Preliminary Results

British Smaller Companies VCT PLC
08 June 2005


                        BRITISH SMALLER COMPANIES VCT PLC

                         UNAUDITED PRELIMINARY RESULTS
                               FOR THE YEAR ENDED
                                 31 MARCH 2005

British Smaller Companies VCT plc ('the Company') today announces its unaudited
preliminary results for the year ended 31 March 2005.

• Further significant growth in net asset value

The growth in net asset value for Ordinary shareholders over the year to 31
March 2005, before dividend distributions paid and proposed, was 21.4%. The
equivalent growth over the last three years is 39.5%.

• Post year end realisation at enhanced valuation

Since the year end, the Company has realised its investment in Harlands of Hull
Limited for cash proceeds in excess of the carrying value at 31 March 2005. The
Company will initially receive £1.55 million from this £500,000 investment made
in September 2003 representing over 3 times cash return in 20 months. Further
cash proceeds may be received dependent upon certain conditions being met. The
carrying value at the year end was £1.42 million.

• Total dividend for the year of 4.8p per share

A final dividend of 2.2p per Ordinary share is being proposed for payment on 5
August 2005 to holders of Ordinary shares on the register at 17 June 2005. When
added to the two interim dividends already paid in the year, the total dividend
for the year ended 31 March 2005 is 4.8p per Ordinary share. This is free of
income tax to eligible shareholders.

• Total return increases to 113.4p per Ordinary share

The total return, arrived at by adding cumulative dividends paid and proposed to
date to the net asset value at the reporting date, is now 113.4p per Ordinary
share for shareholders who subscribed in the initial public offering. This
compares to a net cost to those shareholders of 80p per share after allowing for
20% income tax relief on their original subscription.

• Introduction of dividend reinvestment scheme

A dividend reinvestment scheme was approved by shareholders on 7 January 2005.
This enables shareholders to increase their total holding in the Company without
incurring any cost. At the current time, participation will enable shareholders,
subject to individual circumstances, to qualify for 40 per cent tax relief on
the amount reinvested. Shareholders wishing to continue to receive their
dividends as cash can still do so and benefit from the tax free income.

Financial highlights

                                                   Unaudited           Audited
                                                  Year ended        Year ended
                                               31 March 2005     31 March 2004

Loss for the financial year                         £(45,000)        £(755,000)
Unrealised gain on valuation of investments       £2,392,000        £2,746,000
Total recognised gains for the year               £2,347,000        £1,991,000
Loss per Ordinary share                                (0.29)p           (4.88)p
Total recognised gains per Ordinary share              15.30p            12.87p
Total dividend paid and proposed for year                4.8p              4.8p
Total cumulative dividends paid and proposed            29.0p             24.2p
Net asset value per Ordinary share                      84.4p             73.5p
Total return to date                                   113.4p             97.7p

For further information, please contact:

David Hall YFM Private Equity Limited Tel: [phone]
Alan Davies YFM Private Equity Limited Tel: [phone]
Jonathan Becher Teather & Greenwood Limited Tel: [phone]
Michael Bellamy Teather & Greenwood Limited Tel: [phone]



Chairman's Statement

It is pleasing to be able to report further significant growth in the net asset
value of your Company and to propose a third and final dividend distribution in
respect of the year ended 31 March 2005. Successful realisations in the year and
the flotation of Cozart plc, together with a continued general upward trend in 
the performance of the unquoted portfolio, has seen net asset value grow, on a
like-for-like basis and before distributions, 21.4% over the year as a whole.
This brings the cumulative increase on the same basis over the past three years
to 39.5%. In that period, a total of 10.45 pence per Ordinary share has been
proposed and paid to shareholders as a tax free dividend.

Investment Portfolio

Allowing for the retention of a suitable level of liquid funds to meet follow-on
funding requirements from the existing portfolio and selective new investment
opportunities, your Company has been fully invested for some time now. The level
of investment activity in any year will be dependent upon cash generated from
realisations that the Board allocates for such purposes. A total of just over
£400,000 was invested in the year to 31 March 2005.

Following the realisation of Amino Technologies plc and the lightening of some
other AIM stock holdings to crystallise gains, there was a total of £1.97
million of cash and liquid investments at 31 March 2005. Of this, £333,000 is
allocated for the proposed final dividend. The balance provides sufficient
reserves to meet the operational requirements of your Company and estimated
funding requirements for the current portfolio whilst still providing enough
cash to meet selected investment opportunities as they arise.

