Final Results
November 13 2003 - 9:05AM
UK Regulatory
RNS Number:0455S
Close Finsbury Eurotech Trust PLC
13 November 2003
13 November 2003
Close Finsbury EuroTech Trust PLC
Preliminary Results for the year ended 31 August 2003
Highlights As at As at % change
31 August 2003 31 August 2002
(Unaudited) (Audited)
Total net assets #12.5m #8.7m 43.7
Net asset value per Ordinary 36.66p 25.51p 43.7
share
Share Price 28.5p 19.8p 43.9
Discount 22.3% 22.4% -
FTSE eTX All Share Index (sterling 191.1 159.9 19.5
adjusted)
FTSE eTX Innovation Index 161.4 149.2 8.2
(sterling adjusted)
Morgan Stanley Capital
International
Pan-Euro Index (sterling adjusted) 808.4 770.3 4.9
According to data provided by the Association of Investment Trust Companies, the
Company was the best performing of all UK listed investment trusts in the twelve
months to 30 September 2003.
Chairman, Peter Gray, commented:
'These results reflect a significant recovery in the prospects for investment in
technology markets and demonstrate the exceptional strength of Reabourne
Technology Investment Management Limited as advisers on such investment. There
are now substantial grounds for anticipating sustained long term growth from
early stage investment in European companies pioneering new technologies, and we
believe that Close Finsbury EuroTech Trust plc has established itself as the
leading vehicle for obtaining exposure to this field.
By offering a broadly diversified, professionally selected portfolio of
investments, through a closed end structure, the Company has an important role
to play in offering access to the high returns potentially available, at much
lower levels of risk and with considerably greater liquidity than would be the
case from investment direct.'
- ENDS -
The following are attached:
* Chairman's Statement
* Statement of Total Return
* Balance Sheet for the Company
* Cash Flow Statement
* Notes
For further information please contact:-
Michael Bourne
Reabourne Technology Investment Management Limited 020 7426 6290
Alastair Smith
Close Finsbury Asset Management Limited 020 7426 6240
Tracey Gower
Close Finsbury Asset Management Limited 020 7426 6219
Fiona Harris
Quill Communications 020 7763 6977
Peter Gray
Chairman 020 7863 6574
CLOSE FINSBURY EUROTECH TRUST PLC
Chairman's Statement
Performance
The year to 31 August 2003, taken as a whole, has seen a sharp recovery in
performance both in absolute terms and relative to the technology sector as a
whole. Net assets rose by 43.7%, from 25.5p to 36.7p per share. The share price
rose by a similar amount from 19.8p to 28.5p per share, representing a discount
to net asset value virtually unchanged at 22.3%. By comparison the FTSE eTX All
Share and Innovation indices rose by 19.5% and 8.2% respectively. The long term
performance benchmark, the MSCI Pan-European Index (sterling adjusted), which
reflects the performance of European stock markets generally, rather than the
technology sector in particular, rose by 4.9% over the same period.
Since 31 August 2003 this recovery has continued further. At 11 November 2003,
the latest practicable date before the release of these results, the net assets
of the Company had risen to 41.72p per share and the price of its ordinary
shares to 34.5p per share, resulting in a reduced discount to net asset value of
17%. According to data provided by the Association of Investment Trust
Companies, the Company was the best performing of all UK listed investment
trusts in the twelve months to 30 September 2003.
Activity
These results reflect action taken earlier in the year to re-position the
portfolio in order to take full advantage of a recovery in technology markets
when it occurred. As described at greater length in the interim report, this was
designed to increase exposure to companies pioneering new technologies with
significant long term growth potential, many of which had become exceptionally
undervalued by the market - for example, at levels where market capitalisation
barely exceeded net cash resources, despite net cash flow being firmly under
control. This undervaluation reflected the relatively small size of many of
these companies, the lack of marketability in their shares, restricted ability
to assess the technology involved and a decline in research coverage and broker
support. Your Board, however, believe that the Company's investment advisers,
Reabourne Technology Investment Management, have demonstrated that they are
particularly well equipped to identify attractive investment opportunities in
this field.
