Final Results

Aberdeen Grwth Opp VCT2 PLC 23 February 2007 Aberdeen Growth Opportunities VCT 2 PLC Preliminary Announcement for the year ended 31 December 2006 The Board is delighted to report a very successful year for your company. Among the highlights are: â€¢ NAV at year end of 112.2p per share (pps) up 15.2% over the year â€¢ Total Return of 114.2pps at year end â€¢ 4 successful exits from unlisted companies during the year generating gains of 14.7pps â€¢ 1 further exit since the reporting period end for a further gain equivalent to 2.9pps â€¢ Net realised gains from AIM stocks of 2.8pps for the year â€¢ Revenue dividend declared of 0.5pps in addition to capital dividends of 5.5p paid from gains made during the year â€¢ Launch of S Share Issue targeting an additional Â£15 million in new capital. Performance The Net Asset Value (NAV) per Ordinary share at 31 December 2006, before payment of a dividend in respect of the year then ended, was 112.2p compared with 97.4p at 31 December 2005. The increase in NAV of 15.2% compares with an increase in the FTSE SmallCap index of 13.5% over the period, and an increase in the FTSE AIM Index of 4.2%. The effect of the dividend paid on 19 January and payment of the proposed dividend will be to reduce the NAV to 108.2p The most important measure for a VCT is the total return being the long term record of income and capital gains dividend payments plus the current NAV. In the short term, the NAV on its own is a less important measure of the performance as the underlying investments are long-term in nature and not readily realisable. The Total Return per Ordinary Share at 31 December 2006 was 114.2pps, an increase of 17.2% over the equivalent figure at December 2005. Based on announcements made by other VCTs to date, this performance makes your company one of the best performing VCTs of its vintage. Dividends It was stated in the Company's Prospectus that in the early years dividends, if any, would be small until such time as capital realisations occurred. Due to the exceptional gains achieved this year, the Board has however declared two interim dividends of 2.0p and 3.5p which were paid in July 2006 and January 2007 respectively. The Board recommends the payment of a final dividend of 0.5p per Ordinary share, to be paid on 18 May 2007 to shareholders on the register on 20 April 2007. When the final dividend in respect of the year ended 31 December 2006 is paid, Ordinary shareholders will have received 6.0p per share in tax free dividends since launch. All dividends are paid tax free to shareholders and a net dividend of 6.0p is equivalent to a yield of 10% to a higher rate taxpayer; if the initial tax relief of 40% is taken into account the effective annual yield rises to 16.7%. It is intended that regular dividends will be paid from realised gains and the Board envisages being able to pay dividends of at least 4.0p in respect of the year to 31 December 2007, but that will depend on continuing progress being made during the year. It is intended to target a dividend rate of 4.0p each year, and it is hoped that this level may be increased over time, but this will depend on the timing of future profitable realisations and cannot be guaranteed. Investment Strategy The strategy remains to build a diversified portfolio of unlisted and AIM investments which offer excellent growth prospects and therefore the opportunity for capital gains in the medium and longer term while maintaining VCT qualifying status. Investment Activity During the year ended 31 December 2006, fifteen new unlisted and AIM investments were completed and a total of Â£1.7 million was invested. At the year end, the portfolio stood at 33 unlisted and AIM investments at a total cost of Â£4.0 million. Since 31 December 2006, two further new investments have been made at a cost of Â£433,000 and one unlisted investment has been sold. The following new investments have been completed since the publication of the Interim Report:- Investment Date Activity Â£'000 Website Unlisted Buildstore Sep 2006 Online services to the self 98 www.buildstore.co.uk build sector. Enpure Nov 2006 Project engineering in the 100 www.enpure.co.uk water and waste water