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M&G Income Inv. Co (MIV)

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Friday 10 January, 2003

M&G Income Inv. Co

Final Results

M&G Income Investment Company Ltd
10 January 2003


Announcement Body
Information:
10 January 2003
M&G Income Investment Company Limited
PRELIMINARY ANNOUNCEMENT: Annual Results

Performance during the period

Over the course of the period under review, the Net Asset Value ('NAV') of the
Package Units produced a negative total return of 16.5% with net income
reinvested. Over the same period the FTSE All-Share Index produced a negative
total return of 17.7% with net income reinvested. At the interim stage the total
return on the NAV of the Company's Package Units was a positive 4.9%, but this
position was reversed in the second half, due to the extreme weakness of equity
markets from mid-May onwards. The Company's holdings in investment grade
corporate bonds produced a positive return, but there was a negative total
return of 2.3% from the investment in the M&G High Yield Corporate Bond Fund.

The Board is pleased to have been able to declare a twelfth interim dividend of
1.0p per Ordinary Share, in respect of the period ending 31 October 2002 paid on
2 December 2002 to Ordinary Shareholders on the register at the close of
business on 15 November 2002. The ex dividend date was 13 November 2002. This,
together with the eleven interim dividends of 0.13p per Ordinary Share declared
give a total of 2.43p per Ordinary Share for the period ended 31 October 2002.

This equates to total dividends of 4.86p per Package Unit in accordance with the
Prospectus. As at the period end, the yield on the Package Units was 7.6%, well
above the yield on the FTSE All-Share Index of 3.5%. The Company's earnings per
Package Unit were 5.18p.



DIVIDEND ANNOUNCEMENT

Announcement Body Information:
10 January 2003
M&G Income Investment Company Limited
PRELIMINARY ANNOUNCEMENT: Annual Results

Performance during the period

Over the course of the period under review, the Net Asset Value ('NAV') of the
Package Units produced a negative total return of 16.5% with net income
reinvested. Over the same period the FTSE All-Share Index produced a negative
total return of 17.7% with net income reinvested. At the interim stage the total
return on the NAV of the Company's Package Units was a positive 4.9%, but this
position was reversed in the second half, due to the extreme weakness of equity
markets from mid-May onwards. The Company's holdings in investment grade
corporate bonds produced a positive return, but there was a negative total
return of 2.3% from the investment in the M&G High Yield Corporate Bond Fund.

The Board is pleased to have been able to declare a twelfth interim dividend of
1.0p per Ordinary Share, in respect of the period ending 31 October 2002 paid on
2 December 2002 to Ordinary Shareholders on the register at the close of
business on 15 November 2002. The ex dividend date was 13 November 2002. This,
together with the eleven interim dividends of 0.13p per Ordinary Share declared
give a total of 2.43p per Ordinary Share for the period ended 31 October 2002.

This equates to total dividends of 4.86p per Package Unit in accordance with the
Prospectus. As at the period end, the yield on the Package Units was 7.6%, well
above the yield on the FTSE All-Share Index of 3.5%. The Company's earnings per
Package Unit were 5.18p.


Statement of total return
(audited)
(incorporating the revenue account)
for the period from incorporation to 31 October 2002                                                   2002
                                                                                        Revenue     Capital        Total
                                                                                           £000        £000         £000

Losses on investments                                                                         -    (24,922)     (24,922)
Income                                                                                    9,744           -        9,744
Investment management fee                                                               (1,101)       (734)      (1,835)
Other expenses                                                                            (270)           -        (270)
Net return before finance cost and tax                                                    8,373    (25,656)     (17,283)
Interest payable and similar charges                                                      (864)       (576)      (1,440)
Return on ordinary activities before tax                                                  7,509    (26,232)     (18,723)
Tax on ordinary activities                                                                    -           -            -
Return on ordinary activities after tax                                                   7,509    (26,232)     (18,723)
Appropriations for premiums payable on redemption                                             -     (6,587)      (6,587)
Return attributable to equity shareholders                                                7,509    (32,819)     (25,310)
Dividends                                                                               (6,966)           -      (6,966)
Transfer to / (from) reserves                                                               543    (32,819)     (32,276)

Return per Zero Dividend Share                                                                        2.70p        2.70p
Earnings / return per Ordinary Share                                                      2.59p    (11.31)p      (8.72)p
Earnings / return per Package Unit                                                        5.18p    (19.92)p     (14.74)p


All the items dealt with in arriving at revenue on ordinary activities before
tax for 2002 relate to continuing activities.

No operations were acquired or discontinued during the period.

The Company was incorporated on 28 August 2001.

The returns, earnings and dividends arose in the period 16 October 2001 (the
date the shares were issued pursuant to the placing and offer for subscription)
to 31 October 2002.



Balance sheet (audited)
As at 31 October                                                                                       2002
                                                                                                       £000
Employment of capital

Fixed assets
Investments                                                                                         170,673

Current assets
Debtors                                                                                               3,466
Cash at bank                                                                                          2,938
                                                                                                      6,404
Creditors: Amounts falling due within one year                                                      (4,117)
Net current assets                                                                                    2,287
Total assets less current liabilities                                                               172,960
Creditors: amounts falling due after more than one year                                            (24,927)
Net Assets                                                                                          148,033

Capital and
reserves
Called up share capital                                                                               5,247
Capital redemption reserve                                                                              243
Zero Dividend Share appropriation reserve                                                             6,514
Special reserve                                                                                     168,305
Capital reserves   - realised                                                                       (7,952)
                   - unrealised                                                                    (24,867)
Revenue reserve                                                                                         543
Total shareholders' funds                                                                           148,033

Total shareholders' funds are attributable to:
Equity                                                                                               60,663
shareholders
Non equity shareholders                                                                              87,370
                                                                                                    148,033
Asset value per Zero Dividend Share                                                                  36.20p
Asset value per Ordinary Share                                                                       22.41p
Asset value per Package Unit                                                                         81.02p



Cash flow statement (audited)
for the period from incorporation to 31 October 2002                                                   2002
                                                                                                       £000         £000

Net cash inflow from operating activities                                                                          7,490

Servicing of
finance
Interest paid on bank loan                                                                                       (1,328)
Equity dividends                                                                                                 (3,763)
paid

Investment
activities
Purchase of investments                                                                           (142,591)
Sale of                                                                                             118,654
investments
Net cash outflow from investing activities                                                                      (23,937)

Financing
Drawdown of bank loan                                                                                             25,000
Specific loan                                                                                                       (85)
costs
Repurchase of Ordinary Shares                                                                                    (1,607)
Repurchase of Package Units                                                                                      (5,068)
Shares issued for cash                                                                                             9,489
Share issue costs                                                                                                (3,253)
Increase in cash                                                                                                   2,938


Note:

The 2002 figures have been extracted from the audited financial statements with
an unqualified audit report with no matters of adverse comment.

The Annual Report and Accounts will be posted to Shareholders on 24 January 2003
and the Annual General Meeting will be held at Westbourne, The Grange, St Peter
Port, Guernsey GY1 3BG on 24 February 2003 at 12: 10 pm.




Kleinwort Benson (Guernsey) Fund Services Limited
Company Secretary



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