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THE BIOTECH GROWTH TRUST PLC - Unaudited Half Year Results

Friday, November 23, 2012 9:49 AM


                                                                   NEWS RELEASE
                                                          For immediate release
                                                               23 November 2012
                         The Biotech Growth Trust PLC                          
             Unaudited Half Year Results for the six months ended              
                               30 September 2012                               
Financial Highlights
                                                           30      31  % change
                                                    September   March          
                                                         2012    2012          
                                                                               
Net asset value per share                              297.0p  250.9p     18.4%
                                                                               
Share price                                            296.0p  236.0p     25.4%
                                                                               
Discount of share price to net asset value per           0.3%    5.9%      
  -
share                                                                          
                                                                               
NASDAQ Biotechnology Index (sterling adjusted)          920.1   801.1     14.9%
                                                                               
Ongoing charges*                                         1.3%    1.2%         -

No interim dividend is proposed.

The following are attached:
  * Chairman's Statement
   
  * Review of Investments
   

* Principal Contributors to and Detractors from Net Asset Value Performance

   
  * Portfolio
   
  * Income Statement
   
  * Statement of Changes in Equity
   
  * Statement of Financial Position
   
  * Cash Flow Statement
   
  * Notes to the Financial Statements
   
  * Interim Management Report
   

This Announcement is not the Company's Half Year report. It is an abridged version of the Company's full Half Year report for the six months ended 30 September 2012. The full Half Year report will be sent to shareholders on 28 November 2012. The full Half Year report, together with a copy of this announcement, will also be available on the Company's website: www.biotechgt.com

The Company's Half Year Report & Accounts for the six months ended 30 September 2012 has been submitted to the UK Listing Authority, and will shortly be available for inspection on the National Storage Mechanism (NSM): www.hemscott.com/nsm.do

For further information please contact: Mark Pope, Frostrow Capital LLP 020 3008 4913

Chairman's Statement

"….The Company 's net asset value per share rose by 18.4% and the share price by 25.4% during the period. This represents a substantial outperformance of both the benchmark and the wider market".

PERFORMANCE

This is my first statement as Chairman. It is an honour to succeed John Sclater, our founding Chairman.

I am delighted to report that against a background of continued economic and
political uncertainty, the biotechnology sector has continued its strong
performance driven, in part, by an increasing expectation that the sector will
continue successfully to develop new drugs. The MSCI World Index fell by 1.0%
in sterling terms during the period while the Company's benchmark, the NASDAQ
Biotechnology Index, measured in sterling terms, rose by 14.9%. The Company's
net asset value per share rose by 18.4% during the period. This represents a
substantial outperformance of both the benchmark and the wider market. The
Company's share price performed better still, rising by 25.4%, as the discount
of the share price to the net asset value per share narrowed from 5.9% at 31
March 2012 to 0.3% at 30 September 2012.
I am pleased to report that the Company won the Specialist Category at the 2012
Investment Week Investment Company of the Year Awards; our Manager, Frostrow
Capital LLP, also won the Specialist Group of the Year award.
In addition, for the second year in succession, our Investment Manager OrbiMed
Capital LLC, won the techMark Technology Fund Manager of the Year award for its
management of the Company's portfolio.

Further information on investment performance and the outlook for the Company is given in the Review of Investments.

CAPITAL STRUCTURE

The Board has continued to implement its policy of active discount management
and to buy back shares for cancellation when the discount of the share price
against the net asset value per share is greater than 6%. During the six months
under review the Company repurchased a total of 19,079 shares for cancellation
at a cost of £47,000 (including expenses).

However, I am pleased to report that as a result of the Company's strong performance, we have been able to issue 835,000 new shares during the six months under review at a price representing a small premium to net asset value per share. The shares were issued under shareholder authority and raised £ 2,344,000 of new funds for the Company.

REVENUE AND DIVIDENDS

The revenue profit for the period was £18,000 (six months ended 30 September
2011: loss of £170,000) and no interim dividend is declared (six months ended
30 September 2011: nil).
OUTLOOK

The development of new products and the prospect of merger and acquisition activity continue to be key drivers for the biotechnology sector. The Board remains confident on the prospects for the sector with the portfolio being well positioned to benefit from this activity.

Our Investment Manager's focus remains on the selection of stocks with strong prospects for capital enhancement and we reiterate our belief that the long-term investor in the sector will be well rewarded.

