Final Results

Scottish American Investment Co PLC 10 February 2004 THE SCOTTISH AMERICAN INVESTMENT COMPANY P.L.C. Results for the year to 31 December 2003 • During the year to 31 December 2003, under First State's management, the Company's net asset value per share (NAV) rose by 14.8% compared to a 17.1% increase in the Company's benchmark during the year (65% FTSE All-Share Index and 35% FTSE World Ex UK Index in sterling terms). The Board is recommending the payment of a final dividend of 1.42p (1.41p) per ordinary share making 5.65p (5.61p) for the year ended 31 December 2003. • During the second half of the year NAV rose by 10.8% compared to an 11.2% increase in the Company's benchmark. • As announced in December 2003, the Board undertook a fundamental strategic review during the year and, after contact with shareholders, brokers and advisers, it concluded that a change of Managers was in the best interests of shareholders. Following a thorough and comprehensive search in Scotland and London, the Board appointed Baillie Gifford and Co as Managers of the Company. • The transition of management to Baillie Gifford took place with effect from 1st January. Under the terms of the contractual arrangement between the Company and First State there was a net payment on transition of £288,000 by First State to the Company. The company has had a new benchmark since 1st January 2004 of 70% FTSE All-Share Index and 30% FTSE World Ex UK Index (in sterling terms). • Since 1st January a number of changes have been made to the Company's investments. The investment objective remains to offer private investors a diversified portfolio that achieves a balance between growth of capital and income. The Company has been reclassified within the Association of Investment Trust Companies' (AITC) categorisation from the Global Growth Category to the Global Growth and Income Category. • The increase in the UK element will improve the portfolio yield and will contribute to a return to a progressive dividend policy with the dividend being fully covered by earnings. A global equity element has been retained, the primary aim of which is to contribute to growth in capital. The Board continues to believe that directly held property, currently amounting to about 9% of gross assets, is an important element of the portfolio. • The Board believes that the debenture is a useful tool in the management of the portfolio and the ability to borrow is one of the benefits of investment trust status. The Board has reviewed the accounting policies for the management fee and finance costs and has concluded that with effect from 1st January 2004, these should be allocated on a 50/50 basis between capital and income rather than the previous 75/25 basis. The unused portion of the Company's borrowings not invested in property, previously held in cash, is now invested in a bond portfolio with a yield comparable to the debenture cost. 10 February 2004 Press Enquiries Brian Ivory Chairman 0131 311 6909 Patrick Edwardson, Baillie Gifford & Co 0131 275 2133 Mike Lord, Broadgate 0207 776 0511 THE SCOTTISH AMERICAN INVESTMENT COMPANY P.L.C. The following is the unaudited preliminary statement for the year to 31 December 2003 which was approved by the Board on 9 February 2004. The Board of The Scottish American Investment Company P.L.C. is recommending to the Annual General Meeting of the Company to be held on 24 March 2004 the payment of a final dividend of 1.42p (1.41p last year) per ordinary share to be paid on 2 April 2004 to all shareholders on the register at the close of business on 12 March 2004, making 5.65p (5.61p last year) for the year ended 31 December 2003. STATEMENT OF TOTAL RETURN (incorporating the revenue account*) For the year ended For the year ended 31 December 2003 31 December 2002 (unaudited) (audited) Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains/(losses) on investments - 34,029 34,029 - (89,756) (89,756) Currency losses - (88) (88) - (67) (67) Income from investments 8,146 - 8,146 8,890 - 8,890 Other income 3,266 - 3,266 3,185 - 3,185 Investment management fee 132 550 682 103 310 413 Other administrative expenses (985) - (985) (1,041) - (1,041) Net return before finance costs and taxation 10,559 34,491 45,050 11,137 (89,513) (78,376) Finance costs of borrowings (1,473) (4,420) (5,893) (1,473) (4,420) (5,893) Return on ordinary activities before taxation 9,086 30,071 39,157 9,664 (93,933) (84,269) Tax on ordinary activities (1,173) 1,064 (109) (1,732) 1,605 (127) Return attributable to equity shareholders 7,913 31,135 39,048 7,932 (92,328) (84,396) Ordinary dividends on equity (7,643) - (7,643) (7,742) - (7,742) shares Transfer to/(from) reserves 270 31,135 31,405 190 (92,328) (92,138) Return per ordinary share 5.82p 22.90p 28.72p 5.64p (65.63p) (59.99p) (note 2) Dividend per ordinary share 5.65p 5.61p (note 3) * The