Interim Results

Investment Company PLC
22 November 2007



The Investment Company plc

Unaudited Interim Results
For the Six Month Period ended 30 September 2007



Chairman's Statement



One of the latest obligations of the Listing Agreement obliges all companies to
issue quarterly trading statements, however brief.  Accordingly in July we
issued the following statement.



'Further rises in short term interest rates have recently been reflected in a
similar movement at the long end of the bond market.  As a result liquid issues
of preference shares have seen market prices ease a little.  Our portfolio is
virtually unaffected since we have a large spread of individually illiquid
holdings.  Nevertheless we are unlikely to see capital appreciation in the short
term outside of redemptions or similar corporate activity.'



Since that time there has been turmoil in the credit markets which has clearly
caught a lot of people by surprise, not least the Governor of the Bank of
England.



The (virtually) unprecedented drying up of interbank credit and the reluctance
of the Bank of England to recognise its duty as 'Lender of Last Resort', to
lend, created the only run on a British bank (apart from that on stage in Mary
Poppins) for more than a century.  Perhaps not surprisingly these events caused
fixed interest securities of all sorts to be marked down as a precautionary
measure and quotations of most preference shares by the end of September were
lower by up to 10% or 15% in the less marketable issues.  In the eight weeks
since then, prices of regularly traded preference shares have recovered to some
extent but as many of the shares that we hold do not trade for weeks on end,
sometimes months, market makers have been in no hurry to re-adjust upwards
quotations at which we valued our portfolio at 30 September.



Your company is fairly highly geared although the actual portfolio consists of
mainly ungeared securities.  Our ordinary shareholders' assets rank after
approximately £5 million worth of preference shareholders' assets and £3.66
million worth of 5% loan notes held by the former shareholders of New Centurion
Trust.  It is not difficult to see therefore that a modest decline in the gross
value of our portfolio has a significant impact at least temporarily on the
asset value attributable to the ordinary shares.  The fall of £581,440 in the
value of our overall assets translates to a fall of 30.6p in the assets
attributable to each of the 1,899,891 ordinary shares in issue.



Among our top 20 holdings as listed in the Report & Accounts of 31 March 2007 we
have seen four very satisfactory developments.  Our third largest holding valued
at about £1 million consisted of two preference shares in the Whitbread Hotel
Company.  We were approached during the period and invited to consent to a
scheme designed to retire all three classes of preference shares in that company
via a Court Approved capital reduction at prices based on discounting each
share's future cash flows at the same net yield.  Our consent was necessary for
such a scheme to proceed in respect of the two classes of shares in which we
held 46% and 33% respectively.  Only last February we had sold a 20% interest in
the third issue.



We were unable to agree that this proposal was satisfactory and the Whitbread
board has therefore resolved to repay the capital, which does not require our
consent, under the terms of the Articles.  The result of this is that we will
get a very much higher price for our 4.5% issue, the larger holding, than was
proposed under their original suggestion.  The 6.5% issue will be redeemed at a
fractionally lower price than the first proposal set, while the 7% issue, where
we sold our holding at 123p in February last year, will be redeemed at a
significantly lower price even though the directors have felt generous enough to
add an ex gratia 5p to the 100p redemption value.  This is the first most
satisfactory news.



Secondly our fifth largest holding of Equitable Life Finance 8% bonds were
repaid at par in August.  During Equitable's troubles buyers of the bond were
much mocked in the press since it was naively assumed that the enterprise would
not be able to fulfil its obligations to bond holders as a result of the court
case going against the Society with regard to bonuses from the with-profits
pool.  Fortunately our advisers were better informed and stood aloof from the
consensus.  Although we were not so fortunate as to buy the bonds at £25% to
which they fell at one time, we did nevertheless make a profit of 63% on our
investment on which we had enjoyed a running yield of 13% throughout the several
years that we held the stock.



