Interim Results

Highcroft Investments PLC
20 August 2003

                                   HIGHCROFT

                                  INVESTMENTS

                                      PLC



                                 Interim Report

                     For the six months ended 30 June 2003





Highlights

•         Interim dividend increased by 7.1% to 3.75p per share

•         Operating profit increased by 3.3% to £748,000

•         Pre tax profit up by 23.3% to £836,000

•         Net assets per share up to 635p




Highcroft Investments PLC

Chairman's Statement

for the six months ended 30 June 2003




Summary



I am pleased to report that, in the six months to 30 June 2003, we have achieved
an increase in operating profits compared to the six months to 30 June 2002 and
that our net asset value per share has risen to 635p which is its highest ever
reported value.  We have made further moves in altering the balance of our
interests more towards property and our balance sheet remains strong.  The
interim dividend is 3.75p per share (2002 3.50p) an increase of 7.1%, continuing
our policy of payments well in excess of inflation.  The dividend is payable on
31 October 2003.



Operating Activities



Operating profit - which reflects the underlying income of the Group, excluding
the more volatile short term gains or losses on capital items - increased by
3.3% to £748,000.  The comments made at this stage in 2002 bear repeating - good
gains in rental income (and a firm grip on expenses) were offset to a degree by
lower investment income principally as a result of falling interest rates.
Property income now represents almost 84% of total income and we would expect
this to continue to rise as a proportion as we continue to put more emphasis on
our property activities.



Capital Activities



In April 2003, we purchased a property in a good secondary position in Norwich,
let to Austin Reed for 25 years from January 1990.  The board feels that this
investment is a valuable part of a continuing programme to enhance the quality
of the Group's property portfolio and will provide good long term rental income.
We continue to look for properties which will enhance the portfolio and secure
rising rental income over the medium to long term.



In line with our practice of disposing of small commercial properties and
selling residential properties when possession becomes available, two
residential and one commercial property have been sold in the first six months
of the year generating a total of £657,000.  There was a £1,242,000 surplus on
revaluation of our property portfolio an increase of 5.9% on a like for like
basis.



With our listed investment portfolio, we made investments of £262,000 and sold
holdings of £624,000, a net withdrawal from the portfolio of £362,000.  At 30
June 2003, there was a surplus on revaluation of £238,000 - the value of the
portfolio being £7,584,000, an increase of 3.4% on a like for like basis.



Cash balances, mostly on the money market were a little lower than at the year
end but have risen following the receipt of proceeds on completion of the sale
of one property in July.  The next property purchase is likely to be part funded
by a medium term loan.




Taxation



Taxation has risen to £186,000 (June 2002 £152,000); net capital losses on
investments will cover the gains on property disposals.



Net Asset Value



At 30 June 2003, net asset value was 635p per share (against 624p at June 2002
and 597p at 31 December 2002).  This pleasing increase comes from all sources -
a property portfolio surplus of £1,242,000, a £238,000 rise in the value of
listed investments and retained profits of £368,000.  It is also pleasing to
report a highest ever net asset value per share.



Board



In early August, Robert Craig retired as a director of the company on reaching
his 70th birthday.  On behalf of the board and shareholders, I thank Robert for
his guidance and leadership as Chairman over the last decade - a period when the
net asset value per share rose 102%, dividends per share increased by 108% and
the share price rose 73%.



The Future



We have a solid trading performance and balance sheet which gives us confidence
as we move towards greater emphasis on our property interests.  We believe we
can continue to enhance shareholder value over the medium term and it remains
our intention to raise dividends in real terms year-on-year.





