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  Print      Mail a friend       Annual reports

Friday 13 August, 2010


Half-yearly Report



Per ordinary share (pence)                                                                   30.06.10 31.12.09 30.06.09
Net asset value                                                                                  18.8     22.7     24.3
Dividend paid (1)                                                                                 4.0        -        -
Cumulative dividend (2)                                                                          57.7     53.7     53.7
Total return (3)                                                                                                       

SPARK VCT plc                                                                                    76.5     76.4     78.0
Return including tax benefits (6)                                                                96.5     96.4     98.0

Total return to former shareholders of:                                                                                
Quester VCT 2 plc per 100p invested in shares of that company (4)                                62.3     62.3     63.9
Return including tax benefit (6)                                                                 82.3     82.3     83.9

Quester VCT 3 plc per 100p invested in shares of that company (5)                                36.3     36.1     37.7
Return including tax benefit (6)                                                                 56.3     56.1     57.7
(1) Dividend paid in the financial period ended on the date stated                                                     
(2) Cumulative dividends paid by SPARK VCT plc                                                                         
(3) Net asset value plus cumulative dividend per share to ordinary shareholders                                        
in SPARK VCT plc since the launch of the Company (then called Quester VCT plc)                                         
in April 1996                                                                                                          
(4) Total return to original shareholders in Quester VCT 2 plc, launched in                                            
March 1998, which merged with SPARK VCT plc (then called Quester VCT plc) in                                           
June 2005, the share exchange ratio for former shareholders in Quester VCT 2                                           
plc being 1.0249                                                                                                       
(5) Total return to original shareholders in Quester VCT 3 plc, launched in                                            
February 2000, which merged with SPARK VCT plc (then called Quester VCT plc) in                                        
June 2005, the share exchange ratio for former shareholders in Quester VCT 3                                           
plc being 0.9816                                                                                                       
(6) Return after 20% income tax relief but excluding capital gains deferral                                            
The Directors propose an interim dividend of 1.0 pence per share for the year                                          
ending 31 December 2010.                                                                                                
The Interim management report comprises the Chairman's statement, the                                                  
Investment manager's report, the Fund summary and note 9 to the condensed                                              
financial statements.                                                                                                  




The economic uncertainty that has unsettled financial and commercial markets
since the summer of 2008 continues to make conditions very difficult for small
companies and particularly so for early stage technology companies.   While
there are early indications that the UK is emerging from its longest recession
in recent history the strength of recovery remains fragile and investor
sentiment nervous.  The UK banks are beginning to emerge from the crisis which
engulfed them but bank funding and credit facilities for small, early stage
companies still remain extremely difficult to obtain.  Nevertheless, there are
some signs that, as a result of the various Government initiatives and
improvements in the wider UK and global economies, trade buyers are beginning
to regain confidence.  Our new strategy of realising existing investments and
moving towards relatively lower risk investment opportunities should benefit
from these trends.


Net assets per share, before the payment of the 4p final dividend for the year
ended 31 December 2009, moved ahead marginally from 22.7p on 31 December 2009
to 22.8p on 30 June 2010.  This is the first positive movement in net assets
that the Company has experienced since 2007.

Against the background of  continuing difficult markets, it is encouraging to
report that in June 2010 the Company was able to sell its investment in Secerno
Limited to Oracle Corporation at a gain of £655,000 over its carrying value. 
Cash proceeds received to date amount to £917,000 net of transaction and
warranty claim insurance costs.  In addition, a further £293,000 is being held
in escrow against potential warranty claims and is due to be released to the
Company in June 2012.  As a result of this transaction, the Company recorded a
post tax profit for the six months to 30 June 2010 of £101,000.  This compares
to a loss in the equivalent period last year of £2.8m and a loss of £4.6m in
the full year to 31 December 2009.

No new investments were made during the period under review, but two modest
follow on investments were made to businesses from which worthwhile exits are
anticipated. A secured loan of £143,000 was advanced on attractive interest
terms to Sift Group Limited ("Sift"), as part of a £800,000 debt facility from
shareholders and a £400,000 facility from its bankers.  These funds have been
applied to the acquisition of an adjacent business, which is expected to
contribute to Sift's profitable growth and increase the probability of a
satisfactory sale in the medium term.

