Final Results

Baronsmead VCT 2 PLC 28 May 2003 Baronsmead VCT 2 plc To: RNS From: Baronsmead VCT 2 plc Date: 28• May 2003 Unaudited Preliminary Results - Year Ended 31 March 2003 • NAV fell to 96.7p from which 7.0 pence per share of dividends were paid, leaving a revised NAV of 89.7p at the year end • The first capital distribution was made following the sale of Tricom • Revenue and capital dividends totalling 7.0 pence per share for the year • Total return of 15.5 per cent since launch in April 1998, ahead of FTSE All-Share Index by 45 per cent over the comparable period • The well-diversified portfolio increased to 45 companies Results During the year to 31 March 2003 the Net Asset Value per share decreased by 3.9 per cent from 100.5p to 96.7p before the payment of 7.0p dividends per share. The comparable reduction in the FTSE All-Share index (total return) was 29.8 per cent while the falls in the FT indices for smaller companies were higher still. The Board is also aware of the importance of maintaining close control of costs and these have been reduced to 2.7% of net assets (prior to the payment of dividends). The dividends paid during the year comprised 2.1p per share from income and 4.9p per share from the distribution of the profit realised from the successful sale of Tricom. The main measure of investment performance is the total return derived from the increase in net asset value per share assuming dividends are reinvested. The Board regularly reviews the total return of the Company against the FT indices and other VCTs with similar investment policies. During the year your Company has consistently remained in the top three of this group of 34 generalist VCTs and currently is second only to Baronsmead VCT. Investment Environment The Managers are seeing some signs that the economic uncertainty of the last year is diminishing although it is likely that any significant recovery will take some years to feed through to business generally. The approach of the Managers is to invest across its five chosen sectors, which because of their different 'demand cycles' can give greater consistency. For instance the consumer boom is now cooling while IT and media are believed to be emerging from their nadirs. Another encouraging sign is that corporate buyers have begun to show interest in the acquisition of a number of our portfolio companies of which Tricom is a very interesting example recently sold to the BSS Group. As reported at the interim stage, a number of provisions were made in the unquoted portfolio although latterly the overall news from this part of the portfolio has improved. Outlook We have weathered the recent economic uncertainty better than many investment funds although the UK economy is likely to see a slow and fragile recovery. The Managers remain selective in terms of investment choice and are actively involved in the progress of investees within the unquoted portfolio. The ability of Baronsmead VCT 2 to return cash to shareholders has become more evident during the last year and there are prospects for sale of some other investees. The priority during the current year is to increase the size of the portfolio at what will hopefully be a good point in the economic cycle for longer-term investment into above average growth companies. David Thorp, ISIS Equity Partners plc : 0207 506 1100 Gary Fraser, ISIS Asset Management plc : 0131 465 1000 Unaudited Profit and Loss Account of the Company For the year ended 31 March 2003 2003 2003 2003 Revenue Capital Total £'000 £'000 £'000 Losses on realisation of Investments - (267) (267) Income 1,809 - 1,809 Investment management fee (193) (580) (773) Other expenses (295) - (295) ---------- ----------- ----------- Profit/(loss) on ordinary activities before taxation 1,321 (847) 474 Taxation on ordinary activities (349) 187 (162) ---------- ----------- ----------- Profit/(loss) on ordinary activities after taxation 972 (660) 312 Dividends paid (858) (2,004) (2,862) ----------- ----------- ----------- Retained profit/(loss) transferred from reserves 114 (2,664) (2,550) ---------- ---------- ----------- Earnings/(loss) per ordinary share 2.37p (1.61)p 0.76p ______ _____ _____ Statement of Total Recognised Gains and Losses 2003 2030 2003 Revenue Capital Total £'000 £'000 £'000 Profit/(loss) on ordinary activities after taxation 972 (660) 312 Unrealised loss on revaluation of investments - (1,926) (1,926) ---------- ----------- ----------- Total