Final Results

RNS Number : 6181W

Lowland Investment Co PLC

23 November 2010

 



Page 1 of 13

LOWLAND INVESTMENT COMPANY PLC

Annual Financial Report for the year ended 30 September 2010

This announcement contains regulated information

Key Data (per ordinary share)	Year ended 30 September 2010	Year ended 30 September 2009	Change %
Net asset value #	770.3p	657.3p	+17.2
Share price#	699.5p	610.0p	+14.7
Net revenue return	22.5p	22.7p	-0.9
Total return	139.5p	8.4p
First interim dividend	10.0p	10.0p	-
Second interim dividend	17.0p	16.5p	+3.0
Gearing*	12.6%	11.7%
Total expense ratio (excluding VAT write back)**	0.70%	0.83%

     ^#    Excluding reinvested income.

   *   Defined here as investments as a percentage of equity shareholders' funds minus 100.

** Defined here as total management and administrative expenses, as a percentage of the average shareholders' funds at the beginning and end of the year.

Performance (to 30 September 2010)	1 year %	5 years %	10 years %
Net asset value total return(1)	21.9	15.4	113.3
Share price total return(1)	19.7	7.5	138.4
Peer group net asset value total return(2)	14.7	15.3	53.9
FTSE All-Share Index (total return)(3)	12.5	24.7	31.9

   (1)     Source:  AIC Information Services Ltd (net income reinvested).

   (2)     Source:  AIC Information Services Ltd.  The performance of the AIC UK Income & Growth Sector (arithmetic average).

   (3)     Source:  AIC Information Services Ltd (gross income reinvested).

MANAGEMENT REPORT

Commenting on the results Chairman, John Hancox, said:

During the year ended 30 September 2010, Lowland's net asset value per share rose by 17.2% to 770.3p. The revenue return per share fell by 0.9%. Total dividend payments, of 27.0p, will be an increase of 1.9% from last year.

Performance for the year to 30 September 2010

Over the year the Company's net asset value total return was 21.9% compared with the total return of 12.5% for our benchmark, the FTSE All-Share Index. The recovery in equities which began in March 2009 has continued. Some of the shares in our portfolio whose prices fell most sharply during 2008 have been the best performers since then. This has helped Lowland's relative performance over the period, although the recovery in our net asset value has not yet made up for the severe fall in 2008. However, in every year of the decade except for 2008, Lowland has outperformed its benchmark index. Its investment style has meant that despite occasional periods of short-term under-performance Lowland has a strong long-term record.

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Page 2 of 13

LOWLAND INVESTMENT COMPANY PLC

Annual Financial Report for the year ended 30 September 2010

Chairman's comments (continued)

Earnings and Dividends

The total dividend for the year will be 27.0p comprising a first interim dividend of 10p per share (2009: 10p) followed by a second interim dividend of 17.0p per share (2009:16.5p). This is a total dividend increase of 1.9%. The revenue return per share for the year was 22.5p which is down slightly from last year's 22.7p as there was no further benefit from VAT reclaims during the year, which added 2.9p last year. We have therefore drawn on our Revenue Reserve to enable us to make a small increase in the dividend. During the years of strong earnings growth earlier in the decade we retained some of our earnings in our Revenue Reserve for this very purpose: so that the total dividend could be at least maintained in years when earnings were weak. Our projections for next year suggest that earnings will grow strongly. Most of the stocks held in the portfolio are generating cash, so our expectation is that earnings growth will lead to robust dividend increases next year. We expect at least to cover the dividend next year, and if our expectations prove correct, we would hope to be in a position to consider a further increase. After payment of the second interim dividend the total revenue reserve will be £2.8m compared with the cost of this year's dividend of £7.1m.  The second interim dividend will be paid on 22 December 2010 to shareholders on the register at 3 December 2010.

Expenses and Fees

The total expense ratio (TER) which is the management fee and other non-interest expenses as a percentage of shareholders' funds was 0.70% (2009: 0.83%). This reduction is due, in part, to the increase in the value of our portfolio in the year.