A further £25,000 investment in preferred investment stock was made alongside
the management of Haemostatix Limited to support the business while discussions
continue with potential trade partners.

We have continued to monitor the performance of all underlying investments
closely and have made an additional provision of £167,000 against the
investment in We7 Limited.  This is in anticipation that the company will need
to raise further funds and that, in current market conditions, this may be at a
discount to the last investment round.

In our small AIM quoted portfolio, the holding in Vernalis plc has been
disposed of for net cash proceeds of £30,000, a loss of £35,000 on its carrying
value at 31 December 2009.  A part disposal of Celldex Therapeutics, Inc 
produced net proceeds of £26,000 and a gain of £11,000.  The three remaining
AIM investments have been marked down by the market by an aggregate £82,000.

Despite these adverse movements, it is encouraging that the value of the
portfolio overall has stabilized and that a long-standing investment (the
initial investment in Secerno was made in 2007) has been brought to trade sale.

Nevertheless, the Board remains very conscious that the Company's performance
in the long term has been far from satisfactory and is actively exploring a
range of options to enhance shareholders' interests. The Board hopes to be in a
position to inform shareholders of these opportunities more fully in the near

As part of our efforts to reduce costs, the Board has taken the decision to
release the half yearly results electronically through the stock market and on
the Company's website rather than in hard copy.

Net assets

The movement in net assets is summarised in the table below:

                                                Venture        and Net                  
                                                Capital        Current             Pence
                                                Invest-ments    Assets     Total     per
                                                       £'000     £'000     £'000   Share
Net asset value at 31 December 2009                   14,870    10,160    25,030    22.7
Net gain on disposal of investments                      631        24       655     0.6
Net loss on valuation of investments                   (249)         -     (249)   (0.2)
Income                                                     -       108       108     0.1
Operating expenses                                         -     (413)     (413)   (0.4)
Net investment                                       (1,098)     1,098         -       -
Net assets before dividends and share buybacks        14,154    10,977    25,131    22.8
Dividend paid                                              -   (4,430)   (4,430)   (4.0)
Share buybacks                                             -         -         -       -
Net asset value at 30 June 2010                       14,154     6,547    20,701    18.8


Following the disposal of Secerno Limited and other realisations, the Board has
approved an interim dividend per share of 1p (2009: nil) to be payable on 24
September 2010 to shareholders on the register at 27 August 2010. 


This has proved a more satisfactory period for your Company.  The improving
market conditions and successful disposal of Secerno indicate that more exit
opportunities may be available in the medium term.  The Board, however, remains
very conscious that a change of approach is necessary and is actively seeking
to progress this.

Robin Field


12 August 2010


Director's responsibility statement                                                        
The Directors confirm to the best of their knowledge that:                                 
  ·         the condensed set of financial statements contained within the                 
  Half-Yearly Financial Report have been prepared in accordance with the                   
  Accounting Standards Board's Statement 'Half-Yearly Financial Reports'; and              
  ·         the interim management report includes a fair review of the                    
  information required by Disclosure and Transparency Rule 4.2.7R of important             
  events that have occurred during the first six months of the financial year and          
  their impact on the condensed financial statements, and a description of the             
  principal risks and uncertainties for the remainder of the financial year; and           
  ·         the condensed financial statements (note 9) includes a fair review of          
  the information concerning related parties transactions as required by                   
  Disclosure and Transparency Rule 4.2.8R.                                                 
The Half-Yearly financial report was approved by the Board on 12 August 2010               
and the above responsibility statement was signed on its behalf by the                     




Over the half year to 30 June 2010 the activity of the Investment Manager has
been conducted against the background of the new strategy agreed with the Board
at the beginning of the year and summarised in the Chairman's statement in the
last annual report.

The key points of strategy in terms of investment management are:

in the current economic climate, fresh investment in early stage venture
capital investments, of a type similar to the majority of the companies in
SPARK VCT's existing portfolio, is no longer considered to present an
appropriate investment for VCT shareholders;

the Company's existing portfolio investments should be realised as soon as they
mature and suitable exits are achievable: it is acknowledged that this is
likely to take several years and that some highly selective follow-on funding
may be required where it is possible to enhance realisation prospects;

the remaining cash funds not required for follow-on investments should be used
to make new, qualifying investments, within the Company's existing investment
policy, enabling the Company to maintain its VCT tax status; such investments
should be focused towards relatively lower risk opportunities, where investee
companies are more advanced in their development - either generating revenues
and able to pay dividends or well positioned for exit in a short time frame.

