Interim Results

Highcroft Investments PLC
05 August 2004


                           Highcroft Investments PLC

                     for the six months ended 30 June 2004

     
•    Interim dividend increased by 8.0% to 4.05p per share
    
•    Operating profit before disposals of assets increased by 3.2% to £772,000

•    Pre tax profit after disposals of assets down by 7.5% to £773,000

•    Net assets per share up to 676p (2003: 653p)


Chairman's Statement

Summary

I am pleased to report that, in the six months to 30 June 2004, we have achieved
another increase in operating profits and that our net asset value has risen to
676p per share which is again its highest ever reported value.  We have made
further moves, albeit modest, in altering the balance of our interests more
towards property and our balance sheet remains strong.  The interim dividend is
4.05p (2003: 3.75p) an increase of 8.0%, continuing our policy of payments in
excess of inflation.  The dividend is payable on 20 October 2004.


Operating Activities

Operating profit - which reflects the underlying income of the Group, excluding
the more volatile short term gains or losses on capital items - increased by
3.2% to £772,000 despite extensive repairs to one residential property.  Rental
income was steady and investment income, including interest, was up 7.0% on the
equivalent period in 2003.

Capital Activities

Having reviewed a number of opportunities, we announced in May that we had
purchased a property located in Cirencester.  The property comprises three
retail units let to Going Places, Card Warehouse and Ladbrokes on leases which
expire in 2009, 2014 and 2017 respectively. The property was acquired for
£1,515,000 plus costs and paid for from available cash.  The net income from the
property is approximately £91,000 per year producing an initial yield of 5.7%.

This was another step in implementing the Board's strategy of modifying the
allocation of funds in order to place a greater focus on the property portfolio.
While we continue to look for properties which will enhance the portfolio and
secure rising rental income over the medium to long term, shareholders will be
aware that the next purchase may be funded to a significant extent by long term
loan finance.

There was a £662,000 surplus on revaluation of our property portfolio an
increase of 2.9% on a like for like basis.  The independent valuers upheld the
valuation we put on our Cirencester purchase.

With our listed investment portfolio, we made investments of £453,000 and sold
various holdings for £610,000, a net withdrawal from the portfolio of £157,000.
At 30 June 2004, there was a surplus on revaluation of £21,000 - the value of
the portfolio being £7,926,000, an increase of 0.3% on a like for like basis

Taxation

The taxation charge has risen to £191,000 (June 2003: £186,000) and in addition
there is a £39,000 tax liability on realised revaluation gains which has been
deducted from the realised capital reserve.

Net Asset Value

At 30 June 2004, net asset value was 676p per share (against 635p at June 2003
and 656p at 31 December 2003).  This has been a pleasing trend and the most
recent increase comes from all sources - a property portfolio surplus of
£662,000, a £21,000 rise in the value of listed investments and retained profits
of £372,000.

The Future

We have a solid trading outlook and balance sheet which gives us confidence as
we move towards greater emphasis on our property interests.  We believe we can
continue to enhance shareholder value over the medium term and it remains our
intention to raise dividends in real terms year-on-year.


                                                                   G J Kingerlee
                                                                   4 August 2004


Group Profit and Loss Account (Unaudited)
for the six months ended 30 June 2004

                                                             First Half     First Half    Full Year
                                                       Note        2004           2003         2003
                                                                  £'000          £'000        £'000
Income from fixed asset investments
    and other interest receivable
    From properties                                                 731            725        1,457
    From investments, including net interest receivable             153            143          301
                                                                    884            868        1,758

Administrative expenses                                             112            120          209
Operating profit                                                    772            748        1,549

Gain on disposals of assets                               2           1             88          158
Profit on ordinary activities before taxation                       773            836        1,707

Taxation                                                  3         191            186          409
Profit for the financial period                                     582            650        1,298

(Gain) on disposals of assets after taxation
transferred to realised capital reserve                             (1)           (88)        (158)
Profit available for distribution                                   581            562        1,140

Dividends                                                 4         209            194          568
Profit retained                                                     372            368          572

Earnings per share                                        5
    Including gains on disposals of assets                         11.3 p         12.6 p       25.1 p
    Excluding gains on disposals of assets                         11.2 p         10.9 p       22.1 p

Statement of Total Recognised Gains and Losses
                                                             First Half     First Half    Full Year
                                                                   2004           2003         2003
                                                                  £'000          £'000        £'000

Profit for the financial period                                     582            650        1,298
Unrealised surplus on revaluation of:
investment properties                                               662          1,242        1,320
listed and unlisted investments                                      21            238          996
Tax on prior years' surplus realised in year                       (39)              -            -
Total recognised gains and losses for the period                  1,226          2,130        3,614

Group Balance Sheet (Unaudited)

as at 30 June 2004

                                                                30 June        30 June  31 December
                                                                   2004           2003         2003
                                                         Note     £'000          £'000        £'000
Fixed assets
Tangible assets                                             6    27,697         25,358       25,436
Investments                                                 7     7,927          7,584        8,062
                                                                 35,624         32,942       33,498