At its annual review of the management agreement, the Board decided to make certain changes which it has agreed with the Investment Manager, Henderson Global Investors ("Henderson").

The changes, which will take effect from 1 October 2010, are:

• A reduction in the Notice Period required to terminate the management contract from the current 12 months to 6 months, which is more in line with current practice in the investment trust sector.

• A change in the method of calculating the basic management fee payable from 0.5% of what has effectively been aggregate gross assets to 0.5% of aggregate net assets. Since Lowland normally operates with a degree of gearing, this will lead, all other things being equal, to a reduction in the basic management fee payable to Henderson.

At the same time, the Board has decided to introduce an incentive to Henderson, and in particular to the team allocated by Henderson to manage Lowland, to reward performance above Lowland's benchmark over three year periods.

This performance fee will be 15% of any out-performance on a total return basis of Lowland's benchmark (currently the FTSE All-Share Index) by more than 10% (the "hurdle rate") over the average of the last three years. This fee, plus the basic fee of 0.5% of net assets described above, will be capped in any year at a total of 0.75% of net assets.

In the first year of operation, the year to 30 September 2011, the performance fee will be based on Lowland's performance over that one year. In the second year, it will be based on the average of the two years to 30 September 2012. In the year to 30 September 2013 and thereafter, it will be based on the average of the previous three years.

Any performance fee paid will be charged to the capital return column of the income statement whereas the management fee will continue to be charged to the revenue return.

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Page 3 of 13

LOWLAND INVESTMENT COMPANY PLC

Annual Financial Report for the year ended 30 September 2010

Chairman's comments (continued)

Board

The Board composition will change over the coming two years. I will be retiring after the AGM in January 2012 and we will appoint a new director during the current financial year. Our aim is to refresh the Board but also ensure a continuity of approach.

Investment Report

The performance attribution for the year is set out in the Report and Financial Statements. It shows that the medium and smaller sized companies have added the most value, while the FTSE 100 holdings have underperformed. The analysis needs to be treated carefully as the portfolio is not run in segregated pools. The largest companies are generally less economically sensitive. The exception among the largest companies is mining, in which we are underweight, but which have benefited from the global economic recovery. Our portfolio has instead profited from the economic recovery through its holdings in medium and small sized industrial companies. It would increase the overall risk in the portfolio to have large exposures to cyclical shares in both large and small companies. The large companies in the portfolio include the oil and pharmaceutical companies. They bring some defensive qualities to the overall portfolio. They underperformed this year, having held up much better in 2008. The Board and the Portfolio Manager attempt to reduce risk through a genuinely diversified portfolio which means a relatively long list of holdings. This means stock specific risk is reduced and it allows the Portfolio Manager to invest in the early stages of an expected recovery, when the returns can be high but the risks are greater. The upturn in the economy has meant that these recovery situations have had a beneficial effect on the portfolio over the last year.

Borrowings

As at 30 September 2010 we had increased our overall level of borrowings to £28m from £23m a year earlier. The £23m at 30 September 2009 included a £6m 11.25% debenture which we redeemed on 1 July 2010. Since the period end, a new two-year loan facility of £33m has been negotiated to replace our existing one year loan facility of £32m. This was done on marginally better terms but the redemption of the debenture in July 2010 means that the overall interest rate which we pay on our borrowings will be considerably less than in recent years. The gearing at the year end was 12.6% and we expect to retain some gearing for as long as we consider that equities offer good value.

Annual General Meeting

The Annual General Meeting will be held at the offices of Henderson Global Investors, 201 Bishopsgate, London on Wednesday, 19 January 2011 at 12.00 noon.  Full details of the business to be conducted at the meeting are set out in the Notice of the Meeting. As usual our Portfolio Manager, James Henderson, will be making a presentation and all shareholders are most welcome to attend.