In considering the above strategy it is recognised that the current portfolio
does contain businesses of promise and that there are expected to be
opportunities for profitable realisations.


During the half year significant steps have been taken in the implementation of
this strategy, in particular towards the realisation of existing portfolio
investments, and we are pleased to report the sale of Secerno Limited.  This
Oxford-based data security business has been sold to Oracle Corporation in a
transaction completed in June - this has produced proceeds of £1,210,000
(including a proportion retained in escrow), against a carrying value at 31
December 2009 of £555,000, resulting in a profit in the half year to 30 June
2010 of £655,000.

The opportunity has also been taken to realise cash from certain of the quoted
venture capital investments, with the sale of the entire holding in Vernalis
plc and part of the holding in Celldex Therapeutics, Inc.  Overall, proceeds
generated from these transactions, together with certain other cash recoveries,
have totalled £1,368,000 in the half year to 30 June 2010.

These realisations have enabled the Board to declare an interim dividend of
1.0p per share.

Progress of investments

In the Business review in the last annual report we analysed SPARK VCT's
venture capital investments into three categories: "maturing" venture capital
investments, "developing" venture capital investments and "early stage"
investments.  Following the realisations referred to above, the proportions
that investments in each category represent in the venture capital portfolio by
valuation at 30 June 2010 are as follows:

                                                            Percent. of venture
                                                           capital portfolio by
"Maturing" venture capital investments:                                        
companies with stable and growing revenue streams,                             
achieving profitable trading or very close to it, and                          
with stable cash positions                                                     
examples: Elateral Holdings Limited, Imagesound plc, Lab                       
M Holdings Limited, Sift Group Limited, UniServity                             
Limited , Workshare Limited                                               59.9%
"Developing" venture capital investments:                                      
companies with developed business models and growing                           
revenue streams, though still facing uncertainties, and                        
breaking through into cash-flow positive trading                               
examples: Antenova Limited, Cluster Seven Limited, Level                  19.3%
Four Software Limited                                                          
"Early stage" investments                                                      
companies still establishing their business model or, in                       
the case of businesses in the life sciences sector, still                      
at the product development stage                                               
examples: Academia Networks Limited, Haemostatix Limited,                      
Isango! Limited, Perpetuum Limited, Vivacta Limited, We7                       
Limited                                                                   20.8%

The percentage of the venture capital portfolio now represented by "maturing"
venture capital investments provides a reasonably stable base to the portfolio
and means that the net asset value of SPARK VCT is much less exposed than
previously to the risks associated with early stage investment.

Significant recent business developments within the portfolio are summarised

• Elateral Limitedhad another very successful year to 31 March 2010 delivering
17% revenue growth and a substantial improvement in EBITDA margin. New client wins for
the year included NetApp and major customers Coca Cola and SAP renewed their
contracts, taking additional services and territorial licences at the same

• Imagesound Limited: after a satisfactory year to 31 December 2009 has
continued to perform close to budget on revenues in its current financial year
and ahead on EBITDA, remaining profitable and cash generative despite a
difficult trading environment.

• Level Four Software Limited has seen sales growth of 35% in its year to 30
June 2010 and has reached profitability: it continues to show impressive growth
in the range of its customer contacts within the banking industry for its ATM
testing tools business, and potential for further expansion both geographically
and into other sectors.

• Sift Group Limited is delivering revenues above last year and forecasting
further growth and improved profitability for the year as a whole.

• UniServity Limited: following management changes towards the end of last year
and a dramatic reduction in the cost base, financial performance has
significantly improved.  Sales have remained ahead of budget despite
uncertainty about policy changes and public procurement following the change of
Government, and profitability is now strong and consistent.  After a successful
launch of the 'parent portal' product, resources are now being concentrated on
completing the build of a new technology platform ready for launch at the
beginning of the new year.

• Workshare Limitedcontinues to enjoy very high market penetration in the legal
IT market for its document comparison software.  New management has undertaken
some significant restructuring, with a particular focus on the sales model and
distribution network, reducing the overall level of operating cost and
improving profitability, while the company maintains a robust cash position.

