Final Results

RNS Number:0605S
Unicorn AIM VCT PLC
14 November 2003


UNICORN AIM VCT PLC

14 NOVEMBER 2003

Preliminary Results for the year ended 30 September 2003

CHAIRMAN'S STATEMENT

The progress of the Company's investment portfolio during the year has continued
to be encouraging. The net asset value (NAV) at 30 September 2003 was 107.43
pence per share after providing for a final dividend of 0.45 pence per share.  I
am pleased by the Fund's performance compared to other VCTs launched in the 2001
/02 tax year with Unicorn AIM VCT showing the greatest return in terms of the
increase in net asset value together with cumulative dividends paid and
proposed.

The Investment Manager had rightly been slow to invest in 2001/02 but took
advantage of improved conditions in your Company's target market and invested a
total of #5.07 million during the year in eight further qualifying stocks and
one follow-on investment. All the investments are outlined in the Investment
Manager's Review.  At the balance sheet date, your Company had a portfolio of
fourteen qualifying investments with a total cost of #8.97 million and a value
of #12.18 million, covering a broad spectrum of business sectors at various
stages of development. As qualifying investments have been made the cash on
deposit has been utilised. The Board and the Investment Manager remain confident
that the 70% qualifying target required by the Inland Revenue by September 2004
will be reached.

Net revenue attributable to shareholders for the period was #326,984 a
significant improvement on the previous period, reflecting a full twelve months
contribution since the original fundraising.  A loss of #182,579 was realised
upon the sale of investments from the non-qualifying portfolio following a shift
towards higher growth opportunities.

The Board's policy is to pay out as high a level of dividends as is possible
generated either from income received or capital profits realised on the sale of
investments.

Income is derived from both interest received from cash on deposit and dividends
from the investment portfolio.  The Board is pleased to recommend a final
dividend of 0.45 pence per share making 0.95 pence per share for the full year
(2002 - 0.5 pence per share). The final dividend will be paid on 27 January 2004
to shareholders on the Register at close of business on 5 January 2004.

The Company purchased an aggregate of 40,500 ordinary shares for cancellation at
an average price of 68.78 pence per share (net of costs).  This has reduced the
number of shares in issue to 34,959,234.  Since these purchases were made at a
discount to the underlying asset value of the Company, the NAV per share has
been enhanced by 0.12 pence per share, based on the year-end NAV.

In the interim statement I commented on the fact that during the period under
review UK equities yielded more than gilts. I am pleased to report that this
unwarranted degree of risk aversion has again proven to be a clear buying
signal. The Board continues to believe that the selected portfolio of smaller
companies offer income and capital growth opportunities especially at this stage
in the cycle.

Following the success achieved to date the Board is pleased to announce the
launch of an Offer for Subscription for the 2003/2004 tax year of up to
20,000,000 'S' shares. The 'S' share will offer existing and new investors
substantial tax reliefs and access to the successful range of Unicorn Investment
Funds whilst applying the Unicorn style to create a diversified portfolio of
smaller companies at an attractive stage in the stock market cycle.


Peter Dicks
Chairman

13 November 2003



INVESTMENT MANAGER'S REVIEW 

INTRODUCTION

The net asset value at the 30 September 2003 was 107.43 pence per share
representing an increase of 28.9% over the previous year. In contrast the FTSE
All Share and FTSE AIM indices have increased by 10.7% and 24.8% respectively.
Since launch the initial net asset value has increased by 13.7% from 94.50 pence
to 107.43 pence at 30 September 2003. This compares favourably with the
performance of the FTSE All Share and FTSE AIM indices, which have declined by
11.4% and 8.1% respectively as the exuberance of the late 1990's and early 2000
has given way to more realism.

INVESTMENT STRATEGY

The adopted investment policy has avoided over-ambitious start-ups in new
markets, which require a leap of faith and have often been priced as though they
had already succeeded. Instead, the Investment Manager has focused on the
strength of companies' balance sheets and the ability to pay progressive
dividends, thereby safeguarding capital and maximising the tax-free income
stream available to shareholders.

AIM MARKET REVIEW

Exploration companies and international listings have dominated the IPO market.
Investors appear to be chasing fools' gold. In a similar manner to the 'dot com'
era the exploration sector has enjoyed mouth-watering valuations on the basis of
projected earnings whilst disregarding the low probability of success. Once
again it seems likely that the only real winner of adopting the latest fashion
will be the stylists in the guise of advisors and brokers. Furthermore, we fail
to understand the logic behind the London Stock Exchange's attempt to
internationalise AIM or indeed investors' appetite for additional political,
economic and currency risk.