Outlook

The global economy is expected to continue to grow. For the UK this growth will be relatively weak, as the spending cuts combined with tax increases reduce demand. This is necessary for the imbalances in the economy to unwind but it will mean tough trading conditions for many UK orientated companies. Lowland's portfolio is focused on companies which we believe will not only survive but will also expand. These companies serve a wide range of markets, and in many cases offer their customers a unique proposition. The portfolio is not a proxy for the UK economy; rather it is a collection of strong companies that bring to the portfolio a diversified earnings profile and the prospect of good dividend growth. We therefore expect the recovery in Lowland's net asset value to continue.

John Hancox

Chairman

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Page 4 of 13

LOWLAND INVESTMENT COMPANY PLC

Annual Financial Report for the year ended 30 September 2010

PRINCIPAL RISKS AND UNCERTAINTIES

With the assistance of the Investment Manager, the Board has drawn up a Risk Map, which identifies the key risks to the Company. These key risks fall broadly under the following categories:

● Investment and Strategy

An inappropriate investment strategy, for example, in terms of asset allocation or level of gearing, may result in underperformance against the Company's benchmark index and the companies in its peer group, and also in the Company's shares trading on a wider discount. The Board manages these risks by ensuring a diversification of investments and a regular review of the extent of borrowings. The Investment Manager operates in accordance with investment limits and restrictions and policy determined by the Board, which includes limits on the extent to which borrowings may be employed. The Board reviews the limits and restrictions on a regular basis and the Investment Manager confirms adherence to them every month. The Investment Manager provides the Board with management information, including performance data and reports and shareholder analyses. The directors monitor the implementation and results of the investment process with the Portfolio Manager at each Board meeting and monitor risk factors in respect of the portfolio. Investment strategy is reviewed at each meeting.

● Market

Market risk arises from uncertainty about the future prices of the Company's investments.

● Accounting, legal and regulatory

In order to qualify as an investment trust, the Company must comply with section 1158 of the Corporation Tax Act 2010 ("s.1158"). A breach of s.1158 could result in the Company losing investment trust status and, as a consequence, realised gains in the Company's portfolio would be subject to Corporation Tax. Compliance with the requirements of s.1158 are monitored by the Investment Manager and the results are reported at each Board meeting.

The Company must comply with the provisions of the Companies Act and, since its shares are listed on the London Stock Exchange, the UKLA's Listing and Disclosure Rules. A breach of the Companies Act could result in the Company and/or the directors being fined or the subject of criminal proceedings. A breach of the UKLA Rules could result in the suspension of the Company's shares; which in turn would breach s.1158. The Board relies on its Company Secretary and advisers to ensure adherence to the Companies Act and the UKLA Rules.

● Operational

Disruption to, or the failure of, the Investment Manager's accounting, dealing or payment systems or the Custodian's records could prevent the accurate reporting or monitoring of the Company's financial position. The Investment Manager contracts some of the operational functions (principally those relating to trade processing, investment administration and accounting), to BNP Paribas Securities Services.

Details of how the Board monitors the services provided by the Investment Manager and its other suppliers, and the key elements designed to provide effective internal control, are explained further in the Annual Report and Financial Statements.

● Financial

The financial risks faced by the Company include market price risk, interest rate risk, liquidity risk and credit risk. Details of these risks and how they are managed are disclosed in the Annual Report and Financial Statements.

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Page 5 of 13

LOWLAND INVESTMENT COMPANY PLC

Annual Financial Report for the year ended 30 September 2010

PRINCIPAL RISKS AND UNCERTAINTIES (continued)

RELATED PARTY TRANSACTIONS

Investment management, accounting, company secretarial and administrative services were provided to the Company by wholly-owned subsidiary companies of Henderson Group plc ("Henderson" or the "Investment Manager"). This is the only related party arrangement currently in place. Other than fees payable by the Company in the ordinary course of business, there have been no material transactions with this related party affecting the financial position or performance of the Company during the year under review.

STATEMENT OF DIRECTORS' RESPONSIBILITIES UNDER DTR 4.1.12

Each of the directors confirms that, to the best of their knowledge:

• the financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

• the Directors' Report in this Annual Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.

