Final Results

Lowland Investment Co PLC 06 November 2003 5 November 2003 LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2003 Financial Highlights Unaudited Audited Year ended Year ended 30 September 30 September Change 2003 2002 Earnings per ordinary share 15.6p 15.2p 2.6% Net dividends per ordinary share: Interim paid 6.5p 6.3p 3.2% Final recommended 10.5p 9.2p 14.1% -------- -------- -------- Total 17.0p 15.5p 9.7% Net asset value per ordinary 520.5p 405.2p 28.5% share Extracts from the Chairman's Statement Review During the year the Company's net asset value rose from 405.2p to 520.5p per share, an increase of 28.5%, compared with a rise of 12.6% in the FTSE All-Share Index over the same period. This favourable positive performance follows two years when both the net asset value and the Index declined. Taking the three years as a whole, the net asset value shows a rise of 7.0% compared with a decline in the Index of 33.1%. Stock market returns have benefited from the recovery in investor confidence brought about by a gradual pick up in global economic activity. Medium and smaller companies in aggregate have witnessed particularly strong share price recoveries. The FTSE Small Cap Index (excluding Investment Trusts) was up 36.4% over the year. This factor, coupled with a reasonable level of gearing, has helped Lowland participate strongly in the upward movement in equity prices. -MORE- - 2 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2003 Dividend The earnings per share for the year were 15.6p, a rise of 2.6% from the 15.2p achieved last year. The recommended final dividend is 10.5p per share, making a total dividend per ordinary share of 17.0p, an increase of 9.7% from last year's 15.5p. The Board recently reviewed the distribution policy. As the Company's underlying holdings are returning to a path of dividend growth, the size of the revenue reserve would appear to be unduly cautious. Therefore, as is the case this year, the Board's intention is to make selective use of the revenue reserve to support the progressive dividend policy. Share Capital During the year 300,000 new shares were issued at 409p and, since the year end, a further 305,000 new shares have been issued at 572p. Both these allotments were at a premium at the time to the net asset value. The Board will again seek authority to increase the issued share capital of the Company by up to 10% at this year's Annual General Meeting. This authority would only be used to issue shares at a premium to net asset value. The Board will also be seeking a renewal of its annual authority to purchase up to 14.9% of the issued share capital for cancellation. This is just under the maximum authority permitted by the UK Listing Authority and shares would only be bought back at a discount to net asset value. Borrowings During the year the net borrowings rose from £25.1m to £29.8m, however, as a result of the increase in net asset value the gearing level fell from 28.3% to 27.7%. The majority of borrowings are short term. During the year, £5m of borrowings were fixed at 3.9% for a year. The Trust has been benefiting from current low interest rates and we regularly review whether it would be beneficial for longer term borrowings to replace part of the short term borrowings. -MORE- - 3 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2003 The level of gearing is regularly debated by the Board. When equity values appear stretched it can be reduced and increased when share prices fall. The ability to gear is an important attribute of investment trusts, as we believe equity markets will over time outperform the cost of borrowings. Therefore our usual position is to be reasonably geared. Outlook Dividend yields still suggest UK stocks on aggregate are modestly valued. The yield on the ten year gilt at our financial year end was 4.5% which is less than the expected running yield on Lowland's portfolio of 4.9%. If the dividend growth from the underlying holdings comes through and yields on gilts do not rise substantially, then there is scope for further upward movement in equity prices. The portfolio is positioned to benefit. The Manager will continue to seek investments in companies that can provide capital as well as income growth over the medium to long term. Ian M Trotter Chairman 5 November 2003 -MORE- - 4 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2003 Statement of Total Return (incorporating the revenue account) for the year ended 30 September 2003 Unaudited Audited Year ended Year ended 30 September 2003 30 September 2002 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital - 24,155 24,155 - (12,621) (12,621) gains/(losses) from investments Income from 5,754 - 5,754 5,661 - 5,661 fixed asset investments Other interest 56 - 56 134 - 134 receivable and similar income --------- --------- --------- --------- --------- --------- Gross revenue 5,810 24,155 29,965 5,795 (12,621) (6,826) and capital gains/(losses) Management (713) - (713) (763) - (763) fee Other (249) - (249) (231) - (231) administrative expenses --------- --------- --------- --------- --------- --------- Net return/ 4,848 24,155 29,003 4,801 (12,621) (7,820) (loss) on ordinary activities before interest payable and taxation Interest (1,639) - (1,639) (1,797) - (1,797) payable --------- --------- --------- --------- --------- --------- Net return/ 3,209 24,155 27,364 3,004 (12,621) (9,617) (loss) on ordinary activities before taxation Taxation on - - - - - - net return on ordinary activities --------- --------- --------- --------- --------- --------- Net return/ (loss) on ordinary