Interim Results

Elderstreet Downing VCT PLC
26 September 2003

ELDERSTREET DOWNING VCT PLC
INTERIM RESULTS TO 30 JUNE 2003



CHAIRMAN'S STATEMENT



The period ended 30 June 2003 has seen the end of the main hostilities in Iraq
and may have seen a change in investor sentiment.  The FTSE AIM and FTSE 100
indices showed small gains over the period, however, as expected, there may be
some lag in this effect filtering down to the valuations of smaller unquoted
companies, which form the majority of the Company's venture capital portfolio.



Net Asset Value

At 30 June 2003, the Net Asset Value per share ('NAV') stood at 55.1p, a fall of
3.8p or 6.3% compared to the NAV at the previous year end before taking into
account the interim dividend described below.



Venture capital investments

During the period the Company made seven partial disposals of investments
producing a net profit of £6,000 against original cost or £4,000 against the
previous carrying value.  There were also two major redemptions of loan stock,
at par, from Rose Bowl plc and Wessex Advanced Switching Products Ltd, totalling
£500,000.



The Company has also made four follow-on investments totalling £418,000.



The Board has made adjustments to the valuation of seven investments during the
period; five valuations reducing and two increasing.  The largest single
movement has been to the valuation of the investment in European
Telecommunications & Technology plc.  The investment has now been valued by
comparison to a listed competitor giving rise to a fall of £364,000.  It should
be noted that the valuation still remains substantially above the original cost.



The investments in both Fords Packaging and UM Holdings have valued on an
earnings basis, with improved results giving rise to increases of £150,000 and
£81,000 respectively.  Overall the valuation of the venture capital portfolio
has fallen by £634,000, equivalent to 4.2p per share.



Listed fixed income securities

The remaining fixed interest security was redeemed at par during the year.  The
funds are now held as cash and consequently Cazenove have ceased to act as the
Company's fixed income advisers.



Dividend

Although the Company made a low level of disposals in the period, there are
undistributed gains made from earlier periods which the Board have decided to
use to supplement the dividend that is derived from the revenue surplus. An
interim dividend of 1.0p per share (2002 - 1.5p) will be paid on 31 October 2003
to shareholders on the register at 10 October 2003.  This will bring total
dividends paid to shareholders since launch to be 25.5p per share.



Repurchase of shares

The Directors are conscious that the Company's share price is affected by the
illiquidity of its shares in the market resulting from the requirement that
shareholders must retain their shares at least five years in order to retain
their tax benefits.



The Directors are continuing to monitor the market in the Company's shares and
will make share purchases when appropriate.  During the period the Company
repurchased 157,100 shares, at a price of 42p per share, for cancellation.



Publication of share price

The Company's share price is quoted in the Financial Times on a daily basis and
can be found within the 'Investment Companies' sector.



Outlook

The steady increase in world stock markets indices, which has been experienced
through the latter part of the period, has continued since the period end.  It
is too early to tell whether the improved conditions will have a significant
impact on the valuation of smaller unquoted companies.  It is however pleasing
to note that some impact has already been felt by the Company's AIM quoted
investments.  For example, Computer Software Groups Plc, in which the Company
holds 32 millions shares, has seen its shares price rise from 2.75p at 30 June
2003 to 4.0p at today's date.



The Company continues to have significant levels of funds available for
investment, so is in a good position to take advantage of stronger deal flow and
better conditions for investing as they improve.



David Brock

Chairman

UNAUDITED SUMMARISED BALANCE SHEET

as at 30 June 2003


                                                 30 June              30 June              31 Dec
                                                    2003                 2002                2002
                                                   £'000                £'000               £'000
Fixed assets
Venture capital investments                        5,862                7,742               6,704
Listed fixed income investments                        -                  821                 805

                                                   5,862                8,563               7,509

Net current assets                                 2,356                2,288               1,528

Net assets                                         8,218               10,851               9,037

Capital and reserves

Called up share capital                              746                  754                 754
Capital redemption reserve                            11                    3                   3
Revaluation reserve                                (545)                  504               (267)
Special reserve                                    8,006                9,590               8,547

Total equity shareholders' funds                   8,218               10,851               9,037

Net asset value per share                          55.1p                71.9p               59.9p




UNAUDITED PROFIT AND LOSS ACCOUNT
for the six months ended 30 June 2003


                                                      Six          Six         Year
                                                   months       months
                                                    ended        ended        ended
                                                  30 June      30 June       31 Dec
                                                     2003         2002         2002
                                                    £'000        £'000        £'000

Investment income                                     194          197          389
Investment management fees                           (74)        (106)        (195)
Other expenses                                       (89)        (102)        (197)
Operating profit/(loss)                                31         (11)          (3)

Net movement on permanent diminution provision      (298)        (322)        (362)
Profit on realisation of investments                    -           44        (409)
Loss on ordinary activities before taxation         (267)        (289)        (774)

Tax on ordinary activities                              -          (2)          (2)
Loss on ordinary activities after taxation          (267)        (291)        (776)

Dividends                                           (149)        (226)        (528)

Retained loss for period                            (416)        (517)      (1,304)

Earnings/(loss) per share                          (1.8p)       (1.9p)       (5.1p)



All revenue and capital items in the above statement derive from continuing
operations.