For and on behalf of the Board

R G M L Barclay

Director

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Page 6 of 13

LOWLAND INVESTMENT COMPANY PLC

Annual Financial Report for the year ended 30 September 2010

Audited Income Statement

for the year ended 30 September 2010

	Year ended 30 September 2010			Year ended 30 September 2009
	Revenue Return £'000	Capital Return £'000	Total £'000	Revenue Return £'000	Capital Return £'000	Total £'000
Gains/(losses) on investments held at fair value through profit or loss	-	30,917	30,917	-	(3,764)	(3,764)
Income from investments (note 2)	8,303	-	8,303	7,402	-	7,402
Other interest receivable and similar income (note 3)	107	-	107	362	-	362
Interest on VAT refunds (note 3)	-	-	-	371	-	371
	---------	---------	---------	---------	---------	---------
Gross revenue and capital gains/(losses)	8,410	30,917	39,327	8,135	(3,764)	4,371
Management fee	(924)	-	(924)	(1,030)	-	(1,030)
Write back of prior-years' VAT	-	-	-	407	-	407
Other administrative expenses	(399)	-	(399)	(423)	-	(423)
	---------	---------	---------	---------	---------	---------
Net return/(loss) on ordinary activities before finance charges and taxation	7,087	30,917	38,004	7,089	(3,764)	3,325
Finance charges	(1,064)	-	(1,064)	(1,083)	-	(1,083)
	---------	---------	---------	---------	---------	---------
Net return/(loss) on ordinary activities before taxation	6,023	30,917	36,940	6,006	(3,764)	2,242
Taxation on net return/(loss) on ordinary activities	(90)	-	(90)	(19)	-	(19)
	---------	---------	---------	---------	---------	---------
Net return/(loss) on ordinary activities after taxation	5,933	30,917	36,850	5,987	(3,764)	2,223
	=====	=====	=====	=====	=====	=====
Return/(loss) per ordinary share - basic and diluted (note 4)	22.5p	117.0p	139.5p	22.7p	(14.3p)	8.4p
	=====	=====	=====	=====	=====	=====

The total columns of this statement represent the Income Statement of the Company. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies.  All revenue and capital items in the above statement derive from continuing operations.  No operations were acquired or discontinued during the year.  The Company had no recognised gains or losses other than those disclosed in the Income Statement.

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Page 7 of 13

LOWLAND INVESTMENT COMPANY PLC

Annual Financial Report for the year ended 30 September 2010

Reconciliation of Movements in Shareholders' Funds

for the years ended 30 September 2010 and 30 September 2009

Year ended 30 September 2010	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 30 September 2009	6,604	53,561	1,007	104,069	8,392	173,633
Net return on ordinary   activities after taxation	-	-	-	30,917	5,933	36,850
Second interim dividend (16.5p) for the year ended 30 September 2009 paid 22 December 2009	-	-	-	-	(4,359)	(4,359)
First interim dividend (10.0p) for the year ended 30 September 2010 paid 19 June 2010	-	-	-	-	(2,642)	(2,642)
Refund of unclaimed dividends over 12 years old	-	-	-	-	2	2
	---------	---------	---------	---------	---------	---------
At 30 September 2010	6,604	53,561	1,007	134,986	7,326	203,484
	=====	=====	=====	=====	=====	=====
Year ended 30 September 2009	Called up share capital £'000	Share premium account £'000	Capital redemption reserve £'000	Other capital reserves £'000	Revenue reserve £'000	Total £'000
At 30 September 2008	6,604	53,561	1,007	107,833	9,406	178,411
Net (loss)/ return on ordinary activities after taxation	-	-	-	(3,764)	5,987	2,223
Final dividend (16.5p) for the year   ended 30 September 2008 paid 22 December 2008	-	-	-	-	(4,359)	(4,359)
First interim dividend (10.0p) for the year ended 30 September 2009 paid 19 June 2009	-	-	-	-	(2,642)	(2,642)
	---------	---------	---------	---------	---------	---------
At 30 September 2009	6,604	53,561	1,007	104,069	8,392	173,633
	=====	=====	=====	=====	=====	=====

