Interim Results

Glasgow Income Trust PLC 01 May 2003 News Release 1 May 2003 Glasgow Income Trust plc Interim Results for the six months to 31 March 2003 The principal objective of Glasgow Income Trust plc, with total assets of £30.75m, is to provide shareholders with a high level of income and to obtain growth in both income and capital over the longer term. 31 March 2003 30 September 2002 Total assets less current liabilities £30.75m £31.66m Shareholders' funds £17.82m £19.14m Net asset value per share 48.14p 51.70p Share price 50.00p 57.25p Premium (share price to net asset value) 3.9% 10.7% Dividends per share 2.06p 2.06p* * Half year to 31 March 2002. •Total return on net assets was -2.9%, slightly lower than the return of -1.9% on the FTSE All-Share Index, the Company's benchmark. •A second interim dividend of 1.03p has been declared. Dividends declared to date total 2.06p, the same level as paid last year. •The Company offers a high yield to its shareholders - it was 9.7% at 31 March 2003 - while retaining its conventional structure with a single class of share capital. It does not invest in split capital trusts. •The share price continues to trade at a premium to net asset value. It was 3.9% at 31 March 2003. •Equity gearing has reduced to 4.4% at 31 March 2003 from 20% of net assets at 30 September 2002. •Ordinary share prices, which are lowly rated on historical comparisons, should rise when investors allow a longer term perspective to replace short-term concerns. For further information please contact: David Williams, Managing Director Glasgow Investment Managers 0141 572 2700 Glasgow Income Trust plc Interim Report as at 31 March 2003 Chairman's Statement Background The half year to 31 March 2003 witnessed extreme volatility in the world's stockmarkets as concern grew that declines in investor, business and consumer confidence in response to the growing prospect of war in Iraq would undermine the economic recovery forecast to develop this year and next. The small negative return, -1.9%, on the Company's benchmark, the FTSE All-Share Index, masked major moves in equity prices during the period. The Index rose by 11.2% in October and November 2002 only to fall by 14.0% in January and February 2003. Investment Returns Against this turbulent background the total return on net assets was -2.9%. The return on the portfolio of ordinary shares was -1.9%, in line with benchmark, and on fixed income securities 4.1%. Although the geared exposure to equities was reduced during the period, it depressed the overall result. The total return to a shareholder, at -9.1%, was lower than the return on net assets, reflecting a fall in the premium at which the share price stands to net asset value per share, from 10.7% at 30 September 2002 to 3.9% at 31 March 2003. Dividends The Board has declared a second interim dividend of 1.03p per share, to be paid on 29 August 2003 to shareholders on the register at close of business on 1 August 2003. A first interim dividend of 1.03p has been declared for payment on 30 May 2003. Dividends declared to date in 2003 thus total 2.06p per share, the same level as paid last year. Portfolio Profile and Gearing Net sales of £3.6 million of ordinary share investments helped reduce equity gearing from 20.0% of net assets at 30 September 2002 to 4.4% at 31 March 2003. Over the same period total gearing fell from 81.8% to 61.9%. The latter figure includes 57.5% in corporate fixed interest and convertible securities of relatively low volatility which contribute a large proportion of the income which the company distributes. Outlook Although consensus forecasts have consistently indicated that aggregate output will grow progressively faster in 2003 and 2004, stockmarket sentiment has been dominated by worries about the impact of military action in Iraq. With that conflict now effectively at an end, recent OECD forecasts suggest that lower oil prices, the stimulus provided by growing public sector expenditure and continuing low interest rates will begin to encourage a general recovery in confidence and business activity. Ordinary share prices, which are lowly rated on historical comparisons, should rise when investors allow a longer term perspective to replace short-term concerns. The Interim Report will be mailed to shareholders on 8 May 2003. Copies may be obtained from the Mangers, Glasgow Investment Managers Limited, Sutherland House, 149 St Vincent Street, Glasgow G2 5DR after that date. R G Hanna Chairman Consolidated Statement of Total Return (incorporating the Revenue Account) for the half year ended 31 March 2003 Half year to 31 March 2003 (unaudited) Revenue Capital Total £000 £000 £000 (Losses)/Gains on investments - (1,148) (1,148) Dividends and interest receivable 887 - 887 Underwriting commission - - - Profits less losses of dealing (9) - (9) subsidiary Traded option premiums 27 - 27 Investment management fee (43) (43) (86) Other administrative expenses (100) - (100) ---------- ------------ ----------- Net return before finance costs and taxation 762 (1,191) (429) Finance costs of borrowings (17) (17) (34) ---------- ------------ ----------- Return on ordinary activities before taxation 745 (1,208) (463) Taxation (107) 15 (92) ---------- ------------ ----------- Return on ordinary activities after taxation for the period 638 (1,193) (555) Dividends on equity shares (763) - (763) ---------- ------------ ----------- Transfer (from)/to reserves (125) (1,193) (1,318) ---------- ------------ ----------- Return per share 1.72p (3.22)p (1.50)p Dividends per share 2.06p Consolidated Statement of Total Return (continued) Half year to 31 March 2002 Year to 30 September 