Interim Results

Baronsmead VCT 3 PLC 20 August 2003 To: RNS From: Baronsmead VCT 3 plc Date: 20 August 2003 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 - Six months ended 30 June 2003 • Net asset value increased by 1.1 per cent to 95.87p per share • Interim dividend of 0.9p per share declared • Investments in period increased to 23 companies • Total return of 7.5 per cent since launch The two largest unquoted investments were sold in May and June realising aggregate profits of £1.9 million on the sale of Thomas Sanderson and the AIMS Group to trade purchasers. These are examples of how successful private equity investment can add value to growth companies and achieve excellent returns for the shareholders in these companies. Results I During the interim period, the Net Asset Value per share increased by 1.1% to 95.9p per share after declaring an interim dividend of 0.9p per share. This dividend will be paid on 20 September 2003 to shareholders who are on the register at the close of business on 29 August 2003. New investment I In the six months to 30 June 2003, one unquoted and three AiM subscriptions were transacted. • Huveaux - Specialist publishing group based in London Huveaux owns three publishing businesses: Vacher Dod and Le Trombinoscope produce UK and French political biographies; Lonsdale publishes revision guides aimed at school children sitting GCSEs. Baronsmead VCT 3 invested £534,000 of a £7.6 million placing for acquisitions. • Universe Group - provides payment and currency exchange systems Based in London and Southampton, Universe has two divisions: HTEC designs loyalty and payment systems to the retail petrol industry and currency exchange via bureau de change outlets and money transfer systems. Baronsmead VCT 3 invested £158,000 of a £1.5 million placing, raised to develop their global money transfer business. • Cardpoint - operates independent cash machines Based in Lytham, Cardpoint operates 1,600 independent ATMs throughout the UK in service stations, pubs and hospitals. Baronsmead VCT 3 invested £92,000 of the £5.5 million placing on AiM, raised to purchase the automated teller machine estate of Securicor. • Oxxon Pharmacinnes - develops treatments for chronic infectious diseases Based in Oxford, the core activity of Oxxon is the development of innovative 'Pharmacinnes' for the treatment of chronic infectious diseases and cancer. Baronsmead VCT 3 invested £250,000 as part of a £12 million funding round. The Investment Managers have focussed on completing new and follow-on round investments to meet the requirement that at least 70% of the value of the Company's total assets be invested in VCT qualifying holdings by the end of the third accounting period, 31 December 2003, and thereafter. The Board with its advisers monitors the VCT status of its new and existing investments with a view to ensuring that the Company will be able to comply. The Board will be considering a range of options in this regard whilst maintaining the investment policy and sustaining quality standards. Cash management I The Investment Managers have replaced Cazenove Fund Management in managing the Company's liquid capital, awaiting investment into qualifying holdings. The original intention was that active management of a corporate bond portfolio merited Cazenove's involvement. In view of the low yield environment and small relative fund size, Cazenove subsequently recommended that investing in a portfolio of gilts rather than corporate bonds would be more appropriate to achieve the required diversity and flexibility. In these circumstances the Board has decided that the Investment Manager's in-house expertise would be as effective and more cost efficient. Meeting shareholder needs I Since launch, the Managers have sustained performance measured in terms of total return some way ahead of the FTSE All-Share Index. Baronsmead VCT 3 has returned a positive 7.5% total return since launch compared to a fall in total return of 30.0% in the FTSE All-Share index. The relatively high level of cash balances has helped. The performance differential improves further if the VCT tax reliefs are also taken into account. Outlook I There are some signs of increasing corporate activity from trade purchasers, of which the recent sales to corporate purchasers are strong evidence. Economic