Interim Results

Matrix Income & Growth VCT PLC
23 August 2005

Matrix Income & Growth VCT plc ('the Company')

23 August 2005

Interim Statement for the period 1 October 2004 to 30 June 2005



Chairman's Statement

Overview

I am pleased to present my first Interim Report as Chairman of Matrix Income &
Growth VCT plc covering the period from 1 October 2004 to 30 June 2005.



The Company changed its accounting reference date from 30 September to 31
December on 21 April 2005.  This Report therefore covers the nine month period
since the last audited accounts in respect of the period from incorporation
until 30 September 2004. The first issue of shares under the Offer for
Subscription was made on 5 October 2004 and the shares were admitted to the
Official List of the UK Listing Authority and to trading on 8 October 2004.



Your Company has raised £22 million from 1,634 Shareholders.  The Company was
one of only 11 VCTs launched in the 2004/2005 tax year to raise in excess of £20
million.



The net asset value per Ordinary Share at 30 June 2005 was 94.0 pence per share,
after providing for an interim dividend of 0.3 pence per share, compared with
the net subscription price of 94.5 pence per share. In line with the strategy
set out in the Prospectus, the Board has invested the majority of the funds in a
portfolio of interest bearing investments, which are readily available for
investment to meet the Investment Manager's qualifying investment programme as
it unfolds.



Investment portfolio

The Company's strategy is to invest in established, profitable, unquoted
companies. Typically these investee companies will be cash-generative and
therefore capable of producing dividend income, as well as capital returns to
Shareholders on their ultimate sale or flotation. The Company will focus
principally on investments in management buyouts ('MBOs').



In this period under review and in the period since 30 June 2005, two
investments were completed by the Investment Manager.  An investment of £212,893
was made in FH Ingredients Limited, an unquoted company engaged in the
processing and distribution of frozen herbs. This investment was completed in
February 2005 as part of a larger investment syndication allocated amongst other
funds managed by the Investment Manager. One further investment of £150,000 in
SectorGuard plc, an AIM-listed company engaged in manned security control, has
been completed since 30 June 2005.



Results and dividend

The revenue account generated a net revenue return (after tax) for the period of
£73,213 and your Directors have declared a maiden interim dividend of 0.3 pence
per share which will be paid on 27 September 2005 to Shareholders on the
Register on 2 September 2005. Whilst modest, this is in line with the Company's
policy to maximise and distribute tax-free dividends and the Board expects to
declare a final dividend in respect of the fifteen months ending 31 December
2005 of at least the same amount.



Investment in qualifying holdings

The change of the accounting reference date to 31 December has maximised the
amount of time available to the Investment Manager to meet the target set by HM
Revenue & Customs of investing 70% of the funds raised in qualifying unquoted
and AIM companies. The key date in this respect is now 31 December 2007.



Communicating with Shareholders

The Company intends to communicate regularly with Shareholders. The April AGM
provided a useful platform to meet Shareholders and share views. Your Board
welcomes active attendance at these meetings to give Shareholders the
opportunity to meet your Directors and representatives of the Investment
Manager. In addition to the Interim Accounts and the Annual Accounts,
Shareholders will receive two newsletters a year providing further information
on the progress of the Company. Our first newsletter was sent out in June 2005.



In June 2005 the Investment Manager sent out questionnaires to a large sample of
Shareholders on behalf of the British Venture Capital Association's Venture
Capital Trusts' Managers' Group as part of the process of discussions with the
Treasury in relation to VCT tax relief after April 2006. The high Shareholder
response was helpful and feedback from this dialogue will be provided to
Shareholders when available.



Outlook

Forecasting economic conditions is always difficult, but your Board sees more
reasons for optimism than pessimism with respect to the outlook for the UK.
Recent announcements in respect of high levels of consumer debt and challenging
conditions on the high street together with the recent terrorist attacks in
London clearly represent concerns. However, interest rates and inflation look
set to remain at low levels by historical standards and with business confidence
remaining relatively optimistic, the UK economy should continue to expand,
albeit at a slower pace than in the recent past.



The Board remains confident that, against this background, the Investment
Manager will be able to identify attractive investment opportunities within the
UK smaller companies sector and, over the next two years or so, construct a
broadly based portfolio of investments to provide Shareholders with a growing
stream of income.



