Interim Results

British SmallerTechCompaniesVCT2PLC
21 September 2004



21 September 2004

                 BRITISH SMALLER TECHNOLOGY COMPANIES VCT 2 PLC
         Unaudited preliminary results for the 6 months to 30 June 2004

   • Successful flotation of Amino Technologies plc
   • 7% increase in net asset value
   • £3.4m of liquid resources still available

British Smaller Technology Companies VCT 2 plc ("the Company"), the venture
capital trust specialising in growing smaller technology companies across a
range of industrial sectors, today announces its unaudited preliminary results
for the six months to 30 June 2004.

Financial highlights:

                                         Unaudited      Unaudited        Audited
                                          6 months       6 months           Year
                                             ended          ended          ended
                                           30 June        30 June    31 December 
                                              2004           2003           2003

Gross revenue                              £35,000       £128,000       £256,000
Net revenue loss before and after tax    £(162,000)      £(33,000)      £(32,000)
Revenue return per share                     (2.07)p        (0.42)p        (0.41)p
Total return                              £463,000      £(275,000)     £(554,000)
Total return per share                        5.92p         (3.54)p        (7.09)p
Net assets                                   £7.09m         £6.90m         £6.62m
Net asset value per share                     90.5p          88.1p          84.6p

Announcing the results, the Chairman, Sir Andrew Hugh Smith, reported that,
despite continued uncertainty in the economic and political climate, there has
been evidence of an improvement in market confidence. With trading performances
of some of the Company's investments becoming more robust, and in particular the
successful flotation of Amino Technologies plc, the net asset value has risen by
7% to 90.5 pence per share.

Investments

The Company reports that a total of £758,000 was invested in five businesses
during the first half of the year. Four of these were into existing portfolio
companies as part of larger syndicated fund raising rounds to support their
further expansion. The one new investment was in DxS Limited, a company that is
developing technology for identifying variations to an individual's DNA that
will enable doctors to predict whether a patient will benefit from a particular
drug.

Since the period end, the Company has invested £400,000 in Cozart plc on its
admission to AIM. The shares were listed at 30 pence per share and have since
traded at a significant premium.

Commenting on the investment strategy, Sir Andrew said, "The Company still has
both an adequate level of funds to support its existing portfolio and the
ability to invest in growing businesses at a time when entry valuations have
become much more attractive. The Board continues to seek to invest selectively
in later stage technology companies that will complement the early stage
businesses in the current portfolio."

Financial Results

The result for the period was a total return gain of 5.92 pence per share
resulting in a net asset value at 30 June 2004 of 90.5 pence per share. Sir
Andrew commented that the principle reason for this increase was the successful
flotation of Amino Technologies, which was admitted to AIM on 9 June. The shares
were quoted at 120 pence per share and, by 30 June 2004, had risen to a bid
price value of 136 pence per share. Since that date the share price has
continued to rise.

Shareholder Relations

With Shareholder approval now in place, Sir Andrew said that the Company will
seek to buy back a limited number of shares where the directors determine it is
in the best interests of the remaining Shareholders to do so. He referred to the
success of the Shareholder workshops run by Yorkshire Fund Managers, the
Company's Investment Adviser, and the Board's commitment to their continuation.

Sir Andrew said that, since the period end, the Board had taken the decision for
the Company to revoke investment company status in the near future. Referring to
the advantages to Shareholders, he said, "This will enable the Company to
distribute realised capital profits in the form of tax free dividends."

Outlook

Looking ahead, Sir Andrew said, "The conditions for new investment remain
attractive, particularly for later stage businesses that can demonstrate clear
innovative advantage in their market. Strong syndicates remain an essential part
in making new investments, ensuring there is appropriate resource to assist in
maximising the opportunity to create value."

For further information, please contact:

Alan Davies, Yorkshire Fund Managers Limited Tel: [phone]
David Hall, Yorkshire Fund Managers Limited Tel: [phone]
Keith Williams, Brewin Dolphin Securities Limited Tel: [phone]



Chairman's Statement

Whilst the economic conditions in the six months to 30 June 2004 have remained
uncertain, there has been some evidence of an improvement in confidence with a
more favourable IPO market, increased corporate activity and with trading
performances of some of the Company's investments becoming more robust. In
particular, the successful flotation of Amino Technologies plc has significantly
contributed to the increase in the net asset value per share from 84.6 pence per
share to 90.5 pence per share.

Your Company's portfolio, however, remains relatively young and some of our
investments will need further funding as the businesses grow and develop. The
Company is well placed to further support these investments but the presence of
a continuing favourable investment climate will also help to strengthen our
co-investors so that further well-merited rounds of investment are readily
available.