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Page 8 of 13

LOWLAND INVESTMENT COMPANY PLC

Annual Financial Report for the year ended 30 September 2010

Audited Balance Sheet

at 30 September 2010

	2010 £'000	2009 £'000
Investments held at fair value through profit or loss
Listed at market value in the United Kingdom	205,140	174,923
Quoted at market value on AIM	17,384	14,028
Listed at market value overseas	5,243	3,687
Unquoted	1,307	1,302
	-----------	---------
	229,074	193,940
	-----------	---------
Current assets
Debtors	1,562	1,357
Cash at bank	2,282	2,334
	-----------	---------
	3,844	3,691
Creditors: amounts falling due within one year	(29,434)	(23,998)
	-----------	-----------
Net current liabilities	(25,590)	(20,307)
	-----------	-----------
Total net assets	203,484	173,633
	======	======
Capital and reserves
Called up share capital (note 6)	6,604	6,604
Share premium account	53,561	53,561
Capital redemption reserve	1,007	1,007
Other capital reserves	134,986	104,069
Revenue reserve	7,326	8,392
	-----------	-----------
Shareholders' funds	203,484	173,633
	======	======
Net asset value per ordinary share (note 7)	770.3p	657.3p
	======	======

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Page 9 of 13

LOWLAND INVESTMENT COMPANY PLC

Annual Financial Report for the year ended 30 September 2010

Audited Cash Flow Statement

for the year ended 30 September 2010

	2010 £'000	2010 £'000	2009 £'000	2009 £'000
Net cash inflow from operating activities		6,774		8,074
Servicing of finance
Interest paid	(1,122)		(1,021)
	----------		---------
Net cash outflow from servicing of finance		(1,122)		(1,021)
Taxation
Tax recovered	95		-
	----------		---------
Net tax recovered		95		-
Financial investment
Purchase of investments	(28,542)		(45,959)
Sales of investments	24,780		57,678
	----------		-----------
Net cash (outflow)/inflow from financial investment		(3,762)		11,719
Equity dividends paid		(6,999)		(7,001)
		----------		---------
Net cash (outflow)/inflow before financing activities		(5,014)		11,771
Financing
Repayment of Debenture Stock	(6,000)		-
Net loans drawndown/(repaid)	11,000		(10,586)
	-----------		-----------
		5,000		(10,586)
		----------		----------
(Decrease)/increase in cash		(14)		1,185
		======		======
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash as above		(14)		1,185
Repayment of Debenture Stock		6,000		-
Net cash (inflow)/outflow from movement in loans		(11,000)		10,586
Exchange movements		(38)		33
		---------		----------
Movement in net debt		(5,052)		11,804
Net debt at 1 October		(20,666)		(32,470)
		----------		-----------
Net debt at 30 September		(25,718)		(20,666)
		======		======

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Page 10 of 13

LOWLAND INVESTMENT COMPANY PLC

Annual Financial Report for the year ended 30 September 2010

Notes to the Accounts:

1.

Accounting policies

The financial statements have been prepared on a going concern basis and under the historical cost basis of accounting, as modified to include the revaluation of investments. The financial statements have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice and with the Statement of Recommended Practice ("the SORP") for investment trusts issued by the Association of Investment Companies ("the AIC") in January 2009. All of the Company's operations are of a continuing nature. The Company's accounting policies are consistent with the prior year.

2.	Income from investments	2010 £'000	2009 £'000
	UK dividends
	Quoted investments	7,316	6,700
	Unquoted	43	41
		--------	-------
		7,359	6,741
		--------	-------
	Non UK dividends
	Overseas dividend income	820	317
	Stock dividends	-	24
	Property income dividends	119	210
	Interest income	5	110
		--------	--------
	Non UK dividends	944	661
		--------	--------
		8,303	7,402
		=====	=====

3.	Other interest receivable and similar income	2010 £'000	2009 £'000
	Deposit interest	2	11
	Stock lending fees	7	55
	Income from underwriting	98	296
		-------	-------
		107	362
	Interest on VAT refunds	-	371
		--------	--------
		107	733
		=====	=====