2002 (unaudited) (audited) Revenue Capital Total Revenue Capital Total £000 £000 £000 £000 £000 £000 (Losses)/Gains on - 4,464 4,464 - (5,694) (5,694) investments Dividends and 869 - 869 1,967 - 1,967 interest receivable Underwriting - - - 3 - 3 commission Profits less losses of dealing subsidiary 15 - 15 (29) - (29) Traded option - - - 297 - 297 premiums Investment (52) (52) (104) (108) (108) (216) management fee Other (70) - (70) (170) - (170) administrative -------- ------- ------ -------- ------- ------- expenses Net return before finance costs and 762 4,412 5,174 1,960 (5,802) (3,842) taxation Finance costs of (21) (21) (42) (71) (71) (142) borrowings -------- ------- ------ -------- ------- ------- Return on ordinary activities before taxation 741 4,391 5,132 1,889 (5,873) (3,984) Taxation (102) 49 (53) (207) 104 (103) -------- ------- ------ -------- ------- ------- Return on ordinary activities after taxation 639 4,440 5,079 1,682 (5,769) (4,087) for the period Dividends on (744) - (744) (1,777) - (1,777) equity shares -------- ------- ------ -------- ------- ------- Transfer (from)/ (105) 4,440 4,335 (95) (5,769) (5,864) to reserves -------- ------- ------ -------- ------- ------- Return per 1.95p 13.52p 15.47p 4.92p (16.88)p (11.96)p share Dividends per 2.06p 4.85p share Note: These are not statutory accounts under section 240 of the Companies Act 1985 and are unaudited. The information relating to the group balance sheet as at 30 September 2002 is an extract from the latest audited accounts which have been delivered to the Registrar of Companies; the report of the auditors on these accounts was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. Group Balance Sheet as at 31 March 2003 31 March 2003 31 March 2002 30 September 2002 (unaudited) (unaudited) (audited) £000 £000 £000 Fixed assets Listed investments Ordinary shares 18,612 31,502 22,964 Convertibles 1,419 2,358 2,043 Corporate bonds 8,814 9,551 9,786 ----------- ----------- -------------- 28,845 43,411 34,793 Current assets Debtors 454 799 1,949 Investments of dealing subsidiary undertaking 119 - 128 Cash at bank and in hand 2,383 150 - ----------- ----------- -------------- 2,956 949 2,077 ----------- ----------- -------------- Creditors: amounts falling due within one year (1,052) (4,681) (5,208) ----------- ----------- -------------- Net current liabilities 1,904 (3,732) (3,131) ----------- ----------- -------------- Total assets less current 30,749 39,679 31,662 liabilities Creditors: amounts falling due after more than one year Zero coupon finance (12,930) (11,766) (12,525) ----------- ----------- -------------- Net assets 17,819 27,913 19,137 ----------- ----------- -------------- Capital and reserves Called up share capital 9,254 8,641 9,254 Share premium account 4,837 4,027 4,837 Special reserve 5,000 5,000 5,000 Realised capital reserve 4,300 7,348 6,604 Unrealised capital reserve (6,362) 1,992 (7,473) Revenue reserve 790 905 915 ----------- ----------- -------------- Equity shareholders' funds 17,819 27,913 19,137 ----------- ----------- -------------- Net asset value per share 48.14p 80.75p 51.70p Consolidated Cash Flow Statement for the half year ended 31 March 2003 Half year to Half year to Year to 31 March 2003 31 March 2002 30 September 2002 (unaudited) (unaudited) (audited) £000 £000 £000 Net cash inflow from operating 770 608 1,727 activities Servicing of finance Interest paid (62) (37) (121) Investing activities ---------- --------- ---------- Purchases of investments (2,392) (11,619) (19,045) Sales of investments 7,596 9,481 16,100 ---------- --------- ---------- 5,204 (2,138) (2,945) Equity dividends paid (1,033) (914) (1,626) ---------- --------- ---------- Net cash inflow/(outflow) before financing 4,879 (2,481) (2,965) Financing ---------- --------- ---------- Issues of shares (see note) 1,427 1,500 1,496 Debt due within one year ---------- --------- ---------- - (decrease)/increase in short-term borrowings (3,000) 2,000 2,000 ---------- --------- ---------- (1,573) 3,500 3,496 ---------- --------- ---------- Increase in cash 3,306 1,019 531 ---------- --------- ---------- Note: There were no share issues during the period. The £1,427,000 shown as proceeds of share issues during the period relates to an issue made on 26 September 2002, the proceeds of which were not received until 2 October 2002. Analysis of Changes in Net Debt At Cash Other At 30 September flows non- cash 31 March 2002 changes 2003 £000 £000 £000 £000 Cash at bank and in hand - 2,383 - 2,383 Bank overdrafts (923) 923 - - Short-term borrowings (3,000) 3,000 - - Zero coupon finance (12,525) - (405) (12,930) ---------- --------- --------- --------- (16,448) 6,306 (405) (10,547) ---------- --------- --------- --------- Distribution of Assets Valuation at Valuation at 30 September 2002 Purchases Sales Appreciation 31 March 2003 (audited) (unaudited) £000 % £000 £000 £000 £000 % Listed investments Ordinary 22,964 120.0 867 (4,467) (752) 18,612 104.4 shares Convertibles 2,043 10.7 - (555) (69) 1,419 8.0 Corporate 9,786 51.1 1,525 (2,574) 77 8,814 49.5 bonds ------- ------- -------- ------- --------- ------- ------ 34,793 181.8 2,392 (7,596) (744) 28,845 161.9 -------- ------- --------- Net current (liabilities)/ assets (3,131) (16.4) 1,904 10.7 Total assets less current liabilities 31,662 165.4 30,749 172.6 Zero coupon finance (12,525) (65.4) (12,930) (72.6) ------- ------- ------- ------ Net assets 19,137 100.0 17,819 100.0 ------- ------- ------- ------ Net asset value per share 51.70p 48.14p This information is provided by RNS The company news service from the London Stock Exchange

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