Investment Operations

During the period £758,000 was invested in five companies. Four of these were
follow-on investments in businesses within the existing portfolio, namely
ExpressOn Biosystems, Infinite Data Storage, Vibration Technology and Broadreach
Networks. All four were made as part of a larger syndicate to support the
further expansion of these businesses.

The one new investment during the period under review was in DxS Limited. DxS
owns the intellectual property for ScorpionsTM, a technology for identifying
variations in an individual's DNA. Your Company invested £131,000 as part of a
syndicate that invested over £1m to support the next phase of the business'
expansion in the roll out of further products and services that will allow
doctors to predict whether a patient will benefit from a particular drug.

Since the period end, your Company has invested £400,000 at a price of 30 pence
per share in Cozart plc on its admission to AIM. In August, your Company
disposed of 20,000 shares at a price of 57 pence per share.

Financial Results

The result for the period was a total return gain of 5.92 pence per share with a
revenue loss of 2.07 pence per share and a capital gain of 7.99 pence per share.
The net asset value at 30 June was 90.5 pence per share.

The principle increase in net asset value arose through the successful flotation
of Amino Technologies plc. The shares were quoted at £1.20 per share and have
subsequently traded at levels significantly above this price. This success has
only been partially eroded by the reduction in the value of Primus Knowledge
Solutions Inc, a US based business that acquired your Company's investment in
Amacis Holdings Limited.

Liquid Resources and Rate of Investment

Liquid fund resources at the period end amounted to £3.4m in a mixture of cash
and gilt investments. Therefore, your Company still has both an adequate level
of funds to support its existing portfolio and the ability to invest in growing
businesses at a time when entry valuations have become much more attractive.
Your Board continues to seek to invest selectively in later stage technology
companies that will complement the early stage businesses in the current
portfolio.

The Company maintains sufficient funds in a non-interest bearing bank account to
retain Shareholder tax benefits whilst permitting the construction of a balanced
portfolio of technology-based companies that will offer Shareholders the
opportunity for longer term capital growth.

Shareholder Relations

A total of 10,073 Ordinary shares were allotted during the period as a
consequence of some Shareholders exercising their Warrants. There was no
buy-back of shares in the period. The Company will continue to use the existing
authority to seek to buy back a limited number of shares in the market where the
directors determine it is in the best interests of Shareholders as a whole to do
so.

Over the last six months, your Board's Investment Adviser, Yorkshire Fund
Managers Limited (YFM), has held one investor workshop at the British Museum in
London. Over 100 Shareholders from across the three VCTs managed by YFM
attended, making this the most successful workshop to date. It has become clear
that this provides an excellent forum for updating Shareholders on recent
developments in both the Company and the industry and to informally discuss the
portfolio with the directors and Investment Adviser. Another workshop is planned
later in the year for Manchester, with further events next year in Birmingham
and London.

Following the period end, your Board has taken the decision that the Company
should revoke investment company status in the near future and this is being
kept under review. This action, when taken, will enable the Company to
distribute realised capital profits in the form of tax free dividends.

Outlook

Whilst there remains some uncertainty in the international economic and
political outlook, there have been some grounds for optimism in the recent
performance of the portfolio. The current overall trading results of your
Company's investments and a reasonably strong IPO market have helped to lift the
net asset value. This trend has continued into the early stages of the second
half of the financial year.

The conditions for new investment remain attractive, particularly for later
stage businesses that can demonstrate clear innovative advantage in their
market. Strong syndicates remain an essential part in making new investments,
ensuring that there is appropriate resource to assist in maximising the
opportunity to create value.


Sir Andrew Hugh Smith
21 September 2004



Statement Of Total Return

                                            Unaudited   Unaudited        Audited
                                             6 months    6 months           Year
                                                ended       ended          ended
                                              30 June     30 June    31 December
                                                 2004         2003          2003
                                                 £000         £000          £000
                                    Notes
Revenue
Gross revenue                                      35          128           256
Administrative expenses                          (197)        (161)         (288)
Taxation                                2           -            -             -
                                               ------       ------        ------
                                                 (162)         (33)          (32)
Capital 
Realised (losses) gains (net)                     (60)          68           (27)
Unrealised gains (losses) (net)                   711         (271)         (439)
Management fee allocated to capital               (26)         (39)          (56)
                                               ------       ------        ------
                                                  625         (242)         (522)

Total return                                      463         (275)         (554)
                                               ======       ======        ======
Appropriated:

Revenue
Transfer from revenue reserve                    (162)         (33)          (32)
                                               ------       ------        ------
Capital
Increase (decrease) on reserves                   625         (242)         (522)
                                               ------       ------        ------
Basic and diluted return per
Ordinary share
Revenue                                         (2.07)p      (0.42)p       (0.41)p
Capital                                          7.99p       (3.12)p       (6.68)p
                                               ------       ------        ------
                                        3        5.92p       (3.54)p       (7.09)p
                                               ======       ======        ======

Notes

The revenue section of this statement is the profit and loss account of the
Company

All activity has arisen from continuing operations.