sector. AIM Concateno Oct 2006 Testing services for 98 www.concateno.com alcohol and drugs for employers. Eleco Dec 2006 Specialist construction 99 www.eleco.com products company. Hasgrove Nov 2006 Communication services for 49 www.hasgrove.com public relations. Individual Dec 2006 Restaurants 60 www.individualrestaurants.co.uk Restaurant Group Velosi Aug 2006 Quality control services to 99 www.velosi.com the oil and gas sector. Aberdeen Growth Opportunities VCT 2 has co-invested with Aberdeen Development Capital, Aberdeen Growth VCT I, Aberdeen Growth Opportunities VCT, Talisman First Venture Capital Trust and Murray VCT 4 in some or all of the above transactions and is expected to continue to do so with these as well as other clients of the Manager. The advantage is that, together, the funds are able to underwrite a wider range and size of transaction than would be the case on a stand alone basis. Portfolio Developments Aberdeen Growth Opportunities VCT 2 is continuing to build a diversified portfolio of unlisted and AIM investments with good growth prospects and, therefore, the opportunity to generate capital gains in the medium and longer term. In the Interim Report reference was made to the increasing maturity of a number of the private equity investments and further realisations being expected over the course of the remainder of the year. This has proved to be the case with three substantial sales achieved from unlisted investments in the second half of the year. Bond Aviation Solutions was sold to an Indian investment company realising Â£423,000 generating a gain of Â£173,000. Styles & Wood achieved a listing on the London Stock Exchange and the holding was sold. Proceeds were Â£799,000 providing a gain of Â£599,000 over cost. Vibration Technology was sold to a major seismic exploration company 13 months after the investment was completed generating a gain of Â£189,000 from proceeds of Â£339,000. In each case the holding period has been shorter than would normally be the case for an unlisted investment ranging from 11 to 13 months with cash multiples of 1.7x to 4.0x. The AIM portfolio continued to be actively traded when the opportunity arose, recognising the second half of the reporting year covers the summer period when markets are traditionally quieter and the market correction which occurred in May 2006. Net gains of Â£48,000 were generated in the second half of the year. The total gain arising on the AIM portfolio for the year was Â£221,000. The AIM Market has fallen over the second half of the year with the AIM 100 index falling by 9.5%; the performance of the Company's portfolio is better than the market showing a decline of 7.6% over the second half of the year. For the full year the value of the AIM portfolio again fell by 6.8% compared to an AIM 100 Index decline of 8.7%. In addition to the realised gains mentioned above details of which can be found in the table overleaf, unrealised gains compared to valuations at December 2005 totalling Â£20,000 arose on the investment portfolio. Of the total, Â£192,000 arose on unlisted investments with losses of Â£172,000 arising on AIM investments. The major changes in value were on EIG (Investments) which was increased by Â£194,000 in anticipation of the contracted sale of that holding in January 2007 and a number of AIM investments but notably Leisure & Gaming where legislation was introduced in the US to outlaw internet gambling which reduced the value of all companies in that sector. Investments in the unlisted portfolio are generally trading well but, if there is any underperformance, particular attention is paid to those companies by the Manager to effect an improvement and protect the value of the investment. Realisations during the financial year Date first Complete/ Cost of Sales Realised gain invested partial exit shares proceeds /(loss) disposed of Â£'000 Â£'000 Â£'000 Original Pool Unlisted Bond Aviation 2005 Complete 250 423 173 Original Shoe 2005 Complete 250 250 - Styles & Wood 2005 Complete 200 799 599 Travel Class 2005 Complete 125 312 187 Vibration Technology 2005 Complete 150 339 189 Total unlisted 975 2,123 1,148 AIM Avanti Screenmedia 2005 Partial 24 26 2 Axeon 2005 