4.	Return per ordinary share - basic and diluted
	The return per ordinary share is based on the net return attributable to the ordinary shares of £36,850,000    (2009: return of £2,223,000) and on 26,417,427 ordinary shares (2009: 26,417,427) being the weighted average number of ordinary shares in issue during the year. The return per ordinary share can be further analysed between revenue and capital, as below:
		2010 £'000	2009 £'000
	Net revenue return	5,933	5,987
	Net capital return/(loss)	30,917	(3,764)
		---------	---------
	Net total return	36,850	2,223
		=====	=====
	Weighted average number of ordinary shares in issue during the year	26,417,427	26,417,427
	Revenue return per ordinary share	22.5p	22.7p
	Capital return/(loss) per ordinary share	117.0p	(14.3p)
		--------	--------
	Total return per ordinary share	139.5p	8.4p
		=====	=====
	The Company does not have any dilutive securities, therefore basic and diluted returns per share are the same.

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LOWLAND INVESTMENT COMPANY PLC

Annual Financial Report for the year ended 30 September 2010

Notes to the Accounts (continued):

5.	Dividends paid and payable on the ordinary shares
	Dividends on ordinary shares	Record Date	Payment Date	2010 £'000	2009 £'000
	Final dividend (16.5p)   for the year ended 30 September 2008	21 November 2008	22 December 2008	-	4,359
	First interim dividend (10.0p)    for the year ended 30 September 2009	29 May 2009	19 June 2009	-	2,642
	Second interim dividend (16.5p)   for the year ended 30 September 2009	4 December 2009	22 December 2009	4,359	-
	First interim dividend (10.0p)    for the year ended 30 September 2010	28 May 2010	18 June 2010	2,642	-
	Refund of unclaimed dividends over 12 years    old			(2)	-
				--------	-------
				6,999	7,001
				=====	=====
	The second interim dividend for the year ended 30 September 2010 has not been included as a liability in these financial statements.  The total dividends payable in respect of the financial year, which form the basis of one of the retention tests under Section 1158 of the Corporation Tax Act 2010, are set out below.
				2010 £'000
	Revenue available for distribution by way of dividend for the year			5,933
	First interim dividend (10.0p) for the year ended 30 September 2010			(2,642)
	Second interim dividend (17.0p) for the year ended 30 September 2010 (based on 26,417,427 ordinary shares in issue at 22 November 2010)			(4,491)
				----------
	Undistributed revenue for Section 1158 purposes*			(1,200)
				======
	* All current year revenue after tax has been distributed.  The shortfall of £1,200,000 has been funded from the revenue reserve.

6.	Called up share capital	2010 £'000	2009 £'000
	Allotted, issued and fully paid
	26,417,427 (2009:  26,417,427) ordinary  shares of 25p each	6,604	6,604
		======	======

7.	Net asset value per ordinary share
	The net asset value per ordinary share is based on the net assets attributable to ordinary shares of £203,484,000 (2009: £173,633,000) and on 26,417,427 (2009:  26,417,427) shares in issue on 30 September 2010. An alternative net asset value per ordinary share can be calculated, by deducting from the total assets less current liabilities of the Company the debenture stock at market (or fair) value rather than at par (or book) value.  The net asset value per ordinary share at 30  September 2009 calculated on this basis was 655.5p. The movements during the year of the assets attributable to the ordinary shares were as follows:
		2010 £'000
	Total net assets at 1 October 2009	173,633
	Total net return on ordinary activities after taxation	36,850
	Net dividends paid in the year: Ordinary shares	(6,999)
		----------
	Net assets attributable to the ordinary shares at 30 September 2010	203,484
		======

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LOWLAND INVESTMENT COMPANY PLC

Annual Financial Report for the year ended 30 September 2010

Notes to the Accounts (continued):

8.

VAT on Management Fees

Following the 2007 decision by the European Court of Justice that Value Added Tax ("VAT") should not be charged on fees paid for management services provided to investment trust companies, over the previous two financial years the Company received in total £1,238,000 in VAT reclaims relating to management fees paid during the periods 1 January 1990 to 4 December 1996 and 1 October 2000 to 30 June 2007. In addition, the Company received £371,000 of simple interest on those VAT reclaims, which was included in the financial statements to 30 September 2009. No further reclaims of VAT or interest were expected or received during the year under review.

