Final Results - Year Ended 31 December 1999

Witan Investment Company Plc 27 January 2000 WITAN INVESTMENT COMPANY PLC Unaudited Preliminary Results for the Year Ended 31 December 1999 Financial Highlights (Audited) Year ended Year ended 31 December 31 December 1999 1998 Per Ordinary Share pence pence Net asset value 560.7 423.9 Earnings 7.54 8.06 Dividends - interims and 7.60 7.40 final (net) Extracts from the Chairman's Statement for the year ending 31 December 1999 Results 1999 will become memorable, not only for its capacity to surprise hardened investors but also to bring home to them that stock selection is the only thing that really matters in a trans-global economy, and all the 90's hype and actuarial guff about geographical allocation and index and asset weightings is no substitute for investment flair and entrepreneurial courage. The Board is delighted to be paying our investment managers their full performance fee of £500,000 for the results before you now, which are excellent, and for the most part have been achieved by superior stock selection. -2- WITAN INVESTMENT COMPANY PLC Unaudited Preliminary Results for the Year Ended 31 December 1999 Extracts from the Chairman's Statement cont/d... Dividends To some of you our dividend increase of 2.7% for the year - admittedly marginally more than the annual rate of inflation - may look rather puny, when compared to our overall rate of return per ordinary share of 34.06% (i.e. capital appreciation of 32.27% and only 1.79% of income). Unlike others, we think applying all the running expenses of the Trust against shareholder's revenue (and revenue reserves) provides the right sort of management discipline for containing costs. In this respect your Board's renegotiation of the management contract last year and our move away from an ad valorem fee has been surprisingly helpful. Nonetheless if our investment policy was stifled in any way by this rather hirsute approach, then the Board would re-consider applying costs to capital. The immediate prospects for dividends in the companies we like to own are not encouraging and it looks likely that even to maintain this year's dividend next year we are likely to use up a third of our revenue reserves. In the past shareholders have been warned of this trend, but the day of reckoning has now arrived. Valuations: Real or Unreal? Much has been written about the unsustainable market valuations to which investors have pushed communication, software and fledgling internet companies, and the sucking of teeth is loudest from those who have experienced past bear markets, or read about 'bubbles' and tulips and point to similarities this time round. Others think that the sea change in our habits brought about by the universal availability of the world- wide web are so significant that traditional ways of acquiring knowledge, buying and selling goods and communicating with each other, is nothing short of an all pervasive revolution. All the market is doing is delivering, in perhaps a rather melodramatic way, its verdict on future winners and losers; a massive shakeout in prices has already taken place between companies in the vanguard of change and those who are not, and this has been a global phenomenon. Market re-ratings of stocks always create opportunities, as it is not a perfect science, and it is under these conditions that stock selectors can knock spots off index trackers. -3- WITAN INVESTMENT COMPANY PLC Unaudited Preliminary Results for the Year Ended 31 December 1999 Statement of Total Return (incorporating the revenue account) for the year ended 31 December 1999 (Audited) Year ended 31 Year ended 31 December December 1999 1998 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital gains from - 507,558 507,558 - 184,782 184,782 investments Income from fixed asset 40,203 - 40,203 43,265 - 43,265 investments Other interest receivable 2,688 - 2,688 4,713 - 4,713 and similar income ------- ------- ------- ------- ------- ------- Gross revenue and capital 42,891 507,558 550,449 47,978 184,782 232,760 gains Management fee (4,370) - (4,370) (4,044) - (4,044) Other administrative (1,935) - (1,935) (1,078) - (1,078) expenses ------- ------- ------- ------- ------- ------- Net return on ordinary activities before interest payable and 36,586 507,558 544,144 42,856 184,782 227,638 taxation Interest payable (4,219) - (4,219) (6,205) - (6,205) ------- ------- ------- ------- ------- ------- Net return on ordinary activities before taxation 32,367 507,558 539,925 36,651 184,782 221,433 Taxation on net return on (4,095) - (4,095) (6,334) - (6,334) ordinary activities ------- ------- ------- ------- ------- ------- Net return on ordinary activities after taxation 28,272 507,558 535,830 30,317 184,782 215,099 Dividends - preference (83) - (83) (83) - (83) shares ------- ------- ------- ------- ------- ------- Available for ordinary 28,189 507,558 535,747 30,234 184,782 215,016 shareholders ------- ------- ------- ------- ------- ------- Dividends - ordinary shares Interim payment of 3.50p (13,082) - (13,082)(12,568) - (12,568) (1998: 3.35p) Second interim payment of - - - (8,632) - (8,632) nil (1998: 2.35p) Final proposed 4.10p (1998: (15,084) - (15,084)(6,568) - (6,568) 1.70p) ------- ------- ------- ------- ------- ------- (28,166) - (28,166)(27,768) - (27,768) ------- ------- ------- ------- ------- ------- Transfer to reserves 23 507,558 507,581 2,466 184,782 187,248 ===== ====== ====== ===== ======= ====== Return per ordinary share 7.54p 135.76p 143.30p 8.06p 49.23p 57.29p (note 3) ===== ====== ====== ===== ====== ====== The revenue columns of this statement represent the revenue accounts of the Company. -4- WITAN INVESTMENT COMPANY PLC Unaudited Preliminary Results for the Year Ended 31 December 1999 Summary of Net Assets at 31 December 1999 (Audited) 31 December 31 December 1999 1998 £'000 £'000 Fixed asset investments Listed in United Kingdom at 1,196,593 972,199 market value Listed abroad at market value 928,713 682,324 Unquoted at directors' 9,665 16,533 valuation ------------ ------------ 2,134,971 1,671,056 Net current liabilities (3,432) (31,315) ------------ ------------ Total assets less current 2,131,539 1,639,741 liabilities Creditors: amounts falling due after more than one year (46,000) (46,000) Provisions for liabilities and (74) (123) charges ------------ ------------ Total net assets 2,085,465 1,593,618 ======= ======= Net asset value per ordinary 560.7p 423.9p share ======= ======= Notes 1. Share Buy Backs During the year to 31 December 1999 the Company made authorised market purchases for cancellation of 3,800,000 ordinary shares of 25p. Since 1 January 2000 the Company has made further authorised market purchases for cancellation of 3,595,000 ordinary shares of 25p. 2. Dividend A final dividend of 4.10p per share has been recommended payable on 3 April 2000. The record date for the dividend will be 10 March 2000 and the ex-dividend date will be 6 March 2000. The accrual for the final dividend for 1999 has been adjusted to reflect the reduction in the number of ordinary shares outstanding as detailed above. 3. Return per Ordinary Share Revenue return per ordinary share is based on earnings attributable to ordinary shares of £28,189,000 (1998: £30,234,000) and on the weighted average number of ordinary shares in issue of 373,863,778 (1998: 375,303,094). Capital return per ordinary share is based on net capital gains for the year of £507,558,000 (1998: £184,782,000) and on the weighted average number of ordinary shares in issue, as shown above. -5- WITAN INVESTMENT COMPANY PLC Unaudited Preliminary Results for the Year Ended 31 December 1999 4. Year 2000 The directors of Witan Investment Company plc have been advised by Henderson plc, and its subsidiaries ('Henderson') which provide investment management, UK custodial, accounting, administrative and company secretarial services to the Company that the corporate action programme initiated by Henderson has been satisfactorily completed and that at the date of this document no material or significant problems affecting the Company have arisen from the year 2000 date change. Costs relating to this project were borne by Henderson. 5. 1999 Accounts The preliminary figures for the year ended 31 December 1999 are an extract from the Company's latest accounts. These accounts have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. 6. 1998 Accounts The figures and financial information for the year ended 31 December 1998 are extracted from the latest published accounts of the Company and do not constitute statutory accounts for that year. 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 either under section 237(2) or 237(3) of the Companies Act 1985. 7. Annual General Meeting Copies of the Report and Accounts will be posted to shareholders by 28 February 2000 and will thereafter be available from the Secretary at 3 Finsbury Avenue, London EC2M 2PA. The Annual General Meeting will be held at Drapers' Hall, Throgmorton Avenue, London EC2N 2DQ on Thursday 30 March 2000 at 3.00pm. For further information, please contact: James Budden Witan Investment Company plc Tel: 020 7410 3121 Gordon Puckey Biddick Harris Tel: 020 7377 6677

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