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Baronsmead VCT 3 PLC (BMD)

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Friday 17 August, 2001

Baronsmead VCT 3 PLC

Interim Results

Baronsmead VCT 3 PLC
17 August 2001

Investment  Objective

Baronsmead VCT 3 plc aims to achieve long-term capital growth and to generate
tax-free dividends for private investors.

Interim Results - Period Ended 30 June 2001

 £32.8 million funds raised

 First interim dividend of 1.0 pence per share

 Net asset value per share of 94.5 pence

 First five qualifying investments made

The Board are delighted to present the first interim report to the 2,078
shareholders that have subscribed to Baronsmead VCT 3 in the seven weeks to 6
March 2001.  The Company raised £32.8 million gross proceeds during the period
under review.

The Board's intention is to communicate to shareholders the progress of the
Company as clearly as possible, particularly the nature of the underlying
portfolio investments so that shareholders can appreciate how the performance
is achieved.

Performance is measured by calculating the total return generated for
shareholders from the growth in net asset value (NAV) per share combined with
the reinvestment of dividends.  In the period since inception of the Company
on 26 January 2001 to 30 June 2001, the total return has been 0.5 per cent. 
This compares with a fall in the FTSE All-Share Index of 10 per cent over the
same period.  The initial NAV per share has fallen slightly from 95.0p to
94.5p per share and a first interim dividend has been declared of 1.0p per
share which will be paid on 17 September 2001 to shareholders on the register
at the close of business on 31 August 2001.  The Board intends to pay capital
dividends to shareholders in the future once capital profits have been
realised on the sale of investments.  These distributions are, however,
unlikely to occur before the fund is more fully invested and the investees
have had time to progress their plans towards a satisfactory outcome.

Building the portfolio  To fulfil the investment policy, the intention is to
build the equity portfolio to over 30 companies across a range of different
sectors and stages of corporate growth.  Baronsmead VCT 3 will invest in
unquoted companies as well as companies whose shares are traded on the
Alternative Investment Market (AiM).  VCT legislation requires that over £22
million be invested in qualifying holdings by 31 December 2003.  At 30 June
2001, £20.9 million was retained in cash awaiting investment into fixed rate
securities and qualifying holdings. 

At 30 June 2001, five investments totalling £2 million had been completed in
accordance with the Company's investment policy.  To date of the equity
investments, 50% has been invested in consumer markets, 27% in business
services and 23% in the healthcare sector.

 Management buy-in/buy-out  Thomas Sanderson, based in Waterlooville, is the
UK market leader in pleated conservatory blinds.  Two directors from Staybrite
Windows and seven incumbent senior managers acquired the company from the
founding shareholders. As part of the £6 million fund raising, Baronsmead VCT
3 provided £667,000.

 Early stage expansion  Vectura is based in Bath and is a drug discovery
business specialising in particle science and pulmonary inhalation.  It was
formed in collaboration with Bath University in 1997 and in the second round
financing raised £10.5 million.  Baronsmead VCT 3 invested £445,000.

 Growth by acquisition  Blooms of Bressingham, based in Maidenhead, is a chain
of retail garden centres.  Blooms of Bressingham was listed on AiM in December
1999 and in April 2001 it acquired the share capital of a similar business,
Jardinerie, increasing the number of garden centres to thirteen and extending
geographically across the southern half of England.  Baronsmead VCT 3 invested
£320,000 as part of a total equity fund raising on AiM of £4 million before

 AiM flotation  Capcon based in central London is a stock auditing and
surveillance company servicing the pub and transport industry.  It floated on
AiM on April 2001 raising £1.75 million before expenses of which Baronsmead
VCT 3 subscribed £137,000.

 Shareholder reconstruction/expansion  Kidsunlimited based in Cheshire manages
32 day care nursery centres for children under 5 years old.  Two new directors
acquired a minority shareholding from the founders and in all £4.95 million
was raised to increase the number of day care centres, including work place
day centres for businesses.  Baronsmead VCT 3 invested £400,000.

Outlook  Economic confidence has fallen during 2001 as lower profits are
declared by larger quoted companies which has been reflected in lower stock
market prices and signals  more difficult trading conditions for unquoted
companies.  In the short-term, the high level of fixed interest securities in
the portfolio provides a buffer during the period that the qualifying
portfolio is built up.  The Company is well positioned to take advantage of
these lower valuations and benefit once stronger economic conditions return.


