Interim Results

Lowland Investment Co PLC 20 May 2004 LOWLAND INVESTMENT COMPANY PLC Unaudited Interim Results for the half year ended 31 March 2004 Chairman's Statement Review The net asset value for the six month period to 31 March 2004 appreciated from 520.5p to 565.1p, a rise of 8.6%. This compares with an increase in the FTSE All-Share Index of 8.3%. Over the twelve months to 31 March the net asset value has risen by 54.0%, whilst the FTSE All-Share Index rose by 26.6%. The continued economic recovery in the UK, fuelled by accommodating monetary and fiscal policy, provided a benign backdrop for equity investment. Company results have, on aggregate, been better than expected and, in spite of healthy dividend growth, the earnings cover of dividends has improved. Investor sentiment remains subdued with concerns over the weakness of the US dollar, interest rate increases, a high oil price and terrorism all coming to the fore. However, the growth in corporate profits is reasonably strong and this is improving companies' balance sheets. The focus on stock picking remains the same with the emphasis on low valuations, cash generation and good long term dividend growth prospects. The holdings in major companies such as Shell T&T and Glaxo have been increased as have the holdings in Charter and Elementis amongst the smaller companies in the portfolio. Lowland was 27.6% geared at the end of the period. Dividend Earnings per share for the half year were 7.4p, compared with 4.4p in the corresponding period last year. This is partially the result of dividends from the companies in the portfolio coming in earlier than last year. The Board proposes an interim dividend of 7.0p, an increase of 7.7% on last year's interim of 6.5p. It is the Board's intention, barring unforeseen circumstances, to at least maintain the final dividend, subject to shareholder approval. Outlook The momentum in the growth of profits in UK companies will surprise many investors. The cost bases of a significant number of businesses have been reduced in recent years and the pick up in revenue is leading to margin expansion. Corporate debt is falling which is assisting the speed of dividend growth. In addition the trend of companies buying back shares may increase. This is a sound background for a value approach to investing in UK equities Ian M Trotter Chairman 19 May 2004 - MORE - LOWLAND INVESTMENT COMPANY PLC Unaudited Interim Results for the half year ended 31 March 2004 - 2 - Statement of Total Return (incorporating the revenue account) for the half year ended 31 March 2004 (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 31 March 2004 31 March 2003 30 September 2003 Revenue Capital Total Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 --------- -------- -------- -------- -------- -------- -------- -------- -------- Total capital gains/ (losses) on investments - 9,158 9,158 - (7,485) (7,485) - 24,155 24,155 Income from fixed asset investments 2,925 - 2,925 2,118 - 2,118 5,754 - 5,754 Other interest receivable and similar income 29 - 29 28 - 28 56 - 56 -------- -------- -------- -------- -------- -------- -------- -------- -------- Gross revenue and capital gains/(losses) 2,954 9,158 12,112 2,146 (7,485) (5,339) 5,810 24,155 29,965 Management fee (364) - (364) (345) - (345) (713) - (713) Other administrative (127) - (127) (128) - (128) (249) - (249) expenses -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return/(loss) on ordinary activities before interest payable and taxation 2,463 9,158 11,621 1,673 (7,485) (5,812) 4,848 24,155 29,003 Interest payable (916) - (916) (779) - (779) (1,639) - (1,639) -------- -------- -------- -------- -------- -------- -------- -------- -------- Net return/(loss) on ordinary activities before 1,547 9,158 10,705 894 (7,485) (6,591) 3,209 24,155 27,364 taxation Taxation on net return/ (loss) on ordinary - - - - - - - - - activities --------- --------- --------- --------- --------- --------- --------- --------- --------- Net return/(loss) on ordinary activities after 1,547 9,158 10,705 894 (7,485) (6,591) 3,209 24,155 27,364 taxation Dividends declared Underprovision (32) - (32) - - - - - - Interim of 7.0p (2003: (1,470) - (1,470) (1,345) - (1,345) (1,345) - (1,345) 6.5p) Final 2003: 10.5p - - - - - - (2,173) - (2,173) -------- -------- -------- -------- -------- -------- -------- -------- -------- (1,502) - (1,502) (1,345) - (1,345) (3,518) - (3,518) -------- -------- -------- -------- -------- -------- -------- -------- -------- Transfer to/(from) reserves 45 9,158 9,203 (451) (7,485) (7,936) (309) 24,155 23,846 ===== ===== ===== ===== ===== ===== ===== ===== ===== Return/(loss) per ordinary share (see note 1) 7.4p 43.7p 51.1p 4.4p (36.6)p (32.2)p 15.6p 117.4p 133.0p 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 2004 - 3 - Balance Sheet As at 31 March 2004 (Unaudited) (Unaudited) (Audited) 31 March 2004 31 March 2003 30 September £'000 £'000 2003 £'000 --------------- --------------- --------------- Fixed assets Investments at market value 151,361 97,192 137,613 Current assets Debtors 2,372 2,703 3,078 Cash at bank and in hand 67 102 55 ---------- ---------- ---------- 2,439 2,805 3,133 Creditors: amounts falling due within one year (29,131) (12,057) (27,025) ---------- ---------- ---------- Net current liabilities (26,692) (9,252) (23,892) ---------- ---------- ---------- Total assets less current liabilities 124,669 87,940 113,721 Creditors: amounts falling due after more than one year (6,000) (12,000) (6,000) ---------- ---------- ---------- Total net assets 118,669 75,940 107,721 ====== ====== ====== Capital and reserves Called-up share capital 5,250 5,174 5,174 Share premium account 6,922 5,254 5,253 Other reserves 103,495 62,697 94,337 Revenue reserve 3,002 2,815 2,957 ---------- ---------- ---------- Total equity shareholders' funds 118,669 75,940 107,721 ====== ====== ====== Net asset value per share (see note 2) 565.1p 366.9p 520.5p - MORE - LOWLAND INVESTMENT COMPANY PLC Unaudited Interim Results for the half year ended 31 March 2004 - 4 - Cash Flow Statement for the half year ended 31 March 2004 (Unaudited) (Unaudited) (Audited) Half year ended Half year ended Year ended 31 March 2004 31 March 2003 30 September 2003 £'000 £'000 £'000 ------------------ ------------------ ----------------- Net cash inflow from operating activities 1,888 1,703 4,696 Net cash outflow from servicing of finance (1,058) (760) (1,511) Net tax recovered 102 - - Net cash (outflow)/inflow from financial investment (3,703) 2,346 (6,220) Equity dividends paid (2,173) (1,876) (3,221) ---------- ---------- ---------- Net cash (outflow)/inflow before financing (4,944) 1,413 (6,256) Net cash inflow/(outflow) from financing 4,957 (1,673) 5,926 ---------- ---------- ---------- Increase/(decrease) in cash 13 (260) (330) ====== ====== ====== Reconciliation of operating revenue to net cash inflow from operating activities Net revenue before interest payable and taxation 2,463 1,673 4,848 Increase/(decrease) in accrued income (525) 110 (60) Increase in other debtors (30) (1) (2) (Decrease)/increase in other creditors (20) (5) 27 Stock dividends included in investment income - (71) (114) Tax on unfranked investment income - (3) (3) ---------- ---------- ---------- Net cash inflow from operating activities 1,888 1,703 4,696 ====== ====== ====== Reconciliation of net cash flow to movement in net debt Increase/(decrease) in cash as above 13 (260) (330) Cash inflow/(outflow) from (increase)/decrease in debt (3,213) 2,900 (4,700) Exchange difference (1) 15 38 ---------- ---------- ---------- Movement in net debt (3,201) 2,655 (4,992) Net debt at start of period (29,745) (24,753) (24,753) ---------- ---------- ---------- Net debt at end of period (32,946) (22,098) (29,745) ====== ====== ====== Represented by: Cash 67 102 55 Debt falling due within one year (27,013) (10,200) (23,800) Debt falling due between one and two years - (6,000) - Debt falling due after five years (6,000) (6,000) (6,000) ---------- ---------- ---------- (32,946) (22,098) (29,745) ====== ====== ====== - MORE - LOWLAND INVESTMENT COMPANY PLC Unaudited Interim Results for the half year ended 31 March 2004 - 5 - Notes: 1. Return per ordinary share Revenue return per ordinary share is based on the net return on ordinary activities after taxation of £1,547,000 (half year ended 31 March 2003: £894,000 and year ended 30 September 2003: £3,209,000) and on a weighted average number of 20,966,872 ordinary shares in issue during the period (half year ended 31 March 2003: 20,462,788 and year ended 30 September 2003: 20,579,315). Capital return per ordinary share is based on the net capital gain of £9,158,000 (half year ended 31 March 2003: £7,485,000 loss and year ended 30 September 2003: £24,155,000 gain) and on a weighted average number of 20,966,872 ordinary shares in issue during the period (half year ended 31 March 2003: 20,462,788 and year ended 30 September 2003: 20,579,315). 2. Net asset value per ordinary share The net asset value per ordinary share is based on net assets attributable to ordinary shares of £118,669,000 (31 March 2003: £75,940,000 and 30 September 2003: £107,721,000) and on 21,000,205 ordinary shares in issue at 31 March 2004 (31 March 2003 and 30 September 2003: 20,695,205). 3. Accounts for the year ended 30 September 2003 The figures and financial information for the year ended 30 September 2003 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. Issued Share Capital As disclosed in the Annual Report for the year ended 30 September 2003, on 20 October 2003 305,000 ordinary shares were issued. The issued share capital is 21,000,205 ordinary shares. 5. Gearing Gearing is calculated by dividing fixed asset investments by total equity shareholders' funds. 6. Interim Report The Company's Interim Report will be posted to shareholders in early June. 7. Dividend An interim dividend of 7.0p per ordinary share has been declared payable on 25 June 2004 to shareholders on the register of members at the close of business on 28 May 2004. The Company's shares will be quoted ex-dividend on 26 May 2004. - 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 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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