Interim Results

GARTMORE DISTRIBUTION TRUST PLC Announcement of Interim Results for the six months to 31 October 2003 The Directors announce the Group's results for the six months to 31 October 2003 as follows:- Overview * In aggregate, 84.2% of GDT Securities PLC Zero Dividend Preference shares in issue at 30 April 2002 have been redeemed at their accrued pre-determined capital entitlement. * GDT Securities PLC Zero Dividend Preference shares are 34% covered for full repayment on 30 April 2004. Total Assets (at bid prices) need to rise by 290% if these shares are to be paid their full pre-determined capital entitlement on that date. * Holders of Ordinary shares will receive no return unless the Zero Dividend Preference shareholders have been paid in full. Chairman's Statement During the period under review it is encouraging to note that the total assets of the Company rose from £5.1million to £7.5 million. This reflects a recovery in the split capital investment trust market and in the underlying value of the Company's remaining income share holdings. After reaching a multi-year low in mid-March 2003, the UK equity market rebounded strongly over the period after an early resolution to the main conflict in Iraq. A revival in merger and acquisition activity combined with encouraging signs that the global economic background is improving have provided a further fillip for share prices. As the UK equity market rebounded, sentiment in the income share market has improved, albeit from a low base. This reflects the recovery in underlying net asset values whilst the spectre of further dividend cuts has receded. In turn, liquidity constraints have become less acute as new investors have entered the market to capitalise on valuation anomalies. Despite this improvement in liquidity, spreads between mid and bid prices on all but the most highly rated `AAA' trusts are still substantial. We are, therefore, continuing to value the Company's remaining income share portfolio each month based on bid prices. The Company's investment portfolio now comprises income shares of which 70% are rated Category `A' trusts. Of these, 41% are `AAA' or `AA' rated, which means that these funds have no more than 5% of their assets invested in other split capital investment trusts, and 29% are `A' rated (between 5% and 10% in other splits). The recovery in the income share market has meant that the price of the Zeros rose from 23.5p as at 30 April 2003 to 40p as at 31 October 2003, an increase of 70%. The net asset value of the Zeros rose from 31.2p to 45.4p over the review period, an increase of 45%. In view of the Zeros ultimate redemption date of 30 April 2004, the Managers have accelerated their realisation programme, subject to ongoing liquidity constraints. The Managers continue to employ a rigorous investment process with the aim of ascertaining a realistic assessment of the fair realisable value of the remaining holdings, and when such values are attainable. During the review period, proceeds from the realisation of income share holdings amounted to £1.2 million. We would expect the value of the Company's remaining income shares to respond positively to any further improvement in the broader UK equity market and the Managers will continue to seek appropriate realisation opportunities in the run up to 30 April 2004. Based on current market conditions, it is unlikely that the pre-determined capital entitlement of the Zero Dividend Preference shares, of 131.30p at 30 April 2004, will be achieved. I would like to reiterate the statement that I made in the Annual Report, that consideration is being given by the Board to all strategic options which may be in the best interests of all shareholders prior to the Zero shareholders' ultimate redemption date of 30 April 2004. The conclusions to these considerations will be circulated to all shareholders at the appropriate time. Group Total Return Six Months to 31 October 2003 Revenue Capital Total Return £'000 £'000. £'000 Income and Capital Profits/(Losses) Dividends and other income 701 - 701 Net profit on investments - 1,734 1,734 ------------ ------------ ------------ Return before Expenses and Taxation 701 1,734 2,435 Expenses Management fees - - - Other expenses (90) - (90) ------------ ------------ ------------ Return before and after Taxation 611 1,734 2,345 Non Equity Minority interest - (931) (931) ------------ ------------ ------------ Return to Equity Shareholders 611 803 1,414 ------------ ------------ ------------ Transferred to Reserves 611 803 1,414 ------------ ------------ ------------ Return per Ordinary share 0.6p* 0.7p 1.3p Notes * Distributable reserves are insufficient to meet the full redemption value of the Zero Dividend Preference shares. Therefore, in accordance with s264 of the Companies Act 1985, the Company is prevented from making a distribution to