Investment Prospects
In the opinion of your Board and of Reabourne, the recovery in technology
markets that has now occurred should be seen primarily as a response to
stabilisation in the industry and a correction to oversold market levels. It has
not yet begun to anticipate prospects of a more fundamental recovery in the
longer term technology cycle, at least so far as shares in European technology
companies are concerned. However, current expenditure on technology remains at
well below 1999 levels; there is substantial unsatisfied demand for new
technologies, such as digital and wireless broadband applications in which the
position of European technology companies is particularly strong; and the range
of new applications of technology in general to many aspects of life is becoming
ever more extensive. Although there are currently mixed signals as to the extent
to which such a recovery in the technology cycle is already under way, the
imminence of such a recovery is not in question. In a context of relatively
moderate prospects for global economic growth overall, therefore, the prospects
for sustained growth from investment in technology look conspicuously
attractive.
Future of the Company
On the one hand, as indicated above and in previous reports, we remain convinced
of the validity of European technology as a distinct and attractive investment
theme; we believe that current prospects for investment in this area are
exceptionally favourable; and we regard Reabourne as particularly well qualified
to advise on such investment. We also consider the structure of your Company to
be appropriate for this purpose - the inherently risky nature of the underlying
investments requiring a broadly diversified portfolio and the illiquidity of
these investments requiring a closed end vehicle, despite the possibilities for
shares to trade at a discount to asset value that this creates. On purely
investment grounds, therefore, the overall priority must be to ensure that
shareholders, particularly those that invested early in the Company's life and
who have suffered substantial loss on their investment so far, benefit to the
maximum possible degree from the sustained recovery in technology markets that
is clearly now in prospect.
On the other hand, the relatively small size of the Company, leading to
illiquidity in its own shares and the discount to asset value at which they have
recently tended to trade, discourages the sort of large scale institutional
investor that might otherwise find it particularly attractive. If the Company is
to fulfil its true potential it ought to be increased in size and your Board
believes that current prospects for investment in technology are such as to
justify further commitment on a significant scale.
It is against this background and in the light of the continuation vote to be
put to shareholders at the 2003 AGM that your board and their advisers are
assessing the future of the Company and considering proposals to expand the
Company in the interests of shareholders as a whole. A further announcement will
be made in conjunction with the posting of the annual report and accounts for
the year ended 31 August 2003.
Peter Gray
Chairman
13 November 2003
CLOSE FINSBURY EUROTECH TRUST PLC
Statement of Total
Return
Incorporating the revenue account for the year to 31 August 2003
(unaudited) (audited)
year to year to
31 August 2003 31 August 2002
Revenue Capital Total Revenue Capital Total
2003 2003 2003 2002 2002 2002
#'000 #'000 #'000 #'000 #'000 #'000
Profit/(loss) on - 4,109 4,109 - (5,417) (5,417)
investments
Exchange losses on - (18) (18) - (16) (16)
currency balances
Income 75 - 75 96 - 96
Investment management (106) - (106) (184) - (184)
fee
Other expenses (244) - (244) (297) - (297)
------- ------ ------ ------ ------- -------
Net (loss)/return (275) 4,091 3,816 (385) (5,433) (5,818)
before finance costs
and taxation
Interest payable and (1) - (1) (1) - (1)
similar charges
------- ------ ------ ------ ------- -------
(Loss)/return on (276) 4,091 3,815 (386) (5,433) (5,819)
ordinary activities
before taxation
Taxation on ordinary (3) - (3) (2) - (2)
activities
------- ------ ------ ------ ------- -------
(Loss)/return on (279) 4,091 3,812 (388) (5,433) (5,821)
ordinary activities
after taxation
Dividends on Ordinary - - - - - -
shares (equity)
------- ------ ------ ------ ------- -------
(Loss)/return for the (279) 4,091 3,812 (388) (5,433) (5,821)
year ------- ------ ------ ------ ------- -------
(Loss)/return per (0.82)p 11.96p 11.14p (1.13)p (15.89)p (17.02)p
Ordinary share ------- ------ ------ ------ ------- -------
The revenue column of this statement is the profit and loss account of the
Company.