THE RT HON LORD WALDEGRAVE OF NORTH HILL

CHAIRMAN
23 NOVEMBER 2012
Review of Investments

"...The biotechnology sector strongly outperformed the broader markets during the review period."

PERFORMANCE
We are pleased to report that the Company's net asset value per share increased
18.4% during the six month period ended 30 September 2012. This compares to a
14.9% increase in the Company's benchmark, the sterling-adjusted NASDAQ
Biotechnology Index. The Company's share price increased 25.4% during the
period.

Top contributors to performance in the portfolio were Onyx Pharmaceuticals, Gilead Sciences, Affymax, Amgen, and Infinity Pharmaceuticals.

• Onyx Pharmaceuticals shares increased following the U.S. approval of its
myeloma drug, Kyprolis. Due to the U.S. Food and Drug Administration (FDA)
having previously expressed reluctance to consider the drug due to the design
of the clinical trials, the positive FDA advisory panel vote and the ultimate
approval came as a surprise to the market. With Kyprolis as a fully owned
asset, Nexavar as a co-marketed product for liver and kidney cancer, and a
royalty interest in Stivarga for colorectal cancer, we believe Onyx is also an
attractive acquisition target.
• Shares of Gilead Sciences rose over the period due to positive data announced
in April for their lead hepatitis C drug GS-7977. Investor confidence in the
drug's best-in-class profile has continued to increase as other companies have
terminated competing programmes due to toxicity concerns. Gilead also received
approval for Stribild, a four-drug regimen for HIV.
• Shares of Affymax increased over the period due to increasing optimism about
the launch of their recently approved anemia drug Omontys. The company was able
to secure an initial supply contract with the dialysis chain Fresenius, which
could potentially pave the way for eventual adoption of Omontys by one-third of
U.S. dialysis clinics.
• Amgen shares increased due to consistent low-risk earnings growth supported
by share buybacks and a secure dividend yield. Investors view the company as
having a compelling valuation relative to large pharmaceutical companies.
• Infinity Pharmaceuticals, a recent addition to the portfolio, was also a top
contributor. Infinity is developing a PI3 kinase delta/gamma inhibitor for
haematological cancers. The stock increased after the company announced that
the initial clinical trial had demonstrated a response at the lowest doses
tested along with an adequate safety profile. We look forward to seeing the
full proof of concept data presented at the American Society of Haematology
meeting in December.

Key detractors from performance were from positions in Idenix Pharmaceuticals, 3SBio, Salix Pharmaceuticals, and Incyte Genomics.

• Idenix Pharmaceuticals' shares declined due to the company's lead drug
candidate being placed on clinical hold by the U.S. FDA. The compound, a
polymerase inhibitor for hepatitis C, is structurally related to a compound
discontinued by Bristol-Myers Squibb due to significant cardiac toxicity seen
in clinical trials. We exited the position on the news, as it is unclear if the
company will be able to restart the programme.
• Shares of 3SBio declined due to increasing investor concerns about possible
government-mandated price cuts on its lead anemia drug EPIAO. Recently the
company's management team proposed a buyout offer for all the shares they do
not already own, suggesting they view the asset as undervalued.
• Salix Pharmaceuticals' shares were weak due to the FDA rejection of their
supplemental drug application for Relistor for Opioid induced constipation in
chronic pain. We expect that the company will be able to address the FDA's
concerns.
• Incyte Genomics declined due to disappointing 2012 guidance for its recently
launched product, Jakafi for Myelofibrosis. The launch of Jakafi had been off
to a good start in fourth quarter of 2011 and in the first quarter of 2012.
However, the company disclosed that many of the initial patients prescribed the
drug were sicker than expected, causing a higher than expected discontinuation
rate. We believe that the guidance was conservative, and that the patients
prescribed Jakafi more recently have a more favourable prognosis. Therefore we
expect the sales trajectory to improve.

