Final Results

Northern 2 VCT PLC
26 April 2001

NORTHERN 2 VCT PLC

26 APRIL 2001

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 JANUARY 2001

HIGHLIGHTS OF THE YEAR:

  * 17 new venture capital holdings acquired at cost of £7.1 million
  * Net asset value per share up by 1.1% to 94.2p
  * Dividend increased by 9.1% to 2.4p per share
  * Over £18 million raised in top-up share issue since year end

The Chairman of Northern 2 VCT PLC, Dr Matt Ridley, included the following
points in his statement to shareholders:

I am pleased to report on a year of solid progress by your company. We have
continued to develop the portfolio of venture capital investments, have
achieved a modest increase in net asset value per share and have declared an
increased dividend. Subsequent to the year end our 'top-up' share issue has
progressed well despite difficult stock market conditions.

Net asset value

The net asset value (NAV) at 31 January 2001 was 94.2p per share, an increase
of 1.1% over the corresponding figure of 93.2p at 31 January 2000. At this
early stage in the company's development, the majority of our venture capital
investments are still valued at their original cost and the directors regard
the overall position as satisfactory.

Investment portfolio

During the year our managers completed 17 new venture capital investments,
further details of which are given in the Manager's Review. Your directors
continue to be encouraged by the way the portfolio is developing and by the
continuing flow of potential new investments.

Revenue and dividends

The revenue surplus before tax for the year was £932,000, compared to £638,000
in a shorter corresponding period following the launch of the company in 1999.
This produced a revenue return per share of 2.9p per share, slightly down on
the previous period's 3.0p. The directors have already declared dividends
totalling 2.4p, including a second interim declared in January 2001 in advance
of the ordinary share issue launched just before the year end, and no final
dividend will be paid this year. The corresponding period's dividend was 2.2p.

For the year ending 31 January 2002, we expect in the absence of unforeseen
circumstances to pay an interim dividend in December 2001 and a final dividend
in June 2002. As before, I must point out to shareholders that in the short
term the annual dividend is likely to reduce as funds are moved from the
fixed-interest portfolio into venture capital investments, which may yield
less income.

VCT qualifying status

Your board has retained PricewaterhouseCoopers to monitor and report on the
company's progress towards meeting the qualifying investment requirements laid
down in the VCT legislation. We remain confident that all the relevant
conditions will be met in advance of the first deadline in January 2002.

Share issues and buy-backs

During the year the directors used their share placing authority to issue a
further 2,200,000 ordinary shares at a price of 103p per share, raising £2.2
million after expenses. In June 2000 33,905 shares which had come onto the
market were re-purchased for cancellation at a price of 92p. This had the
immediate effect of causing the company's mid-market share price to fall from
100p to 90p, where it has remained to the time of writing. Otherwise there has
been very little trading in the company's shares. In order to maintain the
company's ability to act as a market purchaser where this is in the interests
of shareholders generally, at the forthcoming annual general meeting we will
ask shareholders to renew the board's powers to purchase the company's shares
in the market. We also intend in due course to seek Court consent to a
reduction in the share premium account, so as to create a new distributable
reserve which can then be utilised in cancelling re-purchased shares.

In January 2001 we announced the launch of new open offers and offers for
subscription, spanning the 2000/01 and 2001/02 tax years, to raise a maximum
of £25.4 million by the issue of up to 24,191,595 new ordinary shares at a
price of 105p per share. I am pleased to report a good response from existing
and new investors, notwithstanding the background of heavy falls in the stock
market, and to date the offers have raised over £18 million. The final closing
date is 28 June 2001.

Corporate governance

The company has continued to comply with current published guidance to best
practice in corporate governance. A statement covering the key matters
relevant to the company is set out in the annual report.

Future prospects

Last year I described the enthusiasm for internet stocks as a bubble. This
year it has burst. Our portfolio of venture capital investments has largely
escaped both the exuberance and the hang-over. This is because it still
consists mostly of private companies in a mixture of sectors. Our objective
remains to create shareholder value by providing private equity to
entrepreneurs. We remain confident that this can be achieved over time.



The financial statements will show the results set out below:

STATEMENT OF TOTAL RETURN (INCORPORATING THE REVENUE ACCOUNT)
                       Year ended 31 January 2001    Period ended 31 January
                                                                        2000
                       Revenue  Capital  Total    Revenue  Capital  Total
                       £000     £000     £000     £000     £000     £000
Gains/(losses) on      -        279      279      -        (259)    (259)
investments
Income                 1,246    -        1,246    869      -        869
Investment management  (128)    (382)    (510)    (68)     (203)    (271)
fee                    (186)    -        (186)    (163)    -        (163)
Other expenses       -------  -------  -------  -------  -------  -------
Return on ordinary
activities              932     (103)     829      638     (462)     176
before tax
Tax on ordinary        (239)    98        (141)    (152)   48        (104)
activities  
                     -------  -------  -------  -------  -------  -------
Return on ordinary
activities             693      (5)      688      486      (414)    72
after tax
Dividends              (581)    -        (581)    (485)    -        (485)
                     -------  -------  -------  -------  -------  ------- 