its Ordinary shareholders. In addition, despite being an investment company, the Company is prevented from making a distribution to its Ordinary shareholders under s265 of the Companies Act 1985 as its assets are less than one and a half times the aggregate of its liabilities. The revenue column shown above represents the profit and loss account of the Group. All revenue and capital items derive from continuing activities. Management fees (which were waived with effect from 13 May 2002) and all administrative expenses are charged 100% to the Revenue account. Group Total Return (comparative) Six Months to 31 October 2002 Revenue Capital Total Return £'000 £'000. £'000 Income and Capital Profits/(Losses) Dividends and other income 1,712 - 1,712 Net loss on investments - (14,881) (14,881) ------------ ------------ ------------ Return before Expenses and Taxation 1,712 (14,881) (13,169) Expenses Management fees (24) - (24) Other expenses (123) - (123) ------------ ------------ ------------ Return before and after Taxation 1,565 (14,881) (13,316) Non Equity Minority interest - (1,077) (1,077) ------------ ------------ ------------ Return to Equity Shareholders 1,565 (15,958) (14,393) ------------ ------------ ------------ Transferred to/(from) Reserves: 1,565 (15,958) (14,393) ------------ ------------ ------------ Return per Ordinary share 1.4p (14.5)p (13.1)p Group Balance Sheet At At 31 October 30 April 2003 2003 £'000 £'000 Current Assets Listed investments at valuation 3,847 3,317 Debtors 179 269 Cash at bank 3,506 1,638 ------------ ------------ 7,532 5,224 Creditors: amounts falling due within one year (43) (80) ------------ ------------ Net Assets 7,489 5,144 ------------ ------------ Capital and Reserves Called-up share capital 1,098 1,098 Other reserves: Special reserve 159,993 159,993 Capital reserve - realised (151,582) (137,782) Capital reserve - unrealised (27,717) (42,320) Revenue reserve 4,982 4,371 ------------ ------------ Equity Shareholders' Shortfall (13,226) (14,640) Non Equity Minority Interest 20,715 19,784 Entitlement ------------ ------------ Capital Employed 7,489 5,144 ------------ ------------ Net Asset Value/(deficit) per share (as per FRS4): Ordinary shares (12.0)p (13.3)p Zero Dividend Preference Shares 125.5p 119.8p Available Assets per share (as per Articles): Ordinary shares Nil Nil Zero Dividend Preference Shares 45.4p 31.2p Group Cash Flow Six Months Six Months to to 31 October 31 October 2003 2002 £'000 £'000 Operating Activities Net dividends 757 2,638 and interest received from investments Interest received on deposits 41 268 Expenses paid, allocated to revenue (110) (297) ------------ ------------ Net cash inflow from operating 688 2,609 activities ------------ ------------ Financial Investment Disposals of investments 1,180 37,727 ------------ ------------ Net cash inflow from financial 1,180 37,727 investment ------------ ------------ Financing Redemption of GDT Securities ZDP shares - (91,190) ------------ ------------ Net Cash Inflow/(Outflow) 1,868 (50,854) ------------ ------------ Reconciliation of Net Cash Inflow/ (Outflow) to Movement in Net Cash Balances Balance brought forward 1,638 55,882 Net cash inflow/(outflow) 1,868 (50,854) ------------ ------------ Balance at 31 October 3,506 5,028 ------------ ------------ Comprising: Cash at bank 3,506 5,028 ------------ ------------ Notes to the Accounts Full statutory accounts for the year to 30 April 2003 included an unqualified audit report and have been filed with the Registrar of Companies. There have been no changes to accounting policies since 30 April 2003. Listed investments, which are treated as current assets, have been valued at bid prices. Total return per Ordinary share has been calculated on the return to Ordinary shareholders of £1,414,000 (2002: negative return of £14,393,000) and 109,842,768 Ordinary shares (2002: 109,842,768) in issue throughout the period. Listed investments are all listed in the UK. FRS 4 requires the accounts to be presented in a way that reflects the financial obligations of the Company to its subsidiary, GDT Securities PLC. Accordingly, Net Asset Values per share have been calculated as per FRS4 on attributable assets and shares in issue at the period end as follows: At At 31 October 30 April 2003 2003 £'000 £'000 16,510,947 (104,223,106) 20,715 19,784 GDT Securities Zeros 109,842,768 (109,842,768) Ordinary (13,226) (14,640) shares ------------ ------------ 7,489 5,144 ------------ ------------ Interim Report The Interim Report for the six months to 31 October 2003 will be posted to shareholders shortly. Copies will be available from the Registered Office of the Company: Gartmore House, 8 Fenchurch Place, London EC3M 4PB. Gartmore Distribution Trust PLC Gartmore Investment Limited - Secretaries 27 November 2003

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