Follow-on funding provided to existing portfolio companies in the half year has
been limited to a total of £168,000, including £143,000 advanced to Sift Group
Limited in a loan instrument with an attractive coupon (alongside the company's
management and SPARK's syndicate partner) to provide additional working capital
and £25,000 to Haemostatix Limited to support product development.

Against the background of the overall strategy for SPARK VCT referred to above,
and with the growing maturity of some of the key investments, members of the
SPARK management team are increasingly focused on working with portfolio
company managements on positioning the companies as attractive acquisition
candidates for major corporates.  A number of the companies are now reaching
the stage at which a transaction of this type can realistically be planned for
some time over the next two years, enabling the businesses concerned to be
taken forward to the next stage of growth under new ownership and achieving
cash realisations for SPARK VCT.

Subject to no deterioration in business and financial conditions, we expect to
be able to announce a number of positive developments in this respect by the
date of release of the annual report.

Valuation changes

Valuations of the unquoted investments have been determined under the
application of the International Private Equity and Venture Capital Valuation
Guidelines. The quoted venture capital investments (shares traded on AIM, the
Frankfurt stock exchange and NASDAQ) have been valued at their bid prices at 30
June 2010.

Given the profitable exit from Secerno, the portfolio has recorded a positive
result for the half year, after operating costs have been deducted.  The
movement on other investments has shown a downward revaluation of £249,000, of
which £167,000 was in respect of one of the early stage investments and £82,000
was in respect of quoted venture capital investments.

Principal risks and uncertainties                                             
As a Venture Capital Trust the Company invests in unquoted and AIM-traded UK
companies in accordance with its investment policy. In addition to its      
venture capital porfolio, the Company maintains liquidity balances in the   
form of cash held for follow-on financing and new venture capital investment
and debtors and creditors that arise directly from its operations. Its      
principal risks are therefore market risk, credit risk and liquidity risk.  
Other risks faced by the Company include economic, loss of approval as a    
VCT, investment and strategic, regulatory, reputational, operational and    
financial risks. These risks, and the ways in which they are managed, are   
described in more detail in the Company's Annual Report and Accounts for the
year ended 31 December 2009. The Company's principal risks and uncertainties
have not changed materially since the date of that report.  


Earlier evidence of an improving M&A market is confirmed not only by the
transactions completed by SPARK VCT in the year to date but also by
transactions seen elsewhere, with major corporates looking for growth now
clearly interested in strategic acquisition opportunities among venture-backed

As long as business and financial conditions remain stable, we believe that
opportunities should emerge during the remainder of the current year and over
2011 and 2012 for significant realisations and the extraction of value for
SPARK VCT shareholders.

This will enable both the distribution of substantial amounts of cash by way of
dividend and a start to be made on a programme of investment in new qualifying
investments: in line with the new strategy, this will be focused on companies
more advanced in their development and representing relatively lower risk