Transfer to/(from)     112      (5)      107      1        (414)    (413)
reserves            
                     -------  -------  -------  -------  -------  -------
  
Return per share       2.9p        -     2.9p     3.0p   (2.5)p     0.5p



BALANCE SHEET
                                           31 January 2001   31 January 2000
                                                      £000              £000
Fixed assets
Investments                                21,758            18,842
                                           ---------------   ---------------
Current assets
Debtors                                    638               557
Cash at bank                               1,344             1,684
                                           ---------------   ---------------
                                           1,982             2,241
Creditors (amounts falling due
   within one year)                        (942)             (560)
                                           ---------------   ---------------
Net current assets                         1,040             1,681
                                           ---------------   ---------------
Net assets                                 22,798            20,523
                                           ---------------   ---------------
Capital and reserves
Called-up equity share capital             1,210             1,101
Share premium                              21,894            19,835
Capital reserve - realised                 (354)             (166)
                            - unrealised   (65)              (248)
Revenue reserve                            113               1
                                           ---------------   ---------------
Total equity shareholders' funds           22,798            20,523
                                           ---------------   ---------------

Net asset value per share                              94.2p             93.2p


CASH FLOW STATEMENT
                                             Year ended            Period ended
                                        31 January 2001         31 January 2000
                                       £000        £000        £000        £000
Operating activities:
Net revenue before taxation                 932                     638
Decrease/(increase) in debtors              11                      (530)
Increase in creditors                       5                       75
Management fees charged to                  (382)                   (203)
capital reserve                             ---------------      ---------------
Net cash flow from operating                566                     (20)
activities
Taxation:
Corporation tax paid                        (233)                   (131)
Financial investment:
Purchase of investments         (9,627)                 (21,020)
Sale/repayment of investments   6,990                   1,919
                                ---------------         ---------------
Net cash outflow from financial             (2,637)                 (19,101)
investment
Equity dividends paid                       (727)                   -
Financing:
Issue of redeemable preference  -                       50
shares                          2,266                   22,025
Issue of ordinary shares        523                     -
Share issue proceeds received   (67)                    (1,089)
in advance                      (31)                    -
Share issue expenses            -                       (50)
Purchase of ordinary shares for ---------------         ---------------
cancellation
Redemption of preference shares
Net cash inflow from financing              2,691                   20,936
                                            ---------------      ---------------
(Decrease)/increase in cash at              (340)                   1,684
bank                                        ---------------      ---------------
Analysis of cash balance:
At 1 February 2000                          1,684                   -
Net cash (outflow)/inflow for               (340)                   1,684
the year                                    ---------------      ---------------
At 31 January 2001                          1,344                   1,684
                                            ---------------      ---------------

TEN LARGEST VENTURE CAPITAL INVESTMENTS AT 31 JANUARY 2001

                                                    Valuation    % of portfolio
                                                         £000      by valuation
T J Brent Limited                                       1,000               4.6
T&D Packaging Limited                                     800               3.7
BioFocus plc**                                            720               3.3
TFB Group Limited                                         700               3.2
Tolwood Limited                                           673               3.1
Alaric Systems Limited                                    584               2.7
Interlube Systems Limited                                 500               2.3
PrismTech Limited                                         500               2.3
Alizyme plc*                                              493               2.3
Barony Universal Products plc                             468               2.1
                                              ---------------   ---------------
Ten largest venture capital investments                 6,438              29.6
Other investments                                      15,320              70.4
                                              ---------------   ---------------
Total investments                                      21,758             100.0
                                              ---------------   ---------------
* Listed on London Stock Exchange
**Listed on Alternative Investment Market



The above summary of results for the year ended 31 January 2001 does not
constitute statutory financial statements within the meaning of Section 240 of
the Companies Act 1985 and has not been delivered to the Registrar of
Companies. Statutory financial statements will be filed with the Registrar of
Companies in due course; the auditors' report on those financial statements
under Section 235 of the Companies Act 1985 is unqualified and does not
contain a statement under Section 237(2) or (3) of the Companies Act 1985.

A copy of the full annual report and financial statements for the year ended
31 January 2001 is expected to be posted to shareholders on 27 April 2001 and
will be available to the public at the registered office of the company at
Northumberland House, Princess Square, Newcastle upon Tyne NE1 8ER.

ENDS

For further information contact:
Christopher Mellor                                        0191 244 6000
(Northern 2 VCT PLC)
Richard Evans                                             0161 839 4222
(Brewin Dolphin Securities Limited)