Final Results

Glasgow Income Trust PLC 18 November 2004 News Release 18 November 2004 Glasgow Income Trust plc Preliminary Results for the year ended 30 September 2004 Glasgow Income Trust's principal objective is to provide shareholders with a high level of income and to obtain growth in both income and capital over the longer term. The Company is managed by Glasgow Investment Managers Limited. 30 September 30 September 2004 2003 Shareholders' funds £31.61m £21.16m Market capitalisation £32.32m £23.60m Net asset value per share 64.55p 57.17p Ordinary share price 66.00p 63.75p Premium (share price to net asset value) 2.2% 11.5% Revenue return per share 4.94p 4.85p Dividends per share 4.85p 4.85p Total Gearing 53.4% 64.3% Equity Gearing 6.3% 14.8% • The table below demonstrates the consistent performance of the Company against its benchmark index over 1, 3 and 5 years: Performance 1 year 3 years 5 years Net asset value total return 21.4% 22.4% 18.0% Share price 11.1% 17.8% 24.5% FTSE All-Share Index 15.7% 7.0% -7.1% • Dividends declared and paid have been maintained at the same level as last year, 4.85p. • At the year end share price of 66.0p, the yield was 7.3%, well above the FTSE All-Share Index dividend yield of 3.2%. • Total gearing was reduced over the year from 64.3% to 53.4%. This gearing is mainly invested in corporate fixed interest securities of investment grade rating. Equity gearing reduced from 14.8% to 6.3%. • At the year end the share price stood at a premium to net asset value per share of 2.2%, reflecting the strength of private investor demand for the Company's shares. For further information please contact: Mike Balfour, Chief Executive Glasgow Investment Managers 0141 572 2700 Glasgow Income Trust plc Annual Report 30 September 2004 Chairman's Statement Financial Highlights I am pleased to report continued growth in the Company in the year to 30 September 2004. The net asset value per share increased from 57.17p to 64.55p. Dividends paid and declared to date have been maintained at the same level as last year (4.85p) producing a dividend yield of 7.3% based on the share price of 66p at 30 September 2004. Background These results were achieved against the background of a recovery in the UK stockmarket. Improving corporate earnings and the belief that interest rates may be near their peak in the current cycle outweighed fears about rising world oil prices. These were the main factors underpinning the 15.7% total return on the FTSE All-Share Index, the Company's benchmark. Investment Returns The total return on net assets for the year was 21.4%, considerably ahead of benchmark. The share price total return, at 11.1%, was lower than the return on net assets because the premium at which the share price stands to net asset value per share fell from 11.5% to 2.2% over the course of the year. Share Capital In last year's Annual Report, it was noted that the Board was considering an issue of new shares by way of a placing and offer for subscription. At the Extraordinary General Meeting on 16 December 2003, a special resolution was passed to increase the authorised share capital from 50,000,000 to 85,000,000 and to authorise the Directors to allot relevant securities pursuant to the placing and offer. As noted in the Interim Report, 11,959,162 ordinary shares of 25p were issued on 17 December 2003 at a price of 62p per share, representing a 4% premium to net asset value per share at that date. After the expenses of the issue, net proceeds were £7.1 million. Although this placing was relatively modest, it enhanced net assets per share for existing shareholders. It should also lead to better liquidity in the shares and spreads the fixed costs of running the trust over a larger share base. In order to meet smaller scale regular demand, the Company sought a block listing facility of 2,850,000 ordinary shares of 25p each in July 2004. Shares will not be issued pursuant to the block listing unless at the time of issue, the price of an existing share exceeds the underlying net asset value of that share. Following the year end 209,384 shares have been issued pursuant to the block listing at prices ranging from 68p to 69.5p per share. One of the sources of the strongest demand for the Company's shares comes from The Glasgow Investment Collection, through which 16.7% of the Company is owned. The Glasgow Investment Collection is a collection of savings schemes operated by the Company's Managers. It allows monthly or lump sum investments in an ISA, TrustPlan or Children's Plan and also allows PEP transfers. It is an effective and cheap method of saving for the future and I commend the scheme to you. Dividends On 5 October 2004 the Board declared a fourth interim dividend of 1.76p per share which was paid on 29 October 2004 to shareholders on the register at close of business on 15 October 2004. The total of the four interim dividends declared for the year to 30 September 2004 is 4.85p, the same level as last year. Portfolio Profile and Gearing As disclosed in the Interim Report, £4.1 million of additional zero coupon finance was raised in January 2004 in order to maintain the Company's gearing levels following the share issue. This arrangement has a maturity value of £5.4 million repayable in December 2008 which equates to an overall capital charge of 5.7% per annum. This additional zero coupon finance means that the Company now has two separate such arrangements. The original zero coupon finance has a