SPARK Venture Management Limited
12 August 2010


Fund summary as at 30 June 2010                                                                           
                                                                       Cost (1) Valuation Equity % of fund
                                             Industry sector              £'000     £'000 % held  by value
Fifteen largest venture capital investments                                                               
Elateral Holdings Limited          (2)       TMT                          1,009     1,990  23.4%      9.6%
Imagesound plc                               TMT                          2,848     1,920  11.7%      9.3%
Sift Group Limited                           TMT                          2,658     1,782  21.1%      8.6%
UniServity Limited                           TMT                          1,208     1,208  16.5%      5.8%
Cluster Seven Limited                        TMT                          1,569     1,197   9.0%      5.8%
Vivacta Limited                              Healthcare                   1,210     1,145   7.3%      5.5%
Workshare Limited                            TMT                            695       928   1.9%      4.5%
Level Four Software Limited                  TMT                            855       855   7.8%      4.1%
Haemostatix Limited                          Healthcare                     527       527  12.5%      2.5%
Lab M Holdings Limited             (2)       Healthcare                     690       440  26.8%      2.1%
Antenova Limited                             TMT                          1,307       343   4.7%      1.7%
Academia Networks Limited                    TMT                            103       280   4.1%      1.4%
Isango! Limited                              TMT                          1,000       250   9.1%      1.2%
Perpetuum Limited                            TMT                            686       228   7.0%      1.1%
Community Internet Group Limited   (2)       TMT                             28       211  20.9%      1.0%
                                                                         16,393    13,304            64.2%
Other venture capital investments                                                                         
We7 Limited                                  TMT                            816       167  13.1%      0.8%
Atego Limited (formerly Artisan)   (2)       TMT                            120       120  28.4%      0.6%
Symetrica Limited                            TMT                            108       114   2.4%      0.6%
MediGene AG                        Frankfurt Healthcare                     316       107   0.1%      0.5%
TeraView Limited                             Healthcare                   1,172       100   4.8%      0.5%
Other investments: valuations less than £100,000 (4 investments)          2,660       242             1.2%
                                                                          5,192       850             4.2%
Total venture capital investments                                        21,585    14,154            68.4%
Total unquoted venture capital investments                               19,992    13,886            67.1%
Total quoted venture capital investments                                  1,593       268             1.3%
Total investments                                                        21,585    14,154            68.4%
Cash and other net assets                                                 6,547     6,547            31.6%
Net assets                                                               28,132    20,701           100.0%
(1)          Amounts shown as accounting cost represent the acquisition cost in the case of               
             investments originally made be the Company and/or the valuation attributed to                
             the investments acquired from Quester VCT 2 plc and Quester VCT 3 plc at the                 
             date of the merger in 2005, plus any subsequent acquisition cost, as reduced in              
             certain cases (2) by amounts written off as representing an impairment in                    
(2)          Cost reduced by amounts written off as representing an impairment in value                   
             (Elateral Holdings Limited reduction of £1,117,000, Lab M Holdings Limited of £              
             486,000, Community Internet Group Limited of £698,000 and Atego Limited of £                 


Income statement                                                                                                        
                                              Six months to 30 June   Six months to 30 June 2009   Year to 31 December  
                                                2010 (unaudited)             (unaudited)             2009 (audited)     
                                              Revenue   Capital Total Revenue    Capital   Total Revenue Capital   Total
                                      Notes     £'000     £'000 £'000   £'000      £'000   £'000   £'000   £'000   £'000
Loss on valuation of investments at     3                                                                               
fair value though profit or loss                    -     (249) (249)       -    (2,462) (2,462)       - (3,933) (3,933)
Gain/(loss) on disposal of                                                                                              
investments at fair value through       3                                                                               
profit or loss                                      -       655   655       -         60      60       -    (40)    (40)
Income                                            108         -   108     131          -     131     241       -     241
Investment management fee                       (243)         - (243)   (288)          -   (288)   (549)       -   (549)
Other expenses                                  (170)         - (170)   (195)          -   (195)   (342)       -   (342)
Profit/(loss) on ordinary activities                                                                                    
before taxation                                 (305)       406   101   (352)    (2,402) (2,754)   (650) (3,973) (4,623)
Tax on profit/(loss) on ordinary activities         -         -     -       -          -       -       -       -       -
Profit/(loss) on ordinary activities                                                                                    
after taxation                                  (305)       406   101   (352)    (2,402) (2,754)   (650) (3,973) (4,623)
Basic and fully diluted earnings/       4                                                                               
(loss) per share                               (0.3)p      0.4p  0.1p  (0.3)p     (2.2)p  (2.5)p  (0.6)p  (3.6)p  (4.2)p
The 'Total' column of this statement is the profit and loss account of the                                              
Company; the supplementary revenue return and capital return columns have been                                          
prepared under guidance published by the Association of Investment Companies.                                           
All revenue and capital items in the above statement derive from continuing                                             
The Company has only one class of business and derives its income from                                                  
investments made in shares and securities and from bank deposits.                                                       
There are no gains and losses for the period other than those disclosed in the                                          
income statement of the Company.                                                                                        
The accompanying notes are an integral part of this statement.                                                          