Partial 40 55 15 Billing Services Group 2006 Complete 129 67 (62) Hambledon Mining 2006 Partial 25 47 22 Leisure & Gaming 2005 Partial 52 94 42 MTI Wireless 2006 Partial 29 39 10 Neutrahealth 2005 Partial 56 72 16 Software Radio Technology 2005 Partial 13 24 11 Talarius 2005 Complete 84 193 109 United Clearing 2005 Complete 159 217 58 Others 45 43 (2) Total AIM 656 877 221 Total 1,631 3,000 1,369 The year has seen four very successful exits from the unlisted investment portfolio, which together have generated gains of more than Â£1.1 million while a further sale has concluded after the reporting period end realising a further gain of Â£231,000. One of those exits, Travel Class, occurred in the first half of the year and was recorded in the Interim Report. Net gains have also been realised from the AIM portfolio totalling Â£48,000 in the second half in addition to the Â£173,000 which arose in the first half of the year. The gain in the second half is after a loss of Â£60,000 which arose on the disposal of Billing Services which acquired United Clearing in a share for share transaction earlier in the year. The Manager did not support the sale to Billing Services and sold the resulting holding at the earliest opportunity; since then the Billing Services share price has declined further. The early realisations of four unlisted investments has resulted in a portfolio which is weighted more to AIM stocks than was originally planned; this has arisen due to circumstances rather than by design and the Manager has already completed two new unlisted investments early in 2007 which will begin to redress the balance back in favour of the majority of assets being invested in unlisted companies. S Share Issue The Board announced proposals in August 2006 to raise up to Â£15 million before the deduction of expenses in an S share issue. The Directors believe that the issue will benefit the Company by reducing the total expense ratio, increasing the spread of risk across a larger number of investments and, due to an increased fund size, an improvement in the liquidity of the Company's shares in the secondary market. Unlike many new issues undertaken by other VCTs, the investments made by the S share pool will not be merged in future with those of the original pool as the rules under which the new pool will invest were changed in the Budget of 2006 in that the maximum gross assets of the investee company must be no more than Â£7 million. The two pools will invest alongside each other in many situations in future dependent upon the availability of liquidity in both pools, the amount of investment required and the gross assets of the investee company. The new issue will be strictly limited to Â£15 million. The Future Following the very successful realisations which occurred during the year, the immediate focus has changed to building the unlisted portfolio in a diversified portfolio of good quality smaller company assets which will deliver sustained long term performance. The Manager has a number of potential investments in hand which will form the basis of the first step in this process. ABERDEEN GROWTH OPPORTUNITIES VCT 2 PLC INCOME STATEMENT For the year ended 31 December 2006 Year ended 31 December 2006 70 weeks ended 31 December 2005 (unaudited) (audited) Revenue Capital Total Revenue Capital Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Gains on investments - 1,304 1,304 - 219 219 Income from investments 309 - 309 211 - 211 Other income 17 - 17 38 - 38 Investment management fees (21) (84) (105) (13) (52) (65) Other expenses (213) - (213) (213) - (213) Profit on ordinary activities before taxation 92 1,220 1,312 23 167 190 Tax on ordinary activities (14) 14 - (3) 3 - Profit on ordinary activities after taxation 78 1,234 1,312 20 170 190 Earnings per share (pence) 1.00 15.7 16.7 0.4 3.9 4.3 A Statement of Total Recognised Gains and Losses has not been prepared, as all gains and losses are recognised in the Income Statement. All items in the above statement are derived from continuing operations. The Company has only one class of business and derives its income from investments made in shares, securities and bank deposits. The total column of this statement is the Profit and Loss Account of the Company. