Interim Results

SVM OFEX FUND PLC Results for the six months to 30 September 2003 KEY POINTS * Net Asset Value decreased by 10.3% over the period under review. Net asset value per ordinary share is 49.9p. * Good business progress being made by a number of companies, contrasting with a lack of share price performance. * New investor interest in smaller companies has returned to more senior markets but this has not as yet extended to the OFEX market. * Some 18% of portfolio now listed on AIM. Further listings likely given an increasingly positive investment environment. - Ends - For further information, please contact: David Stevenson SVM Asset Management 0131 226 6699 Roland Cross Broadgate 020 7726 6111 . SVM OFEX FUND PLC Chairman's Statement Unaudited results for the six months to 30 September 2003 'In the period under review, the Fund's net asset value decreased by 10.3% from 55.6 pence to 49.9 pence. Whilst investor interest in smaller companies has returned to more senior markets, it has not as yet extended to OFEX. As a consequence, the Fund's relative performance for the period was disappointing. The recent pattern across much of the portfolio has been one of good business progress by companies, contrasting with a lack of share price performance. Several companies within the portfolio reported solid growth in their businesses during the period. Four of these are now profitable, whilst nine others are achieving substantial turnover gains and could reach profitability in the near term. Together, these two groupings generate an annualised turnover base of some £65 million, and represent 60% of the portfolio. Further confirmation of the increasing maturity of these companies comes from the fact that two of them received bid approaches during the period. This follows the takeover of portfolio company Squaresum, in December of last year. Whilst the recent approach for motor vehicle finance provider Britannia has since been rejected by the company, the shares are now substantially higher than the original bid. In the other case, involving healthcare property developer Ashley House, discussions are continuing. The Fund's performance was impacted by provisions totalling £275,000 made against the carrying value of its six unquoted holdings. Most of this writedown reflected the refinancing of three of the companies during the period at reduced valuations. The total unquoted exposure within the Fund is now 10%. Elsewhere in the portfolio, business progress was converted into share price gains for only about half of the Fund's core holdings. Strong gains were achieved by business grants consultant j4b and print services provider Printing.com, but marketing group Chemistry Communications, smoke alarm manufacturer Sprue Aegis and degradable packaging manufacturer Symphony Plastics, all suffered declines. This was in spite of announcing like-for-like turnover growth rates ranging between 55% and 85%. We believe such a performance pattern is more a consequence of low trading volumes on the OFEX market, as institutional investors remain absent. The Fund's recent performance has been poor, and it is particularly frustrating that the stockmarket's renewed appetite for smaller, growth companies does not yet extend to those on OFEX. The Managers continue to believe that the business progress being achieved by several portfolio companies will be translated into share price gains. Some 18% of the portfolio is now listed on AIM, with the likelihood that further promotions can be achieved in an increasingly positive investment environment. The Fund is well placed to benefit from these trends.' Peter Dicks Chairman 24 October 2003 . Summarised Unaudited Statement of Total Return 6 months to 30 September 6 months to 30 September 2003 2002 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Losses on sale of - (103) (103) - - - investments Movement in - (154) (154) - (748) (748) unrealised depreciation -------- -------- -------- -------- -------- -------- Losses on - (257) (257) - (748) (748) investments Income 2 - 2 8 - 8 Investment - (12) (12) - (18) (18) management fees Other expenses (46) - (46) (36) - (36) -------- -------- -------- -------- -------- -------- Transfer from (44) (269) (313) (28) (766) (794) reserves -------- -------- -------- -------- -------- -------- Return per ordinary (0.81p) (4.93p) (5.74p) (0.52p) (14.03p) (14.55p) Share . Unaudited Balance Sheet As at As at 30 September 30 September 2003 2002 £'000 £'000 Investments 2,649 3,598 Net current assets 76 238 --------- --------- Ordinary shareholders funds 2,725 3,836 --------- --------- Net asset value per ordinary share 49.91p 70.26p . Summarised Unaudited Cash Flow 6 months to 6 months to Statement 30 September 30 September 2003 2002 £'000 £'000 Net cash flow from operating (48) (63) activities Capital expenditure and financial (214) (375) investment Servicing of finance (1) - -------- -------- Decrease in cash (263) (438) -------- -------- . Notes 1. The results reflect the adoption in the accounts of the Statement of Recommended Practice (SORP) issued by the Association of Investment Trust Companies. 2. Returns per Ordinary Share are based on 5,460,000 shares in issue during the period (30 September 2002 - same). The number of shares in issue at 30 September 2003 was 5,460,000. (30 September 2002- same). 3. The above figures do not constitute full accounts in terms of Section 240 of the Companies Act 1985. The accounts for the year to 31 March 2003, which were unqualified, have been lodged with the Registrar of Companies. The interim report will be mailed to shareholders in early November 2003. Copies will be available for inspection at 7 Castle Street, Edinburgh, the registered office of the Company. ENDS

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