Balance sheet                                                                                                        
                                                                       30 June 2010   31 December 2009   30 June 2009
                                                                        (unaudited)          (audited)    (unaudited)
                                                                 Notes        £'000              £'000          £'000
Fixed assets                                                                                                         
  Investments at fair value through profit or loss                   6       14,154             15,873         17,923
Current assets                                                                                                       
  Debtors                                                                       761                457          1,747
  Cash at bank                                                                6,150              8,900          7,618
                                                                              6,911              9,357          9,365
Creditors: amounts falling due within one year                                (364)              (200)          (367)
Net current assets                                                            6,547              9,157          8,998
Net assets                                                                   20,701             25,030         26,921
Capital and reserves                                                                                                 
  Called-up equity share capital                                              5,519              5,519          5,538
  Share premium account                                                         150                150            150
  Capital redemption reserve                                                    765                765            746
  Special reserve                                                            21,524             22,685         23,068
  Investment holding losses                                                 (7,431)            (7,941)        (6,697)
  Profit and loss account                                                       174              3,852          4,116
Total equity shareholders' funds                                             20,701             25,030         26,921
Net asset value per share                                            7        18.8p              22.7p          24.3p
The accompanying notes are an integral part of this statement.                                                       

Cash flow statement                                                                                         
                                                                        Six months                Six months
                                                                                to     Year to            to
                                                                          30.06.10    31.12.09      30.06.09
                                                                       (unaudited)   (audited)   (unaudited)
                                                                 Notes       £'000       £'000         £'000
Cash (outflow)/inflow from operating activities                    8         (445)         529         (299)
Financial investment                                                                                        
  Purchase of venture capital investments                                    (168)       (854)         (352)
  Sale of venture capital investments                                        1,266         396           280
  Sale/redemption of listed fixed interest investments                       1,000       1,850         1,000
  Amounts recovered from investments previously written off                     27          92            80
Total net financial investment                                               2,125       1,484         1,008
Equity dividends paid                                              5       (4,430)           -             -
  Buyback of ordinary shares                                                     -        (78)          (56)
(Decrease)/increase in cash for the period                                 (2,750)       1,935           653
Reconciliation of net cash flow to movement in net funds                                                    
  (Decrease)/increase in cash for the period                               (2,750)       1,935           653
  Net funds at the start of the period                                       8,900       6,965         6,965
Net funds at the end of the period                                           6,150       8,900         7,618
The accompanying notes are an integral part of this statement.                                              
Net funds comprise cash at bank and on short-term deposit.                                                  


Reconciliation of movements in shareholders' funds                                                                   
                                                                 Share     Capital         Investment     and        
                                                               premium redemp-tion Special    holding    loss        
                                Called-up equity share capital account     reserve reserve     losses account   Total
Six months to 30 June 2010                               £'000   £'000       £'000   £'000      £'000   £'000   £'000
At 1 January 2010                                        5,519     150         765  22,685    (7,941)   3,852  25,030
Shares purchased for                                                                                                 
cancellation                                                 -       -           -       -          -       -       -
Realisation of prior years'                                                                                          
net unrealised losses on                                                                                             
investments                                                  -       -           -       -        759   (759)       -
Transfer from special                                                                                                
reserve to profit and loss                                                                                           
account                                                      -       -           - (1,161)          -   1,161       -
Investment holding loss on                                                                                           
valuation of investments                                     -       -           -       -      (249)     249       -
Profit on ordinary                                                                                                   
activities after taxation                                    -       -           -       -          -     101     101
Dividends                                                    -       -           -       -          - (4,430) (4,430)
At 30 June 2010                                          5,519     150         765  21,524    (7,431)     174  20,701

Year to 31 December 2009                                                                                             
At 1 January 2009                                        5,553     150         731  23,751    (4,842)   4,388  29,731
Shares purchased for                                                                                                 
cancellation                                              (34)       -          34    (78)          -       -    (78)
Realisation of prior years'                                                                                          
net unrealised losses on                                                                                             
investments                                                  -       -           -       -        834   (834)       -
Transfer from special                                                                                                
reserve to profit and loss                                                                                           
account                                                      -       -           -   (988)          -     988       -
Investment holding loss on                                                                                           
valuation of investments                                     -       -           -       -    (3,933)   3,933       -
Loss on ordinary activities                                                                                          
after taxation                                               -       -           -       -          - (4,623) (4,623)
Dividends                                                    -       -           -       -          -       -       -

