Final Results

Highcroft Investments PLC
14 March 2002

                           Highcroft Investments PLC

            Preliminary results for the year ended 31 December 2001



  • Gross property income up 4% to £1,412,000
  • Operating profit up 1% to £1,384,000
  • Earnings per share up 2% to 20.6p
  • Further improved quality of the property portfolio
  • Net asset value per share down 2% to 620p
  • Total dividends up 9% to 9.25p per share
  • Final dividend of 6.05p payable on 19 June 2002
  • All of this in the context of a difficult economic setting
  • Annual General Meeting on Wednesday 12 June 2002

'The solid performance of the property portfolio, and an investment approach
that kept equity portfolio in line with market indices, has meant that our net
asset value has stood up well given overall market conditions.'



14 March 2002




Chairman's Statement



The details of our financial statements indicate that 2001 was a mixed year.
The group's equity investment portfolio performed more or less in line with the
markets, with falls in both asset value and gross income.  A modest improvement
in net income arising from our property portfolio ensures that the group's
operating profit is slightly ahead of 2000.  However, the slight rise in the
value of the property portfolio was not enough to prevent the net assets of the
group falling for the first time since 1992.  The background to this has been a
sustained period when world equity and financial markets have faced a number of
significant challenges, and has seen most indices in decline, while recessionary
pressures in global markets have significantly dented business confidence and
corporate profits.  On balance, the directors are pleased with the group's
performance.



Our broad objectives remain to enhance shareholder value through a combination
of rising asset values and increasing profits, intended to sustain long term
dividend growth.



Summary results - operating activities



Operating profit rose to £1,384,000 from £1,373,000 in 2000, an increase of 1%.
Total income, including interest on cash deposits, was £1,612,000 as compared
with £1,568,000 in 2000.  Net property income rose from £1,218,000 to
£1,278,000, an increase of 5%.



Gross rents receivable were up 4% on 2000 as the purchases made in both 2000 and
2001, along with two particularly successful rent reviews, took effect in 2001.
Property income represented 79% of total income compared with 78% in 2000.  In
part this reflects these factors and also the effects of a steady repositioning
within the portfolio towards investments with higher quality tenants.  This
latter point also contributes to property outgoings continuing to run at
relatively low levels, despite some significant repairs to four residential
properties.  It is expected that these repairs will lead to increased rental
income in the future.



The structure of the group has been streamlined with the property portfolio
being held in one company, Rodenhurst Estates Limited, rather than across four.
The three companies which are no longer required are being liquidated.  This
activity has contributed extra administrative costs in 2001 but there will be
clear benefit in the form of lower operational costs from 2002 onwards.



Summary results - capital activities



Net assets fell back by 2% during the year from £32.6 million to £32.0 million.
Most of this occurred during the first half of the year, having been 631p per
share at 31 December 2000, 622p at 30 June 2001 and 620p per share at 31
December 2001.  The fall was just under 2% during the year despite a difficult
economic setting.



During the course of the year, the group spent £1,878,000 on property assets
(2000 £1,688,000) and invested £893,000 (2000 £1,626,000) in stock markets.  The
net proceeds from property disposals during the year amounted to £1,377,000
(2000 £1,667,000) while investment disposals raised £1,247,000 (2000
£1,261,000).



Profits from the gains on these disposals amounted to £76,000 (2000 £295,000),
comprising £146,000 of gains on property disposals and £70,000 of losses on
disposal of investments.  Gains before taxation again became losses after
taxation.  This circumstance occurs as the calculation of gains for accounts
purposes is not the basis for calculating capital gains for tax purposes.  A
transfer from realised capital reserve was required to cover a net loss after
taxation of £235,000 (2000 £57,000).

Property



The directors have continued to implement a strategy seeking to improve the
quality of the property portfolio and our expectations of the type, style and
size of additions to the portfolio are also rising.  Those properties that are
perceived as being of poorer quality now account for a smaller proportion of the
portfolio, both by number and value.



The property valuation showed a rise from £21.4 million to £22.7 million.  Those
properties that remained in the portfolio throughout the period show a rise in
value equivalent to 4.6% (2000 8.9%).  There are 20 (2000 22) commercial
properties in the portfolio with an average value of £989,000 (2000 £847,000).
There are 20 residential properties in the portfolio and ground rent investments
(2000 27).  The average value of these residential investments is £147,000 (2000
£103,000).



Listed investments



2001 was a disappointing year for equity markets.  There was a gradual fall in
markets during the first half of the year.  This continued until news of the
tragic events of 11 September hit us and markets plunged.  The recovery was
remarkably rapid but the downtrend continued until the year end, with the
FTSE100 finishing down from 6,222 to 5,217,a fall of 16.1%.  Those listed
investments that remained in our portfolio throughout the period showed a fall
in value equivalent to 15.3% (2000 0.4% rise).



The directors maintained their strategy of looking for long term investments in
solid stocks.  We have continued to look for opportunities in computer and
telecommunications stocks but still remain underweight in this sector.



Our gross income from investments shows a fall of 4% compared with last year, as
we reduced the amount of money invested in this portfolio.



