Interim Results

Lowland Investment Co PLC 14 May 2003 LOWLAND INVESTMENT COMPANY PLC Unaudited Interim Results for the half year ended 31 March 2003 Chairman's Statement Review The net asset value for the six month period fell from 405p to 367p, a fall of 9.4%. This compares with a fall in the FTSE All-Share Index of 3.7%. The underperformance was partially the result of the Company's exposure to small and medium sized companies, the value of which declined further than that of FTSE 100 companies in the period. In addition, the Company's gearing in falling markets accounted for nearly half of the underperformance. Over the longer term, exposure to smaller companies has been responsible for much of Lowland's outperformance against the FTSE All-Share Index. A reasonable level of gearing will continue to be maintained to enable the Company and shareholders to benefit from the expected long term outperformance of equities over the cost of debt. It has been a very difficult period with the subdued economic background compounded by uncertainties arising from the Middle East. The downward spiral in investor confidence has resulted in a fall in equity prices often ignoring fundamental values. The investment approach of the Manager has been to concentrate on companies that are robust enough to produce satisfactory results in these difficult circumstances. Dividend Earnings per share for the half year were 4.4p compared to 3.8p in the corresponding period last year. It should be noted that the bulk of Lowland's income is usually received during the second half of the year. Although it is becoming more difficult to predict future dividends from some companies the dividend payments from most of the underlying holdings are coming through as expected. Therefore the Board proposes an interim dividend of 6.5p per share, compared with 6.3p for the corresponding period last year. It is the Board's intention, barring unforeseen circumstances, at least to maintain the final dividend, subject to shareholder approval. Outlook Since the end of March until the time of writing there has been a recovery in share prices. The FTSE All-Share Index has risen 11.1%, while Lowland's net asset value is up 18.6% over this period. The gearing and the smaller company exposure has benefited the portfolio. Economic uncertainties remain but low interest rates, falling oil prices and the depreciation of sterling may result in a pick up in activity in the second half of the year. The patient investor should be rewarded as we continue to follow the disciplines of focusing on value and growing dividends. The net asset value per share on 12 May was 435p. Ian M Trotter Chairman 13 May 2003 - MORE - LOWLAND INVESTMENT COMPANY PLC Unaudited Interim Results for the half year ended 31 March 2003 - 2 - Statement of Total Return (incorporating the revenue account) for the half year ended 31 March 2003 (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 31 March 2003 31 March 2002 30 September 2002 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 --------- -------- -------- -------- -------- -------- -------- -------- -------- Total capital (losses)/ gains on investments - (7,485) (7,485) - 15,821 15,821 - (12,621) (12,621) Income from fixed asset investments 2,118 - 2,118 2,090 - 2,090 5,661 - 5,661 Other interest receivable and similar income 28 - 28 29 - 29 134 - 134 -------- -------- -------- -------- -------- -------- -------- -------- -------- Gross revenue and capital (losses)/gains 2,146 (7,485) (5,339) 2,119 15,821 17,940 5,795 (12,621) (6,826) Management fee (345) - (345) (394) - (394) (763) - (763) Other administrative (128) - (128) (95) - (95) (231) - (231) expenses -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return/(loss) on ordinary activities before interest payable and taxation 1,673 (7,485) (5,812) 1,630 15,821 17,451 4,801 (12,621) (7,820) Interest payable (779) - (779) (879) - (879) (1,797) - (1,797) -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return/(loss) on ordinary activities before 894 (7,485) (6,591) 751 15,821 16,572 3,004 (12,621) (9,617) taxation Taxation on net return/ (loss) on ordinary - - - - - - - - - activities --------- --------- --------- --------- --------- --------- --------- --------- --------- Net return/(loss) on ordinary activities after 894 (7,485) (6,591) 751 15,821 16,572 3,004 (12,621) (9,617) taxation Dividends declared Interim of 6.5p (2002: (1,345) - (1,345) (1,241) - (1,241) (1,241) - (1,241) 6.3p) Final 2002: 9.2p - - - - - - (1,876) - (1,876) -------- -------- -------- -------- -------- -------- -------- -------- -------- (1,345) - (1,345) (1,241) - (1,241) (3,117) - (3,117) -------- -------- -------- -------- -------- -------- -------- -------- -------- Transfer (from)/to reserves (451) (7,485) (7,936) (490) 15,821 15,331 (113) (12,621) (12,734) ===== ===== ===== ===== ===== ===== ===== ===== ===== Return/(loss) per ordinary share (see note 1) 4.4p (36.6)p (32.2)p 3.8p 80.3p 84.1p 15.2p (63.9)p (48.7)p The revenue columns of this statement represent the revenue accounts of the Company. - MORE - LOWLAND INVESTMENT COMPANY PLC Unaudited Interim Results for the half year ended 31 March 2003 - 3 - Balance Sheets As at 31 March 2003 (Unaudited) (Unaudited) (Audited) 31 March 2003 31 March 2002 30 September £'000 £'000 2002 £'000 --------------- ---------------- --------------- Fixed assets Investments at market value 97,192 134,814 106,002 Current assets Debtors 2,703 1,179 3,774 Cash at bank and in hand 102 991 347 ---------- ---------- ---------- 2,805 2,170 4,121 Creditors: amounts falling due within one year (12,057) (17,769) (15,474) ---------- ---------- ---------- Net current liabilities (9,252) (15,599) (11,353) ---------- ---------- ---------- Total assets less current liabilities 87,940 119,215 94,649 Creditors: amounts falling due after more than one year (12,000) (12,000) (12,000) ---------- ---------- ---------- Total net assets 75,940 107,215 82,649 ====== ====== ====== Capital and reserves Called-up share capital 5,174 4,924 5,099 Share premium account 5,254 778 4,102 Other reserves 62,697 98,624 70,182 Revenue reserve 2,815 2,889 3,266 ---------- ---------- ---------- Total equity shareholders' funds 75,940 107,215 82,649 ====== ====== ====== Net asset value per share (see note 2) 366.9p 544.4p 405.2p - MORE - LOWLAND INVESTMENT COMPANY PLC Unaudited Interim Results for the half year ended 31 March 2003 - 4 - Cash Flow Statement for the half year ended 31 March 2003 (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 31 March 2003 31 March 2002 30 September 2002 £'000 £'000 £'000 ------------------ ---------------- ----------------- Net cash inflow from operating activities 1,703 1,811 4,547 Net cash outflow from servicing of finance (760) (871) (1,794) Net cash inflow/(outflow) from financial investment 2,346 (3,970) (5,786) Equity dividends paid (1,876) (1,723) (2,964) ---------- ---------- ---------- Net cash inflow/(outflow) before financing 1,413 (4,753) (5,997) Net cash (outflow)/inflow from financing (1,673) 5,500 6,099 ---------- ---------- ---------- (Decrease)/increase in cash (260) 747 102 ====== ====== ====== Reconciliation of operating revenue to net cash inflow from operating activities Net revenue before interest payable and taxation 1,673 1,630 4,801 Decrease/(increase) in accrued income 110 170 (104) Increase in other debtors (1) (2) (4) (Decrease)/increase in other creditors (5) 15 (10) Stock dividends included in investment income (71) - (134) Tax on unfranked investment income (3) (2) (2) ---------- ---------- ---------- Net cash inflow from operating activities 1,703 1,811 4,547 ====== ====== ====== Reconciliation of net cash flow to movement in net debt (Decrease)/increase in cash as above (260) 747 102 Cash outflow/(inflow) from decrease/(increase) in debt 2,900 (5,500) (2,600) Exchange difference 15 (5) (4) ---------- ---------- ---------- Movement in net debt 2,655 (4,758) (2,502) Net debt at start of period (24,753) (22,251) (22,251) ---------- ---------- ---------- Net debt at end of period (22,098) (27,009) (24,753) ====== ====== ====== Represented by: Cash 102 991 347 Debt falling due within one year (10,200) (16,000) (13,100) Debt falling due between one and two years (6,000) - - Debt falling due between two and five years - (6,000) (6,000) Debt falling due after five years (6,000) (6,000) (6,000) ---------- ---------- ---------- (22,098) (27,009) (24,753) ====== ====== ====== - MORE - LOWLAND INVESTMENT COMPANY PLC Unaudited Interim Results for the half year ended 31 March 2003 - 5 - Notes: 1. Return per ordinary share Revenue return per ordinary share is based on the net return on ordinary activities after taxation of £894,000 (half year ended 31 March 2002: £751,000 and year ended 30 September 2002: £3,004,000) and on a weighted average number of 20,462,788 ordinary shares in issue during the period (half year ended 31 March 2002: 19,695,205 and year ended 30 September 2002: 19,746,986). Capital return per ordinary share is based on the net capital loss of £7,485,000 (half year ended 31 March 2002: £15,821,000 gain and year ended 30 September 2002: £12,621,000 loss) and on a weighted average number of 20,462,788 ordinary shares in issue during the period (half year ended 31 March 2002: 19,695,205 and year ended 30 September 2002: 19,746,986). 2. Net asset value per ordinary share The net asset value per ordinary share is based on net assets attributable to ordinary shares of £75,940,000 (31 March 2002: £107,215,000 and 30 September 2002: £82,649,000) and on 20,695,205 ordinary shares in issue at 31 March 2003 (31 March 2002: 19,695,205 and 30 September 2002: 20,395,205). 3. Issued Share Capital On 12 February 2003 the Company issued 300,000 shares. 250,000 shares were issued to Cazenove and 50,000 to UBS Warburg (Apollo Nominees Ltd). The shares were allotted at 409p per share, a premium to net asset value of 3.8%. 4. Accounts for the year ended 30 September 2002 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 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. 5. Interim Report The Company's Interim Report will be posted to shareholders in mid-May. 6. Dividend An interim dividend of 6.5p per ordinary share has been declared payable on 6 June 2003 to shareholders on the register of members at the close of business on 23 May 2003. The Company's shares will be quoted ex-dividend on 21 May 2003. - ENDS - 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 Investor Relations Manager, 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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