Further down the list in 18th place is our stake in Hawtin preference which paid
off 3 years arrears at the end of June resulting in a very welcome boost to our
revenue account.  Finally our 19th largest holding Courtaulds Clothing Brands
preference shares were repaid at 105p in May on satisfactory terms.



While conflicting views are held about the immediate likelihood of reductions in
interest rates competing with inflationary expectations, we are comforted by the
extent of the liquidity arising from these recent and forthcoming redemptions.
We are also pleased at the improvement in the revenue account brought about by
the receipt of arrears and deemed distributions arising from redemptions at a
premium.



We are conscious of the costs of running this small listed company but are sad
that the only reduction I have to report is consequent upon the retirement
announced today of our colleague Charles Marsh from the board for family
reasons.  Amongst the most experienced people in the City of London in the
preference share market Charles has been a much valued member of the board these
last few years and we thank him for his contribution.



Your directors have declared a maintained interim dividend of 4p which will be
paid to ordinary shareholders on the register on 14 December 2007.  The ordinary
shares will be marked ex dividend on 12 December 2007 and the dividend will be
paid on 14 January 2008.






Sir David Thomson Bt.                             Registered office:
Chairman                                          3rd Floor, Salisbury House
                                                  London Wall
21 November 2007                                  London EC2M 5QS





Consolidated Income Statement
For six months ended 30 September 2007






                                     Notes Half-year to  Half-year to  Year to
                                           30 September  30 September  31 March
                                           2007          2006          2007
                                           (unaudited)   (unaudited)   (audited)
                                              £             £             £

Total income                               517,728       449,944       911,902
Administrative expenses                    (190,886)     (184,539)     (379,775)
Loan note interest                         (91,425)      (91,425)      (182,850)
Other interest payable                     -             (76)          (76)

Net revenue before taxation                235,417       173,904       349,201
Taxation                                   -             -             -

Net revenue after taxation                 235,417       173,904       349,201
Dividends: Participating preference      4 (174,818)     (174,818)     (437,045)
Dividends: Ordinary                      4 (94,995)      (96,370)      (173,465)

Transfer from reserves                     (34,396)      (97,284)      (261,309)

Earnings/(loss) per 50p Ordinary
Share
Basic and diluted                        3 1.67p         (0.03)p       (2.41)p

Net asset value per 50p Ordinary           246.05p       276.74p       273.77p
Share

All the Company's operations are
continuing.



Consolidated Statement of Changes in Equity
For six months ended 30 September 2007


                                              Capital
                                             Redemption
              Issued     Share   Own Shares             Revaluation  Capital   Revenue
              Capital  Premium     Held      Reserve     Reserve    Reserve   Account    Total
             £         £         £           £          £           £         £         £

Balance at   4,319,881 1,019,246 (2,919,861) 671,500    860,636     4,630,228 1,241,016 9,822,646
30 September
and 1
October 2005

Buy in of    -         -         -           -          -           -         -         -
own shares

Realised     -         -         -           -          -           943,331   -         943,331
capital
gains

Movement in  -         -         -           -         (93,598)    -          -         (93,598)
unrealised
appreciation                                           
of
investments

Retained     -         -         -           -          -           -         (216,043) (216,043)
loss for the
period


Balance at   4,319,881 1,019,246 (2,919,861) 671,500    767,038     5,573,559 1,024,973 10,456,336
31 March
2006 and 1
April 06

Realised     -         -         -           -          -           46,715    -         46,715
capital
gains

Movement in  -         -         -           -          (77,075)    -         -         (77,075)
unrealised
appreciation                                                                    
of
investments

Retained     -         -         -           -          -           -         (97,284)  (97,284)
loss for the
period


Balance at   4,319,881 1,019,246 (2,919,861) 671,500    689,963     5,620,274 927,689   10,328,692
30 September
2006 and 1
October 2006

Buy in of    (3,750)   -         -           3,750      -           -         (16,669)  (16,669)
own shares