I am pleased to announce that, following the year end, your Company's investment
in Harlands of Hull Limited has been successfully realised through the trade
sale of that company to Clondalkin Group. Your Company invested £500,000 in
September 2003 to support a management buy-out in Harlands of Hull Limited, a
leading UK specialist manufacturer of self-adhesive labels. An initial cash
payment of £1.55 million has been received in respect of the sale, with up to a
further £157,000 cash payment due dependent upon certain conditions being met.
The carrying value of this investment in the balance sheet at 31 March 2005 was
£1.42 million.

Financial Results and Dividend

The reported result in the profit and loss account for the year was a loss of
£45,000. However, after allowing for the net capital appreciation in the
investment portfolio that is taken straight to the revaluation reserve (being
unrealised gains above cost), the total recognised gain for the year under
review was £2.3 million, equivalent to 15.3 pence per Ordinary share.

The directors are proposing a final dividend for the year of 2.2 pence per
Ordinary share. Following the interim and special interim dividend already paid
in November 2004 and February 2005 respectively, the final dividend, if
approved, will take total distributions in respect of the year to 31 March 2005
to 4.8 pence per Ordinary share, which is tax free to eligible shareholders. The
final dividend will be payable on 5 August 2005 to holders of Ordinary shares on
the register at 17 June 2005.

The net asset value, after providing for the proposed dividend, is 84.4 pence
per Ordinary share. After taking account of the total dividends paid and
proposed to date of 29 pence per Ordinary share, the return to 31 March 2005 for
qualifying founder shareholders amounts to 113.4 pence per Ordinary share
compared with their initial net subscription of 80 pence per Ordinary share.

Shareholders and Fundraising

Following our appointment of new brokers, Teather & Greenwood, toward the end of
2004, I am pleased to report that the discount of the Company's share price to
its net asset value has narrowed, thus providing better liquidity for those
shareholders who wish to, or need to, dispose of their stock. The share price is
generally at a 10% discount to net asset value, reflecting the Board's stated
policy of buying back shares in the market for cancellation at that level. The
Board has agreed to continue this policy where it is, in its opinion, in the
remaining shareholders' interests to do so. During the year just ended, a total
of 318,000 Ordinary shares were purchased in the market for cancellation.

In furtherance of implementing policies and schemes for the benefit of
shareholders, the Extraordinary General Meeting on 7 January 2005 approved the
introduction of a dividend reinvestment scheme. This enables shareholders to
increase their total holding in the Company without incurring dealing costs,
issue costs or stamp duty. Subject to individual circumstances, these shares
should qualify for the 40 per cent tax relief that is applicable to
subscriptions for new shares in venture capital trusts. In relation to the 2005
dividend, this scheme will apply only to holders of Ordinary shares.

Shareholders will be aware that a C Share issue, at a price of £1 per share, was
made by your Company on 7 January 2005. I have to report that the level of
subscriptions received to date has so far been disappointingly low. Including
allotments since the year end, the total subscribed under the C share offer is
currently £1.25 million, of which just under £250,000 had been allotted at 31
March 2005. As these are a separate class of shares, to be converted into
Ordinary shares at a future date, the net asset value is reported separately on
the balance sheet. The C shares do not qualify for any dividend distribution in 
respect of the financial year to 31 March 2005. The directors have decided to 
extend the Offer until 23 June 2005 and are keeping under review the date on 
which the C Shares will be converted into Ordinary shares.

Your Board

On 3 May 2005, Stephen Noar joined the Board as a non-executive director.
Stephen, a dentist by profession, was the founder chairman and chief executive
of Denplan Limited until its successful trade sale in 2003; in the following
year winning the Financial Times Venturer of the Year Award. He is well known to
this Board through his involvement with the other VCTs in the British Smaller
Companies stable. I am delighted that Stephen has agreed to join the Board as he
brings a wealth of experience to our investment work.

This is the final part of the Board restructuring that took effect from October
2004 and provides a range of complimentary skills within a tight, but
sufficiently flexible, framework. Stephen's appointment is subject to his
election by shareholders at the forthcoming Annual General Meeting.

Outlook

The portfolio continues to provide significant growth as the underlying
companies move toward maturity and exit potential. The challenge for our
Investment Adviser is to maintain this momentum in an economic climate that
shows signs of uncertainty and potential slowdown. Your Board will be working
with the YFM Private Equity team to critically assess the new investment
opportunities that are presented to us, whilst ensuring that the existing
portfolio is focused on delivering shareholder value.