conditions, however, are unlikely to return to the more buoyant times of the 1990s for some years. There has been resilient performance to date, both relatively and absolutely, and the first sales of investments demonstrate what private equity can achieve. The Managers are focusing hard on building the level of new investment within the criteria to establish a diversified portfolio of over 30 holdings in qualifying unquoted and AiM-traded companies. Enquiries: David Thorp ISIS Equity Partners plc Tel: 0207 506 1100 Unaudited Statement of Total Return (incorporating the revenue account) of the Company Six Months to 30 June 2003 Revenue Capital Total £'000 £'000 £'000 Gain on investments - 459 459 Income 745 - 745 Investment management fee (95) (284) (379) Other expenses (116) - (116) Return on ordinary activities before tax 534 175 709 Tax on ordinary activities (140) 92 (48) Return attributable to equity shareholders 394 267 661 Dividends in respect of equity shares (308) - (308) Transfer to reserves 86 267 353 Return per ordinary share: 1.16p 0.79p 1.95p 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 Year to 31 December 2002 Revenue Capital Total £'000 £'000 £'000 Gain on investments - 698 698 Income 1,825 - 1,825 Investment management fee (186) (559) (745) Other expenses (290) - (290) Return on ordinary activities before tax 1,349 139 1,488 Tax on ordinary activities (396) 181 (215) Return attributable to equity shareholders 953 320 1,273 Dividends in respect of equity shares (941) - (941) Transfer to reserves 12 320 332 Return per ordinary share: 2.85p 0.96p 3.81p Unaudited Balance Sheet As at As at As at 30 June 30 June 31 December 2003 2002 2002 £'000 £'000 £'000 Fixed Assets Quoted on the Alternative Investment Market 4,337 3,016 3,539 Unquoted investments 5,217 5,724 8,125 Listed fixed interest investments 11,281 20,104 16,927 ________ ________ ________ 20,835 28,844 28,591 Net current assets 11,675 2,892 3,459 _______ ________ _______ Net assets 32,510 31,736 32,050 ________ ________ ________ Financed by: Shareholders' funds 32,510 31,736 32,050 ________ ________ ________ Net asset value per ordinary share: 95.87p 95.02p 94.85p Ordinary shares in issue 33,909,332 33,400,146 33,792,157 Summarised Unaudited Statement of Cash Flows Six months Six months Year to to to 30 June 30 June 31 December 2003 2002 2002 £'000 £'000 £'000 Net cash flow inflow from operating activities 493 405 1,228 Tax paid - - (167) Capital expenditure and financial investment 7,850 2,536 3,367 Equity dividends paid (476) (430) (898) Net cash inflow before financing 7,867 2,511 3,530 Financing 108 367 649 Increase in cash 7,975 2,878 4,179 Reconciliation of net cash flow to movement in net cash Increase in cash 7,975 2,878 4,179 Opening net cash 4,587 408 408 Net cash at 30 June / 31 December 12,562 3,286 4,587 Reconciliation of net revenue before taxation to net cash flow from operating activities Net revenue before taxation 534 786 1,349 Management fee charged to capital (284) (282) (559) Decrease/(increase) in debtors 48 (87) 427 Increase/(decrease) in creditors 195 (12) 11 Net cash flow from operating activities 493 405 1,228 Notes 1. The unaudited interim results which cover the six months to 30 June 2003 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 2002. 2. There were 33,909,332 ordinary shares in issue at 30 June 2003 (31 December 2002: 33,792,157; 30 June 2002: 33,400,146). During the period 157,175 ordinary shares were issued and 40,000 ordinary shares of 10p each were bought in by the company for cancellation. 3. Earnings for the six months to 30 June 2003 should not be taken as a guide to the results for the full year and are based on a weighted average of 33,842,855 (31 December 2002: 33,446,891; 30 June 2002: 33,298,728) ordinary shares in issue during the period. 4. Income for the period to 30 June is derived from: 2003 2002 £'000 £'000 Equity investment 50 14 Fixed interest investment 584 994 Deposit interest 111 25 Other income - 4 ___ _____ 745 1,037 5. The interim dividend of 0.90p will be paid on 20 September 2003 to shareholders on the register on 29 August 2003. 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 year to 31 December 2002, 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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