Realised     -         -         -           -          -           293       -         293
capital
gains

Movement in  -         -         -           -          102,609     -         -         102,609
unrealised
appreciation                                                                     
of
investments

Retained     -         -         -           -          -           -         (164,025) (164,025)
loss for the
period


Balance at   4,316,131 1,019,246 (2,919,861) 675,250    792,572     5,620,567 746,995   10,250,900
31 March
2007 and 1
April 2007

Buy in of    (10,000)  -         -           10,000     -           -         (45,361)  (45,361)
own shares

Realised     -         -         -           -          -           440,307   -         440,307
capital
gains

Movement in  -         -         -           -         (941,990)    -         -         (941,990)
unrealised
appreciation                                            
of
investments

Retained     -         -         -           -          -           -         (34,396)  (34,396)
loss for the
period


Balance at   4,306,131 1,019,246 (2,919,861) 685,250    (149,418)   6,060,874 667,238   9,669,460
30 September
2007




Consolidated Balance Sheet
At 30 September 2007
                                          30 September  30 September  31 March
                                          2007          2006          2007
                                          (Unaudited)   (Unaudited)   (Audited)
                                          £             £             £
Non current assets
Investments at cost                       12,691,592    12,575,979    12,828,016
Unrealised (depreciation)/                (202,153)     718,727       775,390
appreciation

Portfolio investments at market           12,489,439    13,294,706    13,603,406
value

Current assets
Trade and other receivables               155,082       41,524        81,184
Investments                               147,260       43,723        84,756
Cash and bank balances                    900,190       927,200       465,558

                                          1,202,532     1,012,447     631,498

Current liabilities
Dividends payable                         174,818       174,818       174,818
Trade and other payables                  190,689       146,639       152,182

                                          365,507       321,457       327,000

Net current assets                        837,025       690,990       304,498
Non-current liabilities
Interest bearing liabilities              (3,657,004)   (3,657,004)   (3,657,004)


Net assets                                9,669,460     10,328,692    10,250,900


Capital and reserves
Issued capital                            4,306,131     4,319,881     4,316,131
Share premium                             1,019,246     1,019,246     1,019,246
Own shares held                           (2,919,861)   (2,919,861)   (2,919,861)
Capital redemption reserve                685,250       671,500       675,250
Revaluation reserve                       (149,418)     689,963       792,572
Capital reserve                           6,060,874     5,620,274     5,620,567
Revenue reserves                          667,238       927,689       746,995


Shareholders' funds                       9,669,460     10,328,692    10,250,900



Consolidated Cash Flow Statement
For the six months ended 30 September 2007

                                     Notes Half-year to  Half-year to  Year to
                                           30 September  30 September  31 March
                                           2007          2006          2007
                                           (unaudited)   (unaudited)   (audited)
                                           £             £             £
Operating activities
Cash received from investments             403,061       348,687       746,953
Interest received                          128,992       98,937        142,705
Sundry income                              -             -             -
Cash paid to and on behalf of              (50,285)      (86,129)      (172,344)
employees
Other cash payments                        (111,335)     (113,825)     (210,645)
UK corporation tax paid                    -             -             -


Net cash inflow from operating             370,433       247,670       506,669
activities
Financing activities
Bank interest                              -             (76)          (76)
Loan note interest paid                    (91,425)      (91,425)      (182,850)
Non-equity dividends paid                  (174,818)     (174,818)     (437,045)


Net cash outflow from returns on           (266,243)     (266,319)     (619,971)
investments and servicing of
finance

Investing activities
Purchase of investments                    (963,433)     (1,202,698)   (1,881,481)
Further payment in respect of
purchase of subsidiaries                    -             -             -
Purchase of own shares                   5 (45,361)      -             (16,669)
Sale of investments                        1,430,072     1,193,653     1,596,874


Net cash (outflow)/inflow from
capital expenditure and financial
investment                                 421,278       (9,045)       (301,276)

Equity dividends paid                      (90,836)      (94,068)      (168,826)


Net increase/(decrease) in cash and
cash equivalents                        6  434,632       (121,762)     (583,404)




Notes to the Interim Report

1  Financial information

The financial information above does not constitute statutory accounts within
the meaning of Section 240 of the Companies Act 1985. Statutory accounts for the
year ended 31st March 2007 have been delivered to the Registrar of Companies and
contain an audit report in accordance with Section 285 which was unqualified.

