Interim Results

Progressive Euro Alt. Portfolio Ltd
20 May 2004

PROGRESSIVE EUROPEAN ALTERNATIVE PORTFOLIO LIMITED


Announcement of Interim Results for the six months to 31 March 2004


KEY FEATURES


Investment objectives


The Company's objectives are to achieve:


  • positive annual returns in all market conditions; and
  • significantly higher returns than the composite European equity market* over 
    the medium term, with less variability of returns.

*  as measured by the FTSE Eurotop 300 Index in Euros.



The Company invests, directly or indirectly, in a portfolio of hedge funds 
predominantly focused on European Equity Securities.



STATISTICS


                                                                At 31 Mar 2004          At launch

Net asset value ('NAV') per share                                      103.52p            97.21p*
Share price                                                             99.00p            100.00p

* after share issue expenses


PERFORMANCE

                                                              Six months to 31      Since launch*
                                                                    March 2004
FTSE Eurotop 300 Index in Euros                                         14.90%             18.19%

Progressive European Alternative Portfolio
  • NAV per share                                                       +4.25%             +6.49%
  • Share price                                                         +0.51%             -1.00%


* NAV at launch was 97.21p after share issue expenses and share price was 100p.


CHAIRMAN'S STATEMENT



I am pleased to present my second interim report to the shareholders of Progressive European Alternative Portfolio
Limited.  This interim commentary covers the six month period to 31 March 2004.



During the period the Company achieved its objective of producing absolute gains, irrespective of the direction of the
underlying European stock markets, with less volatility of returns.  The portfolio is currently invested in a selection
of hedge funds focused predominately on European equity securities and remains well within all investment restrictions
and criteria.



Performance and Current Status



The UK and Continental European markets were stable during the period and European hedge funds produced a good set of
results, albeit behind the comparable equity markets.  Performance relative to the markets improved as managers drew
back from their previous cautious approach and gross and net exposures were consequently higher.  The result for the
period was pleasing, with good absolute performance and a very low level of volatility in the net asset value ('NAV')
per share.



The Company's NAV of GBP15.8 million at launch after share issue expenses had risen to GBP16.9 million at 31 March
2004.  This represents an increase of 4.25% from the 99.30p NAV at the end of the 2003 financial year to 103.52p per
share at the end of the period.



Outlook



Over the next few months the euro-zone will change beyond all recognition.  Ten new member states have joined the
European Union and the opportunities thrown up will be many, although the main benefits will of course be for those
countries prepared to be proactive in seeking growth.  The green shoots of growth are still weak, but, with Europe
uniting peacefully, there is some hope for long-term prosperity in the area.  The debate about supply side shocks will
rage for some time, but it is inevitable that at the very least these changes will open new doors for investing in
Europe.



This fundamental rebalancing will create considerable opportunities as performance differentials between individual
equities increase.  The potential for value-enhancing corporate restructurings will also increase the wave of merger
and acquisition activity across all sectors.  Long-only funds can exploit only the winners, while hedge funds, through
their ability to go both long and short of shares, can take advantage of the price movements and trends of all
companies.



PEAPL will continue to invest in well-managed hedge funds, which have strong risk control mechanisms in place.  Given
the current, more stable environment and the current higher overall gross exposure of the fund, the directors believe
that the portfolio will produce good absolute returns in the coming months.



Christopher Clark

20 May 2004



STATEMENT OF TOTAL RETURN
(incorporating the profit and loss account*)

                              Six months   Six months   Six months       9 Jul 2002   9 Jul 2002   9 Jul 2002
                               to 31 Mar    to 31 Mar    to 31 Mar        to 31 Mar    to 31 Mar    to 31 Mar
                                    2004         2004         2004             2003         2003         2003

                                   £'000        £'000        £'000            £'000        £'000        £'000

                                 Revenue      Capital        Total          Revenue      Capital        Total


Gains  on investments                  -          454          454                -          401          401

Capital gains / (losses) on
currency movements
                                       -          450          450                -        (310)        (310)
Net gains                              -          904          904                -           91           91
Income - bank interest                 6            -            6               20            -           20
Investment management fee

                                       -        (122)        (122)                -         (56)         (56)
Other expenses                     (100)            -        (100)             (58)            -         (58)
Total return for period             (94)          782          688             (38)           35          (3)
Return per redeemable            (0.58)p        4.80p        4.22p          (0.23)p        0.21p      (0.02)p
preference share


*The revenue column of this statement is the profit and loss account of the Company.



All capital and revenue items in the above statement derive from continuing operations.  No operations were acquired or
discontinued during the period.



Return per redeemable preference share is based on 16,300,000 redeemable preference shares in issue throughout the
period.



SUMMARISED BALANCE SHEET


                                                      At 31 March       At 31 March        At 30 Sept
                                                             2004              2003              2003
                                                            £'000             £'000             £'000
                                                            
    Fixed assets - Investments at market value             15,729            14,742            15,582

    Current assets                                          1,435             1,215               709
    Current liabilities                                     (289)             (115)             (104)
    Net current assets                                      1,146             1,100               605

    Total net assets                                       16,875            15,842            16,187

    Share capital                                             163               163               163
    Share premium                                           7,614            15,682             7,614
    Share purchase reserve                                  8,069                 -             8,069
    Capital reserves                                        1,271                35               489
    Revenue reserve                                         (242)              (38)             (148)
    Equity shareholders' funds                             16,875            15,842            16,187

    Net asset value per redeemable preference             103.52p            97.19p            99.30p
    share

    Number of redeemable preference shares in          16,300,000        16,300,000        16,300,000
    issue


CASH FLOW STATEMENT



                                                                         Six months to         9 July 2002
                                                                         31 March 2004
                                                                                               to 31 March
                                                                                                      2003


                                                                                 £'000               £'000


Operating activities
Net cash inflow/(outflow) from operating activities                                258               (341)
Financial investment
Payments to acquire fixed asset investments                                    (1,877)            (15,190)
Receipts on disposal of fixed asset investments                                  2,361                 886
Net cash inflow/(outflow) from investing activities                                484            (14,304)


Financing
Issue of redeemable preference share capital                                         -              16,300
Share issue expenses                                                                 -               (455)
Net cash inflow from financing                                                       -              15,845

Increase in cash                                                                   742               1,200




NOTES



The Company is a closed-ended investment company incorporated and resident in Guernsey.



The Company's investments are in hedge funds which may be denominated in or exposed to either Euros or US dollars. The
Company uses foreign exchange forward currency contracts to seek to ensure that its net exposure to currencies other
than sterling does not at any time exceed 15 per cent. of the Company's net assets.



This report has been prepared in accordance with applicable United Kingdom accounting standards and with the Statement
of Recommended Practice 'Financial Statements of Investment Trust Companies' as it is considered best practice to do
so, although the Company, as an overseas company, does not meet all the criteria set out in the SORP. The Company is
not an investment trust.



These financial statements are not the Company's statutory accounts.  They are unaudited. The interim report will be
sent to shareholders and copies will be made available to the public at the registered office of the Company and at the
address of the UK Administration Agent.



The Company was incorporated on 9 July 2002.  Business operations commenced on 19 December 2002.



SECRETARY, ADMINISTRATOR & REGISTERED OFFICE
Legis Corporate Services Limited
1 Le Marchant Street
St Peter Port
Guernsey
GY1 4HP



UK ADMINISTRATION AGENT
Cavendish Administration Limited
Crusader House
145-157 St John Street
London
EC1V 4RU


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