BCAP.L Regulatory News (BCAP)

6 August 2013

Better Capital PCC Limited

Interim Management Statement

Better Capital PCC Limited (the "Company"), including its two cells, the Better Capital 2009 Cell (the "2009 Cell") and the Better Capital 2012 Cell (the "2012 Cell"), today issues its Interim Management Statement in accordance with FCA Disclosure and Transparency Rule 4.3 and relates to the period from 1 April 2013 to 6 August 2013.

1 Capital distribution

On 19 April 2013, the 2009 Cell paid a second distribution of capital of 6.0 pence per ordinary share to all shareholders of the 2009 Cell. In line with the first distribution, this distribution of £12.4 million has been treated by the Company as a reduction of share capital. To enable the second distribution, £12.4 million was repaid to the 2009 Cell from BECAP Fund LP ("Fund I").

2 Firm Placing and Placing and Open Offer of New 2012 Shares

On 29 July 2013, the Company announced its intention to raise additional capital through an issue of New 2012 Shares in the 2012 Cell for investment in BECAP12 Fund LP ("Fund II"), to invest principally in UK and Irish turnaround opportunities.

Deal highlights

• Intention to raise gross proceeds of up to approximately £250 million through a Firm Placing and Placing and Open Offer by the 2012 Cell for investment in Fund II

• £121 million raised through the Firm Placing and up to approximately £129 million available through the Placing and Open Offer

• The Directors believe there to be a sufficiently large number of investment opportunities such that Fund II can be substantially invested or committed within approximately 24 months following Admission

• As a result of the Firm Placing and Placing and Open Offer, the Directors propose to extend the Fund II Investment Period by 18 months from 31 December 2014 to 30 June 2016, subject to approval of the Shareholders

• Directors of the Company and members of the Consultant to invest approximately a further £6.4 million in total through the Firm Placing and Placing and Open Offer

A prospectus has been published (available on the Company's website: www.bettercapital.gg) containing full details of the Firm Placing and Placing and Open Offer.

3 Fund

This section sets out a comprehensive and meaningful analysis of the investment portfolio of Fund I as at 29 July 2013, as announced in the prospectus:

* Better Capital Fund I holds its investments at cost in accordance with the terms of the Limited Partnership Agreement.** The Company values its investment in the Better Capital Fund I in accordance with the accounting policies as set out in Note 2 of the published financial report of the Company for the year ended 31 March 2013.

Note:

All investments are Sterling denominated and unlisted.Summary details of each investment are set out below.

3.1 Gardner

Business description

A Tier-1 supplier of medium and high complexity machined metallic components to the aerospace industry (www.gardner-aerospace.com).

Progress

• The UK site rationalisation programme completed in Autumn 2012.

• New production facility in Derby is fully functioning. The relocation of head office and production completed in Q4 2012.

• Acquired Airia, France in April 2012 and a majority stake in Pranita, India in June 2012. Integration of these acquisitions is progressing satisfactorily.

• Strengthened relationships with Airbus, GKN and Rolls Royce.

Performance

• Trading in line with investment plan with profitability significantly up on prior year.

3.2 Reader's Digest

Business description

• An iconic magazine brand in the UK (www.readersdigest.co.uk).

Progress

• Closure of the unprofitable direct marketing business.

• Right-sized cost base to reflect current business activities.

• Strategic partnerships for the provision of financial services.

Performance

• Reader's Digest is now trading profitably albeit from a substantially smaller platform. The business remains debt-free.

3.3 Calyx

Business description

The Calyx investment consists of two separate businesses:

• m-hance - develops, manages and deploys enterprise-wide business management software solutions (www.m-hance.com) .

• Calyx Managed Services - supplier of managed IT and cloud services, connectivity, technology infrastructure management, hardware maintenance and support (www.calyxms.com).

Progress

• m-hance - integration of certain trade and assets of Maxima plc completed with benefits being realised.

• New product developments have been well-received by customers.

• Calyx Managed Services - strengthened management and sales force.

Performance

• m-hance continues to trade well with potential for further profitable growth.

• Calyx Managed Services is operating close to break even. Trading conditions remain challenging.

3.4 Santia

Business description

• Provider of consultancy and advisory health, safety and environmental services

(www.santia.co.uk).

Progress

• A new Enterprise, Resource and Planning system is now in full implementation.

• Significant cost reduction achieved.

• Growth in order pipeline encouraging. International enquiries continue to grow, particularly in Dubai and Turkey.

• Acquired First Order Red, an asbestos consultancy in May 2013.

• Acquisition of the head office freehold near Cardiff is at an advanced stage of negotiation.

Performance

• Varied performance across Santia's seven divisions, with strong growth in its contractor accreditation division. Substantial contracts building in the pipeline for 2013, further enhanced by the acquisition of First Order Red.

3.5 Omnico Group

Business description

• Provider of omni-channel hardware and software services to the retail, entertainment, hospitality and leisure sectors (www.omnicogroup.com).

Progress

• Merger between DigiPos and Clarity completed in Q4 2012.

• Management team is now fully in place.

• Re-positioning the combined business as a software-led proposition.

• New software and hardware product developments well received by customers.

• Significant progress in the reorganisation of the business's logistics and supply chain operations.

Performance

• Omnico is expected to trade profitably in the current period.

3.6 Fairline

Business description

• A leading global brand specialising in the design, engineering and manufacture of luxury boats in the range of 38 to 80 feet (www.fairline.com).

Progress

• Re-layout of Corby manufacturing facility to match product output to customer demand (pull model) completed in Q1 2013.