OUTLOOK

The biotechnology sector strongly outperformed the broader market during the
review period. The outperformance was broad-based, with strong performance from
large-capitalisation stocks which benefitted from strong financial performance
and favourable valuations compared to their pharmaceutical peers, and from
smaller-capitalisation stocks which benefitted from positive pipeline
advancement and the increase in merger and acquisition activity beginning last
year.
We expect the positive momentum in the sector to be sustained, driven by
clinical catalysts and new product launches. Specifically with regard to drug
launches for portfolio companies, we highlight the following recently launched
products:
• Medivation and partner Astellas recently launched Xtandi for advanced
prostate cancer. This drug has shown impressive efficacy in late stage
patients. We expect strong demand for the drug in its labeled indication. Over
the longer term we expect this drug to have multi-billion dollar potential as
it is used in earlier stage patients with longer duration of therapy.
• In September, VIVUS launched Qsymia for obesity in the U.S. This drug
combination is the first obesity drug to reach the market in 13 years. Clinical
trials have shown that patients lose about 10% of their body weight after a
year of treatment. We expect this drug to have good gradual adoption into this
large market.
• Onyx recently launched Kyprolis for refractory myeloma. Initial feedback
suggests a robust uptake into that market. We expect positive clinical trial
data in earlier line use in combination with Revlimid in 2013 which should
significantly grow the drug's potential.
On the regulatory front, in June the U.S. Supreme Court ruled against a
challenge to the Affordable Care Act ("Obamacare") that could have invalidated
the entire law. Readers may recall that we have previously maintained that the
Affordable Care Act's expansion of coverage with manageable cost control has
not had a major negative effect on the biotechnology sector. The focus in
November then turned to the U.S. Presidential election and, despite a late run
in the polls by Governor Romney, President Obama was re-elected. With regard to
the U.S. legislature, the Republican Party maintained control of the House of
Representatives with slightly fewer seats while the Democrats maintained
control of the Senate, actually increasing their number of seats. The net
result was status quo, and therefore we expect the impact to be minor for the
biotechnology sector.
The number of holdings in the portfolio remains approximately 40. The
geographic distribution of investments is 90% North America, 5% Europe and 5%
Asia. Currently approximately 40% of the Company's assets are invested in major
capitalisation companies, and 60% are invested in small and mid-capitalisation
companies. We continue to see many opportunities within the sector and look
forward to updating investors in the future.
SVEN BORHO
ORBIMED CAPITAL LLC
INVESTMENT MANAGER
23 NOVEMBER 2012

Principal Contributors to and Detractors from Net Asset Value Performance

for the six months to 30 September 2012

                                              Contribution for                 
                                                                               
                                                 the period to     Contribution
                                                                               
Top Five Contributors                  30 September 2012 £'000        per share
                                                                       (pence)*
                                                                               
1   Onyx Pharmaceutical                                  5,306              8.5
                                                                               
2   Gilead Sciences                                      4,327              6.9
                                                                               
3   Affymax                                              2,508              4.0
                                                                               
4   Amgen                                                2,469              3.9
                                                                               
5   Infinity Pharmaceuticals                             2,178             
3.5
                                                                               
                                                        16,788             26.8
                                                                               
Top Five Detractors                                                            
                                                                               
1   Idenix Pharmaceuticals                               (661)            (1.0)
                                                                               
2   3SBio                                                (535)            (0.9)
                                                                               
3   Salix Pharmaceuticals                                (468)            (0.7)
                                                                               
4   Incyte Genomics                                      (413)            (0.7)
                                                                               
5   Celgene                                              (412)            (0.7)
                                                                               
                                                       (2,489)            (4.0)

*based on 62,541,679 ordinary shares being the weighted average number of shares in issue during the period ended 30 September 2012

Source: Frostrow Capital LLP

Portfolio
as at 30 september 2012
                                                  Fair Value               % of
                                                                               
Security                            Country            £'000        Investments
                                                                               
Gilead Sciences               United States           17,578                9.8
                                                                               
Amgen                         United States           13,338                7.4
                                                                               
Onyx Pharmaceutical           United States            9,958                5.5
                                                                               
Alexion Pharmaceuticals       United States            8,531                4.7
                                                                               
Perrigo                       United States            8,474                4.7
                                                                               
Celgene                       United States            7,755                4.4
                                                                               
Incyte Genomics               United States            7,500                4.2
                                                                               
Biogen Idec                   United States            7,336                4.1
                                                                               
Infinity                      United States            7,278                4.1
Pharmaceuticals                                                                
                                                                               
Illumina                      United States            6,446                3.6
                                                                               
Top 10 investments                                    94,194               52.5
                                                                               
Actelion                        Switzerland            5,491                3.1
                                                                               
Regeneron                     United States            5,313                3.0
Pharmaceutical                                                                 
                                                                               
