Financial review

Net asset value

As at 31st December, 2007 the net assets attributable to the ordinary shares were £451.3 million, compared to net assets of £328.5 million at 31st December, 2006.

Net asset value (£m) 2007

* Adjusted for the return of cash of £101.4 million
** Restated under IFRS – UK GAAP figure was £312.6 million

The movement in net assets over the year is mainly due to net realised gains over prior valuation of £65.9 million, a net increase of £55.6 million on the revaluation of investments, reflecting the maturing of our investments alongside the Candover 2001 Fund, plus other movements.

Net asset bridge analysis (£m)

 

Net asset per share

As at 31st December, 2007 net assets per share were 2065.0p compared to 1503.0p at 31st December, 2006 and 1848.0p at 30th June, 2007. The increase in net assets over the 12 months to 31st December, 2007 of 37.4% compares with an increase of 2.0% in the FTSE All-Share Index over the same period. The increase in net assets per share over the six months to 31st December, 2007 was 11.7% compared to a decrease in the FTSE All-Share Index over the same period of 3.5%.

Indexed net asset value per share*
1997-2007

* Indexed from 31st December, 1997 and adjusting for the return of cash of £101.4 million in 2006

The compound growth in net assets per share on a five and ten year basis was 21.3% and 14.5% respectively, compared to increases in the FTSE All-Share Index of 11.7% and 3.1% respectively over the same periods.

 

Profits before tax

Revenue profits before tax for the year were £21.0 million, compared with £20.6 million for the 12 months to 31st December, 2006. The slight increase in profit was mainly due to increased income from investments and reduced expenses, partly offset by lower income on cash following the return of cash during 2006, and the reduction in management fees arising due to realisations from the Candover 2001 Fund.

Profit before tax (£m) 2007

 

Valuation of investments

The valuation of financial investments at 31st December, 2007 was £344.9 million (2006: £295.3 million). This valuation of £344.9 million was calculated having taken into account realisations net of new investments amounting to £6.0 million, and a net increase of £55.6 million in the valuation of our investments.

The net increase in the valuation of our investments comprised upward movements of £52.8 million and downward adjustments of £13.9 million, with gains from FX movements on the portfolio since 30th June, 2007 of £16.7 million. The increase in valuations reflects the maturing of the investments alongside the Candover 2001 Fund, which have shown growth in profitability since acquisition, with the average age of investments alongside that fund now 46 months. Due to the increased value of the investments in the Candover 2001 Fund, we have further increased the value of the carried interest in that fund by £12.5 million during the year.

Investment bridge analysis (£m)

 

Net cash position

Cash and cash equivalents, net of loans of £126.1 million, totalled £114.2 million (2006: £29.7 million) at the year-end, representing 25.3% of our net assets (2006: 9.0%). This increase was mainly due to successful realisations during the year including the impact on cash flow from operating activities of receipts on loan stock interest from disposals or refinancings.

Listed shares at the year-end totalled £24.6 million (2006: £11.3 million), representing 5.4% of our net assets (2006: 3.4%).

Net cash as % of net assets 2007

* Return of cash of £101.4 million during 2006

 

Dividends

At the half year the Board increased the interim dividend by 11.1% from 18.0p per share to 20.0p per share. The Board is recommending a final dividend of 40.0p per share (36.0p per share for 2006), making a dividend payable for the year of 60.0p per share against 54.0p for the previous year, an increase of 11.1%.

Payment of the dividend will be made on 22nd May, 2008 to shareholders on the register at 25th April, 2008.

Total dividend per share (p) 2007