maturity value of £14 million in May 2005. The Board is presently reviewing the best way of renewing this arrangement. The proceeds from the share issue and the zero coupon finance were used to increase the size of the Company's existing equity investments and raise the number of holdings in the corporate bond portfolio. The distribution of assets shows that equity gearing has been reduced from 14.8% to 6.3%. Outlook The UK economy is likely to slow somewhat over the next twelve months from the relatively robust levels of GDP growth seen recently. This is the result of higher interest rates and higher oil and commodity prices. It will inevitably lead to a lower rate of corporate earnings growth. Many British companies are, however, producing healthy levels of cash flow and, with balance sheets relatively conservatively geared, are likely to use this to increase share buy-backs and grow dividends at a greater level than their underlying earnings. A healthy level of dividend growth will help the market make progress over the next twelve months. The biggest concerns remain the potential drag that the oil price may have on global demand, the weakness of the dollar and the extent of interest rate rises in the US. The UK stockmarket discounts a great deal of this risk and presently trades at attractive valuation levels. Annual Report The Annual Report will be mailed to shareholders on 22 November 2004. Copies may be obtained from the managers, Glasgow Investment Managers Limited, Sutherland House, 149 St Vincent Street, Glasgow G2 5DR after that date. R.G. Hanna, Chairman Glasgow Income Trust plc Consolidated Statement of Total Return (incorporating the Revenue Account*) for the year ended 30 September 2004 2004 2003 Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000 Gains on investments - 3,366 3,366 - 2,098 2,098 Income 2,955 - 2,955 2,264 - 2,264 ------- ------- ------- ------- ------- ------- Management and administrative (429) (130) (559) (260) (89) (349) expenses ------- ------- ------- ------- ------- ------- NET RETURN BEFORE 2,526 3,236 5,762 2,004 2,009 4,013 FINANCE COSTS AND TAXATION Finance costs of borrowings (19) (19) (38) (17) (17) (34) ------- ------- ------- ------- ------- ------- RETURN ON ORDINARY 2,507 3,217 5,724 1,987 1,992 3,979 ACTIVITIES BEFORE TAXATION Taxation (213) 44 (169) (191) 32 (159) ------- ------- ------- ------- ------- ------- RETURN ON ORDINARY 2,294 3,261 5,555 1,796 2,024 3,820 ACTIVITIES AFTER TAXATION FOR THE FINANCIAL YEAR Dividends on equity shares (2,252) - (2,252) (1,795) - (1,795) ------- ------- ------- ------- ------- ------- TRANSFER TO 42 3,261 3,303 1 2,024 2,025 RESERVES ------- ------- ------- ------- ------- ------- Return per share 4.94p 7.03p 11.97p 4.85p 5.47p 10.32p Dividends per share 4.85p 4.85p *The revenue column of this statement is the consolidated profit and loss account of the Group. All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the year. The financial information set out above and on the following page does not constitute the Company's statutory accounts for the years ended 30 September 2003 and 2004 but is derived from those accounts. Statutory accounts for 2003 have been delivered to the Registrar of Companies and those for 2004 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts; their reports were unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985. Glasgow Income Trust plc Group Balance Sheet as at 30 September 2004 2004 2003 £000 £000 FIXED ASSETS Ordinary shares 33,608 24,288 Convertibles 2,274 1,484 Corporate bonds 12,624 9,010 --------- --------- 48,506 34,782 CURRENT ASSETS Debtors 740 613 Investments of dealing subsidiary undertaking 118 - Cash at bank 1,236 339 --------- --------- 2,094 952 CREDITORS Amounts falling due within one year (14,647) (1,487) --------- --------- --------- --------- NET CURRENT LIABILITIES (12,553) (535) --------- --------- --------- --------- TOTAL ASSETS LESS CURRENT LIABILITIES 35,953 34,247 CREDITORS Amounts falling due after more than one year (4,341) (13,085) --------- --------- --------- --------- NET ASSETS 31,612 21,162 --------- --------- EQUITY SHAREHOLDERS' FUNDS 31,612 21,162 --------- --------- Net asset value per share 64.55p 57.17p Glasgow Income Trust plc Consolidated Cash Flow Statement for the year ended 30 September 2004 2004 2003 £000 £000 £000 £000 OPERATING ACTIVITIES Dividends and interest received from 2,483 1,959 investments Deposit interest received 48 38 Dealing subsidiary receipts - 366 Other cash received 291 136 Administrative expenses paid (457) (352) Payments to and on behalf of Directors (33) (36) Dealing subsidiary payments (118) (188) -------- -------- NET CASH INFLOW FROM OPERATING ACTIVITIES 2,214 1,923 SERVICING OF FINANCE Interest paid (39) (61) TAXATION Corporation tax paid (160) (201) INVESTING ACTIVITIES Purchases of investments (30,922) (10,178) Sales of investments 21,272 12,847 Net premiums received on Zero Coupon 4,108 - Finance -------- -------- NET CASH (OUTFLOW)/INFLOW FROM INVESTING (5,542) 2,669 ACTIVITIES EQUITY DIVIDENDS PAID (2,423) (1,795) -------- -------- (5,950) 2,535 FINANCING Issues of shares 7,147 1,427 Debt due within one year - decrease in short-term borrowings (300) (2,700) -------- -------- 6,847 (1,273) -------- -------- INCREASE IN CASH 897 1,262 -------- -------- This information is provided by RNS The company news service from the London Stock Exchange

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