9.

2010 Annual Financial Statements

The figures and financial information for the year ended 30 September 2010 are extracted from the Company's annual financial statements for that period and do not constitute statutory accounts.  The Company's annual financial statement for the year to 30 September 2010 have been audited but have not yet been delivered to the Registrar of Companies.  The auditors' report on the 2010 annual financial statements was unqualified, did not include a reference to any matter to which the auditors drew attention without qualifying the report, and did not contain any statements under section 498 of the Companies Act 2006.

10.

2009 Financial Information

The figures and financial information for the year ended 30 September 2009 are compiled from an extract of the published accounts for that year and do not constitute statutory accounts.  Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under sections 498(2) or 498(3) of the Companies Act 2006.

11.	Dividend
	The second interim dividend, in lieu of a final dividend, of 17.0p per ordinary share, will be paid on 22 December 2010 to shareholders on the register of members at the close of business on 3 December 2010. The Company's shares will be quoted ex-dividend on 1 December 2010.

12.	Annual Report
	The Annual Report and Financial Statements will be posted to shareholders in December 2010 and will be available on the Company's website (www.lowlandinvestment.com) or in hard copy format from the Company's Registered Office, 201 Bishopsgate, London, EC2M 3AE.

13.	Annual General Meeting
	The Annual General Meeting will be held on Wednesday, 19 January 2011 at 12.00 noon at 201 Bishopsgate, London, EC2M 3AE.

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Page 13 of 13

LOWLAND INVESTMENT COMPANY PLC

Annual Financial Report for the year ended 30 September 2010

Notes to the Accounts (continued):

Twenty Largest Holdings as at 30 September 2010

Rank (2010)	Rank (2009)	Company	Valuation 2009 £'000	Purchases £'000	Sales £'000	Appreciation/ (depreciation) £'000	Valuation 2010 £'000
1	(3)	Senior	6,362	-	(1,629)	7,768	12,501
2	(2)	Royal Dutch Shell	7,812	1,339	-	598	9,749
3	(1)	BP	9,401	1,833	-	(2,250)	8,984
4	(8)	Carclo	4,533	-	-	3,979	8,512
5	(18)	Croda	3,116	-	-	3,923	7,039
6	(4)	Aviva	6,049	636	-	(701)	5,984
7	(5)	GlaxoSmithKline	5,533	-	-	112	5,645
8	(10)	Meggitt	4,371	-	-	1,183	5,554
9	(7)	Vodafone	4,872	463	(708)	597	5,224
10	(*)	Canfor Pulp	1,407	-	-	3,719	5,126
11	(17)	Hiscox	3,127	1,640	-	143	4,910
12	(13)	GKN	3,502	-	(347)	1,588	4,743
13	(15)	Daily Mail & General	3,214	514	-	480	4,208
14	(9)	Hill & Smith	4,419	-	-	(368)	4,051
15	(14)	BHP Billiton	3,416	-	-	634	4,050
16	(11)	Interserve	4,353	212	-	(555)	4,010
17	(*)	Weir	1,694	-	-	1,863	3,557
18	(19)	H&T	3,081	-	-	315	3,396
19	(12)	HSBC	3,759	-	-	(373)	3,386
20	(*)	Severn Trent	971	1,526	-	781	3,278
			---------	---------	---------	---------	---------
			84,992 =====	8,163 =====	(2,684) =====	23,436 =====	113,907 =====

These investments total £113,907,000 or 49.7% of the portfolio.

* Not in the top 20 largest investments last year.

For further information please contact:
James H Henderson	James de Sausmarez
Portfolio Manager	Head of Investment Trusts
Lowland Investment Company plc	Henderson Global Investors
Telephone: [phone]	Telephone: [phone]
Sarah Gibbons-Cook
Investor Relations and PR Manager
Henderson Global Investors
Telephone: [phone]

- ENDS -

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

 

END

 

 

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