At 31 December 2009                                      5,519     150         765  22,685    (7,941)   3,852  25,030
Six months to 30 June 2009                                                                                           
At 1 January 2009                                        5,553     150         731  23,751    (4,842)   4,388  29,731
Shares purchased for                                                                                                 
cancellation                                              (15)       -          15    (56)          -       -    (56)
Realisation of prior years'                                                                                          
net unrealised losses on                                                                                             
investments                                                  -       -           -       -        607   (607)       -
Transfer from special                                                                                                
reserve to profit and loss                                                                                           
account                                                      -       -           -   (627)          -     627       -
Investment holding loss on                                                                                           
valuation of investments                                     -       -           -       -    (2,462)   2,462       -
Loss on ordinary activities                                                                                          
after taxation                                               -       -           -       -          - (2,754) (2,754)
Dividends                                                    -       -           -       -          -       -       -
At 30 June 2009                                          5,538     150         746  23,068    (6,697)   4,116  26,921
The accompanying notes are an integral part of this statement.                                                       

1.  The Financial Statements have been prepared under the historical cost 
convention, except for the measurement at fair value of investments, and 
in accordance with applicable UK accounting standards and the Statement 
of  Recommended Practice 'Financial Statements of Investment Trust 
Companies and Venture Capital Trusts' issued by the Association of 
Investment Companies in January 2009.                                                                                                          
2.  The total reserves available for distribution by way of a dividend is
 £14,267,000 (31 December 2009: £18,596,000, 30 June 2009 £20,487,000),
 being made up of the Special reserve and Profit and loss account less
 Investment holding losses.                                                                                                        

3.  The overall gain/(loss) on investments at fair value through profit
 or loss disclosed in the profit and loss account is analysed as follows:                                                       
                                                                  Six months     Six months                
                                                                          to             to       Year to  
                                                                    30.06.10       30.06.09      31.12.09  
                                                                  (unaudited)    (unaudited)     (audited)  
                                                                        £'000          £'000         £'000  

 Loss on valuation of investments at fair value through profit or loss                                                  
    Net loss on valuation of investments                                 (249)        (2,462)       (3,933)  
    Write-off of investments                                                -              -             -  
                                                                                                                                                                                                   (                                                                        (249)        (2,462)       (3,933)  

 Gain/(loss) on disposal of investments at fair value through profit or loss                                            
    Net gain/(loss) on disposal                                            628           (20)         (132)  
    Recoveries made in respect of investments previously written off        27            80            92  
                                                                           655            60           (40)  
                                                                           406        (2,402)       (3,973)  
    'Net gain/(loss) on disposal' represents the difference between proceeds                                               
    received and the carrying values of those investments sold during the period.                                          
4.  The revenue loss per share of 0.3p (31 December 2009: loss 0.6p and
 30 June  2009: loss 0.3p) is based on the revenue loss on ordinary 
activities after tax of £305,000 (31 December 2009: loss £650,000 and 30
 June 2009: loss £352,000)  and on the weighted average number of 
ordinary shares in issue during the  period of 110,370,134 (31 December
 2009: 110,631,989 and 30 June 2009: 110,781,028).                                                                                                          
The capital profit per share of 0.4p (31 December 2009: loss 3.6p and 30
 June 2009: loss 2.2p) is based on the capital profit on ordinary 
activities after tax of £406,000 (31 December 2009: loss £3,973,000 and
 30 June 2009: loss £2,402,000) and on the weighted average number of 
ordinary shares in issue during the period of 110,370,134 (31 December
 2009: 110,631,989 and 30 June 2009: 110,781,028).                                                                                                    

The total profit per share of 0.1p (31 December 2009: loss 4.2p and 30
 June 2009: loss 2.5p) is based on the profit on ordinary activities 
after tax of £101,000 (31 December 2009: loss £4,623,000 and 30 June 2009
: loss £2,754,000) and on the weighted average number of ordinary 
shares in issue during the period of 110,370,134 (31 December 2009: 
110,631,989 and 30 June 2009: 110,781,028).                                                                                                          


                                                                  Six months     Six months                
                                                                          to             to       Year to  
                                                                    30.06.10       30.06.09      31.12.09  
                                                                  (unaudited)    (unaudited)     (audited)  
                                                                       £'000          £'000         £'000  
Final dividend paid, period ended 31 December 2009: 4.0p per share paid                                                
11 June 2010                                                           4,430              -             -  

