Investment

Falkland Islands Holdings PLC
19 May 2004





Falkland Islands Holdings PLC
Investment in Portsmouth Harbour Ferry Company


The board of Falkland Islands Holdings PLC ('FIH') is pleased to announce the
purchase of 21.6% of the issued share capital of Portsmouth Harbour Ferry
Company public limited company ('PHFC') as a long term investment.


PHFC was established in 1883 and operates a ferry service across Portsmouth
Harbour between Portsea and Gosport and also owns a travel agency.  The Falkland
Islands company also has long a history of providing a service to a local
community having been established by Royal Charter in 1851.


PHFC recently published consolidated accounts for the year ended 31 December
2003, which showed the following:

                                                 2003          2002
                                                £'000         £'000
Turnover                                        4,571         4,693
Pre-tax profit                                    775           915
Net assets                                      2,918         2,520

Earnings per share                            222.87p       323.49p
Dividends per share                               50p           29p
Net assets per share                           £12.69        £10.96




FIH will benefit from dividends paid in respect of its 21.6% shareholding in
PHFC in relation to PHFC's trading activities from 1 January 2004.



The consideration paid for the 49,701 PHFC shares acquired by FIH comprised
£596,412 in cash and 66,268 new FIH shares. Based on the mid market price of a
FIH share at close of business yesterday the total consideration had a value of
£759,000. The cash element is being financed out of FIH's existing cash
resources and bank facilities.  The new FIH shares are subject to transfer
restrictions for up to one year.



At present, FIH's earnings and assets are almost exclusively related to its
activities in the Falkland Islands. The FIH Group provides a wide range of
services to the local economy there including retailing, wholesale and
distribution, financial services, motor vehicle distribution, shipping agency,
port services and accommodation. The FIH Group is also involved in exploration
activities in the Falklands and South Atlantic , onshore for minerals and
offshore for oil.



As part of its stated strategy FIH has been looking to diversify its activities
outside the Falkland Islands. PHFC offers a long term investment opportunity in
a sector which has a number of comparable features to FIH's business .  As a
result   FIH will improve the spread of its assets, its risk profile and scope
for future growth.




Following the issue of 66,268 new FIH shares to the vendors of the PHFC shares
acquired, FIH now has 6,236,305 shares in issue. Application has been made for
the admission of the new FIH shares to trading on AIM.



                                                                     18 May 2004



Enquiries:

Falkland Island Holdings
    David Hudd, Chairman                          07771 893 267

Dawnay, Day Corporate Finance Limited
    David Floyd, Director                         020 7509 4570





                      This information is provided by RNS
            The company news service from the London Stock Exchange