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS For the year ended 31 December 2006 Year ended 70 weeks ended 31 December 2006 31 December 2005 (unaudited) Opening Shareholders' funds 7,634 - Total profit for year 1,312 190 Net proceeds of issue of shares - 7,444 Dividends paid (157) - Closing Shareholders' funds 8,789 7,634 ABERDEEN GROWTH OPPORTUNITIES VCT 2 PLC BALANCE SHEET As at 31 December 2006 31 December 31 December 2005 2006 (unaudited) (audited) Â£'000 Â£'000 Investments at fair value through profit and loss 8,109 7,269 Current assets Debtors 263 62 Cash and overnight deposits 503 401 766 463 Creditors: amounts falling due within one year (86) (98) Net current assets 680 365 Total net assets 8,789 7,634 Capital and reserves Called up share capital 784 784 Share premium - 6,660 Distributable reserve 6,660 - Capital reserves - realised 1,121 (21) Capital reserves - unrealised 126 191 Revenue reserve 98 20 Net assets attributable to Ordinary Shareholders 8,789 7,634 Net asset value per ordinary share (pence) 112.2 97.4 ABERDEEN GROWTH OPPORTUNITIES VCT 2 PLC CASH FLOW STATEMENT For the year ended 31 December 2006 Year to 31 December 70 weeks ended 31 2006 December 2005 (unaudited) (audited) Â£'000 Â£'000 Â£'000 Â£'000 Operating activities Investment income received 245 174 Deposit interest received 15 37 Investment management fees paid (81) (61) Secretarial fees paid (61) (37) Cash paid to and on behalf of Directors (93) (48) Other cash payments (93) (44) Net cash (outflow)/inflow from operating activities (68) 21 Taxation Corporation tax - - Financial investment Purchase of investments (3,288) (10,396) Sale of investments 3,615 3,332 Net cash inflow/(outflow) from financial investment 327 (7,064) Equity dividends paid (157) - Net cash inflow/(outflow) before financing 102 (7,043) Financing Issue of redeemable preference shares - 50 Redemption of redeemable preference shares - (50) Issue of ordinary shares - 7,836 Expense of share issue - (392) Net cash inflow from financing - 7,444 Increase in cash 102 401 ABERDEEN GROWTH OPPORTUNITIES VCT 2 Investment Portfolio Summary (unaudited) As at 31 December 2006 % of equity Bookcost Valuation % of % of held by 31/12/2006 31/12/2006 total equity other Investment Name Nature of Business Â£'000 Â£'000 assets held clients* Unlisted EIG (Investments) Insurance business 250 482 5.5% 0.1% 1.3% focussed mainly on niche risk areas in motor insurance Homelux Nenplas Extruder of plastic 199 314 3.6% 3.4% 41.6% tiling trims and related products Money Plus Manages agreements 225 225 2.6% 4.5% 26.4% and repayment plans for credit card holders Riverdale Publishing Publisher of 92 175 2.0% 1.1% 10.6% greeting cards Oled-T Developer of flat 167 167 1.9% 3.9% 14.7% panel display technologies Essential Viewing Systems Developer of an 155 155 1.8% 9.5% 39.9% advanced delivery technology for video over mobile telephones Enpure Project engineering 100 100 1.1% 0.4% 79.2% in the water and waste water sector Buildstore Services to self 98 99 1.1% 0.8% 9.2% build homeowners Kingsley Cards Greetings card 200 - 0.0% 2.5% 25.0% distributor ------- ------- ------ ------ ------ 1,486 1,717 19.6% ------- ------- ------ ------ ------ AIM Worthington Nicholls Group Installer and 100 232 2.6% 0.3% 1.6% maintainer of air conditioning units in the hotel and retail markets Software Radio Technology Digital wireless 131 212 2.4% 0.6% 2.9% communication development business Hambledon Mining Exploration and 105 168 1.9% 0.3% 0.1% mining of precious metals in Kazakhstan Work Group Provider of 151 146 1.7% 0.7% 2.7% recruitment services Litcomp National supplier 100 135 1.6% 0.0% 4.9% of medical reports in the support of legal actions Concateno Provider of 98 130 1.5% 0.3% 2.6% services for the testing of employees for drugs and alcohol Imprint Provider of a 152 128 1.5% 0.1% 0.4% result and search service AT Communications Group Leading 141 124 1.4% 0.6% 1.2% communications integrator Amazing Holdings Leisure and hotel 151 118 1.3% 0.5% 1.8% developer Datong Electronics Producer of tracker 151 114 1.3% 0.9% 1.1% devices to track vehicles and mobile phones Eleco Specialist 