Interim Results

Baronsmead VCT 3 PLC 13 August 2002 To: RNS From: Baronsmead VCT 3 plc Date: 13 August 2002 Investment Objective Baronsmead VCT 3 plc is a tax efficient listed company which aims to achieve long-term capital growth and generate tax-free dividends for private investors. Interim Results - Period Ended 30 June 2002 • Net asset value per share increased to 95.02 pence. • Interim dividend increased by 0.40 pence to 1.40 pence per share. • Six new investments made increasing the portfolio to 15. • Favourable comparison with the FTSE All-Share Index over the same period. The Chairman, Mark Cannon Brookes, said: 'My anticipation of a bumpy economic ride has proved to be the case since I wrote in March 2002. The Stock Markets have signalled worsening conditions since then amid concerns about US reporting standards and weakness in consumer and business spending. The deflationary effect of lower share prices should not be under-estimated and now lower interest rates look to be a possibility. Against this backcloth, the performance of the Company is proving to be resilient. The 15 equity investments are making sound progress overall and the remaining part of the portfolio is held in fixed rate securities and cash prior to investment. Performance Review During the six months to 30 June 2002 the net asset value per share has increased by 1.2% from 93.9 pence to 95.0 pence per share. This compares favourably with the FTSE All-Share, which has fallen 19.5% over the same period. The FTSE All-Share is the most widely drawn indicator of UK equity markets and has been adopted as a comparison by the Board. The comparable FTSE SmallCap Index fell 10.8% and the FTSE AIM Index by 15.3%. The Board has declared an interim dividend of 1.4 pence per share (1.0 pence in 2001) which will be paid on 30 September 2002 to shareholders on the register at close of business on 23 August 2002 Investment Portfolio Six new investments were made in the period, predominantly in the business services and information technology sectors. Baronsmead VCT 3 plc is therefore making good progress towards building a diversified portfolio of more than 30 companies. 65% by value of the invested portfolio is in unquoted companies with 35% in companies traded on AiM. 70% is invested in established and profitable companies and the balance in earlier stage investments. The total return of the Company has held steady in falling markets and since launch amounts to a positive 4% and compares to the reduction in the FTSE All-Share total return of 22.5% over the same period. This comparison is made before the VCT tax reliefs are taken into account, which increase the favourable differential still further. Outlook The portfolio is beginning to be well diversified by sector and stage of development. The Company's investments are in unquoted, AiM and fixed rate securities. An important common theme is that the businesses in which we invest are able both to scale up their operations easily as they grow and to reduce their costs quickly, if customer demand falls. ISIS Capital is closely involved with the progress of the unquoted companies. There is also regular dialogue with AiM investee companies. We believe that as active major shareholders we can help businesses to weather tough trading conditions and prepare them to make the most of the next upswing.' Enquiries: David Thorp ISIS Capital plc Tel: 0207 506 1100 Unaudited Statement of Total Return (incorporating the revenue account) of the Company Six Months to 30 June 2002 Revenue Capital Total £'000 £'000 £'000 Gain on investments - 491 491 Income 1,037 - 1,037 Investment management fee (94) (282) (376) Other expenses (157) - (157) Return on ordinary activities before tax 786 209 995 Tax on ordinary activities (232) 91 (141) Return attributable to equity shareholders 554 300 854 Dividends in respect of equity shares (468) - (468) Transfer to reserves 86 300 386 Return per ordinary share: 1.66p 0.90p 2.56p Unaudited Statement of Total Return (incorporating the revenue account) of the Company Period from 22 November 2000 to 30 June 2001 Revenue Capital Total £'000 £'000 £'000 Loss on investments - (48) (48) Income 