    The Directors propose an interim dividend of 1.0 pence per share for the year
ended 31 December 2010.                                                                                                
6.    Movements  in investments during the six months ended 30 June 2010 are as follows:                                                                                                               
                                                                 Venture   Listed fixed                
                                                                 capital       interest                
                                                             investments    investments         Total  
                                                                   £'000          £'000         £'000  
    Cost at 1 January 2010                                        22,814          1,000        23,814  
 Investment holding (losses)/gains at 1 January 2010              (7,944)             3        (7,941)  
    Valuation at 1 January 2010                                    14,870         1,003        15,873  
    Movements in the period:                                                                                               
    Purchases at cost                                                168              -           168  
    - proceeds                                                    (1,266)        (1,000)       (2,266)  
    - net gains/(losses) on disposal                                 631             (3)          628  
    Net loss on valuation of investments                            (249)             -          (249)  
    Valuation at 30 June 2010                                      14,154              -        14,154  
    Book cost at 30 June 2010                                      21,585              -        21,585  
    Investment holding losses at 30 June 2010                      (7,431)             -        (7,431)  
    Valuation at 30 June 2010                                      14,154              -        14,154  
    Amounts shown as cost represent the fair value of the investment at the date of                                        
    the merger in 2005, or subsequent acquisition cost, less any reduction made on                                         
    account of impairment in value.                                                                                        
7.   The net asset value per share as at 30 June 2010 of 18.8p (31 December 2009:                                          
    22.7p and 30 June 2009: 24.3p) is based on net assets of £20,701,000 (31                                               
    December 2009: £25,030,000 and 30 June 2009: £26,921,000) divided by the                                               
    110,370,141 ordinary shares in issue as at that date (31 December 2009:                                                
    110,370,141 and 30 June 2009: 110,761,138). There is no dillution effect as at                                         
    30 June 2010 (31 December 2009: nil and 30 June 2009: nil).                                                            
8.  Reconciliation of operating loss to cash flow from operating activities for the                         
  period is as follows:                                                                                                  
                                                         Six months                   Six months  
                                                                 to        Year to            to  
                                                           30.06.10       31.12.09      30.06.09  
                                                         (unaudited)      (audited)   (unaudited)  
                                                              £'000          £'000         £'000  
    Proift/(loss) on ordinary activities before tax              101        (4,623)       (2,754)  
    (Gain)/loss on investments at fair value through profit or loss
                                                                (406)        3,973         2,402  
    (Increase)/decrease in debtors                              (304)        1,479           189  
    Increase/(decrease) in creditors                             164          (303)         (136)  
    Amortisation of fixed interest investments                     -              3             -  
    Cash (outflow)/inflow from operating activities             (445)            529         (299)  

9.  Spark Investors Limited (a fellow subsidiary of the Manager), of which AB                                              
    Carruthers is a director, may from time to time be eligible to receive                                                 
    transaction fees and/or directors' fees from investee companies. During the                                            
    period to 30 June 2010, fees of £18,000 attributable to the investments of the                                         
    Company were received pursuant to these arrangements (year ended 31 December                                           
    2009: £26,000, period to 30 June 2009: £13,000).                                                                       
    During the six months to 30 June 2010 there were no transactions by Directors                                          
    in shares of companies in which the Company has invested (31 December 2009:                                            
    none; 30 June 2009 none)                                                                                               
10. This Half Yearly Financial Report, has been neither audited nor reviewed by the                                        
    Company's auditors and does not constitute statutory accounts within the                                               
    meaning of Section 434 of the Companies Act 2006. The statutory accounts for                                           
    the period ended 31 December 2009 have been delivered to the Registrar of                                              
    Companies and received an audit report which was unqualified, did not include a                                        
    reference to any matters to which the auditors drew attention by way of                                                
    emphasis without qualifying the report and did not contain any statements under                                        
    Section 498(2) and (3) of the Companies Act 2006.                                                                      
11. Interim management statements relating to the first and third quarters of the                                          
    financial year will be released via the Regulatory News Service on or shortly                                          
    before 18 May and 18 November each year.                                                                               

For further information, please contact:                   
Rawlings Financial PR Limited              Tel:  01653 618016

Catriona Valentine [email protected]

Keeley Clarke [email protected]

Spark VCT plc             Tel: 0207 8517777



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