There has also been a growing trend for companies on the Official List to
transfer to AIM. In some instances this has been in order to exploit a lighter
regulatory framework. Whilst welcoming legislation designed to protect the
interests of minority shareholders further regulation is required to improve the
suitability criteria for companies seeking an AIM listing as approximately
three-quarters of the current constituents are loss making and over one-third of
the constituents have a market capitalisation of less than #5 million.

QUALIFYING INVESTMENTS

The performance of the qualifying investments made in the previous year has been
largely positive. The highlight of the year was the record profit posted by
Glisten following a widening of the product range and further operational
efficiencies. In addition, Lloyds British Testing declared a maiden dividend
reflecting the positive progress within the Engineering Services division. The
only set-back has been the trading performance of Aludel, which has not met
initial expectations and as a consequence a full provision has been made against
cost.

During the period under review only two IPO investments, Centurion Electronics
and Tellings Golden Miller Group, were made. Instead the Fund has exploited the
need for existing AIM listed companies to seek additional funding to support the
working capital demands associated with an increase in sales. Secondary
fundraisings have a number of advantages over IPOs as the business is often more
established, the management team have a track record in the public arena and the
valuation is typically more attractive due to the pressing need to raise new
money.

Centurion Electronics designs, markets and distributes in-car entertainment
systems. This profitable, niche operator, listed on AIM in order to increase
warehouse facilities and product development. The group has distribution
agreements to sell Plug & Play, the retail range, with a number of high street
retailers including Currys, Argos, Dixons & Halfords and OEM agreements for the
professional range with Fiat, Nissan & Toyota. Following rapid growth a further
follow-on investment was made later in the year to support expansion across
Continental Europe.

Tellings Golden Miller operates bus services under contract with Transport for
London (TfL) and Surrey County Council and luxury coach hire throughout the UK
and Europe. This highly cash generative business listed on AIM in order to
expand the number of TfL contracts which provide further exposure to the growing
London market and a visible, recurring, revenue stream in a regulated market.

The removal of hope from share price valuations has been a painful but necessary
adjustment towards building a base for positive returns in the future. This '
process' has enabled your Company to invest in Staffing Ventures, Huveaux and
Cobra Bio-Manufacturing at par or a discount to previous rounds despite a
significant improvement in the underlying profitability of each business.

Recognising the need for Staffing Ventures to establish critical mass and market
presence a follow-on investment was made enabling the group to fund the
acquisition of further bolt-on businesses, thereby increasing the payroll
outsourcing capability and customer base.   In October 2003 Staffing Ventures
announced that they had entered Heads of Terms with a third party which may lead
to an acquisition being made by the company. As the acquisition, if completed,
would effectively constitute a reverse take-over, the price has been suspended.

Huveaux was formed as a cash shell with the objective of building a broadly
based media group by means of acquisition and organic growth. To date the group
has acquired four businesses focusing upon business publishing and education.
All four businesses are cash generative, have the opportunity to expand the
number of titles, enjoy healthy margins and provide 'must have' content direct
to the customer.

Cobra Bio-Manufacturing is a niche contract manufacturer utilising specialist
expertise and technology to genetically engineer DNA and bacteria for phase I
and II clinical trials. In addition, the group seeks to secure royalties on the
sale of FDA approved products. Barriers to entry are high due to significant
up-front capital expenditure, a high fixed cost base and patented technology. As
a result of the group's growing order book the current manufacturing facility is
expected to become fully utilised and new money was raised to develop an
additional facility.

The historical trading losses associated with the new investments in Screen,
Intelliplus (since acquired by Eckoh Technologies) and Xpertise Group reflect
either complacency under an old regime or the cyclical nature of the business
and are not necessarily an indication of the future potential.

Screen serves the growing security & surveillance, emergency services and
defence markets where its respected brands service a high quality customer base.
The entire executive board of Screen has changed since June 2002 and the new
management team has stabilised the business, renegotiated banking facilities and
introduced more prudent accounting policies. Consequently the restructuring
charges and provisions are major contributors to the significant bottom line
loss reported.

Intelliplus Group provided specialist telecom solutions and web-based services
to SMEs. In August 2003 the Group received a recommended all share offer from
Eckoh Technologies. The complimentary businesses offer significant strategic,
commercial and financial synergies enabling the enlarged Group to sell a broader
range of voice, Internet and data services to a wider customer base.