Summary



The solid performance of our property portfolio, and an investment approach that
kept the equity portfolio in line with market indices, has meant that our net
asset value has stood up well given overall market conditions.  Income has shown
a modest increase and the directors are able to declare a further satisfactory
rise in the level of dividends.  Dividends for 2001 are up 9% on 2000, albeit
with a slightly reduced level of retained profits.



Current trading and prospects



On the property side, we are always actively looking for investments which will
give the group long term income and capital growth but we have not been
successful in adding to the portfolio in 2002.  One residential property became
vacant and is being marketed and an approach has been accepted on one of the
smaller commercial properties.



The themes of declining market valuations, failing business confidence and a
mixed economic outlook that marked out 2001 as a difficult year appear to be
persisting in the early months of 2002.  Much will depend on how quickly the US
economy recovers from recession and how global markets respond to any
improvements.  Asian and European economies appear to have little enough
momentum to do anything but follow America's lead.  Low interest rates will
assist sentiment in the UK but group profits will come under increasing
pressure.  For the moment, we are cautious in our investment approach.


Highcroft Investments PLC and its subsidiary undertakings
Group Profit and Loss Account (audited)
for the year ended 31 December 2001


                                                             Note                     2001            2000
                                                                                     £'000           £'000
Income from fixed asset investments
and other interest receivable                                                        1,612           1,568

Administrative expenses                                                                228             195
                                                                                    ______          ______
Operating profit                                                                     1,384           1,373

Gains on disposals of assets                                   1                        76             295
                                                                                    ______          ______
Profit on ordinary activities before taxation                                        1,460           1,668

Taxation                                                       2                       626             674
                                                                                    ______          ______
Profit for the financial year                                                          834             994

Losses on disposals of assets after taxation
taken from realised capital reserve                                                    235              57
                                                                                    ______          ______
Profit available for distribution                                                    1,069           1,051

Dividends                                                      3                       478             439
                                                                                    ______          ______
Profit retained                                                                        591             612
                                                                                      ====            ====


Earnings per share                                             4
Including losses on disposals of assets                                              16.1p           19.2p
Excluding losses on disposals of assets                                              20.6p           20.3p



The accompanying notes form an integral part of these financial statements.




Highcroft Investments PLC and its subsidiary undertakings
Balance Sheets (audited)
at 31 December 2001




                                                              The Group                 The Company
                                               Note              2001         2000          2001       2000
                                                                £'000        £'000         £'000      £'000
Fixed assets
Tangible assets                                  5             22,727       21,352             -          -
Investments                                      6              9,654       11,855        32,682     33,578
                                                              _______      _______       _______     ______
                                                               32,381       33,207        32,682     33,578
                                                              _______      _______       _______     ______
Current assets
Debtors                                                           462          401           347        322
Cash at bank                                                      419          380           419         13
                                                               ______       ______        ______     ______
                                                                  881          781           766        335
Creditors
Amounts falling due within
one year                                                        1,244        1,276         1,430      1,301
                                                              _______      _______       _______     ______
Net current liabilities                                         (363)        (495)         (664)      (966)
                                                              _______      _______      ________     ______
Total assets less current liabilities                          32,018       32,712        32,018     32,612

Provision for liabilities and charges                               -          100             -          -
                                                              _______      _______      ________     ______
Net assets                                                     32,018       32,612        32,018     32,612

                                                                =====        =====        ======      =====
Capital and reserves
Called up share capital                                         1,292        1,292         1,292      1,292
Revaluation reserve - property                                  5,713        5,647             -          -
                    - other                                     4,131        6,470        26,831     27,865
Capital redemption reserve                                         95           95            95         95
Realised capital reserve                                       13,822       12,734         3,029      2,600
Profit and loss account                                         6,965        6,374           771        760
                                                              _______      _______       _______     ______
Shareholders' funds - equity                                   32,018       32,612        32,018     32,612
                                                                =====        =====        ======      =====



Highcroft Investments PLC and its subsidiary undertakings
Group Cash Flow Statement (audited)
for the year ended 31 December 2001




                                                     Note                     2001                    2000
                                                                   £'000     £'000       £'000       £'000

Net cash inflow from operating activities              7                     1,398                   1,387

Taxation
Taxation paid                                                                (763)                   (620)

Capital expenditure and financial investment
Purchase of fixed assets - properties                            (1,878)               (1,688)
                         - listed                                  (893)               (1,626)
investments
Sale of fixed assets        - properties                           1,377                 1,667
                            - listed                               1,247                 1,261
investments
Net cash outflow from capital expenditure and                                (147)                   (386)
financial investment

Dividends
Equity dividends paid                                                        (449)                   (416)
                                                                             _____                   _____
Increase/(decrease) in cash                            8                        39                    (35)
                                                                              ====                   =====




Highcroft Investments PLC and its subsidiary undertakings
Total Recognised Gains and Losses and Historical Cost Profits and Losses
for the year ended 31 December 2001

Statement of total recognised gains and losses

                                                                                           2001             2000
                                                                                          £'000            £'000

Profit for the financial year                                                               834              994