The Company has only one class of business and derives its income from
investments made in shares, securities and bank deposits.





STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 30 June 2003
                                                         Six            Six            Year
                                                      months         months
                                                       ended          ended           ended
                                                    30 June         30 June          31 Dec
                                                        2003           2002            2002
                                                       £'000          £'000           £'000

Loss on ordinary activities after taxation             (267)          (291)           (776)

Net movement on permanent diminution provision           298            322             362

Total unrealised (losses) on revaluation of            (634)          (391)         (1,449)
investments
Total recognised losses for the period                 (603)          (360)         (1,863)

Recognised (losses)/gains brought forward            (1,682)            181             181

Recognised losses carried forward                    (2,285)          (179)         (1,682)


UNAUDITED CASHFLOW STATEMENT
for the six months ended 30 June 2003

 
                                                                                  Six            Six            Year
                                                                               months         months
                                                                                ended          ended           ended
                                                                              30 June        30 June          31 Dec
                                                                                 2003           2002            2002
                                                                                £'000          £'000           £'000


Cash inflow from operating activities and returns on 
investments (note 1)                                                               66            88              20

Taxation                                                                            -             -              36

Capital expenditure

Purchase of venture capital investments                                         (418)         (586)         (1,334)

Proceeds on disposal of listed fixed income securities                            800           600             600

Proceeds on disposal of venture capital investments                               621           508             799

Net cash inflow from capital expenditure                                        1,003           522              65



Equity dividends paid                                                           (302)         (302)           (528)



Net cash inflow/ (outflow) before financing                                       767           308           (407)


Financing

Purchase of own shares                                                           (57)             -             (3)
Net cash outflow from financing                                                  (57)             -             (3)


Increase/(decrease) in cash (note 2)                                              710           308           (410)

Notes to the cashflow statement:


1  Cash outflow from operating activities and returns on investments

Operating profit/(loss)                                                            31          (11)             (3)
Decrease in other debtors                                                          44           112              29
Decrease in other creditors                                                       (9)          (13)             (6)
  Net cash inflow from operating activities                                        66            88              20

2  Analysis of net funds

Beginning of period                                                             1,702         2,112           2,112
Net cash inflow/(outflow)                                                         710           308           (410)
End of period                                                                   2,412         2,420           1,702



SUMMARY OF INVESTMENT PORTFOLIO
as at 30 June 2003
                                                     Cost    Valuation       % of
                                                                        portfolio
                                                       £'000     £'000   by value
Top ten venture capital investments
Computer Software Group plc *                          1,219       886      15.1%
European Telecommunications &                            450       758      12.9%
Technology plc
Berkeley Scott Group plc                                 900       507       8.6%
Ford Packaging Systems Limited                           200       500       8.5%
U M (Holdings) plc                                       260       422       7.2%
Wessex Advanced Switching Products                       125       360       6.2%
Limited
The National Solicitors Network                          806       350       6.0%
Limited
Henry J Bean's Group plc                                 587       340       5.8%
Qube Design Limited                                      292       329       5.6%
Milkround Online Limited                                 250       295       5.0%
                                                       5,089     4,747      80.9%

Other venture capital investments                      4,398     1,115      19.1%

Total investments                                      9,487     5,862     100.0%





All venture capital investments are unquoted unless otherwise stated.



*    Quoted on the Alternative Investment Market ('AIM')





NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

1.  The above financial information has been prepared on the basis of the
accounting policies set out in the Annual Report.



2.  The calculation of the earnings per share for the period is based upon the
net loss after tax of £267,000 divided by the weighted average number of shares
in issue during the period of 15,037,167.



3.  The unaudited financial statements set out herein do not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985
and have not been delivered to the Registrar of Companies.  The figures for the
year ended 31 December 2002 have been extracted from the financial statements
for that year, which have been delivered to the Registrar of Companies; the
auditors' report on those financial statements was unqualified.



4.  Copies of the unaudited interim results will be sent to shareholders
shortly. Further copies can be obtained from the Company's Registered Office.




                      This information is provided by RNS
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