial Reporting Standard ("FRS") 26 "Financial
Instruments: Measurement", equity investments, units in an authorised UK smaller
company unit trust and debt securities are designated as fair value through
profit or loss ("FVTPL").
Investments listed on recognised exchanges are valued at the closing bid prices
or last traded price at the end of the accounting period. The total column of
the Income Statement represents the Company's profit and loss account. Fair
value movements on equity investments and gains and losses arising on the
disposal of investments are reflected in the capital column of the Income
Statement in accordance with the AITC's SORP.
Investments are recognised as financial assets on legal completion of the
investment contract and are de-recognised on legal completion of the sale of an
investment.
The Directors are conscious of the fact that because shares are traded on AIM,
this does not guarantee their liquidity. The nature of AIM investments and units
in an authorised UK smaller company unit trust are such that the prices can be
volatile and realisation may not achieve current book value, especially when
such a sale represents a significant proportion of that company's market
capital. Nevertheless, on the grounds that the investments are not intended for
immediate realisation, the Directors regard bid prices as the most objective and
appropriate method of valuation.
Investment income
Dividends receivable on quoted equity shares and units from an authorised UK
smaller company unit trust, are taken to revenue on an ex-dividend basis.
Returns on listed debt securities are recognised on a time apportionment basis
from the date of purchase so as to reflect the effective yield on the
securities.
Investment management fees and other expenses
All expenses are accounted for on an accruals basis. Expenses are charged
through the revenue account except as follows:
* expenses which are incidental to the acquisition of an investment are
included within the cost of the investment;
* expenses which are incidental to the disposal of an investment are deducted
from the disposal proceeds of the investment; and
* expenses are allocated between capital and revenue where a connection with
maintenance or enhancement of the value of the investments held can be
demonstrated. In respect of the Investment Manager's fee, 75 per cent has
been allocated to the realised capital reserve and 25 per cent to revenue
in the Income Statement.
Performance incentive
In the event that a performance fee crystallises, the fee will be allocated
between revenue and realised capital reserves (net of corporation tax) based
upon the proportion to which the calculation of the fee in attributable to
revenue and capital returns.
Debtor and creditors
Debtors are non-interest bearing, are short term in nature and are accordingly
stated at their nominal value as reduced by appropriate allowances for estimated
irrecoverable amounts. The Directors consider that the carrying amount of
debtors approximates to their fair value.
Creditors are non-interest bearing and are stated at their nominal value. The
Directors consider that the carrying amount of creditors approximates their fair
value.
Taxation
Taxation is applied on a current basis in accordance with FRS 16 "Current Tax",
and is based on the profit before taxation for the year. Taxation associated
with capitalised expenses is applied in accordance with the SORP. In accordance
with FRS 19 "Deferred Tax", deferred taxation is provided in full on timing
differences that result in an obligation at the balance sheet date to pay more
tax or a right to pay less tax, at a future date, at rates expected to apply
when they crystallise based on current tax rates and law. Timing differences
arise from the inclusion of items of income and expenditure in taxation
computations in periods different from those in which they are included in the
financial statements. Deferred tax assets are recognised to the extent that it
is regarded as more likely than not that they will be recovered.
The specific nature of taxation of venture capital trusts means that it is
unlikely that any deferred tax will arise. The Directors have considered the
requirements of FRS 19 and do not believe that any provision should be made.
Reserves
The realised capital reserve contains gains and losses on the realisation of
investments, capital dividends paid to shareholders and investment management
fees allocated to the capital reserve and taxation thereon. The unrealised
capital reserve contains increases and decreases in the valuation of investments
held at the period end. The special reserve is distributable and is primarily
used for the cancellation of the Company's share capital. The capital redemption
reserve accounts for amounts by which the issued share capital is diminished
through the repurchase of the Company's own shares.
Dividends
In accordance with FRS 21 "Events after the balance sheet date" dividends
declared by the Company are accounted for in the period in which the dividend is
paid or approved by shareholders at an annual general meeting.
