Maven Income 1 Regulatory News (MIG1)

Maven Income and Growth VCT PLC

Interim results for the six months ended 31 August 2011 (unaudited)

The Directors announce the unaudited Interim Management Report for the six months ended 31 August 2011.

Market commentary

There was a period of relative stability for global financial markets during the five months prior to August 2011, despite ongoing political turmoil throughout the Middle East and a generally uncertain economic landscape in Europe. However, markets have since experienced a period of significant correction, resulting from renewed concerns over levels of sovereign debt and the decision by Standard & Poor's to downgrade the USA's credit rating. Market confidence has also been affected by a stark warning by the US Federal Reserve about projected economic growth and the International Monetary Fund has cut its UK growth forecast for this year. There is a widespread anticipation that this economic environment will further inhibit a return of UK investor confidence, with stubbornly depressed levels of consumer spending in evidence, and interest rates remaining at record lows since early 2009.

Although the UK small business sector is directly affected by the wider economic fragility, and businesses remain constrained by the risk of short to medium term increases in interest rates and inflation, the majority of your Company's private company assets are trading well. Your Company invests in private companies operating cash-generative business models and having only modest levels of external debt, which significantly mitigates the risk of corporate failure in a difficult trading environment. Overall, the medium term deal prospects in the Manager's target private equity market continue to give cause for optimism, and the Manager believes that well resourced generalist VCT managers will continue to see a flow of attractive later-stage opportunities in the short to medium term.

Highlights for the six months:

·; net asset value (NAV) total return of 106.2 p per share at 31 August 2011, up 1.7% over the period;

·; NAV of 63.6p per share at 31 August 2011;

·; final dividend of 3.5p per share paid on 22 July 2011;

·; interim dividend of 1.5p per share declared for payment on 9 December 2011;

·; three substantial new investments during the period, with one completed after the period end; and

·; disposal of Walker Technical Resources, for a return of 2.9x cost.

Dividends

The Board has declared an interim dividend of 1.5p per share, to be paid on 9 December 2011 to Shareholders on the Register at 11 November 2011.

The Company paid dividends totalling 4.5p per Ordinary Share in respect of the year ended 28 February 2011 which represents a yield of 5.6% per annum on the Ordinary Shares based on their net cost after initial tax relief and is equivalent to 7.5% gross from a UK company for a 40% rate tax payer. Based on the mid-market price of 47.9p at 31 August 2011, the annualised equivalent yield is 9.4%, is paid tax-free and is equivalent to 12.5% for a 40% rate tax payer.

Performance

There has been a continual improvement in the performance of the Company since the Manager became responsible for your portfolio and investment strategy in late 2004. The asset base, and the level of income derived from it, has been transformed, with the portfolio now broadly invested in later-stage yielding companies that are capable of generating sufficient revenue to sustain consistently high levels of dividend. The portfolio now includes investments in more than 40 established private companies, across a wide range of industrial sectors.

Principal risks and uncertainties

The Board has reviewed the principal risks and uncertainties facing the Company for the second half of its financial year. These are unchanged from those it faced at the start of the year, which are set out in the Annual Report, and are the risks associated with investment in small and unquoted companies. In order to reduce the exposure to investment risk, the Company has invested in a broadly-based portfolio of established UK private company investments.

The Company is also required to satisfy the HMRC 70% qualifying test, and other tests, on a continuous basis. The Board regularly reviews the VCT qualifying status of the portfolio and is pleased to confirm that all criteria continue to be met.

Manager's strategy

The Manager's investment strategy is to build a large diversified portfolio of income producing later-stage private company assets, creating Shareholder value through investment in companies with strong balance sheets and robust business models. Investments are typically constituted mainly as secured loan stock, in transactions designed to produce an immediate yield. The aim is to generate a sustainable income stream from each asset and ultimately achieve a profitable exit.

The Manager also continues to selectively realise AIM quoted assets where it has identified limited future upside or in cases where sales are enforced by corporate events. The proceeds of AIM disposals are redeployed in acquiring additional later-stage private company assets, and the Manager believes that this strategy will continue to provide the liquidity required to make further such investments, with the objective of enhancing the prospects of revenue and capital dividends.

Maven deal teams operate from regional offices in Glasgow, London, Aberdeen, Edinburgh, Manchester and Birmingham and continue to see a high level of attractive investment opportunities across the key UK corporate finance territories, providing access, at attractive entry multiples, to a wide spectrum of profitable mature businesses across a range of sectors. Maven employs a highly selective investment process, which subjects every potential investment to a number of strict quality and yield generation criteria. Maven actively avoids investment in businesses which are at an early stage in their development, and does not consider companies where there are significant external borrowings or trading activity is overly reliant on a concentrated customer base or a single product.

Investment activity

A total of £1,925,000 was invested during the six month period ended 31 August 2011, including three new private company assets and six follow-on investments where additional funding has helped to support the growth of existing portfolio companies.

One further private company investment was made after the period end.

The three new private company investments added to the portfolio during the period under review were:

·; Glacier Energy Services, an oil equipment services group with two specialist trading subsidiaries, Roberts Pipeline Machining and Wellclad. Roberts designs and manufactures on-site portable cutting machines for blue-chip oil & gas clients. Wellclad provides services to the European offshore and subsea equipment market. Glacier will focus on growth within its core UK market as well as promoting its technologies to the international energy services market;

·; Space Student Living, a provider of contracted management services across the student housing sector, offering a fully integrated accommodation solution covering a range of activities from the initial identification of sites, through overseeing the planning and development phases, to ultimately managing the accommodation under long term contract; and

·; Tosca Penta Exodus, a new company established by Penta Capital to implement a buy-and-build strategy in the business telecommunications service sector based on the converging of mobile, fixed-line, broadband, internet and IT technology businesses. Penta is an established private equity firm with which Maven previously co-invested in the successful 2010 management buy-out of esure.