Xpertise Group provides accredited technical IT training courses to both the
private and public sectors. Recognising the need to consolidate a fragmented and
poorly managed market, the board made a number of acquisitions designed to
increase economies of scale whilst providing national geographic coverage and
increasing the breadth of the training courses.

A pre-IPO investment was made in the Real Good Food Company, which was formed as
a vehicle to build a major food and distribution business. Three under
performing businesses have been acquired with combined sales in excess of #20m.
Upon consolidation there is the opportunity for the proven management team to
more fully utilise the current capacity by extending the product range, reducing
distribution costs and cross selling the product range across the enlarged
customer base. Shortly before the year-end the Real Good Food Company listed on
AIM at a 10% premium to the earlier round and a follow-on investment was made to
fund working capital and to support further opportunistic acquisitions.

NON-QUALIFYING PORTFOLIO

There have only been minor amendments to the non-qualifying portfolio since it
was first invested. We believe that the original portfolio continues to provide
shareholders with exposure to companies serving a diverse range of sectors that
offer significant potential for growth over the next 18 months. Overall, the
underlying holdings have benefited from sound business models, strong balance
sheets, sustainable yields and the general weakness of Sterling. We continue to
remain confident in the focus upon industrial rather than consumer related
stocks as the hangover from record levels of personal indebtedness associated
with mortgage refinancing and zero interest rate deals takes grip as general
levels of taxation rise.

The investment in the Unicorn Free Spirit Fund (Free Spirit) was increased
during the year. At the year end Free Spirit represented 14.79% of the portfolio
in-line with the 15% target in the prospectus.  It is pleasing to note that
since launch on 31 December 2001 Free Spirit has been the best performing fund
in the UK All Companies category, delivering a return of 56.18% in the period to
30 September 2003. This compares favourably to the FTSE All Share Index which
decreased by 14.62% over the comparative period. The out performance reflects a
contrarian investment approach demonstrating that you cannot have great fund
performance from a consensus driven approach.

In the current low interest rate environment there is an appetite for leveraged
buy-outs and at 30 September 2003 there were 40 UK listed companies either
subject to a bid or that have received an approach from a third party. Whilst
recognising that private equity firms can play a useful role in correcting
market inefficiencies, institutional investors need to act as long-term owners
of businesses and recognise that a premium does not always reflect fair value.
Moreover the management involved in such deals, who coincidentally should know
the business better than anyone else, face a potential conflict between their
fiduciary duties to investors who want the greatest value for their business and
the potential returns of the new vehicle. It is worth asking what the incumbent
management teams can do differently working for venture capitalists that they
could not do as a quoted plc.

PROSPECTS

The appearance of new issues has gathered momentum over recent months. Sentiment
has improved allowing investors to view the glass as half full rather than half
empty. Increased market confidence should enable your Company to achieve its
investment objectives over the next 12 months.




STATEMENT OF TOTAL RETURN

(incorporating the Revenue Account of the Company) for the year ended 30
September 2003


                                Year ended 30 September 2003           Period ended 30 September 2002
                                Revenue    Capital     Total          Revenue     Capital       Total
                    Notes          #          #          #               #           #            #

Unrealised gains                       -  9,090,625  9,090,625               -  (3,699,372)  (3,699,372)
and losses on
investments

Realised gains and                     -  (182,579)  (182,579)               -      131,785      131,785
losses on
investments

Income                           835,402               835,402         627,729            -      627,729

Investment              3      (164,281)  (492,843)  (657,124)       (120,162)    (360,487)    (480,649)
management fees

Other expenses                 (344,137)          -  (344,137)       (317,095)            -    (317,095)
                               ---------  ---------  ---------       ---------  -----------  -----------

Net return on                    326,984  8,415,203  8,742,187         190,472  (3,928,074)  (3,737,602)
ordinary activities
before taxation

Tax on ordinary                        -          -          -               -            -            -
activities
                               ---------  ---------  ---------       ---------  -----------  -----------

Return on ordinary               326,984  8,415,203  8,742,187         190,472  (3,928,074)  (3,737,602)
activities after
taxation                4

Dividend                5      (332,163)          -  (332,163)       (174,999)                 (174,999)
                               =========  =========  =========       =========  ===========  ===========

Transfer to/(from)               (5,179)  8,415,203  8,410,024          15,473  (3,928,074)  (3,912,601)
reserves
                               =========  =========  =========       =========  ===========  ===========
Return per ordinary                0.93p     24.06p     24.99p           0.79p     (16.21)p     (15.42)p
share



The revenue column is the profit and loss account of the Company.

