Final Results

Lowland Investment Co PLC 9 November 2001 9 November 2001 LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2001 Financial Highlights Unaudited Audited Year ended Year ended Change 30 September 30 September 2001 2000 Earnings per ordinary share 18.18p 14.79p +22.92% Net dividends per ordinary share: Interim paid 6.00p 5.50p +9.09% Final recommended 8.75p 8.50p +2.94% -------- -------- ----------- Total 14.75p 14.00p +5.36% Net asset value per ordinary share 466.53p 486.54p (4.11)% Extracts from the Chairman's Statement Review In the first six months of the financial year Lowland's net asset value rose by 12.3% compared to a fall of 10.5% in the FTSE All-Share Index. However, in the second six months, the net asset value fell by 14.7% compared to a fall in the index of 13.7%. For the year as a whole Lowland's net asset value declined by 4.1%, while the FTSE All-Share was down by 22.7%. The events of 11 September in New York and Washington changed the outcome of the year. Prior to this it had been a good year for value and income orientated investors. The extreme over-valuation of the 'new' economy stocks had unwound at a time when many 'old' economy stocks were showing reasonable growth. The Trust had benefited from focusing on companies with sound prospects that were neglected when Technology, Media and Telecoms (TMT) shares had most of the attention. The terrorist attack has led to a reassessment of risk by investors. Stocks in the insurance sector and aerospace sector have particularly suffered. Dividend The earnings per share for the year were 18.18p, an increase of 22.9% over last year's 14.79p. The recommended final dividend is 8.75p, making 14.75p per ordinary share for the year, an increase of 5.4%. This compares with dividend growth from the FTSE All-Share over the period of 2.6%. -MORE- - 2 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2001 Lowland's annual compound dividend growth over the last ten years has been 6.3% compared with the 4.7% from the FTSE All-Share. This has been achieved by growing the asset value by more than the FTSE All-Share while investing in higher yielding shares. Lowland's dividend yield on the share price was 3.4% at the year end, while the FTSE All-Share was yielding 2.9%. It is one of the Board's objectives to continue to increase the dividend. Share Buy Backs There were no further purchases of the Company's own shares in the second half of the year, as the discount to net asset value had narrowed with the share price rising. However, in the first half of the year, 125,000 shares were purchased by the Company for cancellation at an average price of 413p. This marginally enhanced the net asset value and compares with a share price of 440p at the year end. A resolution to renew the authority is included in the Notice of the Annual General Meeting. There is also a resolution to allot shares up to 5% of the issued share capital. This would only be used if the shares were trading at a premium and no natural sellers could be found. Borrowings During the year the gearing, being net borrowings as a percentage of net asset value, was marginally increased from 23.8% to 24.5%. It was decided in June, as a result of the falls in interest rates, to fix £6,000,000 of these borrowings for three years at 6.4%. The Board may increase the amount of fixed borrowings during the coming year but the overall level of gearing is unlikely to be increased above 30%. Outlook The future course of the global economy and domestic interest rates, particularly in the light of events in the USA, is uncertain. However, there are opportunities in Lowland's usual investment arena and the Board does not intend to change the investment policy. In this investment environment the manager will seek to invest in companies that are likely to make progress in this difficult time for corporate profits. Lowland's net asset value has outperformed the FTSE All-Share significantly over the past three years. James Henderson, the investment manager, and his immediate colleagues at Henderson Global Investors deserve our thanks and congratulations. The Board believes that Lowland, with its relatively low charges, above average yield and growing dividend, combined with its record of capital growth, should continue to be a sound long term investment. Ian M Trotter Chairman 8 November 2001 -MORE- - 3 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2001 Statement of Total Return (incorporating the revenue account) for the year ended 30 September 2001 Unaudited Audited Year ended Year ended 30 September 2001 30 September 2000 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital - (4,720) (4,720) - 2,425 2,425 (losses)/gains from investments Income from fixed 6,522 - 6,522 5,715 - 5,715 asset investments Other interest 84 - 84 119 - 119 receivable and similar income --------- --------- --------- --------- --------- --------- Gross revenue and 6,606 (4,720) 1,886 5,834 2,425 8,259 capital (losses)/ gains Management fee (745) - (745) (688) - (688) Other (204) - (204) (249) - (249) administrative expenses --------- --------- --------- --------- --------- --------- Net return/(loss) 5,657 (4,720) 937 4,897 2,425 7,322 on ordinary activities before interest payable and taxation Interest payable (2,073) - (2,073) (1,859) - (1,859) --------- --------- --------- --------- --------- --------- Net return/(loss) 3,584 (4,720) (1,136) 3,038 2,425 5,463 on ordinary activities before taxation Taxation on net - - - - - - return on ordinary activities --------- --------- --------- --------- --------- --------- Net return/(loss) 3,584 (4,720) (1,136) 3,038 2,425 5,463 on ordinary activities after taxation Dividends - ordinary shares Over provision in 11 - 11 - - - prior year Interim paid - (1,182) - (1,182) (1,101) - (1,101) 6.00p (2000: 5.50p) Final proposed - (1,723) - (1,723) (1,685) - (1,685) 8.75p (2000: 8.50p) --------- --------- --------- --------- --------- --------- (2,894) - (2,894) (2,786) - (2,786) --------- --------- --------- --------- --------- --------- Transfer to/(from) 