The private company investment made after the period end was:

·; Dantec Hose, a specialist manufacturer of hand-built composite hoses for the global petrochemical industry. Composite hoses provide the vital flexible connection in many fluid transfer systems, and are used worldwide in applications such as unloading road, rail and marine tankers within chemical and oil plants, and in Formula 1 racing. Dantec exports around 70% of its output and is engaged in a number of significant overseas projects.

Details of investments completed during the period are noted in the table below:

Maven Income and Growth VCT has co-invested in the four new transactions with Maven Income and Growth VCT 2, Maven Income and Growth VCT 3, Maven Income and Growth VCT 4, Maven Income and Growth VCT 5 (formerly Bluehone AiM VCT2), Talisman First Venture Capital Trust and Ortus VCT, and is expected to continue to co-invest with these as well as other clients of the Manager. The advantage of this ability to co-invest with other VCTs is that the Company is able to underwrite a wider range and larger size of transaction than would be the case on a stand alone basis.

Portfolio developments

Most of the private companies in the portfolio have traded at or ahead of budget throughout the six month period, and in a number of cases it has been appropriate to increase valuations accordingly. At the period end, the portfolio held 43 private company and 15 AIM or PLUS quoted investments, at a total cost of £24.1 million and with a VCT qualifying level of 77.3%.

There was one notable private company exit during the period. The investment in Dalglen 1150 (Walker Technical Resources) was realised in July. Total proceeds over the life of the investment were £1,512,000 representing an overall 2.9x return on the initial investment cost. The exit was via a secondary buy-out funded by Gresham Private Equity, just two years after Maven originally led the management buy-in. Walker, which provides some of the most advanced composite repairs technology available for the global oil & gas industry, has consistently traded ahead of budget and has more than doubled earnings since the initial investment. In addition, repayments of loan stock were received from some of the investee companies as shown on the table below.

In line with the strategy of reducing exposure to the quoted markets in favour of profitable later-stage private companies, the Manager has continued to pursue the structured realisation of the AIM portfolio.

The table below gives details of realisations during the reporting period:

Two companies were struck off the Register during the period, resulting in a loss of £833,000 being realised, but there was no related impact on the NAV as a full provision had been made in earlier periods.

Share Capital

During the period the Manager raised further funds for the Company through the second Maven linked VCT offer. The maximum amount which the Company could raise was restricted to 10% of its listed share capital, thereby avoiding the higher costs associated with issuing a full prospectus. An additional £1,238,944 was raised for the Company through the linked offer, at a cost of only 5.0% of total funds raised, and 1,954,171 new shares were issued. Also during the period under review, the Company bought back 195,000 shares for cancellation at 47.75p per share.

Outlook

The Manager has continued to diversify your Company's investment portfolio, with a focus on identifying later-stage private company investments with income generating characteristics.

UK growth businesses continue to seek finance in the face of a continued shortage in capital available from more traditional sources, and the market for private equity transactions has become increasingly competitive. Maven is able to leverage its significant UK market presence and experience to further expand the portfolio on behalf of VCT investors. Investment in high quality and income producing assets diversified across a range of sectors has produced steady increases in Shareholder total return, including healthy levels of tax-free dividends.

Whilst the general economic environment is expected to remain challenging for the small business sector, well managed companies can continue to take market share and attract interest from larger trade or private equity buyers. There has been significant recent interest in a number of portfolio companies, which will hopefully lead to successful exits and further significant tax-free returns for investors.

Maven Capital Partners UK LLP

Manager

21 October 2011

Maven Income and Growth VCT PLC

Notes to the Financial Statements

1. Accounting policies

The financial information for the six months ended 31 August 2011 and the six months ended 31 August 2010 comprises non-statutory accounts within the meaning of the Companies Act 2006. The financial information contained in this report has been prepared on the basis of the accounting policies set out in the Annual Report and Financial Statements for the year ended 28 February 2011, which have been filed at Companies House and which contained an Auditor's Report which was not qualified and did not contain a statement under S498(2) or S498(3) of the Companies Act 2006.

2. Movement in reserves

3. Returns per Ordinary Share

The returns per Ordinary Share are based on the following figures:

Directors' responsibility statement

The Directors confirm that, to the best of their knowledge:

·; the Financial Statements for the six months ended 31 August 2011 have been prepared in accordance with applicable accounting standards, the Companies Act 2006 and the 2009 Statement of Recommended Practice 'Financial Statements of Investment Trust Companies (the SORP);

·; the Interim Management Report includes a fair review of the information required by DTR 4.2.7R in relation to the indication of important events during the first six months, and of the principal risks and uncertainties facing the Company during the second six months, of the year ending 28 February 2012; and

·; the Interim Management Report includes adequate disclosure of the information required by DTR 4.2.8R in relation to related party transactions and any changes therein.

Other information

The Net Asset Value per Ordinary Share has been calculated using the number of Ordinary Shares in issue at 31 August 2011 of 39,565,962.

A summary of investment changes for the six months under review and an investment portfolio summary as at 31 August 2011 are included above.

A full copy of the Interim Report and Financial Statements will be printed and issued to Shareholders.

Copies of this announcement will be available to the public at the office of Maven Capital Partners UK LLP, 149 St Vincent Street, Glasgow G2 5NW and at the registered office of the Company, 5th Floor, 9-13 St Andrew Street, London EC4A 3AF.

On behalf of the Board

Maven Capital Partners UK LLP

Secretary

21 October 2011