                                                                   G J Kingerlee

                                                                  20 August 2003




  Group Profit and Loss Account (Unaudited)                                                                           
  for the six months ended 30 June 2003                                                                               
                                                                                                                      
                                                                 First Half         First Half         Full Year      
                                                         Note          2003               2002              2002      
                                                                      £'000              £'000             £'000      
  Income from fixed asset investments                                                                                 
  and other interest receivable                                                                                       
  From properties                                                      725                685             1,395       
  From investments, including net interest receivable                  143                154               322       
                                                                       868                839             1,717       
  Administrative expenses                                              120                115               221       
  Operating profit                                                     748                724             1,496       
  
  Gain/(loss) on disposals of assets                       2            88                (46)              154       
  Profit on ordinary activities before taxation                        836                678             1,650       
  
  Taxation                                                 3           186                152               482       
  Profit for the financial period                                      650                526             1,168       

  (Gain)/loss on disposals of assets after taxation                                                                   
  transferred (to)/from realised capital reserve                       (88)                20               (94)      
  Profit available for distribution                                    562                546             1,074       

  Dividends                                                4           194                181               524       
  Profit retained                                                      368                365               550       

  Earnings per share                                       5                                                          
  Including gains on disposals of assets                              12.6    p          10.2    p         22.6    p  
  Excluding gains on disposals of assets                              10.9    p          10.6    p         20.8    p  
 

                                                                                                                      
  Group Balance Sheet (Unaudited)                                                                                     
  as at 30 June 2003                                                                                                  
                                                                                                                      
                                                                 30 June        30 June               31 December       
                                                                    2003           2002                      2002     
                                                         Note      £'000          £'000                     £'000     
  Fixed assets                                                                                                        
  Tangible assets                                          6     25,358         22,737                    23,098      
  Investments                                              7      7,584          9,389                     7,700      
                                                                 32,942         32,126                    30,798      
  Current assets                                                                                                      
  Debtors                                                           471            724                       916      
  Cash at bank and in hand                                          366            413                       395      
                                                                    837          1,137                     1,311      
  Creditors                                                                                                           
  Amounts falling due within one year                               989          1,043                     1,254      
  Net current (liabilities)/assets                                 (152)            94                        57      

  Total assets less current liabilities                          32,790         32,220                    30,855      

  Capital and reserves                                                                                                
  Called up share capital                                         1,292          1,292                     1,292      
  Revaluation reserve                     - property              6,187          6,094                     5,442      
                                          - other                 2,708          3,585                     2,101      
  Capital redemption reserve                                         95             95                        95      
  Realised capital reserve                                       14,625         13,824                    14,410      
  Profit and loss account                                         7,883          7,330                     7,515      
  Shareholders' funds                                            32,790         32,220                    30,855      
 

                                                                                                                      
  Group Cash Flow Statement (Unaudited)                                                                               
  for the six months ended 30 June 2003                                                                               
                                                                                                                      
                                                                        First Half        First Half        Full Year 
                                                                              2003              2002             2002 
                                                                             £'000             £'000            £'000 
  Net cash inflow from operating activities                                 1,227               937            1,001  

  Taxation                                                                                                            
  Taxation paid                                                              (336)             (258)            (513) 

  Capital expenditure and financial investment                                                                        
  Purchase of fixed assets             - properties                        (1,596)       -                    (1,504) 
                                       - listed investments                  (262)             (792)            (935) 
  Sale of fixed assets                 - properties                           657        -                     1,537  
                                       - listed investments                   624               420              884  
  Net cash outflow from capital expenditure                                  (577)             (372)             (18) 
                                       and financial investment                                                       

  Net cash outflow from servicing of finance                                                                          
  Dividends paid                                                             (343)             (313)            (494) 

  Decrease in cash                                                            (29)               (6)             (24) 

  Reconciliation of operating profit to net                                                                           
  cash flow from operating activities                                                                                 
  Operating profit                                                            748               724            1,496  
  Decrease/(increase) in debtors                                              443               188             (454) 
  Increase/(decrease) in creditors                                             36                25              (41) 
                                                                            1,227               937            1,001  
 

                                                                                                                      
  Statement of Total Recognised Gains and Losses                                                                      
                                                                                First Half    First Half    Full Year 
                                                                                      2003          2002         2002 
                                                                                     £'000         £'000        £'000 
  Profit for the financial period                                                     650           526        1,168  
  Unrealised surplus/(deficit) on revaluation of:                                                                     
                                            investment properties                   1,242           460          161  
                                            listed and unlisted investments           238          (604)      (1,916) 
  Tax on prior years' surplus realised in year                                          -             -          (52) 
  Total recognised gains and losses for the period                                  2,130           382         (639) 
 