The interim financial information has not been audited or reviewed by the
Company's auditors.

2  Accounting policies

These financial statements have been prepared in accordance with International
Accounting Standards (IAS) issued by the International Accounting Standards
Board (IASB) except for the departure from the requirement in IAS 32 (Financial
Instruments:  Disclosure and Presentation) as detailed below, and in accordance
with the Interpretations of International Accounting Standards issued by the
Standing Interpretations Committee of the IASB.

The board has concluded that complying with IAS 32 in respect of the company's
preference shares would be so misleading in the circumstances that it would
conflict with the objective of financial statements set out in the IASB's
framework. The entity has therefore departed from the requirement in IAS 32 to
treat the preference shares as a debt instrument. The preference shares have
been included as an equity instrument in the consolidated and parent company
balance sheets in order to achieve a fair presentation.  The board believes that
the treatment required by IAS 32 would not fairly present the substance of the
preference shares which is that of permanent capital in the company with
participation in the future income and gains arising therein.  With this
departure, the Board has concluded that the financial statements present fairly
the entity's financial position, financial performance and cash flows. The
departure has no impact on the Net asset value per ordinary share calculation or
on the calculation of Earnings per share.

These financial statements have been prepared under the historical cost
convention, except for Portfolio Investments which are stated at market value.
The following are the key accounting policies extracts relating to the financial
information presented:

(a) Taxation

Income tax expense represents the sum of the tax currently payable and deferred
tax.

Current tax

The tax currently payable is based on taxable profit for the period. Taxable
profit differs from profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
periods and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used
in the computation of taxable profit, and is accounted for using the balance
sheet liability method. Deferred tax liabilities are generally recognised for
all taxable temporary differences, and deferred tax assets are generally
recognised for all deductible temporary differences to the extent that it is
probable that taxable profits will be available against which those deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill or from the initial
recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences
associated with investments in subsidiaries and associates, and interests in
joint ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future. Deferred tax assets arising from deductible
temporary differences associated with such investments and


interests are only recognised to the extent that it is probable that there will
be sufficient taxable profits against which to utilise the benefits of the
temporary differences and they are expected to reverse in the foreseeable
future.

The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.

Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the period in which the liability is settled or the asset
realised, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the balance sheet date. The measurement of deferred tax
liabilities and assets reflects the tax consequences that would follow from the
manner in which the Group expects, at the reporting date, to recover or settle
the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and
the Group intends to settle its current tax assets and liabilities on a net
basis.

Current and deferred tax for the period

Current and deferred tax are recognised as an expense or income in profit or
loss, except when they relate to items credited or debited directly to equity,
in which case the tax is also recognised directly in equity, or where they arise
from the initial accounting for a business combination. In the case of a
business combination, the tax effect is taken into account in calculating
goodwill or determining the excess of the acquirer's interest in the net fair
value of the acquiree's identifiable assets, liabilities and contingent
liabilities over cost.

(b) Preference shares

The participating preference shares entitle the holders, in priority to the
payment of any dividend to the holders of all or any other shares in the capital
of the company, to a fixed net cash cumulative dividend at the rate of 7p per
share per annum. In addition, holders are entitled to a participating dividend
at the rate of 25% of any dividends paid on the Ordinary Shares in excess of 2p
per share for any year, subject to a maximum participating dividend in respect
of any year of 3p net per share.