Life Technologies             United States            5,264                2.9
                                                                               
Ariad Pharmaceuticals         United States            5,175                2.9
                                                                               
Affymax                       United States            4,956                2.8
                                                                               
Medivation                    United States            4,877                2.7
                                                                               
Impax Laboratories            United States            4,580                2.5
                                                                               
Cubist Pharmaceutical         United States            4,261                2.4
                                                                               
Affymetrix                    United States            4,215                2.3
                                                                               
Fluidigm                      United States            4,046                2.3
                                                                               
Top 20 investments                                   142,372               79.4
                                                                               
Exact Sciences                United States            3,998                2.2
                                                                               
Neurocrine Biosciences        United States            3,928                2.2
                                                                               
Ono Pharmaceutical                    Japan            3,769                2.1
                                                                               
3SBio                                 China            3,446                1.9
                                                                               
Mylan                         United States            2,852                1.6
                                                                               
Array Biopharma               United States            2,842                1.6
                                                                               
BioMarin Pharmaceutical       United States            2,644                1.5
                                                                               
Immunogen                     United States            1,991                1.1
                                                                               
Algeta                               Norway            1,985                1.1
                                                                               
Orbimed Asia Partners                                                          
L.P.                                                                           
                                                                               
(unquoted)                         Far East            1,861                1.0
                                                                               
Top 30 investments                                   171,688               95.7

All of the above investments are equities unless otherwise stated.

Portfolio (continued)
                                                  Fair Value               % of
                                                                               
Security                              Country          £'000        Investments
                                                                               
Salix Pharmaceuticals           United States          1,836                1.0
                                                                               
VIVUS                           United States          1,246                0.7
                                                                               
Endocyte                        United States          1,194                0.7
                                                                               
Bavarian Nordic                       Denmark          1,149                0.6
                                                                               
Auxilium Pharmaceuticals        United States            908                0.5
                                                                               
Oncothyreon                     United States            794                0.4
                                                                               
Medivir                                Sweden            426                0.2
                                                                               
Verastem                        United States            395                0.2
                                                                               
Trius Therapeutics Wts 24/      United States             41                  -
05/2016*                                                                       
                                                                               
Total investments                                    179,677              100.0

All of the above investments are equities unless otherwise stated.

*warrants

Income Statement

for the six months ended 30 September 2012

                                   (Unaudited)             (Unaudited)               (Audited)
                              Six months ended        Six months ended              Year ended
                             30 September 2012       30 September 2011           31 March 2012
                                                                                              
                       Revenue Capital   Total Revenue Capital   Total Revenue Capital   Total
                                                                                              
                  Note   £'000   £'000   £'000   £'000   £'000   £'000   £'000   £'000   £'000
                                                                                              
Investment Income                                                                             
                                                                                              
Investment income    2     328       -     328      85       -      85     196       -     196
                                                                                              
Total income               328       -     328      85       -      85     196       -     196
                                                                                              
Gains and losses                                                                              
on investments                                                                                
                                                                                              
Gains/(losses) on            -  30,873  30,873       - (1,199) (1,199)       -  44,214  44,214
investments held                                                                              
at fair value                                                                                 
through profit or                                                                             
loss                                                                                          
                                                                                              
Exchange (losses)            -   (204)   (204)       -     351     351       -   (228)   (228)
/gains on                                                                                     
currency balances                                                                             
                                                                                              
Expenses                                                                                      
                                                                                              
Investment           3       - (1,797) (1,797)       -   (857)   (857)       - (3,158) (3,158)
management,                                                                                   
management and                                                                                
performance fees                                                                              
                                                                                              
Other expenses           (286)       -   (286)   (225)       -   (225)   (459)       -   (459)
                                                                                              
Profit/(loss)               42  28,872  28,914   (140) (1,705) (1,845)   (263)  40,828  40,565
before finance                                                                                
costs and                                                                                     
taxation                                                                                      
                                                                                              
Finance costs                -    (13)    (13)    (18)       -    (18)    (19)       -    (19)
                                                                                              
Profit/(loss)               42  28,859  28,901   (158) (1,705) (1,863)   (282)  40,828  40,546
before taxation                                                                               
                                                                                              
Taxation                  (24)       -    (24)    (12)       -    (12)    (27)  40,828    (27)
                                                                                              
Profit/(loss) for           18  28,859  28,877   (170) (1,705) (1,875)   (309)  40,828  40,519
the period/year                                                                               
                                                                                              
Basic and diluted    4    0.0p   46.1p   46.1p  (0.3)p  (2.6)p  (2.9)p  (0.5)p   64.1p   63.6p
earnings/(loss)                                                                               
per share                                                                                     
The Company does not have any income or expenses which are not included in the
profit for the period. Accordingly the "profit/(loss) for the period" is also
the "Total comprehensive income for the period", as defined in IAS 1 (revised)
and no separate Statement of Comprehensive Income has been presented.

