Final Results

Highcroft Investments PLC
23 March 2006


                           Highcroft Investments PLC

            Preliminary results for the year ended 31 December 2005

Highlights

   •Gross property income up 15.0% to £1,917,000

   •Operating profit after tax (excluding capital gains and losses) up 12.8%
    to £1,366,000

   •Basic earnings per share (including capital gains and losses) up 81.1% to
    102.3p

   •Adjusted earnings per share (excluding capital gains and losses) up 12.8%
    to 26.4p

   •Net asset value per share up 13.5% to 758p

   •Total dividends up 8.1% to 12.65p per share

   •Final dividend of 8.30p payable on 7 June 2006

   •Annual General Meeting on Wednesday 24 May 2006


'Net asset value has risen 13.5% to 758p and we have increased dividends in
respect of 2005 by 8.1% over 2004. We look forward to the challenges of 2006.' -
Gavin Kingerlee, Chairman


Enquiries:
+---------------------------------------+---------------------------------------+
|Gavin Kingerlee, Chairman              |                          01865 840 023|
|Highcroft Investments plc              |                                       |
|                                       |                                       |
+---------------------------------------+---------------------------------------+
|Freddy Crossley                        |                          020 7953 2000|
|Charles Stanley Securities             |                                       |
+---------------------------------------+---------------------------------------+

Chairman's Statement

Financial results - operating activities

Operating profit before taxation (excluding capital gains and losses) increased
to £1,825,000 from £1,624,000 in 2004, an increase of 12.4%. Gross income was
£2,256,000 as compared with £1,952,000 in 2004. Gross property income rose from
£1,667,000 to £1,917,000, an increase of 15.0%, driven by the first full year of
income from the recent investments at Cirencester and Southampton and also by a
relatively large number of rent reviews.

Financial results - capital activities

During 2005, there were no investments in property assets (2004 £4,089,000) and
£958,000 was invested in equities (2004 £1,016,000). The net proceeds from
property disposals during the year amounted to £461,000 (2004 £246,000) while
equity disposals generated £675,000 (2004 £1,249,000).

The net gains on these disposals amounted to £39,000 (2004 £48,000), comprising
£8,000 of gains on property disposals and £31,000 of gains on disposal of
investments. The net gain after taxation of £32,000 (2004 £42,000) was
transferred to realised capital reserve.

Property

The property valuation showed a rise from £30.5 million to £33.5 million. Those
properties that remained in the portfolio throughout the period show a rise in
value equivalent to 11.3% (2004 5.8%). There are 20 (2004 20) commercial
properties in the portfolio with an average value of £1,548,000 (2004
£1,376,000). There are 13 residential properties in the portfolio (2004 15). The
average value of these residential investments is £192,000 (2004 £200,000).

In January 2006 we purchased for £2,825,000 a property located in Staines
comprising three retail units, let to Jessops, Millets and a local pet store,
and with office accommodation above, let to Manpower plc. The current income is
£153,500 per annum. There is also planning permission, obtained by the previous
owner, to extend the property to include nine residential units.  We have begun
to pursue this opportunity and look forward to the results that it will bring.

Listed investments

2005 was a very good year for equity markets and the All-Share index was up from
2,410 to 2,847 a rise of 18.1%. Those listed investments that remained in our
portfolio throughout the period showed a rise in value of 18.3% (2004 12.0%). We
have regularly reviewed the portfolio in order to make prudent and tax efficient
disposals while protecting our dividend income stream.

Summary

The property portfolio valuation has risen 11.3%, on a like for like basis,
having realised £461,000 in sales. Our equity portfolio valuation has risen by
18.3%, on a like for like basis, having invested net cash of £283,000. In
addition we have generated net income after tax of £1,366,000. As a result we
are pleased to report that the net asset value per share has risen by 13.5% to
758p (2004 668p). This is after taking into account, for the first time under
International Financial Reporting Standards, the deferred taxation related to
our revaluation surpluses. Total shareholders funds were £39,164,000 (2004
£34,497,000).

The continuing increase in income and operating profits enables us to meet our
target of an increase in dividends well above the rate of inflation. Proposed
dividends for 2005 are up 8.1% on 2004. Basic earnings per share, which take
account of capital activities, are up 81.1% to 102.3p per share and adjusted
earnings per share, adjusted to take out the effect of capital activities, are
up 12.8% to 26.4p per share.