4. Gains on investments at fair value
Year ended 4 August 2005 to
30 November 2007 30 November 2006
�'000 �'000
Realised gains on disposals 138 68
Unrealised appreciation/(depreciation) 92 (12)
Total 230 56
5. Investment income
Year ended 4 August 2005 to
30 November 2007 30 November 2006
�'000 �'000
Dividend income 25 1
Floating Rate Note interest 685 284
Bank deposit interest 92 451
Management fee rebate 56 24
Total 858 760
All of the Company's income is derived from operations based in the United
Kingdom.
6. Tax charge/(credit) on ordinary activities
Year ended 30 November 2007 4 August 2005 to 30 November 2006
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
UK corporation tax 97 (85) 12 95 (65) 30
Approved Venture Capital Trusts are exempt from taxation on investment gains
made.
The tax assessed for the period is lower than the standard rate of corporation
tax in the UK of 30 per cent as it is subject to the smaller companies tax rate
of 19 per cent to 31 March 2007 and 20 per cent from 1 April 2007 (2006: 19 per
cent). The actual tax charge for the current and previous year is below the
smaller companies rate for the reasons set out in the following reconciliation:
Year ended 30 November 2007 4 August 2005 to 30 November 2006
Revenue Capital Total Revenue Capital Total
�'000 �'000 �'000 �'000 �'000 �'000
Return on ordinary 576 (202) 374 523 (286) 237
activities before taxation
UK corporation tax at 20% 115 (40) 75 99 (54) 45
(2006: 19%)
Factors affecting the
charge:
Non-taxable income (18) - (18) (4) - (4)
Non-taxable gains on - (45) (45) - (11) (11)
investments
Total 97 (85) 12 95 (65) 30
No provision for deferred tax has been made in the current or prior accounting
period.
7. Dividends
Year ended 4 August 2005 to
30 November 2007 30 November 2006
�'000 �'000
Dividends of 2.00 pence per share (2006:1.40 pence) 500 158
In addition to the above dividends paid March and August 2007, the Board has
declared a dividend of 1.00 pence per A and B Ordinary share to be paid on 22
April 2008 to shareholders on the register as at 25 March 2008.
8. Basic and diluted return/(loss) per A and B Ordinary share
Year ended 30 November 2007 4 August 2005 to 30 November 2006
Revenue Capital Total Revenue Capital Total
(pence) (pence) (pence) (pence) (pence) (pence)
Basic pence per Ordinary share 1.91 (0.47) 1.44 1.86 (0.96) 0.90
Revenue return per share is based on the net profit on ordinary activities after
taxation of �479,000 (2006: �428,000) in respect of 25,053,501 (2006:
23,046,946) being the weighted average number of A and B Ordinary shares in
issue during the year.
Capital return per A and B Ordinary share is based on the net capital loss on
ordinary activities after taxation for the year of �117,000 (2006: �221,000) in
respect of the same weighted average number of shares in issue as stated above.
There are no dilutive elements and hence the basic return per share is the same
as the diluted return per share.
A Ordinary shares and B Ordinary shares currently rank pari passu for
distribution and net asset value purposes, hence the return per share is
calculated on the number of both A and B shares issued.
9. Called up share capital
30 November 2007 30 November 2006
Authorised
275,000,000 A Ordinary shares of 0.01p each 27 27
275,000,000 B Ordinary shares of 0.01p each 27 27
Allotted, called up and fully paid
�'000 �'000
7,299,461 (2006: 7,319,861) A Ordinary shares of 0.01p 1 1
each
17,680,650 (2006: 17,680,650) B Ordinary shares of 0.01p 2 2
each
Total 3 3
All classes of shares rank pari passu as to rights to attend and vote at any
general meeting of the Company, and to receive dividends.
The capital and assets of the Company shall on a winding up be divided amongst
the holders of each class of share pro rata according to their shareholding.