Finally, I would particularly like to thank all of our Shareholders for their
positive feedback and support at this early stage of your Company's life.



Keith Niven,  Chairman

22 August 2005







Investment Manager's Review



The success of the Company's launch has provided us with excellent capacity to
construct a diversified portfolio of qualifying investments. Our focus is to
meet the minimum 70% VCT compliance test by 31 December 2007 and this requires
us to invest approximately £15 million by that date. We are confident of meeting
this condition but we will plan to use the full period to invest selectively in
order to seek to produce the most attractive returns.



The investment environment has continued to be favourable with relatively low
inflation and interest rates. There is an active lending market, a healthy new
issues market and many companies looking to make strategic acquisitions and
dispose of non-core subsidiaries. These factors have created the conditionS for
healthy acquisition and buyout activity levels.



New qualifying investments

FH Ingredients Limited

Located in Eye, Suffolk, FH Ingredients Limited is the UK's leading producer of
individually packed quick frozen herbs for the ready meals market. The business
raised £5 million to fund the MBO from the Harrington Food Group. We introduced
a new executive chairman to assist the experienced incumbent team with organic
growth and selective acquisitions. Your Company invested £212,893, primarily in
loan stock, for a holding of 9.3%, alongside TriVen VCT and TriVest VCT.

SectorGuard plc

Located in Sawbridgeworth, Hertfordshire, SectorGuard is an established business
providing manned guarding, mobile patrols and alarm response services.
SectorGuard is AIM-listed and raised £3 million through the placing of new
ordinary shares to fund acquisitions in the electronic security sector.  Your
Company invested £150,000 for a holding of 1.48% alongside TriVen VCT, TriVest
VCT and Matrix Venture Fund VCT.



Outlook

Our established relationships with deal introducers are generating a strong
pipeline of interesting unquoted company transactions that are under offer and
progressing through due diligence. We anticipate that this will lead to a
significant increase in the size and number of completed investments in the
period to 31 December 2005.



Unaudited Statement of Total Return

(incorporating the Revenue Account of the Company for the nine months ended 30
June 2005)


                         Nine months ended 30 June 2005          Period from 15 June to 30 September 2004
                         Revenue       Capital       Total           Revenue      Capital      Total
                            £             £            £                £            £           £
Income                   356,802             -     356,802                 -         -              -
Investment management    (49,000)     (146,999)   (195,999)                -         -              -
fees
Other expenses          (211,903)            -    (211,903)           (3,231)        -         (3,231)

Return on ordinary        95,899      (146,999)    (51,100)           (3,231)        -         (3,231)
activities before
taxation

Tax on ordinary          (22,686)       22,686           -                 -         -              -
activities

Return attributable       73,213      (124,313)    (51,100)           (3,231)        -         (3,231)
to equity
shareholders

Dividends in respect     (66,431)            -     (66,431)                -         -             -
of equity shares

Transfer to/(from)         6,782      (124,313)   (117,531)           (3,231)        -         (3,231)
reserves
                          =======       =======     =======           =======    =======       =======

Return per share            0.7p        (1.1)p      (0.4)p         (1,615.5)p      0.0p      (1,615.)p



Unaudited Balance Sheet

As at 30 June 2005
                                                   As at 30 June 2005            As at 30 September 2004
                                                                    £                                  £
Fixed assets
Investments                                                   212,893                                  -
                                                         ------------                       ------------
                                                              212,893                                  -

Current assets

Debtors and prepayments                                       974,817                             37,502
Current investments                                        19,924,470                                  -
Cash at bank                                                    9,429                             12,500
                                                   -------------------               -------------------
                                                           20,908,716                             50,002

Creditors: amounts falling due within one                    (309,247)                            (3,231)
year
                                                   -------------------               -------------------
Net current assets                                         20,599,469                             46,771

                                                           ===========                      ============
Net assets                                                 20,812,362                             46,771
                                                           ===========                      ============

Capital and reserves

Called up share capital
- Ordinary Shares                                             221,436                                  2
- Redeemable Preference Shares                                      -                             50,000
Share premium account                                      20,711,688                                  -
Capital reserve - realised                                   (124,313)                                 -
Revenue reserves                                                3,551                             (3,231)
                                                           ===========                      ============
Shareholders' funds                                        20,812,362                             46,771
                                                           ===========                      ============
Equity interests                                           20,812,362                             (3,229)
Non equity interests                                                -                             50,000
                                                   -------------------               -------------------
                                                           20,812,362                             46,771
                                                           ===========                       ===========