Current trading and prospects

We have already made the acquisition in Staines noted above but will continue to
look for good quality property acquisitions which fit well with our property
portfolio, helping us to meet our broad strategic objectives. We have completed
the sale of a small commercial property, in early 2006, and expect to dispose of
our remaining commercial property valued at less than half million pounds in the
near future. We also have a vacant residential property which is being marketed
through local agents. Our position on the listed investments portfolio is likely
to remain neutral but we continue to try to take advantage of opportunities and
the progress of the market so that the combined portfolio has a good balance of
risk and reward.

The property market is strong, but perhaps likely to show slower progress than
we have seen in the last few years, while equity markets look to have a
promising year ahead. The business has a solid balance sheet and we are well
placed to pursue our strategy successfully.

I look forward to meeting with shareholders at our AGM on 24 May 2006 for what
will be my last AGM as chairman as I shall be retiring from the board in October
2006. I am delighted to say that the board has voted John Hewitt to be my
successor following my retirement and I feel sure that shareholders will be very
happy with this appointment.



G J KINGERLEE
Chairman 22 March 2006

Consolidated income statement
for the year ended 31 December 2005

                                           Note        2005       2004
                                                      £'000      £'000

Gross rental income                                   1,917      1,667
Property operating expenses                           (125)      (127)
Net rental income                                     1,792      1,540

Realised gains on investment property                    44          9
Realised losses on investment property                 (36)          -
Net gain on disposal of investment                        8          9
property

Valuation gains on investment property                3,464      1,545
Valuation losses on investment property                (65)      (310)
Net valuation gains on investment                     3,399      1,235
property

Dividend income                                         339        285
Gains on investments                                  1,748      1,042
Losses on investments                                 (142)      (139)
Net investment income                                 1,945      1,188

Administration expenses                               (222)      (205)

Net operating profit before net financing             6,922      3,767
costs

Financial income                                          8         21
Financial expenses                                     (92)       (17)
Net financing costs                                    (84)          4

Profit before tax                                     6,838      3,771

Income tax expense                          1       (1,551)      (852)

Profit for the year                                   5,287      2,919

Basic earnings per share                    3        102.3p      56.5p

All operations are continuing.



Balance Sheet
at 31 December 2005

                                                 The Group
                                 Note            2005           2004
                                                £'000          £'000
Assets
Non-current assets
Investment property               4            33,461         30,523
Equity investments                5            10,620          8,731
Total non-current assets                       44,081         39,254

Current assets
Trade and other receivables                       301            369
Cash and cash equivalents                         725              -
Total current assets                            1,026            369

Total assets                                   45,107         39,623

Liabilities
Current liabilities
Bank overdraft                                      -            146
Interest-bearing loans and                         71             69
borrowings
Current corporation tax                           358            278
Trade and other payables                          725            679
Total current liabilities                       1,154          1,172

Non-current liabilities
Interest-bearing loans and                      1,429          1,499
borrowings
Deferred tax liabilities                        3,360          2,455
Total non-current liabilities                   4,789          3,954

Total liabilities                               5,943          5,126

Net assets                                     39,164         34,497

Equity
Issued share capital                            1,292          1,292
Revaluation reserve - property                  8,734          6,322
- other                                         3,902          2,933
Capital redemption reserve                         95             95
Realised capital reserve                       15,306         14,766
Retained earnings                               9,835          9,089
Total equity                                   39,164         34,497



Consolidated statement of cash flows
for the year ended 31 December 2005

                                                  2005          2004
                                                 £'000         £'000

Operating activities
Profit for the period                            5,287         2,919
Adjustments for:
Net valuation gains on investment              (3,399)       (1,235)
property
Profit on disposal of investment                   (8)           (9)
property
Gains on investments                           (1,606)         (903)
Finance income                                     (8)           (4)
Finance expense                                     92            21
Income tax expense                               1,551           852
Operating cash flow before changes in            1,909         1,641
working capital and provisions

Decrease in trade and other receivables             68           163
Increase in trade and other payables                46            58
Cash generated from operations                   2,023         1,862

Finance income                                       8             4
Finance expenses                                  (92)          (15)
Income taxes paid                                (564)         (451)
Cash flows from operating activities             1,375         1,400

Investing activities
Purchase of non-current assets -                     -       (4,089)
investment property
- equity investments                             (958)       (1,016)
Sale of non-current assets - investment            469           246
property
- equity investments                               675         1,249
Cash flows from investing activities               186       (3,610)