99 110 1.3% 0.2% 0.5% construction company Velosi Provider of quality 100 103 1.2% 0.3% 0.6% assurance and quality control services to the oil & gas sector Avanti Screenmedia Provider of screens 78 98 1.1% 0.1% 1.6% and media advertising Axeon Developer of semi 111 95 1.1% 0.8% 7.2% conductor intellectual property rights Individual Restaurant Company Restaurant operator 60 80 0.9% 0.2% 1.4% Gold Frost Designer, developer 86 79 0.9% 0.5% 0.9% and distributor of kosher food products Neutrahealth Provider of BioCare 92 70 0.8% 0.6% 1.5% products to health practitioners and specialist retailers System C Healthcare Provider of 150 65 0.7% 0.3% 1.0% information services and IT systems to the healthcare sector Hasgrove Provider of 50 53 0.6% 0.2% 2.0% communication services in public relations MTI Wireless Edge Developer and 41 48 0.5% 0.2% 0.3% manufacturer of sophisticated antennas for broadband Spectrum Interactive Provider of 98 32 0.4% 0.3% 1.3% payphones and internet access throughout the UK. Fairground Gaming Holdings An investment 75 17 0.2% 0.2% 1.0% company in the on-line gaming sector Leisure & Gaming Online gaming 86 12 0.1% 0.2% 0.6% operator Elevation Events Group Integrated events 100 - 0.0% 1.7% 8.9% management and corporate hospitality ------- ------- ------ ------ ------ 2,506 2,369 27.0% ------- ------- ------ ------ ------ Listed Fixed Income Investments Gilt - Treasury 4.5% 2007 1,484 1,483 16.9% - - Bond - GE FRN 04/05/07 900 900 10.2% - - Bond - Barclays FRN 12/03/12 601 600 6.8% ------- ------- ------ ------ ------ 2,985 2,983 33.9% - - ------- ------- ------ ------ ------ Unit Trusts Aberdeen International Fixed Interest 1,006 1,040 11.8% - - ------- ------- ------ ------ ------ 1,006 1,040 11.8% - - ------- ------- ------ ------ ------ ------- ------- ------ ------ ------ TOTAL 7,983 8,109 92.3% ======= ======= ====== ====== ====== * other clients of the Aberdeen Asset Management Group of companies ABERDEEN GROWTH OPPORTUNITIES VCT 2 SUMMARY OF INVESTMENT CHANGES (UNAUDITED) For the period ended 31 December 2006 Net investment Valuation Appreciation Valuation 31 December 2005 (divestment) (depreciation) 31 December 2006 Â£'000 % Â£'000 Â£'000 Â£'000 % Unlisted investments Equities 668 8.7 (1,362) 1,428 734 8.4 Preference 67 0.9 - - 67 0.8 Loan stocks 1,363 17.9 (266) (181) 916 10.4 2,098 27.5 (1,628) 1,247 1,717 19.6 AIM investments Equities 2,033 26.6 297 39 2,369 27.0 Listed investments Fixed income 2,118 27.7 867 (2) 2,983 33.9 Unit Trusts 1,020 13.4 - 20 1,040 11.8 Total investments 7,269 95.2 (464) 1,304 8,109 92.3 Other net assets 365 4.8 315 - 680 7.7 Total Assets 7,634 100.0 (149) 1,304 8,789 100.0 Notes: This Preliminary Announcement has been prepared on the same basis as that set out in the statutory financial statements for the prior year. Returns per Ordinary share have been calculated using the weighted average number of shares in issue during the period of 7,835,163 (2005 - 4,395,996). The Net Asset Value per Ordinary share has been calculated using the number of shares in issue at 31 December 2006 of 7,835,163 (2005 - 7,835,163). The results for the year ended 31 December 2006, which are subject to audit clearance, will be filed with the Register of Companies and a full copy of the Annual Report and Financial Statements will be printed and issued to Shareholders. The financial information contained within this Preliminary Announcement does not constitute the Company's statutory financial statements as defined in Section 240 of the Companies Act 1985. The statutory financial statements for the year ended 31 December 2005 contain an audit report which was unqualified and did not contain statements under Sections 237(2) or (3) of the Companies Act 1985, and have been delivered to the Registrar of Companies. Copies of this announcement will be available to the public at the registered office of the Company and the office of Aberdeen Asset Managers Limited, 123 St Vincent Street, Glasgow. By Order of the Board ABERDEEN ASSET MANAGEMENT PLC SECRETARIES (23) February 2007 This information is provided by RNS The company news service from the London Stock Exchange

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