All of the profit/(loss) and total Comprehensive Income for the period is attributable to the owners of the Company.

The total column of the statement is the Income Statement of the Company prepared in accordance with IFRS. The supplementary revenue and capital columns are presented for information purposes as recommended by the Statement of Recommended Practice issued by the Association of Investment Companies.

All items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.

Statement of Changes in Equity

                      Ordinary   Share            Capital                        
                                                                                 
                         Share Premium Special Redemption Capital Revenue        
                                                                                 
(Unaudited)            Capital Account Reserve    Reserve Reserve Reserve   Total
                                                                                 
Six months ended 30      £'000   £'000   £'000      £'000   £'000   £'000   £'000
September 2012                                                                   
                                                                                 
At 31 March 2012        15,560  19,300  25,214      5,572  94,139 (3,654) 156,131
                                                                                 
Net profit for period        -       -       -          -  28,859      18  28,877
                                                                                 
Issue of new shares        209   2,135       -          -       -       -   2,344
                                                                                 
Repurchase of own          (5)       -    (47)          5       -       -    (47)
shares                                                                           
                                                                                 
At 30 September 2012    15,764  21,435  25,167      5,577 122,998 (3,636) 187,305
                                                                                 
                      Ordinary   Share            Capital                        
                                                                                 
                         Share Premium Special Redemption Capital Revenue        
                                                                                 
(Unaudited)            Capital Account Reserve    Reserve Reserve Reserve   Total
                                                                                 
Six months ended 30      £'000   £'000   £'000      £'000   £'000   £'000   £'000
September 2011                                                                   
                                                                                 
At 31 March 2011        16,239  19,300  30,420      4,893  53,311 (3,345) 120,818
                                                                                 
Net loss for period          -       -       -          - (1,705)   (170) (1,875)
                                                                                 
Repurchase of own        (271)       - (1,947)        271       -       - (1,947)
shares                                                                           
                                                                                 
At 30 September 2011    15,968  19,300  28,473      5,164  51,606 (3,515) 116,996
                                                                                 
                      Ordinary   Share            Capital                        
                                                                                 
                         Share Premium Special Redemption Capital Revenue        
                                                                                 
(Audited)              Capital Account Reserve    Reserve Reserve Reserve   Total
                                                                                 
Year ended 31 March      £'000   £'000   £'000      £'000   £'000   £'000   £'000
2012                                                                             
                                                                                 
At 31 March 2011        16,239  19,300  30,420      4,893  53,311 (3,345) 120,818
                                                                                 
Net profit/(loss) for                                                            
                                                                                 
the year                     -       -       -          -  40,828   (309)  40,519
                                                                                 
Repurchase of own                                                                
                                                                                 
shares                   (679)       - (5,206)        679       -       - (5,206)
                                                                                 
At 31 March 2012        15,560  19,300  25,214      5,572  94,139 (3,654) 156,131

Statement of Financial Position

as at 30 September 2012
                                             (Unaudited)  (Unaudited) (Audited)
                                                                               
                                            30 September 30 September  31 March
                                                                               
                                                    2012         2011      2012
                                                                               
                                       Note        £'000        £'000     £'000
                                                                               
Non current assets                                                             
                                                                               
Investments held at fair value                   179,677      112,731   161,655
through profit or loss                                                         
                                                                               
Current assets                                                                 
                                                                               
Other receivables                                  1,072        5,466       213
                                                                               
Cash and cash equivalents                         11,931        3,870         -
                                                                               
                                                  13,003        9,336       213
                                                                               
Total assets                                     192,680      122,067   161,868
                                                                               
Current liabilities                                                            
                                                                               
Other payables                                     5,375        5,071     5,737
                                                                               
                                                   5,375        5,071     5,737
                                                                               
Net assets                                       187,305      116,996   156,131
                                                                               
Equity attributable to equity                                              
   
holders                                                                        
                                                                               
Ordinary share capital                            15,764       15,968    15,560
                                                                               
Share premium account                             21,435       19,300    19,300
                                                                               
Special reserve                                   25,167       28,473    25,214
                                                                               
Capital redemption reserve                         5,577        5,164     5,572
                                                                               
Capital reserve                                  122,998       51,606    94,139
                                                                               
Revenue reserve                                  (3,636)      (3,515)   (3,654)
                                                                               