                                                                                                                      
  Notes (Unaudited)                                                                                                   
  for the six months ended 30 June 2003                                                                               
                                                                                                                      
  1. Interim report                                                                                                   

  This interim report will not appear as an advertisement in any newspaper but copies are being                       
  sent to all shareholders and are available at the company's registered office. The results for the                  
  six months ended 30 June 2003 are unaudited but have been prepared on the basis of                                  
  accounting policies consistent with those set out in the audited report and financial statements                    
  for the year ended 31 December 2002.                                                                                

  The interim report does not constitute full accounts as defined by the Companies Act 1985 but                       
  should be read in conjunction with the most recent financial statements. Full accounts for 2002                     
  have been delivered to the Registrar of Companies, bearing an unqualified audit opinion.                            


  2. Gain on disposals of assets                                                                                      
                                                                        First Half        First Half        Full Year 
                                                                              2003              2002             2002 
                                                                             £'000             £'000            £'000 
  Gain/(loss) on disposals of assets arising on sales of:                                                             
  Properties                                                                   80               (13)             243  
  Investments                                                                   8               (33)             (89) 
                                                                               88               (46)             154  


  3. Taxation                                                                                                         
                                                                        First Half        First Half        Full Year 
                                                                              2003              2002             2002 
                                                                             £'000             £'000            £'000 
  Corporation tax                                                             186               178              395  
  Corporation tax on disposals of assets                                        -               (26)              60  
  Prior year underprovision                                                     -                 -               27  
                                                                              186               152              482  

  The taxation charge has been based on the estimated effective tax rate for the full year.                           


  4. Dividends                                                                                                        

  The Board has declared an ordinary interim dividend of 3.75p per share (2002 3.50p) payable                         
  on 31 October 2003 to shareholders registered at 3 October 2003.                                                    
                                                                                                                      
  Notes (Unaudited)                                                                                                   
  for the six months ended 30 June 2003                                                                               

                                                                                                                      
  5. Earnings per share                                                                                               

  The calculation of earnings per share is based on the profit for the period of £650,000 (2002                       
  £526,000) and on 5,167,240 shares (2002 5,167,240) which is the weighted average                                    
  number of shares in issue during the period ended 30 June 2003 and throughout the period                            
  since 1 January 2002.                                                                                               

  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 £562,000 (2002 £546,000).                              


                                                                      First Half         First Half         Full Year 
                                                                            2003               2002              2002 
                                                                           £'000              £'000             £'000 
  Earnings:                                                                                                           
  Basic earnings per share                                                  650                526             1,168  
  Adjustment for (gain)/loss on disposals of assets                         (88)                20               (94) 
  Adjusted earnings per share                                               562                546             1,074  

  Per share amount:                                                                                                   
  Basic earnings per share                                                 12.6    p          10.2    p         22.6  
  Adjustment for (gain)/loss on disposals of assets                        (1.7)   p           0.4    p         (1.8) 
  Adjusted earnings per share                                              10.9    p          10.6    p         20.8  



  6. Tangible assets                                                                                                  

  Land and buildings (Investment properties)                                                  Total                   
                                                                                              £'000                   
  Valuation at 1 January 2003                                                               23,098                    
  Additions                                                                                  1,596                    
  Disposals                                                                                   (578)                   
  Surplus on revaluation                                                                     1,242                    
  Valuation at 30 June 2003                                                                 25,358                    


  The directors have used a valuation of properties at 30 June 2003, the basis of which                               
  they believe to be consistent with the valuation prepared for 31 December 2002.                                     



  7. Investments                                                                                                      

  Listed and unlisted                                                                         Total                   
                                                                                              £'000                   
  Valuation at 1 January 2003                                                                7,700                    
  Additions                                                                                    262                    
  Disposals                                                                                   (616)                   
  Surplus on revaluation                                                                       238                    
  Valuation at 30 June 2003                                                                  7,584                    
 
 
END  


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