On any return of capital holders are entitled to the payment of a premium which
shall be the greater of either the sum of 50p per share or a sum equal to the
average mid-market price at which the said shares have been quoted on the London
Stock Exchange during the six months immediately preceding the commencement of
such return of capital, after the deduction of the nominal amount of the capital
paid up or credited as paid up on the Participating Preference Shares.. The
shares also confer voting rights in certain circumstances.

(e) Dividends

Ordinary dividends are accounted for in the period in which they are declared in
accordance with IAS 10. Preference dividends have two dividend elements, the
fixed net cash cumulative dividend and the participating dividend.

The participating dividend element is accounted for in the period in which the
dividend is declared and is treated in the same way as the Ordinary dividend
upon which its calculation is based.

The fixed net cash cumulative element accrues evenly on a daily basis throughout
the period. The dividend payable on 1 October 2007 has therefore been treated as
a charge against revenue for the period to 30 September 2007.

(d) Investments

IAS 39 requires investment funds to measure assets listed on a recognised Stock
Exchange at current bid prices whereas under UK GAAP these assets had been
previously measured at current middle market prices.

The directors are of the opinion that the bid valuation is 1% lower than the mid
valuation due to the nature of the assets concerned and this treatment is
reflected in the investment valuation at the year end.

All investments held as non-current assets are shown in the balance sheet at
valuation and all purchase and sale of investments are accounted for at trade
date. The difference between book cost and valuation is taken to the revaluation
reserve. Profits and losses on the realisation of investments held as
non-current assets are taken to capital reserve.



3  Earnings per share

                                        Half-year to Half-year to  Year to
                                        30 September 30 September  31 March
                                        2007         2006          2007
                                        (unaudited)  (unaudited)   (audited)
                                                     £             £
Revenue after taxation                  235,417      173,904       349,201
Participating preference dividend       (174,818)    (174,818)     (437,045)


                                        60,599       (914)         (87,844)


The calculation of basic earnings per share is based
on the following:
Weighted average number of              3,624,599    3,644,956     3,643,415
Ordinary Shares of 50p each


Earnings/(loss) per share               1.67p        (0.03)p       (2.41)p


As the Company has no options or warrants in issue, basic and diluted loss per
share are the same.

Adjusted earnings per share is based on the 
following:

Weighted average number of              3,624,599    3,644,956     3,643,415
Ordinary Shares of 50p each

Shares reclassified as non voting       (1,717,565)  (1,717,565)   (1,717,565)
shares
                                        1,907,034    1,927,391     1,925,850


Earnings/(loss) per share               3.18p        (0.05)p       (4.56)p


4  Dividends payable

                                          Half-year to  Half-year to  Year to
                                          30 September  30 September  31 March
                                          2007          2006          2007
                                          (unaudited)   (unaudited)   (audited)
                                          £             £             £
Interim Dividends declared or
accrued

Participating preference shares           -             -             262,227



Final dividends declared or accrued

Participating preference shares           174,818       174,818       174,818

Ordinary shares                           94,995        96,370        173,465


                                          269,813       271,188       348,283


Total dividends                           269,813       271,188       610,510



5  Buy in of own shares

                                          Half-year to  Half-year to  Year to
                                          30 September  30 September  31 March
                                          2007          2006          2007
                                          (unaudited)   (unaudited)   (audited)
                                          £             £             £
Buy in of 7,500 ordinary shares of        -             -             16,669
50p each

Buy in of 20,000 ordinary shares of       45,361        -             -
50p each

                                          45,361        -             16,669



6  Analysis of net debt

                                          At            Cash flow     At
                                          30 September  (unaudited)   1 April
                                          2007                        2007
                                          (unaudited)                 (audited)
                                          £             £             £
Bank overdraft                            -             -             -

Cash at bank                              900,190       434,632       465,558


                                          900,190       434,632       465,558

Long term debt                            (3,657,004)   -             (3,657,004)


                                          (2,756,814)   434,632       (3,191,446)






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