Total equity                                     187,305      116,996   156,131
                                                                               
Net asset value per share                 5       297.0p       183.2p    

250.9p

Cash Flow Statement

for the six months ended 30 September 2012

                                          (Unaudited)    (Unaudited)  (Audited)
                                                                               
                                           Six months     Six months Year ended
                                                ended          ended           
                                                                               
                                         30 September   30 September   31 March
                                                 2012           2011       2012
                                                                               
                                                £'000          £'000      £'000
                                                                               
Net cash inflow/(outflow) from                 10,020          (298)      

(439)

operating activities (note 6)                                                  
                                                                               
Net cash inflow/(outflow) before               10,020          (298)       
  -
financing                                                                      
                                                                               
Net cash inflow/(outflow) from                  2,297        (1,874)    (5,206)
financing activities                                                           
                                                                               
Net increase/(decrease) in cash and            12,317        (2,172)    (5,645)
cash equivalents                                                               
                                                                               
Cash and cash equivalents at start of           (182)          5,691      5,691
period                                                                         
                                                                               
Realised (losses)/gains on foreign              (204)            351      (228)
currency                                                                       
                                                                               
Cash and cash equivalents at period            11,931          3,870      

(182)

end                                                                        

Notes to the Financial Statements

1. ACCOUNTING POLICIES

The condensed financial statements of the Company have been prepared in
accordance with International Financial Reporting Standards ("IFRS"). These
comprise standards and interpretations approved by the International Accounting
Standards Board ("IASB"), together with interpretations of the International
Accounting Standards and Standing Interpretations Committee approved by the
International Accounting Standards Committee ("IASC") that remain in effect, to
the extent that IFRS have been adopted by the European Union.
The same accounting policies used for the year ended 31 March 2012 have been
applied.
2. INCOME
                                        (Unaudited)      (Unaudited)  (Audited)
                                                                               
                                         Six months Six months ended Year ended
                                              ended                            
                                                                               
                                       30 September     30 September   31 March
                                                                               
                                               2012             2011       2012
                                                                               
                                              £'000            £'000      £'000
                                                                               
Overseas income                                 328               85        196
                                                                               
Total income                                    328               85        196

3. INVESTMENT MANAGEMENT, MANAGEMENT AND PERFORMANCE FEES

                                        (Unaudited)      (Unaudited)  (Audited)
                                                                               
                                   Six months ended Six months ended Year ended
                                                                               
                                       30 September     30 September   31 March
                                                                               
                                               2012             2011       2012
                                                                               
                                              £'000            £'000      £'000
                                                                               
Investment management fee                       581              397        856
                                                                               
Management fee                                  271              176        379
                                                                               
Performance fee accrued in the                  945              284      1,923
period/year*                                                                   
                                                                               
                                              1,797              857      3,158
*In accordance with the performance fee arrangements described on pages 17 and
18 of the 2012 Annual Report, a performance fee of £2,320,000 was accrued at
the period end (six months ended 30 September 2011: £284,000; year ended 31
March 2012: £1,640,000). During the period an amount of £265,000 crystallised
and was paid.

Notes to the Financial Statements (continued)

4. EARNINGS/(LOSS) PER SHARE

The earnings/(loss) per share figure is based on the net gain for the six
months of £28,877,000 (six months ended 30 September 2011: £1,875,000 loss;
year ended
31 March 2012: £40,519,000 gain) and on 62,541,679 shares, (six months ended
30 September 2011: 64,268,350 and year ended 31 March 2012: 63,666,908) being
the weighted average number of shares in issue during the period.