Current assets
Debtors                                                             400            471          532
Cash at bank and in hand                                              -            366        1,079
                                                                    400            837        1,611
Creditors
Amounts falling due within one year                               1,106            989        1,208
Net current (liabilities) /assets                                 (706)          (152)          403

Total assets less current liabilities                            34,918         32,790       33,901

Capital and reserves
Called up share capital                                           1,292          1,292        1,292
Revaluation reserve
- property                                                        7,222          6,187        6,560
- other                                                           3,254          2,708        3,542
Capital redemption reserve                                           95             95           95
Realised capital reserve                                         14,596         14,625       14,325
Profit and loss account                                           8,459          7,883        8,087
Shareholders' funds                                              34,918         32,790       33,901


Group Cash Flow Statement (Unaudited)

for the six months ended 30 June 2004

                                                             First Half     First Half    Full Year
                                                                   2004           2003         2003
                                                                  £'000          £'000        £'000

Net cash inflow from operating activities                           873          1,227        1,977

Taxation
Taxation paid                                                     (218)          (336)        (530)

Capital expenditure and financial investment
Purchase of fixed assets
- properties                                                    (1,599)        (1,596)      (1,596)
- listed investments                                              (453)          (262)        (624)
Sale of fixed assets
- properties                                                          -            657          660
- listed investments                                                610            624        1,334
Net cash outflow from capital expenditure                       (1,442)          (577)        (226)
and financial investment
Net cash outflow from servicing of finance
Dividends paid                                                    (374)          (343)        (537)

(Decrease) / Increase in cash                                   (1,161)           (29)          684

Reconciliation of operating profit to net
    cash flow from operating activities
Operating profit                                                    772            748        1,549
Decrease in debtors                                                 132            443          384
(Decrease) / Increase in creditors                                 (31)             36           44
                                                                    873          1,227        1,977

Notes (Unaudited)

1.  Interim report

This interim report will not appear as an advertisement in any newspaper but 
copies are being sent to all shareholders and are available at the company's
registered office.  The results for the six months ended 30 June 2004 are
unaudited but have been prepared on the basis of accounting policies consistent
with those set out in the audited report and financial statements for the year
ended 31 December 2003.

The interim report does not constitute full accounts as defined by the Companies
Act 1985 but should be read in conjunction with the most recent financial
statements.  Full accounts for 2003 have been delivered to the Registrar of
Companies, bearing an unqualified audit opinion.

2.  Gain on disposals of assets
                                                              First Half      First Half     Full Year
                                                                    2004            2003          2003
                                                                   £'000           £'000         £'000
Gain on disposals of assets arising on sales of:
Properties                                                             -              80            82
Investments                                                            1               8            76
                                                                       1              88           158

3.  Taxation

                                                              First Half      First Half     Full Year
                                                                    2004            2003          2003
                                                                   £'000           £'000         £'000

Corporation tax                                                      192             186           399
Prior year underprovision                                            -               -              10
                                                                     192             186           409

The taxation charge has been based on the estimated effective tax rate for the
full year.

4.  Dividends

The Board has declared an ordinary interim dividend of 4.05p per share (2003:
3.75p) payable on 20 October 2004 to shareholders registered at 17 September
2004.

5.  Earnings per share

The calculation of earnings per share is based on the profit for the period of
£582,000 (2003: £650,000) and on 5,167,240 shares (2003: 5,167,240) which is the
weighted average number of shares in issue during the period ended 30 June 2004
and throughout the period since 1 January 2004. In view of the uneven nature of
capital disposals, an adjusted earnings per share has also been presented, based
on the profit available for distribution of £581,000 (2003: £562,000).


                                                              First Half      First Half     Full Year
                                                                    2004            2003          2003
                                                                   £'000           £'000         £'000
Earnings:
Basic earnings per share                                             582             650         1,298
Adjustment for (gain) on disposals of assets                         (1)            (88)         (158)
Adjusted earnings per share                                          581             562         1,140

Per share amount:
Basic earnings per share                                            11.3 p          12.6 p        25.1 p
Adjustment for (gain) on disposals of assets                       (0.1) p         (1.7) p       (3.0) p
Adjusted earnings per share                                         11.2 p          10.9 p        22.1 p

6.  Tangible assets
Land and buildings (Investment properties)                                         Total
                                                                                   £'000
Valuation at 1 January 2004                                                       25,436
Additions                                                                          1,599
Surplus on revaluation                                                               662
Valuation at 30 June 2004                                                         27,697

The directors have used an independent valuation of properties at 30 June 2004, the basis of
which they believe to be consistent with the external valuation prepared for 31 December 2003.

7.  Investments
Listed and unlisted                                                                Total
                                                                                   £'000
Valuation at 1 January 2004                                                        8,062
Additions                                                                            453
Disposals                                                                          (609)
Surplus on revaluation                                                                21
Valuation at 30 June 2004                                                          7,927



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