activities after 3,209 24,155 27,364 3,004 (12,621) (9,617) taxation Dividends - ordinary shares Interim paid - (1,345) - (1,345) (1,241) - (1,241) 6.5p (2002: 6.3p) Final proposed (2,173) - (2,173) (1,876) - (1,876) - 10.5p (2002: 9.2p) --------- --------- --------- --------- --------- --------- (3,518) - (3,518) (3,117) - (3,117) --------- --------- --------- --------- --------- --------- Transfer (309) 24,155 23,846 (113) (12,621) (12,734) (from)/to reserves ====== ====== ====== ====== ====== ====== Return/(loss) 15.6p 117.4p 133.0p 15.2p (63.9p) (48.7p) per ordinary share ====== ====== ====== ====== ====== ====== The revenue columns of this statement represent the profit and loss accounts of the Company. -MORE- - 5 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2003 Balance Sheet at 30 September 2003 Unaudited Audited 2003 2002 £'000 £'000 Fixed Asset Investments - Listed in United Kingdom 136,229 101,984 - Listed overseas 470 3,266 - Unquoted at directors' valuation 914 752 ---------- ---------- 137,613 106,002 ---------- ---------- Current Assets Debtors 3,078 3,774 Cash at bank 55 347 ---------- ---------- 3,133 4,121 Creditors: amounts falling due within one year (27,025) (15,474) ---------- ---------- Net current liabilities (23,892) (11,353) ---------- ---------- Total assets less current liabilities 113,721 94,649 Creditors: amounts falling due after more than one (6,000) (12,000) year ---------- ---------- Total net assets 107,721 82,649 ---------- ---------- Capital and reserves Called-up share capital 5,174 5,099 Share premium 5,253 4,102 Other reserves - Capital redemption reserve 1,007 1,007 - Realised reserve 101,791 99,544 - Unrealised reserve (8,461) (30,369) Revenue reserve 2,957 3,266 ---------- ---------- Total equity shareholders' funds 107,721 82,649 ---------- ---------- Net asset value per ordinary share 520.5p 405.2p -MORE- - 6 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2003 Cash Flow Statement For the year ended 30 September 2003 Unaudited Audited 2003 2003 2002 2002 £'000 £'000 £'000 £'000 Net cash inflow from 4,696 4,547 operating activities Servicing of finance Interest paid (1,511) (1,794) ---------- ---------- Net cash outflow from (1,511) (1,794) servicing of finance Taxation UK tax paid - - ---------- ---------- Net tax paid - - Financial investment Purchase of (54,373) (48,896) investments Sales of investments 48,153 43,110 ---------- ---------- Net cash outflow from (6,220) (5,786) financial investment Equity dividends (3,221) (2,964) paid Financing Issue of shares 1,226 3,499 Net loans drawn down 4,700 2,600 ----------- ----------- 5,926 6,099 ---------- ---------- (Decrease)/increase in (330) 102 cash ---------- ---------- Reconciliation of net cash flow to movement in net debt (Decrease)/increase in (330) 102 cash as above Net cash inflow from (4,700) (2,600) increase in loans Exchange movements 38 (4) --------- --------- Movement in net debt (4,992) (2,502) Net debt at 1 (24,753) (22,251) October ---------- ---------- Net debt at 30 (29,745) (24,753) September ---------- ---------- -MORE- - 7 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2003 Top Ten Holdings as at 30 September 2003 Holding % of Portfolio Renold 3.0% McAlpine (Alfred) 2.8% GlaxoSmithKline 2.7% BP 2.6% Johnson Service Group 2.3% Lloyds TSB 1.9% Homestyle 1.9% Avon Rubber 1.8% Shell 1.8% Aviva 1.7% - MORE - - 8 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2003 Notes : 1. Share Issue During the year the Company issued 300,000 ordinary shares of 25p, and since the year end a further 305,000 shares were issued. The issued share capital is 21,000,205 at the date of this report. 2. Dividend The recommended final dividend of 10.5p net per ordinary share, subject to approval at the Annual General Meeting, is payable on 19 December 2003 to shareholders on the register of members at the close of business on 28 November 2003. The Company's shares will be quoted ex-dividend on 26 November 2003. 3. Return per Ordinary Share Revenue return per ordinary share is based on the net return on ordinary activities after taxation of £3,209,000 (2002: £3,004,000) and on the weighted average 20,579,315 ordinary shares in issue during the year (2002: 19,746,986). Capital return per ordinary share is based on net capital gains of £24,155,000 (2002: £12,621,000 loss) and on the weighted average 20,579,315 ordinary shares in issue during the year (2002: 19,746,986). 4. 2003 Accounts The preliminary figures for the year ended 30 September 2003 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. 5. 2002 Accounts The figures and financial information for the year ended 30 September 2002 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. 6. Annual Report The Annual Report will be posted to shareholders in November and thereafter copies will be available at the registered office at 4 Broadgate, London EC2M 2DA. 7. Annual General Meeting The Annual General Meeting will be held on Wednesday, 17 December 2003 at 3.00pm at 4 Broadgate, London, EC2M 2DA. -MORE- - 9 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2003 For further information please contact : James Henderson Lowland Investment Company plc Telephone: 020 7818 4370 Stephen Westwood Head of Investment Trusts Henderson Global Investors Telephone: 020 7818 5517 Stephen Phillips Associate Director Henderson Global Investors Telephone: 020 7818 6417 or Vicki Staveacre Henderson Press Office Telephone: 020 7818 4222 This information is provided by RNS The company news service from the London Stock Exchange

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