Baronsmead 2vt Regulatory News (BMD)

19 Nov 2010 08:58

Baronsmead VCT3 plc Interim Management Statement

For the three month period from 1 July 2010 to 30 September 2010.

Headlines-4.7% Net Asset Value (NAV) per share increased by 4.7% in the quarter following good valuation growth from strong trading across the portfolio. 8.1% Increase in the value of the AIM and Listed investments. Performance SummaryCapital return As at As at Movement 30 Sep 2010 30 Jun 2010 Total net assets £62.69m £62.00m Net asset value per share 102.87p 98.24p* 4.7% Share price 89.00p 89.00p 0.0% Discount to NAV (13.5%) (9.4%) 3 month (%) 1 year (%) 5 years Since launch (%) (%) Net asset valuetotal return 4.7 10.6 23.5 73.9 (1) Share pricetotal return(2) 3.4 7.6 26.7 50.2 FTSE All-sharetotal return(3 13.6 12.5 24.7 31.3 )

* Adjusted for 3.0p interim dividend for comparative purposes. Actual NAV was 101.24p.

Key:

(1) NAV total return = NAV + reinvested dividends; Source: ISIS EP LLP

(2) Share price total return = Mid to mid share price + reinvested dividends; Source: AIC

(3) FTSE All-share = FTSE All-share Index + reinvested dividends; Source: AIC

These total returns are stated before the inclusion of VCT tax reliefs which are designed to mitigate the higher risks and costs associated with investing in smaller companies and the constraints of the VCT legislation. The tax reliefs given at the time of subscription have been 20%, 40% and later 30%, so any adjusted performance measure including this relief will vary depending on the date of subscription. There is the additional benefit of receiving VCT dividends tax free.

Investment Performance

There was strong trading across the portfolio during the quarter and the number of portfolio companies reporting steady or better trading performance was at 93%, its highest level since quarterly measuring of their progress on this basis came into being in 2004. In particular, there were significant increases in the valuation of the Company's investments in Reed & Mackay (business travel services) and Crew Clothing (multi-channel clothing retailer) resulting from strong trading. Relatively few portfolio companies are exposed to the UK public sector however the valuation of the Company's investment in Carnell (motorway maintenance and technical services to the UK Highways Agencies) has been reduced.

The value of the Company's investments in AIM and listed companies increased by approximately 8% during the as investor sentiment and the earnings growth of smaller listed companies improved.

Top ten Investments

Position Position at Percentage at of NAV 30 Jun 2010 Company 30 Sep 2010 as at 30 Sep 2010 1 2 Reed & Mackay Limited 6.8 2 1 Nexus Vehicle Holdings Limited 6.7 3 3 Crew Clothing Company Limited 4.0 4 5 CableCom Networking Holdings 3.5 Limited 5 4 Quantix Limited 3.2 6 10 Kafevend Holdings Limited 2.8 7 6 Fisher Outdoor Leisure Holdings 2.8 Limited 8 9 Independent Living Services Limited 2.8 9 7 CSC (World) Limited 2.7 10 - IDOX plc 2.0 Total 37.3Analysis of Total Assets Percentage of total Percentage of total assets assets 30 Sep 2010 30 Jun 2010 Unquoted investments 50 47 AIM, Listed & Collective 22 21Investments Interest Bearing 24 28 Securities Net current assets 4 4 Total cash portfolio 28 32 Total Assets 100 100

Analysis of Investment Portfolio by Sector

(excluding cash and interest bearing securities)

Percentage of total Percentage of total investments at 30 Sep investments at 30 Jun 2010 2010 Business Services 36 38 Consumer Markets 18 17 Financial Services 6 5 Healthcare & Education 10 10 IT & Media 30 30 Total 100 100Investment Activity

Two AIM traded investments totalling £0.8m were completed in one existing, Electric Word plc, and one new company, Netcall plc. Investment totalling £0.5m was made into the existing collective investment vehicle, Wood Street Microcap Investment Fund. A further unquoted investment was made into Independent Living Services Limited an existing portfolio company,

Investments madeCompany Date Cost (£'000) Electric Word plc Jul 2010 111 Independent Living Services Limited Jul 2010 89 Netcall plc Jul/Aug 2010 712 Wood Street Microcap Investment Fund Aug 2010 500 Total investments 1,412Realisations

Two AIM investments were realised in full, WIN and Vero Software. Both were sold to trade buyers and are further examples illustrating that good value does reside in smaller companies, which in recent times have been lowly rated.

Company Date Cost (£ Proceeds Multiple '000) (£'000) Brainjuicer Group plc Sep 2010 50 85 1.7 Mission Marketing Group (The) Sep 2010 190 14 0.1plc Vero Software plc July 2010 300 244 0.8 WIN plc Aug 2010 413 675 1.6 Total realisations 953 1,018 Net Asset Value

The NAV per share at 31 October 2010 was 104.10p representing an increase of 1.2% since the quarter end driven largely by an increase in the value of the AIM portfolio.

Events after the period end

Other than as discussed in this statement the Board is not aware of any significant events or transactions which have occurred between 30 September 2010 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Fundraising

Having raised £7.56m in February / March 2010, the Company has sufficient cash resources to fund all of its operations for at least the next 12 months. As a result, at this stage, there are no plans to raise further funds through issuing new shares during the current tax year. As many of the Company's shareholders are also shareholders in the other Baronsmead VCTs they will be informed on any offers for subscription that those VCTs may make available to either their existing shareholders or more widely during the course of the current tax year.

Investment objective

Baronsmead VCT 3 plc is a tax efficient listed company which aims to achieve long-term investment returns for private investors.

Further information

Further information regarding the Company, including net asset values published since the end of the period and quarterly factsheets, can be found at the Company's website www.baronsmeadvct3.co.uk

Contact

For further information please contact:

Michael Probin Investor Relations Manager 020 7506 5600 michael.probin@isisep.com