The earnings/(loss) per share detailed above can be further analysed between revenue and capital as follows:

                                        (Unaudited)     (Unaudited)   (Audited)
                                                                               
                                         Six months      Six months  Year ended
                                              ended           ended            
                                                                               
                                       30 September    30 September    31 March
                                                                               
                                               2012            2011        2012
                                                                               
                                              £'000           £'000       £'000
                                                                               
Net revenue gain/(loss)                          18           (170)       (309)
                                                                               
Net capital gain/(loss)                      28,859         (1,705)      40,828
                                                                               
Net total gain/(loss)                        28,877         (1,875)      40,519
                                                                               
Weighted average number of shares in                                       
   
issue                                                                          
                                                                               
during the period/year                   62,541,679      64,268,350  63,666,908
                                                                               
                                              Pence           Pence       Pence
                                                                               
Revenue earnings/(loss) per share               0.0           (0.3)       

(0.5)

Capital earnings/(loss) per share              46.1           (2.6)       

64.1

Total earnings/(loss) per share                46.1           (2.9)       

63.6

5. NET ASSET VALUE PER SHARE

The net asset value per share is based on the net assets attributable to equity
shareholders of £187,305,000 (30 September 2011: £116,996,000; 31 March 2012: £
156,131,000) and on 63,056,347 shares, (30 September 2011: 63,870,537; 31 March
2012: 62,240,426) being the number of shares in issue at the period end.

Notes to the Financial Statements (continued)

6. RECONCILIATION OF PROFIT/(LOSS) BEFORE TAXATION TO NET CASH INFLOW/(OUTFLOW)
FROM OPERATING ACTIVITIES
                                         (Unaudited)     (Unaudited)  (Audited)
                                                                               
                                          Six months      Six months Year ended
                                               ended           ended           
                                                                               
                                        30 September    30 September   31 March
                                                                               
                                                2012            2011       2012
                                                                               
                                               £'000           £'000      £'000
                                                                               
Profit/(loss) before taxation                 28,901         (1,863)     

40,546

(Gains)/losses on investments held at                                      
   
fair value                                                                     
                                                                               
through profit or loss                      (30,669)             848   (43,986)
                                                                               
Movements in investments held at fair                                      
   
value                                                                          
                                                                               
through profit or loss                        11,128             417      1,236
                                                                               
(Increase)/decrease in other                    (47)              33       
  9
receivables                                                                    
                                                                               
Increase in other payables                       707             267      1,756
                                                                               
Net cash inflow/(outflow)                     10,020           (298)      (439)
7. TRANSACTION COSTS
Purchase and sale transaction costs for the six months ended 30 September 2012
were £196,000 (six months ended 30 September 2011: £229,000; year ended 31
March 2012: £597,000). These costs comprise mainly of commission costs.

8. COMPARATIVE INFORMATION

The financial information contained in this half year report does not
constitute statutory accounts as defined in section 435(1) of the Companies Act
2006. The financial information for the six months ended 30 September 2012 and
2011 has not been audited, or reviewed by the auditors.
The information for the year ended 31 March 2012 has been extracted from the
latest published audited financial statements. The audited financial statements
for the year ended 31 March 2012 have been filed with the Registrar of the
Companies. The report of the auditors on those accounts 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 statements
under section 498 of the Companies Act 2006.

Interim Management Report

PRINCIPAL RISKS AND UNCERTAINTIES

A review of the half year, including reference to the risks and uncertainties
that existed during the period, and the outlook for the Company can be found in
the Chairman's Statement beginning on page 3 and in the Review of Investments
beginning on page 4. The principal risks faced by the Company fall into ten
broad categories: objective and strategy; level of discount/premium; portfolio
performance; operational and regulatory; market price risk; liquidity risk;
shareholder profile; currency risk; the risk associated with the Company's loan
facility; and credit risk. Information on each of these areas is given in the
Business Review within the annual report and accounts for the year ended 31
March 2012. In the view of the Board these principal risks and uncertainties
are applicable to the remaining six months of the financial year as they were
to the six months under review.

RELATED PARTY TRANSACTIONS

During the first six months of the current financial year, no transactions with
related parties have taken place which have materially affected the financial
position or the performance of the Company.

DIRECTORS' RESPONSIBILITIES

The Board of Directors confirms that, to the best of its knowledge:

i. the condensed set of financial statements contained within the Half Year

Report has been prepared in accordance with applicable accounting

standards; and

ii. the interim management report includes a fair review of the information

required by 4.2.7R and 4.2.8R of the UK Listing Authority and Transparency

Rules.

The Half Year Report has not been reviewed or audited by the Company's auditors.

The Half Year Report was approved by the Board on 23 November 2012 and the above responsibility statement was signed on its behalf by:

THE RT HON LORD WALDEGRAVE OF NORTH HILL

CHAIRMAN
Frostrow Capital LLP
Company Secretary
23 November 2012

(Source: PR Newswire )
(Source: Quotemedia)

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