640 - 640 Investment management fee (66) (199) (265) Other expenses (93) - (93) Return on ordinary activities before tax 481 (247) 234 Tax on ordinary activities (138) 65 (73) Return attributable to equity shareholders 343 (182) 161 Dividends in respect of equity shares (330) - (330) Transfer to/ (from) reserves 13 (182) (169) Return per ordinary share: 1.23p (0.66)p 0.57p Unaudited Statement of Total Return (incorporating the revenue account) of the Company Period from 22 November 2000 to 31 December 2001 Revenue Capital Total £'000 £'000 £'000 Loss on investments - (74) (74) Income 1,504 - 1,504 Investment management fee (159) (477) (636) Other expenses (248) - (248) Return on ordinary activities before tax 1,097 (551) 546 Tax on ordinary activities (322) 155 (167) Return attributable to Equity shareholders 775 (396) 379 Dividends in respect of equity shares (760) - (760) Transfer to/(from) reserves 15 (396) (381) Return per ordinary share: 2.52p (1.29)p 1.23p Unaudited Balance Sheet As at As at As at 30 June 30 June 31 December 2002 2001 2001 £'000 £'000 £'000 Fixed Assets Quoted on the Alternative Investment Market 3,016 520 2,116 Unquoted investments 5,724 1,512 2,512 Listed fixed interest investments 20,104 8,248 26,261 ________ ________ ________ 28,844 10,280 30,889 Net current assets 2,892 20,901 180 ________ _______ _______ Net assets 31,736 31,181 31,069 ________ ________ ________ Financed by: Shareholders' funds 31,736 31,181 31,069 ________ ________ ________ Net asset value per ordinary share: 95.02p 94.49p 93.85p Ordinary shares in issue 33,400,146 32,999,999 33,106,153 Summarised Unaudited Statement of Cash Flows Six months Period from Period from to 22 November 22 November 30 June 2000 to 2000 to 2002 30 June 31 December 2001 2001 £'000 £'000 £'000 Net cash flow inflow/(outflow) from operating activities 405 (89) 251 Capital expenditure and financial investment 2,536 (10,328) (30,963) Equity dividends paid (430) - (330) Net cash flow inflow/(outflow) before financing 2,511 (10,417) (31,042) Financing 367 32,069 31,450 Increase in cash 2,878 21,652 408 Reconciliation of net cash flow to movement in net cash Increase in cash 2,878 21,652 408 Opening net cash 408 - - Net cash at 30 June / 31 December 3,286 21,652 408 Reconciliation of net revenue before taxation to net cash flow from operating activities Net revenue before taxation 786 481 1,097 Management fee charged to capital (282) (199) (477) Increase in debtors (87) (610) (616) (Decrease)/increase in creditors (12) 239 247 Net cash flow from operating activities 405 (89) 251 Notes 1. The unaudited interim results which cover the six months to 30 June 2002 have been drawn up in accordance with the applicable accounting standards, adopting the accounting policies set out in the statutory accounts for the year ended 31 December 2001. 2. There were 33,400,146 ordinary shares in issue at 30 June 2002 (31 December 2001: 33,106,153). During the period 418,993 ordinary shares were issued and 125,000 ordinary shares of 10p each were bought in by the company for cancellation. 3. Earnings for the six months to 30 June 2002 should not be taken as a guide to the results for the full year and are based on a weighted average of 33,298,728 (31 December 2001 - 30,748,766) ordinary shares in issue during the period. 4. Income for the period to 30 June is derived from: 2002 2001 £'000 £'000 Equity investment 14 - Fixed interest investment 994 170 Deposit interest 25 470 Other income 4 - ____ ___ 1,037 640 5. The interim dividend of 1.40p will be paid on 30 September 2002 to shareholders on the register on 23 August 2002 6. These are not statutory accounts in terms of Section 240 of the Companies Act 1985 and are unaudited. The full audited accounts for the period to 31 December 2001, which were unqualified, have been lodged with the Registrar of Companies. 7. Copies of the interim report have been mailed to shareholders and are available from the Registered Office of the Company at 100 Wood Street, London EC2V 7AN. This information is provided by RNS The company news service from the London Stock Exchange

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