David Thorp 
Friends Ivory & Sime Private Equity plc  :   Tel.  0207 506 1100
Rhonda Nicoll
Friends Ivory & Sime plc                 :    Tel. 0131 465 1000

 Unaudited Statement of Total Return (incorporating the revenue account) of
the Company

                                       Period from 22 November 2000 to
                                            30 June 2001              
                                     Revenue       Capital       Total
                                       £'000         £'000       £'000
Unrealised losses on investments           -          (48)        (48)
Income                                   640             -         640
Investment management fee               (66)         (199)       (265)
Other expenses                          (93)             -        (93)
Return on ordinary activities                                         
before tax                               481         (247)         234
Tax on ordinary activities             (138)            65        (73)
Return attributable to                                                
equity shareholders                      343         (182)         161
Dividend payable                       (330)             -       (330)
Transfer to/(from) reserves               13         (182)       (169)
Return per ordinary share:             1.23p       (0.66p)       0.57p

Unaudited Statement of Total Return (incorporating the revenue account) of the

                                       Period from 22 November 2000 to
                                             31 May 2001              
                                     Revenue       Capital       Total
                                       £'000         £'000       £'000
Unrealised gains on investments            -            59          59
Income                                   495             -         495
Investment management fee               (52)         (156)       (208)
Other expenses                          (44)             -        (44)
Return on ordinary activities                                         
before tax                               399          (97)         302
Tax on ordinary activities             (104)            41        (63)
Return attributable to                                                
equity shareholders                      295          (56)         239
Dividend payable                           -             -           -
Transfer to/(from) reserves              295          (56)       (239)
Return per ordinary share:             1.10p       (0.21p)       0.89p
Unaudited Balance Sheet                                               
                                                     As at       As at
                                                   30 June      31 May
                                                      2001        2001
                                                     £'000       £'000
Fixed Assets                                                          
       Quoted on the Alternative Investment Market     520         582
             Unquoted investments                    1,512       1,112
             Listed fixed interest investments       8,248       8,293
                                                  ________    ________
                                                    10,280       9,987
Net current assets                                  20,901      21,602
                                                   _______     _______
Net assets                                          31,181      31,589
                                                  ________    ________
Financed by:                                                          
       Shareholders' funds                          31,181      31,589
                                                  ________    ________
Net asset value per ordinary share:                 94.49p      95.72p
Ordinary shares  in issue                       32,999,999  32,999,999

 Summarised Unaudited Statement of Cash Flows

                                           Period from     Period from
                                           22 November     22 November
                                               2000 to         2000 to
                                               30 June          31 May
                                                  2001         2000 to
                                                 £'000           £'000
Net cash outflow from operating activities        (89)            (68)
Capital expenditure and financial investment  (10,328)         (9,482)
Net cash outflow before financing             (10,417)         (9,550)
Financing                                       32,069          32,069
Increase in cash                                21,652          22,519

Reconciliation of net cash flow to movement in net cash
Increase in cash                                21,652          22,519
Net cash at 30 June/31 May                      21,652          22,519
Reconciliation of operating profit to net cash flow from activities
Net return before taxation                         481             399
Management fee charged to capital                (199)           (156)
Increase in debtors                              (610)           (543)
Increase in creditors                              239             232
Net cash flow from operating activities           (89)            (68)


1. The unaudited interim results which cover the period from incorporation on
22 November 2000 to 30 June 2001 have been drawn up in accordance with the
applicable accounting Statement of Recommended Practice for Financial
Statements of Investment Trust Companies.  In order to comply with UK Listing
Authority regulations it is necessary to present two sets of interim figures,
from 22 November 2000 to 31 May 2001 being the first six month period and 22
November to 30 June 2001.

2. The Company was launched on 26 January 2001 at which date 5,721,688
ordinary shares were issued.  A further 27,278,311 ordinary shares were issued
during the period to 30 June 2001.

3. Earnings for the period from incorporation on 22 November 2000 to 30 June
2001 should not be taken as a guide to the results for the full year and are
based on a weighted average of 28,021,335 ordinary shares in issue during the
period since launch.

4. Income for the period from incorporation on 22 November 2000 to 30 June
2001 is derived from:

Government securities and corporate bonds                               170
Deposit interest                                                        470
5. The interim dividend of 1.00p will be paid on 17 September 2001 to
shareholders on the register on 31 August 2001.

6. These are not statutory accounts in terms of Section 240 of the Companies
Act 1985 and are unaudited.

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.