Interim Results
Lowland Investment Co PLC
2 May 2002
1 May 2002
LOWLAND INVESTMENT COMPANY PLC
Unaudited Interim Results for the half year ended 31 March 2002
Chairman's Statement
Review
The net asset value for the six month period has risen from 467p to 544p, an
increase of 16.5%. This compares with a rise in the FTSE All-Share Index of
9.3%.
The outperformance is a result of the bias towards medium and smaller companies
that offer good value. During the period holdings have been built up in
companies that may have been struggling with the difficult economic situation
but are now positioned for recovery. The Company maintained a reasonable level
of gearing which has also made a positive contribution to the performance in the
last six months.
Dividend
Earnings per share for the half year are 3.81p, compared to 5.18p in the
corresponding period last year. However, the fall in the earnings figure at the
interim stage may not be indicative of the trend in earnings for the year as a
whole. The earnings figure has been held back by some of the underlying holdings
in the portfolio 'rebasing' i.e. cutting their dividends and a few others
completely passing their dividend. For the second half of the year earnings and
dividends are expected to improve.
The recommended interim dividend is 6.30p, compared with 6.00p paid in the
corresponding period last year. It is the Board's intention barring unforeseen
circumstances to at least maintain the final dividend, subject to shareholder
approval.
Outlook
Commentators are divided about the economic prospects. Some are calling for
immediate hikes in interest rates, as they see the risk of inflation rising,
while others say the economic pick up is very weak and could peter out. The Fund
Manager's approach is to avoid acting on broad generalisations about the future
of the economy. The driver of outperformance in portfolio management will not
come from 'top down' debates as there are too many variables, but from attention
to stock picking. The Board and the Manager expect to be able to find
opportunities to invest in sound companies with good prospects.
The net asset value at the time of writing is up a further 32p at 576p.
Ian M Trotter
Chairman
1 May 2002
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LOWLAND INVESTMENT COMPANY PLC
Unaudited Interim Results for the half year ended 31 March 2002
Statement of Total Return (incorporating the revenue account)
for the half year ended 31 March 2002
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
31 March 2002 31 March 2001 30 September 2001
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
--------- -------- -------- -------- -------- -------- -------- -------- --------
Total capital gains/ - 15,821 15,821 - 11,961 11,961 - (4,720) (4,720)
(losses) on investments
Income from fixed asset 2,090 - 2,090 2,462 - 2,462 6,522 - 6,522
investments
Other interest receivable 29 - 29 44 - 44 84 - 84
and similar income
-------- -------- -------- -------- -------- -------- -------- -------- --------
Gross revenue and capital 2,119 15,821 17,940 2,506 11,961 14,467 6,606 (4,720) 1,886
gains/(losses)
Management fee (394) - (394) (375) - (375) (745) - (745)
Other administrative (95) - (95) (129) - (129) (204) - (204)
expenses
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net return/(loss) on
ordinary activities before
interest payable and
taxation 1,630 15,821 17,451 2,002 11,961 13,963 5,657 (4,720) 937
Interest payable (879) - (879) (981) - (981) (2,073) - (2,073)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net return/(loss) on 751 15,821 16,572 1,021 11,961 12,982 3,584 (4,720) (1,136)
ordinary activities before
taxation
Taxation on net return/ - - - - - - - - -
(loss) on ordinary
activities
--------- --------- --------- --------- --------- --------- --------- --------- ---------
Net return/(loss) on 751 15,821 16,572 1,021 11,961 12,982 3,584 (4,720) (1,136)
ordinary activities after
taxation
Dividend declared
Overprovision in prior year - - - 11 - 11 11 - 11
Interim of 6.30p (2001: (1,241) - (1,241) (1,182) - (1,182) (1,182) - (1,182)
6.00p)
Final 2001: 8.75p - - - - - - (1,723) - (1,723)
-------- -------- -------- -------- -------- -------- -------- -------- --------
(1,241) - (1,241) (1,171) - (1,171) (2,894) - (2,894)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Transfer (from)/to reserves (490) 15,821 15,331 (150) 11,961 11,811 690 (4,720) (4,030)
===== ===== ===== ===== ===== ===== ===== ===== =====
Return/(loss) per ordinary 3.81p 80.33p 84.14p 5.18p 60.65p 65.83p 18.18p (23.95)p (5.77)p
share (see note 1)
The revenue columns of this statement represent the revenue accounts of the
Company.