690 (4,720) (4,030) 252 2,425 2,677 reserves ====== ====== ====== ====== ====== ====== Return per ordinary 18.18p (23.95p) (5.77p) 14.79p 11.80p 26.59p share ====== ====== ====== ====== ====== ====== The revenue columns of this statement represent the revenue accounts of the Company. -MORE- - 4 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2001 Balance Sheet at 30 September 2001 Unaudited Audited 2001 2000 £'000 £'000 Fixed Asset Investments - Listed in United Kingdom 112,182 115,292 - Listed overseas 2,444 4,423 - Unquoted at directors' valuation 759 1,034 ---------- ---------- 115,385 120,749 ---------- ---------- Current Assets Debtors 1,411 978 Cash at bank 249 152 ---------- ---------- 1,660 1,130 Creditors: amounts falling due within one year (13,161) (19,446) ---------- ---------- Net current liabilities (11,501) (18,316) ---------- ---------- Total assets less current liabilities 103,884 102,433 Creditors: amounts falling due after more than one year (12,000) (6,000) ---------- ---------- Total net assets 91,884 96,433 ---------- ---------- Capital and reserves Called-up share capital 4,924 4,955 Share premium 778 778 Other reserves 82,803 88,011 Revenue reserve 3,379 2,689 ---------- ---------- Total equity shareholders' funds 91,884 96,433 ---------- ---------- Net asset value per ordinary share 466.53p 486.54p -MORE- - 5 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2001 Cash Flow Statement For the year ended 30 September 2001 Unaudited Audited 2001 2001 2000 2000 £'000 £'000 £'000 £'000 Net cash inflow from operating 5,398 4,873 activities Servicing of finance Interest paid (1,975) (1,876) ---------- ---------- Net cash outflow from servicing (1,975) (1,876) of finance Taxation UK tax paid (46) - Overseas tax recovered - 13 ---------- ---------- Net tax (paid)/recovered (46) 13 Financial Investment Purchase of investments (47,905) (42,572) Sales of investments 48,411 46,369 ---------- ---------- Net Cash inflow from financial 506 3,797 investment Equity dividends paid (2,856) (2,810) Financing Purchases of own shares (519) (5,764) Repayment of short term loan (6,421) 1,521 Drawdown of three year term loan 6,000 - ----------- ----------- (940) (4,243) ---------- ---------- Increase/(decrease) in cash 87 (246) ---------- ---------- Reconciliation of net cash flow to movement in net debt Increase/(decrease) in cash as 87 (246) above Cash outflow/(inflow) from 421 (1,521) decrease/(increase) in loans Exchange movements 10 (18) --------- --------- Movement in net debt 518 (1,785) Net debt at 1 October (22,769) (20,984) ---------- ---------- Net debt at 30 September (22,251) (22,769) ---------- ---------- -MORE- - 6 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2001 Notes : 1. Share Buy Backs During the year the Company made authorised market purchases for cancellation of 125,000 ordinary shares of 25p. 2. Investment Company Status The Company regained investment company status within the meaning of Section 266 of the Companies Act 1985 in December 2000. It continued to conduct its affairs as an investment trust for taxation purposes under Section 842 of the Income and Corporation Taxes Act 1988. As such it is necessary to continue to present the accounts in accordance with the SORP. Under the SORP, the financial performance of the Company is presented in a statement of total return in which the revenue column is the profit and loss account of the Company. The revenue column excludes net profit on disposals of investments of £ 7,879,000 (2000: £8,505,000) as calculated by reference to their carrying amounts at 30 September 2000. The Companies Act and/or FRS3 would ordinarily require this amount to be included in the profit and loss account. However, in the opinion of the directors, this would be misleading because it would obscure and distort both the revenue and capital performance of the Company, and would not show clearly the revenue profits emerging to be distributable by way of dividend. The directors therefore consider that these departures from the specific provisions of Schedule 4 of the Companies Act relating to the form and content of accounts for companies other than investment companies and these departures from accounting standards are necessary to give a true and fair view. The departures have no effect on total return or on the balance sheet. 3. Dividend The recommended final dividend of 8.75p net per ordinary share, subject to approval at the Annual General Meeting, is payable on 19 December 2001 to shareholders on the register of members at the close of business on 23 November 2001. The Company's shares will be quoted ex dividend on 21 November 2001. 4. Return per Ordinary Share Revenue return per ordinary share is based on the net return on ordinary activities after taxation of £3,584,000 (2000: £3,038,000) and on the weighted average 19,709,041 ordinary shares in issue during the year (2000: 20,543,924). Capital return per ordinary share is based on net capital losses of £4,720,000 (2000: £2,425,000 gain) and on the weighted average 19,709,041 ordinary shares in issue during the year (2000: 20,543,924). -MORE- - 7 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2001 5. 2001 Accounts The preliminary figures for the year ended 30 September 2001 are an extract from the latest accounts of the Company. These accounts have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. 6. 2000 Accounts The figures and financial information for the year ended 30 September 2000 are extracted from the latest published accounts of the Company and do not constitute statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement either under Section 237(2) or 237(3) of the Companies Act 1985. 7. Annual General Meeting The Annual General Meeting will be held on Tuesday, 18 December 2001 at 3.30pm at 4 Broadgate, London, EC2M 2DA. - ENDS - For further information please contact : James Henderson Henderson Global Investors Telephone: 020 7818 4100 Vicki Staveacre Henderson Press Office Telephone: 020 7818 4222

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