Unrealised surplus on revaluation of investment properties                                  728            1,520

Unrealised (deficit)/surplus on revaluation of listed and unlisted investments          (1,778)               36

Deferred taxation                                                                           100            (100)
                                                                                         ______           ______
Total recognised gains and losses for the year                                            (116)            2,450
                                                                                          =====            =====


Note of historical cost profits and losses


                                                                                           2001             2000
                                                                                          £'000            £'000

Profit on ordinary activities before taxation                                             1,460            1,668

Realisation of revaluation gains of previous years
-attributable to investment properties                                                      762              992

-attributable to listed and unlisted investments                                            561              525
                                                                                         ______           ______
Historical cost profit on ordinary activities before taxation                             2,783            3,185
                                                                                          =====            =====
Historical cost profits retained                                                            591              612
                                                                                          =====            =====




Highcroft Investments PLC and its subsidiary undertakings

Notes

for the year ended 31 December 2001





1   Gains on disposals of assets
                                                                                               2001       2000
Gains on disposals of assets arising on sales of:                                             £'000      £'000
Properties                                                                                      146        174
Investments                                                                                    (70)        121
                                                                                              _____      _____
                                                                                                 76        295
                                                                                               ====       ====



2   Taxation

The taxation charge at 30% (2000 30%) is based on the profit for the year and is
made up as follows:


                                                                                               2001       2000
                                                                                              £'000      £'000
Corporation tax                                                                                 315        322
Corporation tax on disposals of assets                                                          311        352
                                                                                              _____      _____
                                                                                                626        674
                                                                                               ====       ====



3   Dividends


                                                                                               2001       2000
Ordinary shares                                                                               £'000      £'000
Interim dividend of 3.2p per share paid (2000 3.0p)                                             165        155
Proposed final dividend of 6.05p per share (2000 5.5p)                                          313        284
                                                                                              _____      _____
                                                                                                478        439
                                                                                               ====       ====



4   Earnings per share



     The calculation of earnings per share is based on the profit for the
financial year of £834,000 (2000 £994,000) and on 5,167,240 (2000 5,167,240)
ordinary shares of 25p each which is the weighted average number of shares in
issue during the year ended 31 December 2001.



     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
£1,069,000 (2000 £1,051,000).  The effect of the adjustment is as follows:


                                                                                               2001      2000
Earnings per share
Including losses on disposals of assets                                                       16.1p     19.2p
Adjustment for losses on disposals of assets                                                   4.5p      1.1p
                                                                                              _____     _____
Excluding losses on disposals of assets                                                       20.6p     20.3p
                                                                                               ====      ====

5   Tangible assets



The group
                                                                                       Land and buildings

                                                                                    (Investment properties)
                                                                             Total    Freeholds          Long
                                                                                                   leaseholds
                                                                             £'000        £'000         £'000
Valuation at 1 January 2001                                                 21,352       19,062         2,290
Additions                                                                    1,878        1,878             -
Disposals                                                                  (1,231)      (1,231)             -
Surplus on revaluation                                                         728          713            15
                                                                         _________    _________     _________
Valuation at 31 December 2001                                               22,727       20,422         2,305
                                                                           =======      =======       =======



6       Investments


                                                                        Total         Listed       Unlisted
   The group                                                            £'000          £'000          £'000
   Valuation at 1 January 2001                                         11,855         11,855              -
   Additions at cost                                                      893            893              -
   Disposals                                                          (1,316)        (1,316)              -
   Deficit on revaluation                                             (1,778)        (1,778)              -
                                                                     ________        _______        _______
   Valuation at 31 December 2001                                        9,654          9,654              -
                                                                       ======         ======         ======



7       Reconciliation of operating profit to net cash flow from operating
activities
                                                                                          2001          2000
                                                                                         £'000         £'000
Operating profit                                                                         1,384         1,373
Increase in debtors                                                                       (61)          (15)
Increase in creditors                                                                       75            29
                                                                                         _____         _____
Net cash inflow from operating activities                                                1,398         1,387
                                                                                         _____         _____



8   Analysis of changes in net funds
                                                                                          2001          2000
Cash at bank                                                                             £'000         £'000
At 1 January 2001                                                                          380           415
Net cash inflow/(outflow)                                                                   39          (35)
                                                                                           ___           ___
At 31 December 2001                                                                        419           380
                                                                                           ___           ___


9   Accounting convention:

The financial statements have been prepared under the historical cost convention
except that freehold and leasehold properties and listed and unlisted
investments are revalued annually.




10 Annual General Meeting:

The Annual General Meeting will be held on 12 June 2002



11 Final ordinary dividend:

     A final ordinary dividend of 6.05p per share will be paid on 19 June 2002
to shareholders registered at the close of business on 17 May 2002.



12 Limitation

     The above does not constitute full accounts within the meaning of section
240 of the Companies Act 1985.  It is an extract from the full accounts for the
year ended 31 December 2001 on which the auditors have confirmed that they
expect to express an unqualified opinion.  They will be posted to shareholders
on or before 30 April 2002 and filed at Companies House in due course.



14 March 2002



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