EKV Electra Kingswy

RNS Number:9911C
Electra Kingsway VCT PLC
15 September 2004

Electra Kingsway VCT Plc ("The Company" or "the Fund" or "Electra Kingsway VCT")

--------------------------------------------------------------------------------
15 September 2004

Electra Kingsway VCT Plc announces that a newsletter reporting upon recent
events will be posted to shareholders shortly. The majority of the contents of
this newsletter are reported below:

Key Features


Unaudited net asset value per share at 31 March 2004

                                                                        117.45p

Portfolio Breakdown at 31 March 2004

Cash

                                                                           #5.3m

Fixed income securities

                                                                           #5.4m

Non-qualifying investments

                                                                           #2.7m

Qualifying investments

                                                                          #12.0m

Investments to 31 August 2004


                                                                            Cost
                        April 2002 Advanced Medical Solutions              #0.50m
                       2002 - 2004 Electra Active Management               #1.50m
                         July 2002 Nectar Taverns                          #0.75m
                      October 2002 Signature Brands Group                  #0.75m
                       2002 - 2003 Centurion Electronics                   #0.70m
                       2002 - 2004 Electra Investment Trust                #1.50m
                       2003 - 2004 Berkeley Morgan                         #0.96m
                          May 2003 BioProgress                             #0.30m
                          May 2003 Keycom                                  #0.95m
                         July 2003 Online Travel                           #0.90m
                     November 2003 James & James                           #0.75m
                       2003 - 2004 Media Square                            #1.23m
                     December 2003 Music Copyright Solutions               #0.50m
                     December 2003 Immedia Broadcasting                    #0.28m
                      January 2004 Happy Times                             #0.75m
                      January 2004 Quadnetics                              #0.40m
                        April 2004 Hallmarq                                #0.75m
                        April 2004 ePOINT                                  #0.55m
                         June 2004 Brady                                   #0.75m
                                                                          #14.77m





Investment Review

It is pleasing to report further progress to shareholders since our last
Newsletter in February this year. As detailed in the interim statement, the
Fund's NAV increased from 109.8p at 31 December 2003 to 117.45p at 31 March
2004, amounting to a total return of 119.1p. This positive return is most
satisfactory against a backdrop of flat performance during 2004 for all major
equity indices.

Since 31 March 2004, four additional qualifying investments have been completed.
Three of the investments were in new companies, as detailed on the following
pages. The fourth was a follow-on investment in Media Square, where the
management team have continued to successfully implement their buy and build
strategy. Importantly for investors, this progress has ensured that the Fund has
achieved its target of investing more than 70% of the original monies raised,
comfortably ahead of the three year qualifying period, which ends on 30
September 2004.

A number of other trends are identifiable:

Firstly, having a generalist investment focus continues to be an advantage for
shareholders, since it enables the Investment Manager to acquire a healthy
diversification in the portfolio. February's Newsletter saw a preponderance of
media related investments. This Newsletter highlights two investments in the
technological hardware sector, and one in the software sector.

Secondly, it is widely anticipated that there will be an increase in the number
of VCT offerings over the next two tax years. This increased competition is
likely to favour those Investment Managers, like Electra Partners, which have
the network and the resources to identify and develop unquoted investment
opportunities, as opposed to those who concentrate solely on investments listed
on AIM.

Lastly, as is illustrated overleaf, the Investment Manager has maintained a
consistent approach of investing in more established companies which enjoy the
options that come from positive cash flow. Such financial strength serves the
expansion plans well, as it provides additional protection in an environment
where interest rates and most commodity prices are increasing.







Hallmarq

Exploiting expertise previously gained working in the human research university
MRI market, Hallmarq has developed an affordable specialist MRI scanner for
veterinary use in the equine market. Lameness in horses is common with an
estimated 10% of the horse population affected every year, and yet precise
diagnosis is often difficult.

The economic value of performance horses and the emotional pull of other horses,
combined with the growing market for animal insurance, means that equine
veterinary practices see the provision of MRI scanning as a part of their
diagnostic offering. Hallmarq has already obtained firm contracts with a number
of the leading equine veterinary practices around the world and hopes to
accelerate the roll-out of its order book.

The key attraction of the business model is that Hallmarq receives long-term
monthly payments based on volume of the usage. While there will be an initial
learning curve, it is believed that the development of the MRI Scanner for
veterinary use will reach levels of human usage and its diagnostic role will
expand.

Attracted by Hallmarq's strong order book and leading-edge technology, the Fund
invested #750,000 for an 11.2% stake in April 2004.

ePOINT

Located near Glasgow, ePOINT is a long-standing player in the design and
production of interactive customer terminals for UK retail, health and leisure
companies, generating approximately #7.9 million of sales for the year ended 30
September 2003. ePOINT hopes to strengthen its performance through the
successful introduction of a new generation of pub games as well as capitalizing
on the Government's Patient Power plan which includes the provision of
entertainment systems to the hospital bedside. Moreover, utilizing its expertise
and expanding its product range, ePOINT has also recently sought to establish
its presence in the digital photography development market with contracts to
supply leading world Original Equipment Manufacturers with counter-top and
stand-alone terminals.

To date, the market has responded positively to ePOINT's product offering.

As a result, ePOINT raised #3.4 million in April 2004 to support its development
and marketing. The Fund took a 4.75% stake for #550,000.

Brady

Brady is a leading provider of specialist, end-to-end software to the metals
trading industry. With a distinctive in-depth approach to all aspects of
trading, Brady is able to supply a uniquely comprehensive 'front office to
physical delivery' package. It has taken Brady several years to acquire the
necessary expertise to gain the confidence of major trading companies which
typically use their own in-house developed systems. Recent large contract wins,
including HSBC Bank, have demonstrated, however, the marketplace's demand and
receptiveness for up-to-date technology and have crowned Brady as leader in the
sector.

In July 2004, although cash rich with cash of #1.8 million on the balance sheet,
Brady came to AIM and raised a further #2.5 million to increase its financial
and market visibility and also to facilitate the acquisition of a smaller rival,
Colplan Systems. This provides a potential expansion of its product suite to the
newly emerging electricity trading market, as well as deepening its marketing
reach.

The Fund invested #750,000 for a 3.7% stake in June 2004. For the year ended 31
December 2003, Brady generated sales of #2.4 million and operating profits of
#609,000.

Important Information

The only purpose of this Newsletter is to provide information to existing
shareholders of Electra Kingsway VCT Plc. This Newsletter does not constitute or
form any part of an offer or invitation to subscribe for or dispose of
securities, nor shall this Newsletter form the basis of or be relied upon in
connection with any contract. Investors are strongly advised to seek independent
professional advice when considering an investment in a Venture Capital Trust ('
VCT').

Past performance is no guarantee of future investment returns. The price of
investments, and the income from them, can fall as well as rise. An investor may
not get back the original amount invested. An investment in a VCT such as
Electra Kingsway VCT, may carry a higher risk than many other forms of
investment. Rates of tax relief may be changed by future legislation.
Investments made by a VCT will normally be in companies where securities are not
publicly traded or fully marketable and therefore may be difficult to realise.
Loss of Inland Revenue VCT approval would be likely to reduce the value of the
shares.



For further information:

Nick Ross, Director, Electra Kingsway VCT Plc          +44 (0)20 7831 6464

Michael George, Electra Quoted Management Ltd          +44 (0)20 7831 6464


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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