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LOWLAND INVESTMENT COMPANY PLC
Unaudited Interim Results for the half year ended 31 March 2002
Balance Sheets
As at 31 March 2002
(Unaudited) (Unaudited) (Audited)
31 March 2002 31 March 2001 30 September
£'000 £'000 2001
£'000
--------------- ---------------- ---------------
Fixed assets
Investments at market value 134,814 138,151 115,385
Current assets
Debtors 1,179 1,103 1,411
Cash at bank and in hand 991 21 249
---------- ---------- ----------
2,170 1,124 1,660
Creditors: amounts falling due within one year (17,769) (25,550) (13,161)
---------- ---------- ----------
Net current liabilities (15,599) (24,426) (11,501)
---------- ---------- ----------
Total assets less current liabilities 119,215 113,725 103,884
Creditors: amounts falling due after more than one year (12,000) (6,000) (12,000)
---------- ---------- ----------
Total net assets 107,215 107,725 91,884
====== ====== ======
Capital and reserves
Called-up share capital 4,924 4,924 4,924
Share premium account 778 778 778
Other reserves 98,624 99,484 82,803
Revenue reserve 2,889 2,539 3,379
---------- ---------- ----------
Total equity shareholders' funds 107,215 107,725 91,884
====== ====== ======
Net asset value per share (see note 2) 544.37p 546.96p 466.53p
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LOWLAND INVESTMENT COMPANY PLC
Unaudited Interim Results for the half year ended 31 March 2002
Cash Flow Statement
for the half year ended 31 March 2002
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
31 March 2002 31 March 2001 30 September 2001
£'000 £'000 £'000
------------------ ---------------- -----------------
Net cash inflow from operating activities 1,811 1,855 5,398
Net cash outflow from servicing of finance (871) (968) (1,975)
Net tax paid - - (46)
Net cash (outflow)/inflow from financial investment (3,970) (5,594) 506
Equity dividends paid (1,723) (1,685) (2,856)
---------- ---------- ----------
Net cash (outflow)/inflow before financing (4,753) (6,392) 1,027
Net cash inflow/(outflow) from financing 5,500 6,257 (940)
---------- ---------- ----------
Increase/(decrease) in cash 747 (135) 87
====== ====== ======
Reconciliation of operating revenue to net cash inflow from
operating activities
Net revenue before interest payable and taxation 1,630 2,002 5,657
Decrease/(increase) in accrued income 170 (157) (182)
(Increase)/decrease in other debtors (2) 34 28
Increase/(decrease) in other creditors 15 (5) (2)
Stock dividends included in investment income - - (35)
Tax on unfranked investment income (2) (19) (68)
---------- ---------- ----------
Net cash inflow from operating activities 1,811 1,855 5,398
====== ====== ======
Reconciliation of net cash flow to movement in net debt
Increase/(decrease) in cash as above 747 (135) 87
Cash (inflow)/outflow from (increase)/decrease in debt (5,500) (6,979) 421
Exchange difference (5) 4 10
---------- ---------- ----------
Movement in net debt (4,758) (7,110) 518
Net debt at start of period (22,251) (22,769) (22,769)
---------- ---------- ----------
Net debt at end of period (27,009) (29,879) (22,251)
====== ====== ======
Represented by:
Cash 991 21 249
Debt falling due within one year (16,000) (23,900) (10,500)
Debt falling due between two and five years (6,000) - (6,000)
Debt falling due after five years (6,000) (6,000) (6,000)
---------- ---------- ----------
(27,009) (29,879) (22,251)
====== ====== ======
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LOWLAND INVESTMENT COMPANY PLC
Unaudited Interim Results for the half year ended 31 March 2002
Notes:
1. Return per ordinary share
Revenue return per ordinary share is based on the net return on ordinary
activities after taxation of £751,000 (half year ended 31 March 2001:
£1,021,000 and year ended 30 September 2001: £3,584,000) and on a
weighted average number of 19,695,205 ordinary shares in issue during the
period (half year ended 31 March 2001: 19,722,953 and year ended 30
September 2001: 19,709,041). Capital return per ordinary share is based
on the net capital gain of £15,821,000 (half year ended 31 March 2001:
£11,961,000 gain and year ended 30 September 2001: £4,720,000 loss) and
on a weighted average number of 19,695,205 ordinary shares in issue
during the period (half year ended 31 March 2001: 19,722,953 and year
ended 30 September 2001: 19,709,041).
2. Net asset value per ordinary share
The net asset value per ordinary share is based on net assets
attributable to ordinary shares of £107,215,000 (31 March 2001:
£107,725,000 and 30 September 2001: £91,884,000) and on 19,695,205
ordinary shares in issue at 31 March 2002 (31 March 2001: 19,695,205 and
30 September 2001: 19,695,205).
3. Accounts for the year ended 30 September 2001
The figures and financial information for the year ended 30 September
2001 are extracted from the latest published accounts of the Company and
do not constitute the 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
under either Section 237(2) or Section 237(3) of the Companies Act 1985.
4. Interim Report
The Company's Interim Report will be posted to shareholders in mid-May.
5. Dividend
An interim dividend of 6.30p per ordinary share has been declared payable
on 7 June 2002 to shareholders on the register of members at the close of
business on 24 May 2002. The Company's shares will be quoted ex-dividend
on 22 May 2002.
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For further information please contact :
James Henderson
Lowland Investment Company plc
Telephone: 020 7818 4370
Vicki Staveacre
Henderson Press Office
Telephone: 020 7818 4222
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