• Continued improvement on production efficiency.

• Global dealer distribution strengthened.

• New product development - Targa 48 and Squadron S48.

• New routes to market being developed.

• Disposal of surplus freehold completed.

Performance

• Fairline achieved significant growth in year-on-year profitability in the prior period. Year to date orders are below plan.

3.7 Spicers

Business description

• A leading office products and stationery wholesaler. It supplies a vast product range - with over 16,000 stock lines across 300 vendors (www.spicers.co.uk).

Progress

• Strategy focused on increasing margins.

• New routes to market and products gaining traction.

• Established representative office in the Far East for low cost sourcing.

• Re-development of new distribution facility in Birmingham progressing to plan.

• Disposal of surplus freehold assets also being progressed.

Performance

• The business is trading ahead of the investment case and has strong cash performance.

3.8 Recent activity

On 2 May 2013, Santia acquired First Order Red Limited, an asbestos consultancy business. £2 million was drawn down from Fund I to facilitate the acquisition.

On 23 July 2013, Fund I injected £1 million into Becap Calyx Limited for onwards drawdown by Calyx Managed Services Limited to fund working capital.

4 Fund II

This section sets out a comprehensive and meaningful analysis of the investment portfolio of Fund II as at 29 July 2013, as announced in the prospectus:

* Better Capital Fund II holds its investments at cost in accordance with the terms of the Limited Partnership Agreement.

** The Company values its investment in the Better Capital Fund II in accordance with the accounting policies as set out in Note 2 of the published financial report of the Company for the year ended 31 March 2013.

Note:

All investments are Sterling denominated and unlisted.

Summary details of each investment are set out below.

4.1 Everest

Business description

• A leading consumer brand in the manufacture, installation and supply of uPVC and aluminium windows and doors, conservatories, roofline products, garage doors, security systems, driveways and other home improvement products (www.everest.co.uk).

Progress

• Significant traction on cost reduction plans.

• Reorganisation of the sales force structure and its remuneration policy completed.

• Increasing efficiency of marketing spend to drive sales growth.

• Improvements implemented in the manufacturing and installation process.

Performance

• Substantial profit growth on prior periods visible.

4.2 Jaeger

Business description

• Ladies and men's wear retailer, operating in the premium end of the market.

Progress

• Strengthening of management team - new CEO announced.

• Steady improvements in the range being recognised by customers.

• Sales are growing.

• New online platform unveiled in May 2013.

• International expansion plans are progressing at pace.

Performance

• Satisfactory progress has been achieved to date. Substantial prior period losses have been stemmed.

4.3 City Link

Business description

• One of the leading express parcel delivery and distribution businesses in the UK.

Progress

• Service improvement through IT processes to "seal the pipeline".

• Introduction of estimated time of arrival software to improve customer experience.

• Pricing improvement.

4.4 Recent Activities

On 29 April 2013, Fund II acquired the entire issued share capital of City Link, on a debt free basis, for a consideration of £1. City Link is one of the UK's leading express delivery courier companies, serving over 10,000 customers, including major account customers such as Amazon, Marks and Spencer, John Lewis and Argos and had sales generated of over £320 million in the year to 29 December 2012. A total of £40.0 million has been committed and invested into City Link to fund its turnaround programme, including the development of a "best in class" IT infrastructure as well as projects on parcel tracking and estimated time of arrival (ETA) to capitalise on its highly regarded security cage network that is already in place. Early views confirm that substantial performance improvement opportunities are available.

On 22 May 2013, Jaeger received £1.8 million of further investment from Fund II. The further investment was deployed towards the refurbishment of its flagship store on Regent Street, London.

Further investments in Jaeger are under consideration.

5 General information

Better Capital PCC Limited (the "Company") is a limited liability, Closed-ended Investment Company, which was incorporated on 24 November 2009 in Guernsey and which, by special resolution of its members, converted to a protected cell company on 12 January 2012 and on that same date changed its name from Better Capital Limited to Better Capital PCC Limited. It has an unlimited life and is registered with the Guernsey Financial Services Company as a Registered Closed-ended Collective Investment Scheme. The registered office of the Company is Heritage Hall, PO Box 225, Le Marchant Street, St Peter Port, Guernsey, GY1 4HY.

Upon conversion, the Company established the 2009 Cell to which it attributed its investment in Fund I which has a portfolio of investments in distressed businesses. It also established a new protected cell, the 2012 Cell, which issued new shares for investment through the 2012 Cell into Fund II which will invest in a portfolio of distressed businesses.

The 2009 and 2012 Cells have the investment objective of generating attractive total returns from investing (through Fund I and Fund II respectively) in portfolios of businesses which have significant operating issues and may have associated financial distress, with a primary focus on businesses which have significant activities within the United Kingdom and Ireland; such returns being expected to be largely derived from capital growth.

For further information, please contact:

Better Capital PCC Limited +44 (0)1481 716000

Richard Crowder

Laurence McNairn (Administrator and Company Secretary)

Numis Securities Limited +44 (0)20 7260 1000

Corporate Broker and Financial Advisor

Nathan Brown, Oliver Hardy

Powerscourt +44 (0)20 7250 1446

PR Adviser to Better Capital PCC Limited

Justin Griffiths

This statement is a general description of the financial position and performance of the Company for the period from 1 April 2013 to 6 August 2013. It does not contain any profit forecast or forward looking information. Future performance and share price are likely to be affected by a number of factors, including (but not limited to) general economic and market conditions and specific factors affecting the financial performance or prospects of individual investments within the Company's portfolios.