recognised gain/(loss) during the year 972 (2,586) (1,614) ---------- ----------- ----------- Total recognised gain/(loss) per ordinary share 2.37p (6.31)p (3.94)p Audited Profit and Loss Account of the Company For the year ended 31 March 2003 2002 2002 2002 as restated Revenue Capital Total £'000 £'000 £'000 Gains on realisation of Investments - 3 3 Income 2,135 - 2,135 Investment management fee (210) (630) (840) Other expenses (335) - (335) ---------- ----------- ----------- Profit/(loss) on ordinary activities before taxation 1,590 (627) 963 Taxation on ordinary activities (434) 200 (234) ---------- ----------- ----------- Profit/(loss) on ordinary activities after taxation 1,156 (427) 729 Dividends paid (1,142) - (1,142) ----------- ----------- ----------- Retained profit/(loss) transferred to/(from) reserves 14 (427) (413) ---------- ---------- ----------- Earnings/(loss) per ordinary share 2.84p (1.05)p 1.79p ______ _____ _____ Statement of Total Recognised Gains and Losses 2002 2002 2002 as restated Revenue Capital Total £'000 £'000 £'000 Profit/(loss) on ordinary activities after taxation 1,156 (427) 729 Unrealised loss on revaluation of investments - (4,413) (4,413) ---------- ----------- ----------- Total recognised gain/(loss) during the year 1,156 (4,840) (3,684) ---------- ----------- ----------- Total recognised gain/(loss) per ordinary share 2.84p (11.91)p (9.07)p Unaudited Balance Sheet 31.3.03 31.3.02 as restated £'000 £'000 Assets Investments Listed investments 343 673 Alternative Investment Market 6,625 5,301 Quoted on OFEX 310 266 Unquoted investments 12,212 11,950 Listed fixed interest investments 7,155 21,477 _____ _____ 26,645 39,667 Net current assets 10,006 1,527 Total assets less current liabilities 36,651 41,194 Financed by Shareholders' funds 36,651 41,194 Net asset value per ordinary share: Basic 89.65p 100.54p Ordinary shares in issue 40,881,722 40,971,186 Summarised Unaudited Statement of Cash Flows Year to Year to 31 March 31 March 2003 2002 as restated £'000 £'000 Net cash inflow from operating activities 1,201 816 Taxation (217) (203) Capital expenditure and financial investment 9,747 2,106 Equity dividends paid (3,477) (1,409) ----------- ----------- Net cash inflow before financing 7,254 1,310 Financing (117) 1,003 ----------- ----------- Increase in cash 7,137 2,313 ----------- ----------- Reconciliation of net cash flow to movement in net cash Increase in cash 7,137 2,313 Opening net cash 2,752 439 ----------- ----------- Net cash at 31 March 2003/2002 9,889 2,752 ----------- ----------- Profit on ordinary activities before taxation 474 963 Loss/(profit) on realisation of investments 267 (3) Decrease/(increase) in debtors 494 (123) Decrease in other creditors (34) (21) ----------- ----------- Net cash inflow from operating activities 1,201 816 ----------- ----------- Notes 1. The unaudited results which cover the year to 31 March 2003 have been prepared under the historical cost convention, modified to include the revaluation of fixed asset investments. These accounts have been prepared in accordance with applicable accounting standards and on the assumption that the Company maintains VCT status. 2. Revenue return per Ordinary Share is based on a weighted average of 40,961,609 (2002 : 40,622,274) Ordinary Shares in issue during the year. 3. There were 40,881,722 Ordinary Shares in issue at 31 March 2003 (2002 : 40,971,186). 67,012 Ordinary Shares were issued through the Offer for Subscription and 133,524 Ordinary Shares were issued through the Dividend Reinvestment Scheme. The Company bought back 290,000 Ordinary Shares for cancellation during the year. 4. These are not statutory accounts in terms of Section 240 of the Companies Act 1985. Full statutory accounts for the year to 31 March 2002, which were unqualified, have been lodged with the Registrar of Companies. No statutory accounts in respect of any period after 31 March 2002 have been reported on by the Company's auditors or delivered to the Registrar of Companies. A full annual report will be sent to shareholders and will be available for inspection at 100 Wood Street, London EC2V 7AN, the registered office of the Company. 5. The Annual General Meeting will be held at the offices of ISIS Asset Management plc, 100 Wood Street, London on 27 June 2003 at 10.30am. This information is provided by RNS The company news service from the London Stock Exchange

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