Your Board's aim is to balance this continued growth with providing shareholders
with a steady, attractive, tax free dividend income. The introduction of the
dividend reinvestment scheme will enable eligible shareholders who wish to take
advantage of the available income tax relief to reinvest their proceeds in an
appropriate way and provide additional funds for investment, whilst allowing
those shareholders who require cash returns to still benefit from a tax free
income.


Sir Andrew Hugh Smith
Chairman



Unaudited Profit and Loss Account
for the year ended 31 March 2005

                                                   Unaudited     Audited
                                          Notes         2005        2004
                                                        £000        £000

Income                                                   396         364
Administrative expenses:
   Investment advisory fee                        (272)        (250)
   Other expenses                                 (262)        (214)
                                                ------       ------
                                                       (534)        (464)
Gain on realisation of investments                      229          111
Impairment of investments                              (136)        (766)
                                                     ------       ------
Loss on ordinary activities before taxation             (45)        (755)
Tax on loss on ordinary activities 2                      -            -
                                                     ------       ------
Loss for the financial year                             (45)        (755)
Dividends paid and proposed                            (732)        (741)
                                                     ------       ------
Sustained loss for the year                            (777)      (1,496)
                                                     ======       ======
Loss per Ordinary share basic and diluted     4       (0.29)p      (4.88)p
                                                     ======       ======

Notes

All activity has arisen from continuing operations. There was no income or
expenditure in the year in respect of the C shares. Consequently the above
results relate only to the Ordinary shares.


Unaudited Statement of Total Recognised Gains and Losses
for the year ended 31 March 2005

                                                   Unaudited     Audited
                                                        2005        2004
                                                        £000        £000

Loss for the financial year                              (45)       (755)
Unrealised gain on valuation of investments            2,392       2,746
                                                      ------      ------
Total recognised gains for the year                    2,347       1,991
                                                      ======      ======


Unaudited Note of Historical Cost Profits and Losses
for the year ended 31 March 2005
                                                   Unaudited     Audited
                                                        2005        2004
                                                        £000        £000

Loss for the financial year                              (45)       (755)
Realisation of investment gains (losses) of 
previous years                                           315        (194)
                                                      ------      ------
Historical cost loss on ordinary activities 
before taxation                                          270        (949)
                                                      ------      ------
Historical cost profit (loss) for the year 
after taxation and dividends                            (462)     (1,690)
                                                      ======      ======



Unaudited Balance Sheet
at 31 March 2005

                                                    Ordinary   Unaudited               Audited
                                                      Shares    C Shares      Total      Total
                                            Notes       2005        2005       2005       2004
                                                        £000        £000       £000       £000
Fixed Assets
Investment portfolio                                  11,045           -     11,045      9,216
                                                      ------      ------     ------     ------
Current Assets
Debtors                                                  160           -        160        101
Investments                                            1,656           -      1,656      2,656
Cash                                                     314         246        560        184
                                                      ------      ------     ------     ------
                                                       2,130         246      2,376      2,941
Creditors: amounts payable within one year              (418)         (9)      (427)      (805)
                                                      ------      ------     ------     ------
Net Current Assets                                     1,712         237      1,949      2,136
                                                      ------      ------     ------     ------
Total Net Assets                                      12,757         237     12,994     11,352
                                                      ======      ======     ======     ======

Capital and Reserves

Called-up share capital                                1,512         125      1,637      1,544
Share premium account                                      -         112        112          -
Capital redemption reserve                                75           -         75         43
Revaluation reserve                                    7,116           -      7,116      5,039
Special reserve                                        3,661           -      3,661      3,871
Profit and loss account                                  393           -        393        855
                                                      ------      ------     ------     ------
Equity shareholders' funds                            12,757         237     12,994     11,352
                                                      ======      ======     ======     ======
Net asset value per share                     6         84.4p       95.0p      84.6p      73.5p
                                                      ======      ======     ======     ======



Unaudited Cash Flow Statement
for the year ended 31 March 2005

                                                    Ordinary             Unaudited    Audited
                                                      Shares   C Shares      Total      Total
                                               Notes    2005       2005       2005       2004
                                                        £000       £000       £000       £000