Financing activities
New medium term loan                                 -         1,568
Loan repayments                                   (70)             -
Dividends paid                                   (620)         (583)
Cash flows from financing activities             (690)           985

Net increase in cash and cash                      871       (1,225)
equivalents
Cash and cash equivalents at 1 January           (146)         1,079
2005
Cash and cash equivalents at 31 December           725         (146)
2005


Notes
for the year ended 31 December 2005

1 Taxation
                                                    2005          2004
                                                   £'000         £'000
Current tax:
On revenue profits                                   461           414
On capital profits                                     8             6
Prior year overprovision                             (1)           (1)
Deferred tax                                       1,083           433
                                                   1,551           852

The tax assessed for the period differs from the standard rate of corporation
tax in the UK of 30% (2004 30%). The differences are explained as follows:

                                                    2005          2004
                                                   £'000         £'000
Profit before tax                                  6,838         3,771
Profit before tax multiplied by standard
rate of corporation tax in the UK of 30 %(         2,051         1,131
2004 30%).
Effect of:
Income/expenses not chargeable or
deductible for tax purposes                         (87)          (72)
Chargeable gains less than accounting              (412)         (206)
profit
Adjustments to tax charge in respect of              (1)           (1)
prior periods
Income tax expense                                 1,551           852

2 Dividends

On 22 March 2006, the directors declared an ordinary interim dividend of 8.30p
per share (2004 7.65p) payable on 7 June 2006 to shareholders registered at 5
May 2006.

The following dividends have been paid by the group.

                                                    2005          2004
                                                   £'000         £'000

2004 Final: 7.65p per ordinary share (2004           395           374
7.25p)
2005 Interim: 4.35p per ordinary share               225           209
(2004 4.05p)
                                                     620           583


3 Earnings per share

The calculation of earnings per share is based on the profit for the period of
£5,287,000 (2004 £2,919,000) and on 5,167,240 shares (2004 5,167,240) which is
the weighted average number of shares in issue during the period ended 31
December 2005 and throughout the period since 1 January 2004.

In order to draw attention to the impact of valuation gains and losses which are
included in the income statement but not available for distribution under the
company's articles of association, an adjusted earnings per share based on the
profit available for distribution of £1,366,000 (2004 £1,211,000) has been
calculated.

                                                    2005          2004
                                                   £'000         £'000
Earnings:
Basic earnings                                     5,287         2,919
Adjustments for:
Net valuation gains on investment property       (3,407)       (1,244)
Gains and losses on investments                  (1,606)         (903)
Income tax on gains and losses                     1,092           439
Adjusted earnings                                  1,366         1,211

Per share amount:
Basic earnings per share                          102.3p         56.5p
Adjustments for:
Net valuation gains on investment property       (65.9)p       (24.1)p
Gains and losses on investments                  (31.1)p       (17.5)p
Income tax on gains and losses                     21.1p          8.5p
Adjusted earnings per share                        26.4p         23.4p

4 Investment property

                                                    2005          2004

Valuation at 1 January 2005                       30,523        25,436
Additions                                              -         4,089
Disposals                                          (461)         (237)
Surplus on revaluation                             3,399         1,235
Valuation at 31 December 2005                     33,461        30,523

In accordance with IAS 40, Jones Lang LaSalle have valued freehold and leasehold
properties. The valuation has been conducted by them as external valuers and has
been prepared as at 31 December 2005, in accordance with the Appraisal &
Valuation Standards of the Royal Institution of Chartered Surveyors, on the
basis of market value. This value has been incorporated into the financial
statements.

5 Equity investments

                                                     2005           2004
                                                    £'000          £'000
Valuation at 1 January 2005                         8,731          8,062
Additions                                             958          1,016
Disposals                                           (643)        (1,211)
Surplus on revaluation                              1,574            864
Valuation at 31 December 2005                      10,620          8,731

6 Accounting convention
The preliminary announcement has been prepared in accordance with applicable
accounting standards as stated in the interim financial statements for the half
year ended 30 June 2005.

7 Annual General Meeting
The Annual General Meeting will be held on 24 May 2006.

8 Final ordinary dividend
A final ordinary dividend of 8.30p per share will be paid on 7 June 2006 to
shareholders registered at the close of business on 5 May 2006.

9 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 2005 on which the auditors have expressed an unqualified
opinion. The accounts will be posted to shareholders on or before 25 April 2006
and subsequently filed at Companies House.








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