Results to 31 December 1999

Acorn Income Fund Ld 30 March 2000 ACORN INCOME FUND LIMITED FINAL RESULTS FOR THE PERIOD 11TH FEBRUARY, 1999 TO 31ST DECEMBER, 1999 CHAIRMAN'S STATEMENT The Company was launched on 11th February, 1999 with a primary listing on the London Stock Exchange, after raising equity of £10.56 million net of expenses together with an associated bank term loan facility of £7.3m. A secondary listing on the Channel Islands Stock Exchange was obtained on 16th April, 1999. The Company's principal investment objective is to provide Shareholders with a high level of income and the opportunity for income and capital growth. The total dividend for the period ended 31st December, 1999 had been estimated before the launch at 8.5p per share and I am pleased to report that this dividend forecast has been met, with the final dividend in respect of this period being paid on 23rd February, 2000. The revenue return achieved during the period was 10.59p. Two further fundraising issues took place in the reporting period. Firstly, a further issue of 1 million ordinary shares at 112p together with an additional bank term loan facility of £700,000 took place on 17th May, 1999. Secondly, on 13th October, 1999, 15 million new ordinary shares were issued at 132.5p with the associated bank term loan facility increasing to £23.337m. These share issues were made in response to demand as it was believed that this was not being fully satisfied by supply in the secondary market. In support of this view, the shares maintained a premium to net asset value following the third share issue to end the reporting period with a mid market price of 138.5p and net asset value per share of 126.7p as at 31st December, 1999. After allowance for the 8.5p dividend for the period to 31st December 1999, the Company's net asset value appreciated by 32%. As at 29th February, 2000, being the most recent reporting date, the net asset value per share stood at 120.1p. The period under review commenced with favourable economic conditions for the smaller UK quoted company sector into which category 75% of the Company's assets are invested. Whilst there was a deterioration in the interest rate outlook towards the end of the period, the smaller companies Investment Adviser's report comments favourably on the numerous investment opportunities available at present. The Board remains confident that the Company will continue to meet its investment objectives. I look forward to welcoming Shareholders to our first Annual General Meeting on 25th April, 2000 at 10am which will be held at the Company's registered office at TSB House, Le Truchot, St Peter Port, Guernsey. D M Bralsford 30th March, 2000 20 PRINCIPAL PORTFOLIO INVESTMENTS AS AT 31ST DECEMBER 1999 Stock Sector Market Value £'000 Fine Art Developments Retailers 2,960 Allied Leisure Leisure 2,153 Abacus Polar Distributors 2,047 Ash & Lacy Engineering 2,023 Heywood Williams Construction and Building Materials 1,949 Jove Investment Trust Investment Trusts 1,912 Baynes (Charles) Distributors 1,889 Stat-Plus Group Support Services 1,865 Metalrax Group Engineering 1,801 Finelist Group Distributors 1,767 Sirdar Household Goods and Textiles 1,746 British Polythene Printing, Paper and Packaging 1,565 BSS Group Distributors 1,491 Elize Tinsley Engineering 1,485 Diploma Distributors 1,459 Dowding & Mills Electronic and Electrical 1,420 Epwin Group Building Materials 1,277 Pendragon Motor Distributors 1,182 Renold Engineering 1,117 Gaskell Household Goods and Textiles 1,105 ______ 34,213 ______ The 20 principal investments represent 60.3% of the investment portfolio. STATEMENT OF TOTAL RETURN for the period 11th February, 1999 to 31st December 1999 Revenue Capital Total £'000 £'000 £'000 Gains on investment - 4,211 4,211 Income 1,965 - 1,965 Investment management fees (68) (203) (271) Other expenses (85) (554) (639) ______ ______ ______ Net returns on ordinary activities before financial costs 1,812 3,454 5,266 Interest payable (180) (538) (718) ------ ------ ------ Return on ordinary activities for the period 1,632 2,916 4,548 Dividends paid (1,395) - (1,395) ------ ------ ----- Transfer to reserves 237 2,916 3,153 ------ ------ ----- Return per Ordinary Share 10.59p 18.92p 29.51p ----- ------ ----- BALANCE SHEET as at 31st December, 1999 £'000 £'000 Fixed assets Investments listed at market value 56,754 Current assets Debtors 812 Cash at bank 2,137 ----- 2,949 Creditors: amounts falling due within one year Creditors (2,146) ----- Net current assets 803 Creditors - amounts falling due after more than one year Long term bank loan (23,337) ------ Net asset value 34,220 ------ Share capital and reserves Share capital 6,750 Share premium 24,317 Profit and loss account 237 Capital reserve 2,916 ------ Total equity shareholders' funds 34,220 ------ Net asset value per Ordinary Share 126.74p ------ CASH FLOW STATEMENT for the period 11th February, 1999 to 31st December, 1999 £'000 Net cash inflow from operating activities 993 Servicing of finance Interest paid (438) Capital expenditure and financial investment Purchase of investments (68,850) Sale of investments 16,748 ------- (52,102) Dividends paid (720) Cash outflow before use of liquid resources and financing (53,260) Financing Issue of ordinary share capital 31,067 Loan drawn down 23,337 ------- Movement in net cash 2,137 ------- Enquiries: Andrew Duquemin Collins Stewart Fund Management Limited 01481 731942

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