Net cash outflow from operating activities              (212)         -       (212)       (58)
                                                      ------     ------     ------     ------
Investing activities
Purchase of fixed asset investments                     (401)         -       (401)      (858)
Proceeds from disposal of fixed asset investments      1,107          -      1,107      2,159
                                                      ------     ------     ------     ------
Net cash inflow from investing activities                706          -        706      1,301
                                                      ------     ------     ------     ------

Equity dividends paid to shareholders                 (1,140)         -     (1,140)      (93)
                                                      ------     ------     ------     ------
Net cash (outflow) inflow before management of 
liquid resources and financing                          (646)         -       (646)     1,150
                                                      ------     ------     ------     ------
Management of liquid resources
Purchase of fixed interest government stocks            (106)         -       (106)    (2,733)
Proceeds from the sale of fixed interest 
government stocks                                      1,056          -      1,056      1,485
                                                      ------     ------     ------     ------
Net cash inflow (outflow) from management of liquid
resources                                                950          -        950     (1,248)
                                                      ------     ------     ------     ------
Financing
Purchase of own shares                                  (174)         -       (174)       (35)
Issue of C shares                                          -        250        250          -
Costs of C share issue                                     -         (4)        (4)         -
                                                      ------     ------     ------     ------
Net cash inflow (outflow) from financing                (174)       246         72        (35)
                                                      ------     ------     ------     ------
Increase (decrease) in cash in the year                  130        246        376       (133)
                                                      ======     ======     ======     ======





Notes to Financial Statements
for the year ended 31 March 2005


1. Basis of reporting

This preliminary announcement, which has been prepared on a basis consistent
with the previous year, does not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985.

The information for the year ended 31 March 2004 is an extract from the
statutory accounts to that date which have been delivered to the Registrar of
Companies. Those accounts included an audit report which was unqualified and
which did not contain a statement under Section 237(2) or (3) of the Companies
Act 1985. The statutory accounts for the year ended 31 March 2005, upon which
the auditors have still to report, will be delivered to the Registrar following
the Company's annual general meeting.

The balance sheet and cash flow includes the C shares issued and allotted at the
reporting date. The assets, liabilities and cash flows of the Company have been
analysed as between the two classes of share.

2. Tax on Ordinary activities
                                                            2005       2004
                                                            £000       £000
Corporation tax payable at 19% (2004: 19%)                     -          -
                                                          ------     ------
3.       Dividends
                                                            2005       2004
                                                            £000       £000
First interim paid - 1.5p per Ordinary share
(2004: nil)                                                  230          -
Second interim paid - 1.1p per Ordinary share
(2004: nil)                                                  169          -
Final proposed - 2.2p per Ordinary share (2004:
4.8p)                                                        333        741
                                                          ------     ------
                                                             732        741
                                                          ======    =======
4.       Loss per Ordinary Share

The loss per Ordinary share is based on net loss from ordinary activities after
tax of £45,000 (2004: £755,000) and 15,343,000 (2004: 15,457,000) shares, being
the weighted average number of shares in issue during the year.

Under FRS14 'Earnings per share' any potentially dilutive shares are not deemed
dilutive in the event that a loss has been incurred. Consequently, the basic and
diluted loss per share for the year ended 31 March 2005 and 2004 are the same.

5. Total recognised gains per Ordinary Share

The total recognised gains per Ordinary share is based on total recognised gains
for the year of £2,347,000 (2004: £1,991,000) and 15,343,000 (2004: 15,457,000)
shares, being the weighted average number of shares in issue during the year.

6. Net Asset Value per Share

The net asset value per Ordinary share is calculated on attributable assets of
£12,757,000 (2004: £11,352,000) and 15,117,838 (2004: 15,435,838) shares in
issue at the year end. The Company has no securities that would have a dilutive
effect in either period and hence the basic and diluted net asset value per
share are the same.

The net asset value per C share is calculated on attributable assets of £237,000
(2004: £nil) and 249,575 (2004: nil) shares in issue at the year end. The
Company has no securities that would have a dilutive effect in either period and
hence the basic and diluted net asset value per share are the same.

7. Annual General Meeting

Copies of the full financial statements for the period ended 31 March 2005 will
be available to the public at the registered office of the Company at Saint
Martins House, 210-212 Chapeltown Road, Leeds, LS7 4HZ . The Company's AGM is
due to be held at 12.45 pm on 26 July 2005 at 23 Berkeley Square, London, W1J
6HE.






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