Net asset value per Ordinary Share                              94.0p                         (1,614.5)p

Net asset value per Preference Share                             0.0p                             100.0p






Unaudited Summarised Cash flow Statement

for the nine months ended 30 June 2005


                                                      Nine months ended        Period from 15 June to 30
                                                           30 June 2005                   September 2004
                                                                      £                                £
Operating activities

Investment income received                                     297,930                                 -
Investment management fees paid                                (36,607)                                -
Other cash payments                                          (140, 417                                 -
                                                    -------------------              -------------------
Net cash inflow from operating                                 120,906                                 -
activities

Investing activities
Acquisition of investments                                    (212,893)                                -
                                                    -------------------              -------------------
Net cash outflow from investing                               (212,893)                                -
activities
                                                    -------------------              -------------------
Cash outflow before financing and liquid                                                               
resource management                                            (91,987)                                -
                                                              

Financing
Share capital raised                                        21,171,454                            12,500
Issue costs of Ordinary Shares                              (1,158,068)                                -
                                                    -------------------              -------------------
                                                            20,013,386                                 -

Management of liquid resources
Increase in current investments                            (19,924,470)                                -
                                                            ===========                      ===========
(Decrease)/increase in cash for the                             (3,071)                           12,500
period
                                                            ===========                      ===========





Notes



1.               The accounts have been prepared under the historical cost
convention, modified to include the revaluation of investments, and in
accordance with applicable accounting standards and with the 2003 Statement of
Recommended Practice, 'Financial Statements of Investment Trust Companies'.



2.               In accordance with the policy statement published under '
Management and Administration' in the Company's prospectus dated 9 July 2004,
the Directors have charged 75% of the investment management fees to the capital
reserve.



3.               An Interim dividend of 0.3 pence per Ordinary Share will be
paid on 27 September 2005 to Shareholders on the Register on 2 September 2005.



4.               The revenue return per Ordinary Share for the nine months ended
30 June 2005 is based on the net revenue on ordinary activities after taxation
of £73,213 and is based on 11,019,549 1p Ordinary Shares, being the weighted
average number of Ordinary Shares in issue during this period.



The capital return per Ordinary Share is based on the net capital loss on
ordinary activities after taxation of £124,313 and is based on 11,019,549 1p
Ordinary Shares, being the weighted average number of 1p Ordinary Shares in
issue during the period.



The revenue return per Ordinary Share for the comparative period ended 30
September 2004 is based on a negative revenue return of £3,231 and is based on
200 1p Ordinary shares, being the weighted average number of 1p Ordinary Shares
in issue during the period.



The capital return per Ordinary Share for the comparative period ended 30
September 2004 is based on the capital return of £nil and is based on 200 1p
Ordinary shares, being the weighted average number of 1p Ordinary Shares in
issue during the period.



5.               The net asset value per Ordinary Share at 30 June 2005 is based
on net assets of £20,812,362 at that date and on 22,143,621 1p Ordinary Shares,
being the number of Ordinary Shares in issue on that date.



The net asset value per Ordinary Share at 30 September 2004 is based on net
liabilities of £3,229 at that date and on 200 1p Ordinary Shares, being the
number of Ordinary Shares in issue on that date.



The net asset value per Preference Share is based on net assets of £nil (30
September 2004: £50,000) at the end of the period attributable to non equity
interests, and on nil (30 September 2004: 50,000) £1 Redeemable Preference
Shares, being the number of £1 Redeemable Preference Shares in issue on that
date.



6.               The financial information for the period ended 30 June 2005 has
neither been audited nor reviewed.



7.               Copies of this statement are being sent to all Shareholders.
Further copies are available free of charge from the Company's registered
office, One Jermyn Street, London SW1Y 4UH.







Enquiries:



Sarah Penfold of Matrix-Securities Limited (the Company Secretary) on 020 7925
3300 or by e-mail on [e-mail]



Mark Wignall or Mike Walker at Matrix Private Equity Partners Limited (the
Investment Manager), on 020 7925 3300 or by e-mail on [e-mail]






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