All revenue and capital items in the above statement derive from continuing
operations.



BALANCE SHEET 
as at 30 September 2003
                                                 as at  30 September           as at 30 September 2002
                                                                2003
                                                                   #                                 #
Fixed assets
Investments                                               31,129,757                   16,336,801

Current assets
Debtors and prepayments                                      109,327                            61,163
Current investments                                        6,612,308                        13,034,936
Cash at bank and short term                                   56,883                            94,055
deposits
                                                         -----------                      ------------
                                                          6,778,518                         13,190,154

Creditors: amounts falling due                             (350,258)                         (350,899)
within one year
                                                         -----------                      ------------
Net current assets                                         6,428,260                        12,839,255
                                                         ===========                      ============
Net assets                                                37,558,017                        29,176,056
                                                         ===========                      ============
Capital and reserves
Called up share capital                                      349,592                           349,997
Capital redemption reserve                                       405                                 -
Special reserve                                           32,710,597                        32,738,660
Capital reserve - realised                               (2,689,415)                         (228,702)
Capital reserve - unrealised                               7,176,544                       (3,699,372)
Revenue reserve                                               10,294                            15,473
                                                         ===========                      ============
Total shareholders' funds                                 37,558,017                        29,176,056
                                                         ===========                      ============
Net asset value per ordinary share                           107.43p                            83.36p



The financial statements were approved by the Board of Directors on 13 November
2003 and were signed on its behalf by:

P F Dicks
Director




CASH FLOW STATEMENT
for the year ended 30 September 2003

                                                       Year ended 30                   Period ended 30
                                                      September 2003                    September 2002
Operating activities                                               #                                 #
Net investment income                                        349,597                           293,791
Dividend income                                              430,738                           280,215
Investment management fees paid                            (657,124)                         (480,649)
Other cash payments                                        (320,193)                         (148,635)
                                                         -----------                       -----------
Net cash outflow from operating                            (196,982)                          (55,278)
activities

Investing activities
Acquisition of investments                               (9,576,526)                      (20,436,956)
Disposal of investments                                    3,691,616                           532,568
                                                         -----------                       -----------
                                                         (5,884,910)                      (19,904,388)

Dividends
Payment of dividends                                       (349,845)                                 -
                                                         -----------                       -----------
Cash outflow before financing and                        (6,431,737)                      (19,959,666)
liquid resource management

Financing
Issue of ordinary shares                                           -                        33,088,657
Purchase of own shares                                      (28,063)                                 -
                                                         -----------                       -----------
                                                            (28,063)                        33,088,657

Management of liquid resources
(Decrease)/increase in monies held                         6,422,628                      (13,034,936)
pending investment
                                                         ===========                      ============
(Decrease)/increase in cash for the                         (37,172)                            94,055
year
                                                         ===========                      ============



Notes


1.   The audited results for the year ended 30 September 2003 have been
     prepared under the historical cost convention, modified to include the
     revaluation of fixed asset investments.  These accounts have been prepared 
     in accordance with applicable accounting standards and on the assumption 
     that the Company maintains VCT status.

2.   These are not full accounts in terms of section 240 of the Companies Act 
     1985.  The Annual Report for the year to 30 September 2003 will be
     sent to shareholders shortly and will then be available for inspection at
     Gossard House 7-8 Savile Row, London W1S 3PE, the registered office of the
     Company.    Statutory accounts will be delivered to the Registrar of 
     Companies after the Annual General Meeting.  The audited accounts for the 
     year ended 30 September 2003 contain an unqualified audit report.

3.   In accordance with the policy statement published under "Management, Fees 
     and Administration" in the Company's prospectus dated 2 October 2001, the 
     Directors have charged 75% of the investment management expenses to
     the capital reserve.

4.   The revenue return per Ordinary Share is based on the net revenue
     from ordinary activities after tax of #326,984 and is based on 34,981,287
     ordinary shares, being the weighted average number of ordinary shares in 
     issue during the period.  There were 34,959,234 ordinary shares in issue at 
     30 September 2003.

5.   The final dividend of 0.45 pence per ordinary share will be paid on
     27 January 2004 to shareholders on the register on 5 January 2004.  This
     together with the interim dividend of 0.5 pence per ordinary share makes 
     the total dividend paid for the full year 0.95 pence per ordinary share.

6.   The Annual General Meeting of the Company will be held at 11.00 am
     on 13 January 2004 at Gossard House, 7-8 Savile Row, London W1S 3PE.


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