CLOSE FINSBURY EUROTECH TRUST PLC
Balance Sheet
As at 31 August 2003
(Unaudited) (Audited)
as at as at
31 August 03 31 August 02
#'000 #'000
--------- ---------
Fixed asset investments 12,547 8,629
Current assets
Debtors 290 210
Cash at bank 14 105
---------
304 315
Creditors
Amounts falling due within one year (313) (218)
--------- ---------
Net current (liabilities)/assets (9) 97
--------- ---------
Net assets 12,538 8,726
--------- ---------
Capital and reserves
Share capital 3,420 3,420
Share premium account 29,976 29,976
Capital reserve - realised (18,579) (15,000)
Capital reserve - unrealised (1,418) (9,088)
Revenue reserve (861) (582)
--------- ---------
Total equity shareholders' funds 12,538 8,726
--------- ---------
Net asset value per Ordinary share 36.66p 25.51p
--------- ---------
Cash Flow Statement
For the year to 31 August 2003
(Unaudited) (Audited)
year ended year ended
31 August 2003 31 August 2002
#'000 #'000
---------- -----------
Net cash outflow from operating (224) (409)
activities
Servicing of finance
Interest paid (1) (1)
Taxation
Net tax recovered 1 2
Financial investments
Purchases of investments (5,361) (12,297)
Sales of investments 5,517 12,808
---------- -----------
Net cash inflow from financial investment 156 511
Net cash (outflow)/inflow before (68) 103
financing
Financing - -
---------- -----------
Net cash flow from financing - -
---------- -----------
(Decrease)/increase in cash for the year/ (68) 103
period ---------- -----------
CLOSE FINSBURY EUROTECH TRUST PLC
Notes to the Accounts
1. Revenue Account
The revenue column of the Statement of Total Return represents the revenue
account of the Company.
2. Income
Income for the year was derived from the following sources:
(unaudited) audited year
year to 31 to 31 August
August 2003 2002
#000 #000
Income from investments
Franked dividends 12 16
Overseas dividends 44 31
Interest income on debt securities 14 36
Other income
Bank interest income 5 13
------------ -------------
Total Income 75 96
------------ -------------
3. Investment Management Fee
(unaudited ) audited year
year to 31 to 31 August
August 2003 2002
#000 #000
Periodic Fee 92 160
Irrecoverable VAT thereon 14 24
------------ --------------
Total 106 184
------------ --------------
4. (Loss)/return per ordinary share
Revenue Loss
Revenue loss per share is based on the revenue losses attributable to equity
shareholders of #279,000 (2002: #388,000 loss).
Capital Return/(Loss)
Capital return per share is based on the capital returns attributable to equity
shareholders of #4,091,000 (2002: #5,433,000 loss). Both the revenue loss and
the capital return are based on the weighted average number of 34,200,875 (2002:
34,200,875) Ordinary shares in issue throughout the year.
5. Net Asset Value per Share
The net asset value per Ordinary share is based on the assets attributable to
equity shareholders of #12,538,000 (2002: #8,726,000) and on the number of
Ordinary shares in issue at the year end of 34,200,875 (2002: 34,200,875).
6. Comparative Information
The figures and the financial information for the year ended 31 August 2002 are
an extract from the latest published accounts and do not constitute statutory
accounts for that year as defined by Section 240 of the Companies Act 1985.
Those accounts have been delivered to the Registrar of Companies and included in
the report of the auditors which was unqualified and did not contain a statement
under either Section 237 (2) and 237 (3) of the Companies Act 1985. The annual
report and accounts for the year ended 31 August 2003 will be sent to
shareholders in due course.
Close Finsbury Asset Management Limited
Company Secretary
13 November 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
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