Balance Sheet

                                            Unaudited    Unaudited       Audited
                                              30 June      30 June   31 December
                                                 2004         2003          2003
                                                 £000         £000          £000
                                    Notes
Fixed assets
Investment portfolio                            3,639        1,938         2,535
                                               ------       ------        ------
Current assets
Debtors                                           134           99            26
Short-term investments                          1,037        2,640         1,026
Cash and short-term deposits                    2,386        2,324         3,057
                                               ------       ------        ------
                                                3,557        5,063         4,109

Creditors: amounts payable within one year       (109)        (100)          (28)
                                               ------       ------        ------
Net current assets                              3,448        4,963         4,081
                                               ------       ------        ------
Total net assets                                7,087        6,901         6,616
                                               ======       ======        ======
Capital and reserves

Called-up share capital                           782          784           782
Share premium account                   4          10            -             1
Capital reserve                                  (140)        (485)         (765)
Warrant reserve                                     3            4             4
Special reserve                         4       6,592        6,597         6,592
Other reserve                                       1            1             1
Revenue reserve                                  (161)           -             1
                                               ------       ------        ------
Equity Shareholders' funds                      7,087        6,901         6,616
                                               ======       ======        ======
Net asset value per Ordinary share      5        90.5p        88.1p         84.6p
                                               ======       ======        ======



Summarised Cash Flow Statement

                                            Unaudited    Unaudited       Audited
                                             6 months     6 months          Year
                                                ended        ended         ended
                                              30 June      30 June   31 December
                                                 2004         2003          2003
                                                 £000         £000          £000
Net cash (outflow) inflow from operating
activities                                       (215)          14            (1)

Financial investment                             (452)        (795)       (1,606)
                                               ------       ------        ------
Net cash outflow before management of
liquid resources and financing                   (667)        (781)       (1,607)

Management of liquid resources                    (12)       3,068         4,633
                                               ------       ------        ------
Net cash (outflow) inflow before financing       (679)       2,287         3,026

Financing                                           8            3            (3)
                                               ------       ------        ------
(Decrease) increase in cash                      (671)       2,290         3,023
                                               ------       ------        ------



Notes to the Financial Statements

1. The interim financial statements have been prepared on a basis consistent
with the statutory financial statements for the year ended 31 December 2003. The
interim financial statements, which have been approved by the directors, are
unaudited and do not constitute full financial statements as defined in section
240 of the Companies Act 1985. The comparative figures for the year ended 31
December 2003 do not constitute full financial statements and have been
extracted from the Company's financial statements for the year ended 31 December
2003 which have been reported upon without qualification by the auditors and
have been delivered to the Registrar of Companies.

2. Taxation charge

                                           Unaudited    Unaudited        Audited
                                            6 months     6 months           Year
                                               ended       ended           ended
                                             30 June      30 June    31 December
                                                2004         2003           2003
                                                £000         £000           £000
Loss on ordinary activities multiplied by
standard small company rate of corporation
tax in the UK of 19% (2003:19%)                   88          (52)          (105)
Effect of:
Non taxable (gains) losses on investments (i)   (124)          39             88
Movement in excess management expenses (ii)       36           13             17
                                              ------       ------         ------
Current tax charge for period                      -            -              -
                                              ------       ------         ------

(i)  Venture Capital Trusts are not subject to corporation tax on these items
(ii) The Company has no deferred tax liability

Deferred tax assets in respect of losses have not been recognised as management
do not currently believe that it is more likely than not sufficient taxable
profits will be available against which the assets can be recovered.

Due to the Company's status as a venture capital trust, and the continued
intention to meet the conditions required to comply with Section 842AA of the
Income and Corporation Taxes Act 1988, the Company has not provided deferred tax
on any capital gains and losses on the revaluation or disposal of investments.

3. The basic revenue return per share is based on net loss from ordinary
activities after tax attributable to Shareholders of £162,000 (30 June 2003: net
loss £33,000 and 31 December 2003: net loss £32,000) and on 7,826,000 shares (30
June 2003: 7,790,000 and 31 December 2003: 7,812,000), being the weighted
average number of shares in issue during the period. The Company has no
securities that would have a dilutive effect and hence the basic and diluted
return per share are the same.

4. The net asset value per Ordinary share is calculated on attributable
assets of £7,087,000 and 7,833,000 shares in issue at the period end (30 June
2003: £6,901,000 and 7,836,000 shares, 31 December 2003: £6,616,000 and
7,823,000 shares).

5. Copies of the interim report can be obtained from the Company's
registered office: Saint Martins House, 210-212 Chapeltown Road, Leeds, LS7 4HZ
thereafter.




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