revenue column of this statement is the profit and loss account of the Company. All revenue and capital items in this statement derive from continuing operations. THE SCOTTISH AMERICAN INVESTMENT COMPANY P.L.C. SUMMARISED BALANCE SHEET at 31 December 2003 31 December 2003 31 December 2002 £'000 £'000 (unaudited) (audited) NET ASSETS Fixed asset investments 298,383 282,367 Net liquid assets 42,163 30,267 Total assets (before deduction of debenture) 340,546 312,634 Debenture (note 4) (89,260) (89,767) 251,286 222,867 CAPITAL AND RESERVES Called-up share capital 33,818 34,419 Capital reserves 206,887 178,137 Revenue reserve 10,581 10,311 Equity shareholders' funds 251,286 222,867 NET ASSET VALUE PER ORDINARY SHARE (after deduction of debenture at book value) 185.8p 161.9p Ordinary shares in issue (note 5) 135,270,943 137,677,943 DISTRIBUTION OF ASSETS at 31 December 2003 (unaudited) 31 December 2003 31 December 2002 £'000 £'000 Quoted equities: United Kingdom 176,805 144,414 North America 35,415 35,332 Continental Europe 12,974 20,055 Japan 8,733 4,354 Asia Pacific/Emerging Markets 22,454 13,687 Total quoted equities 256,381 217,842 Unquoted investments 5,946 6,581 Subsidiary companies 581 659 Quoted fixed interest 5,000 28,485 Property 30,475 28,800 Net liquid assets 42,163 30,267 Total assets (before deduction of debenture) 340,546 312,634 THE SCOTTISH AMERICAN INVESTMENT COMPANY P.L.C. SUMMARISED CASH FLOW STATEMENT For the year ended For the year ended 31 December 2003 31 December 2002 (unaudited) (audited) £'000 £'000 £'000 £'000 CASH AND DEPOSITS AT THE START OF THE YEAR 34,528 26,970 INCOME LESS ADMINISTRATIVE EXPENSES 10,886 10,506 Interest paid on borrowings (1,600) (1,600) Dividends paid to shareholders (7,687) (7,994) CASH PAID IN RESPECT OF INTEREST AND DIVIDENDS (9,287) (9,594) TOTAL TAX PAID (144) (128) CAPITAL Purchases of investments (298,380) (297,799) Sales of investments 316,408 326,646 18,028 28,847 Repurchase of ordinary share capital (3,183) (17,563) Investment management fee charged to capital 781 357 Interest paid on borrowings charged to capital (4,800) (4,800) Currency losses (88) (67) CASH RECEIVED IN RESPECT OF CAPITAL TRANSACTIONS 10,738 6,774 INCREASE IN CASH AND DEPOSITS IN THE YEAR 12,193 7,558 CASH AND DEPOSITS AT THE YEAR END 46,721 34,528 ANALYSIS OF CHANGE IN NET DEBT At 1 January At 31 2003 December Cash flows Other changes Exchange 2003 £'000 movement £'000 £'000 £'000 £'000 Cash 4,543 2,266 - (88) 6,721 Short term deposits 29,985 10,015 - - 40,000 34,528 12,281 - (88) 46,721 8% Debenture stock 2002 (89,767) - 507 - (89,260) Net debt (55,239) 12,281 507 (88) (42,539) THE SCOTTISH AMERICAN INVESTMENT COMPANY P.L.C. NOTES 1. The financial statements for the year to 31 December 2003 have been prepared on the basis of the accounting policies set out in the Company's financial statements as at 31 December 2002, with the exception of the application of the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies' issued in January 2003. 31 December 2003 31 December 2002 £'000 £'000 2. Return per ordinary share Revenue return 7,913 7,932 Capital return 31,135 (92,328) Return per ordinary share is based on the above returns and on 135,955,116 (2002 - 140,688,666) ordinary shares, being the weighted average number of ordinary shares in issue during the year. 3. The total cost of the dividend for the year is £7,643,000 (2002 - £7,742,000). If approved the final dividend of 1.42p will be paid on 2 April 2004 to all shareholders on the register at the close of business on 12 March 2004. 4. Net asset value per share with debenture stock at market value was 181.9p (2002 - 157.3p). The market value of debenture stock at 31 December 2003 was £94.55 million (2002 - £96.10 million). 5. During the year SAINTS bought back 2,407,000 (2002 - 9,677,000) ordinary shares at a cost of £3.0 million (2002 - £17.6 million). At 31 December 2003, authority existed to repurchase a further 19,225,540 shares. 6. The financial information set out above does not constitute the Company's statutory accounts for the year ended 31 December 2003. The financial information for 2002 is derived from the statutory accounts for 2002 which have been delivered to the Registrar of Companies. The Auditors have reported on the 2002 accounts, their report was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The statutory accounts for 2003 are unaudited, however it is expected that the Auditors will issue an unqualified opinion. The statutory accounts for 2003 will be finalised on the basis of the financial information presented in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. Baillie Gifford & Co. is authorised and regulated by the Financial Services Authority. This information is provided by RNS The company news service from the London Stock Exchange

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