On 23 February 2007 the Company purchased for cancellation 20,400 A Ordinary
shares at a cost of �18,360. This represented 0.28 per cent of the A ordinary
shares.
10. Net asset value per Ordinary share
Basic net asset value per share is based on net assets attributable to A and B
Ordinary shareholders of �23,518,203 (2006: �23,675,116) and on 24,980,111
(2006: 25,000,511) A and B Ordinary shares in issue at the year end.
11. Reconciliation of cash inflow from operating activities
Year ended 4 August 2005 to
30 November 2007 30 November 2006
�'000 �'000
Return on ordinary activities before finance costs and 374 241
taxation
Net capital return before finance costs and taxation 202 286
Investment management fees charged to capital (432) (342)
Decrease/(increase) in operating debtors 16 (139)
(Decrease)/increase in operating creditors (42) 109
Net cash inflow from operating activities 118 155
12. Related party transactions
Close Investments Limited, as Investment Manager of the Company is considered to
be a related party by virtue of its management contract with the Company. During
the year, services of a total value of �576,000 (2006: �456,000) were purchased
by the Company from Close Investments Limited. At the financial year end, the
amount due to Close Investments Limited disclosed under creditors was nil (2006:
�47,000), the amount due from Close Investments Limited disclosed under debtors
was �8,000 (2006: nil).
As at 30 November 2007, the Company held 3,412,432 units in Close Special
Situations Fund, an authorised unit trust managed by Close Investments Limited.
The Company received a rebate of �56,000 (2006: �24,000)on the management fees
charged by Close Special Situations Fund in the year under review. The Close
Special Situations Fund held an investment in Tenon Group PLC, a company of
which Andrew Raynor is Chief Executive Director.
Buybacks of shares for cancellation during the year were transacted through
Winterflood Securities Limited, a subsidiary of Close Brothers Group plc, the
ultimate parent company of the Investment Manager, Close Investments Limited. A
total of 20,400 (2006: nil) A ordinary shares were purchased at a price of 90
pence per share.
13. Post balance sheet events
The following investments have been completed since 30 November 2007:
* Invested �750,000 in Research Now plc;
* Invested �600,000 in Ritchey plc and
* Invested �375,000 in Lombard Medical Technologies plc
The following investments have disposed of since 30 November 2007:
* Abbey National Treasury Floating Rate Note 22/09/08 for proceeds of
�2,997,000 and
* BBI Holdings plc for proceeds of �434,000
On 8 February 2008, it was announced that Hatpin plc had been temporarily
suspended from AIM.
14. Financial Information
The information set out in this announcement does not constitute the Company's
statutory accounts within the terms of Section 240 of the Companies Act 1985 for
the year ended 30 November 2007 and 30 November 2006, but is derived from those
statutory accounts. Statutory accounts for the year ended 30 November 2006 have
been delivered to the Registrar of Companies and those for the year ended 30
November 2007 will be delivered following the Company's Annual General Meeting.
The auditors reported on those accounts; their report was unqualified and did
not contain a statement under Section 237(2) or (3) of the Companies Act 1985.
Whilst the financial information included in this preliminary announcement has
been computed in accordance with United Kingdom Generally Accepted Accounting
Practice (UK GAAP), this announcement does not itself contain sufficient
information to comply with UK GAAP. The Company expect to publish full financial
statements that comply with UK GAAP.
15. Publication
The full Report and Financial Statements is being sent to shareholders and
copies will be made available electronically at www.closeventures.co.uk. The
full Report and Financial Statements will also be made available to the public
at the registered office of the Company, Companies House and via the FSA viewing
facility.
For further information, please contact:
Andrew Buchanan / Freda Isingoma Karen Wagg
Close Investments Limited Polhill Communications
Tel: 020 7426 4139 Tel: 0207 655 0540
This information is provided by RNS
The company news service from the London Stock Exchange
END
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