BARONSMEAD SECOND VENTURE TRUST PLC

Earnings Release • May 16, 2014

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BARONSMEAD VCT 3 PLC - Interim Management Statement

PR Newswire

London, May 16

                         Baronsmead VCT 3 plc                         Interim Management StatementFor the three month period from 1 January 2014 to 31 March 2014.Headlines+4.5%                    Increase in Net Asset Value per share before payment                         of interim dividend8.0p                     Interim dividend paid on 7 March 2014£9.7m                    Raised net of costs in January / February 2014Performance Summary                                         As at       As atCapital return                   31 March 2014 31 Dec 2013    MovementTotal net assets                       £82.82m     £74.88mNet asset value per share             118.53p\*     113.40p        4.5%Share price                            103.75p     106.25p       (2.4%)Discount to NAV                         (6.1%)      (6.3%)\* Adjusted for 8.0p (£5.3m) interim dividend paid on 7 March 2014 forcomparative purposes. Actual NAV at 31 March 2014 including the interim dividend paid7 March 2014 was 110.53p per share.Total Return                             3 month (%)  1 year (%)  5 years (%) 10 years (%)Net asset value total return (1)            4.63       13.21       70.13      120.51Key: (1) NAV total return = NAV + reinvested dividends; Source: ISIS EP LLPThese total returns are stated before the inclusion of VCT taxreliefs which are designed to mitigate the higher risks and costs associatedwith investing in smaller companies and the constraints of the VCT legislation.The front end income tax reliefs available at the time of subscription were 20%prior to the end of the 2003/04 tax year, 40% in the 2004/05 and 2005/06 taxyears and 30% since then, so any adjusted performance measure including thisrelief will vary depending on the date of subscription.  There is theadditional benefit of receiving VCT dividends tax free.Investment PerformanceThe net asset value of the company increased by 4.5% during the quarterexcluding the interim dividend paid during the period.  The unquoted portfoliovaluation stayed broadly flat in the quarter and the AIM portfolio increased by7.7%.The Company's net assets as at 31 March 2014 were £82.8 million.  This figuretakes account of the valuation of the Company's investments as at 31 March 2014and takes account of the payment of the interim dividend of 8.0p per share paidon 7 March 2014 (£5.3 million) and the £9.7m (net of costs) raised during theperiod under review.Top Ten Investment Holdings                                                                      Percentage                                                                          of NAVPosition at   Position at                                                  as at31 Mar 2014   31 Dec 2013                Company                     31 Mar 2014      1            1       Nexus Vehicle Holdings Limited                    5.7      2            2       Netcall plc                                       3.4      3            4       Vectura Group plc                                 3.0      4            5       IDOX plc                                          3.0      5            3       Crew Clothing Holdings Limited                    2.9      6            7       Valldata Group Limited                            2.2      7            9       ICCM                                              2.1      8            10      Murgitroyd Group plc                              2.0      9            8       Tasty plc                                         1.9     10            20      Jelf Group plc                                    1.7    Total                                                                   27.9Analysis of Total Assets                                   Percentage of total      Percentage of total                                                assets                   assets                                         31 March 2014              31 Dec 2013Unquoted investments                                32                       38AIM, listed, ISDX &                                 48                       47collective investmentsvehicleListed interest bearing                        0                   5securitiesNet current assets                             20                  10Total cash portfolio                                20                       15Total Assets                                       100                      100Analysis of Investment Portfolio by Sector(excluding cash and interest bearing securities)                                       Percentage of total  Percentage of total                                            investments at       investments at                                             31 March 2014          31 Dec 2013Business Services                                       43                   45Consumer Markets                                        12                   13Healthcare & Education                                  17                   16Technology, Media &Telecommunications                                      28                   26Total                                                  100                  100Investment ActivityOne new unquoted investment of £952,000 was made during the period in Kingsbridge a specialist insurance broker.A total of £508,000 was invested in one new and two follow on investments in AIM traded companiesInvestments madeCompany                              Date            Cost (£'000)Daily Internet plc                   Jan 2014                  25Kingsbridge Limited                  Jan 2014                 952EG Solutions plc Loan note           Feb 2014                  33Scholium Group plc                   Mar 2014                 450Total investments                                           1,460RealisationsDuring the period under review Baronsmead VCT 3 realised proceeds of £2.3m from the sale of two unquoted investments (Empire World Trade and Inspired Thinking Group). Arcas Investments was dissolved in the period and the funds returned to the VCT.The sale of Baronsmead VCT 3's holding in Inspired Thinking Group in March 2014realised a return of 3.4 times its original cost including interest income.                                           Cost    Proceeds  MultipleCompany                         Date     (£'000)    (£'000)     (X)Inspired Thinking Group       Mar 2014     796       2315      3.4\*Limited                              Mar 2014    1,000       998       1.0Arcas World Trade Limited                              Jan 2014    1,297       25        0.0Empire World Trade LimitedTotal realisations                        3,093      3,338\*Includes interest/ dividends received, loan note redemptions and partialrealisations accounted for in prior periodsDividend paid on 7 March 2014Following recent profitable sales of investments, the Directors declared aninterim dividend of 8.0p per share with respect to the year to 31 December2014.  The dividend was paid on 7 March 2014 to shareholders on the register asof 21 February 2014. It is the Board's current expectation that this interimdividend will be in lieu of the dividend that would normally be declared on thepublication of the Company's results for the six months to 30 June 2014.FundraisingAn offer for subscription to raise gross proceeds of up to £10 million waslaunched on 22 January 2014.  The Company's offer was fully subscribed by 19February 2014, raising £9.7 million net of expenses.  As a result, on 14 March2014 the Company allotted 8,896,261 shares at a price of 112.40p per share. TheBoard would like to thank the 482 existing shareholders and extend a very warmwelcome to 576 new shareholders who invested in the Company through thisfundraising. The Company had 4,084 shareholders as at 31 March 2014.Events after the period endOther than the events described above, the Board is not aware of anysignificant events or transactions which have occurred between 1 April 2014 andthe date of publication of this statement which would have a material impact onthe financial position of the Company.Investment objectiveBaronsmead VCT 3 plc is a tax efficient listed company which aims to achievelong-term investment returns for private investors.Further informationFurther information regarding the Company, including net asset values publishedsince the end of the period and quarterly factsheets, can be found at theCompany's websitewww.baronsmeadvct3.co.ukContactFor further information please contact:The Company's Investment Manager, ISIS EP LLP as follows:Email:       baronsmeadvcts@isisep.comTelephone:   020 7506 5717Facsimile:   020 7506 5718Post:        100 Wood Street, London, EC2V 7ANNeither the contents of the Company's website nor the contents of any websiteaccessible from hyperlinks on this announcement (or any other website) isincorporated into, or forms part of, this announcement.