Final Results

Lowland Investment Co PLC 06 November 2002 5 November 2002 LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2002 Financial Highlights Unaudited Audited Year ended Year ended 30 September 30 September Change 2002 2001 Earnings per ordinary share 15.21p 18.18p (16.34)% Net dividends per ordinary share: Interim paid 6.30p 6.00p +5.00% Final recommended 9.20p 8.75p +5.14% -------- -------- ----------- Total 15.50p 14.75p +5.08% Net asset value per ordinary share 405.24p 466.53p (13.14)% Extracts from the Chairman's Statement Review During the year the Company's net asset value fell from 466.53p to 405.24p per share, a decline of 13.1%, compared with a fall of 23.0% in the FTSE All-Share Index. The year to 30 September 2002 was a very difficult one for equity investors. The size of the fall from the peak of the market in March 2000 to its level at the end of September was 43.6%, making it the second most severe bear market since 1945, only surpassed by that of 1974. Equity valuations based on turnover growth rather than profits and cash generation were never going to be sustainable. Accounting standards slipped and fraud occurred as greed prevailed. Nevertheless, Lowland has avoided most of the worst excesses of the bull market. -MORE- - 2 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2002 Dividend The earnings per share for the year were 15.21p, a 16.3% fall from the 18.18p achieved last year. The recommended final dividend is 9.20p per share, making a total dividend per ordinary share of 15.50p for the year, an increase of 5.1% from last year's 14.75p. This year has seen some of the underlying holdings reduce their dividends, but the Manager believes the majority of cuts have now occurred and the companies held will in aggregate grow their dividends from their new base. Accordingly, after substantially building the revenue reserve over the past few years, the Board intends to use a small part of the revenue reserve for this year's payment. Share Capital In the three preceding years the Company had been trading at a discount to net asset value and during this time bought back 3,925,826 shares for cancellation at an average price of 382p per share which enhanced the net asset value. This year, Lowland has at times been trading at a premium to net asset value. To enhance the net asset value, 700,000 new shares were issued at 500p per share, a premium to net asset value. This compares with a share price of 415p at the year end. The main objective of both the purchases and the issue of shares is to enhance the net asset value. However, it is also important to increase the liquidity of the shares. Therefore the Board will seek authority to increase the issued share capital of the Company by up to 10% at this year's Annual General Meeting. This authority would only be used to issue shares at a premium to net asset value. The Board are seeking authority to issue up to 10% of the issued share capital, rather than the usual 5%, as the demand for the shares has been growing and the directors want to be able to satisfy this demand if this is likely to benefit existing holders. The Board will also be seeking a renewal of its annual authority to purchase up to 14.9% of the issued share capital for cancellation. This is just under the maximum authority permitted by the London Stock Exchange and shares would only be bought back at a discount to net asset value. -MORE- - 3 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2002 Borrowings During the year net borrowings rose from £20.8m to £21.0m and the gearing level rose from 22.7% to 25.4%. 52% of borrowing is short term and the Company has been able to take advantage of the current low level of interest rates. Borrowings will remain under review and, if considered beneficial, some longer term borrowings would be sought to replace part of the short term borrowings. The level of gearing has worked against the Company over the six months to September 2002. However, the Board believes the gearing positions the portfolio well for an improvement in investor sentiment towards equities. Outlook The most pressing question is, when will the improvement in investor sentiment come about? The Fund Manager in his report explains why he believes that there is fundamental value in UK equities. The UK economy is expected to keep growing at a modest rate, interest rates are expected to remain low and the greed of the late 1990s has been replaced by fear. The Lowland portfolio is placed to take advantage of better times. Whilst economic and financial conditions remain uncertain, there are shares that have reached a level where good value exists on an acceptable yield basis. The Policy Objective of Lowland gives the Manager scope to take advantage of such investment opportunities to benefit our shareholders in the future. Ian M Trotter Chairman 5 November 2002 -MORE- - 4 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2002 Statement of Total Return (incorporating the revenue account) for the year ended 30 September 2002 Unaudited Audited Year ended Year ended 30 September 2002 30 September 2001 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital losses from investments - (12,621) (12,621) - (4,720) (4,720) Income from fixed asset investments 5,661 - 5,661 6,522 - 6,522 Other interest receivable and similar 134 - 134 84 - 84 income --------- --------- --------- --------- --------- --------- Gross revenue and capital losses 5,795 (12,621) (6,826) 6,606 (4,720) 1,886 Management fee (763) - (763) (745) - (745) Other administrative expenses (231) - (231) (204) - (204) --------- --------- --------- --------- --------- --------- Net return/(loss) on ordinary activities 4,801 (12,621) (7,820) 5,657 (4,720) 937 before interest payable and taxation Interest payable (1,797) - (1,797) (2,073) - (2,073) --------- --------- --------- --------- --------- --------- Net return/(loss) on ordinary activities 3,004 (12,621) (9,617) 3,584 (4,720) (1,136) before taxation Taxation on net return on ordinary - - - - - - activities --------- --------- --------- --------- --------- --------- Net return/(loss) on ordinary activities after taxation 3,004 (12,621) (9,617) 3,584 (4,720) (1,136) Dividends - ordinary shares Over provision in prior year - - - 11 - 11 Interim paid - 6.30p (2001: 6.00p) (1,241) - (1,241) (1,182) - (1,182) Final proposed - 9.20p (2001: 8.75p) (1,876) - (1,876) (1,723) - (1,723) --------- --------- --------- --------- --------- --------- (3,117) - (3,117) (2,894) - (2,894) --------- --------- --------- --------- --------- --------- Transfer (from)/to reserves (113) (12,621) (12,734) 690 (4,720) (4,030) ====== ====== ====== ====== ====== ====== Return/(loss) per ordinary share 15.21p (63.91p) (48.70p) 18.18p (23.95p) (5.77p) ====== ====== ====== ====== ====== ====== The revenue columns of this statement represent the revenue accounts of the Company. -MORE- - 5 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2002 Balance Sheet at 30 September 2002 Unaudited Audited 2002 2001 £'000 £'000 Fixed Asset Investments - Listed in United Kingdom 101,984 112,182 - Listed overseas 3,266 2,444 - Unquoted at directors' valuation 752 759 ---------- ---------- 106,002 115,385 ---------- ---------- Current Assets Debtors 3,774 1,411 Cash at bank 347 249 ---------- ---------- 4,121 1,660 Creditors: amounts falling due within one year (15,474) (13,161) ---------- ---------- Net current liabilities (11,353) (11,501) ---------- ---------- Total assets less current liabilities 94,649 103,884 Creditors: amounts falling due after more than one year (12,000) (12,000) ---------- ---------- Total net assets 82,649 91,884 ---------- ---------- Capital and reserves Called-up share capital 5,099 4,924 Other capital reserves - Share premium 4,102 778 - Capital redemption reserve 1,007 1,007 - Realised reserve 99,544 95,624 - Unrealised reserve (30,369) (13,828) Revenue reserve 3,266 3,379 ---------- ---------- Total equity shareholders' funds 82,649 91,884 ---------- ---------- Net asset value per ordinary share 405.24p 466.53p -MORE- - 6 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2002 Cash Flow Statement For the year ended 30 September 2002 Unaudited Audited 2002 2002 2001 2001 £'000 £'000 £'000 £'000 Net cash inflow from operating activities 4,547 5,398 Servicing of finance Interest paid (1,794) (1,975) ---------- ---------- Net cash outflow from servicing of finance (1,794) (1,975) Taxation UK tax paid - (46) ---------- ---------- Net tax paid - (46) Financial investment Purchase of investments (48,896) (47,905) Sales of investments 43,110 48,411 ---------- ---------- Net cash (outflow)/inflow from financial investment (5,786) 506 Equity dividends paid (2,964) (2,856) Financing Issue of shares 3,499 - Purchases of own shares - (519) Drawdown/(repayment) of short term loan 2,600 (6,421) Drawdown of three year term loan - 6,000 ----------- ----------- 6,099 (940) ---------- ---------- Increase in cash 102 87 ---------- ---------- Reconciliation of net cash flow to movement in net debt Increase in cash as above 102 87 Cash (inflow)/outflow from (increase)/decrease in loans (2,600) 421 Exchange movements (4) 10 --------- --------- Movement in net debt (2,502) 518 Net debt at 1 October (22,251) (22,769) ---------- ---------- Net debt at 30 September (24,753) (22,251) ---------- ---------- -MORE- - 7 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2002 Notes : 1. Share Issue During the year the Company issued 700,000 ordinary shares of 25p. 2. Dividend The recommended final dividend of 9.20p net per ordinary share, subject to approval at the Annual General Meeting, is payable on 18 December 2002 to shareholders on the register of members at the close of business on 29 November 2002. The Company's shares will be quoted ex-dividend on 27 November 2002. 3. Return per Ordinary Share Revenue return per ordinary share is based on the net return on ordinary activities after taxation of £3,004,000 (2001: £3,584,000) and on the weighted average 19,746,986 ordinary shares in issue during the year (2001: 19,709,041). Capital return per ordinary share is based on net capital losses of £12,621,000 (2001: £4,720,000 loss) and on the weighted average 19,746,986 ordinary shares in issue during the year (2001: 19,709,041). 4. 2002 Accounts The preliminary figures for the year ended 30 September 2002 are an extract from the latest accounts of the Company. These accounts have not yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them. 5. 2001 Accounts The figures and financial information for the year ended 30 September 2001 are extracted from the latest published accounts of the Company and do not constitute statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement either under Section 237(2) or 237(3) of the Companies Act 1985. 6. Annual Report The Annual Report will be posted to shareholders in November and thereafter copies will be available at the registered office at 4 Broadgate, London EC2M 2DA. 7. Annual General Meeting The Annual General Meeting will be held on Tuesday, 17 December 2002 at 3.00pm at 4 Broadgate, London, EC2M 2DA. -MORE- - 8 - LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 2002 - ENDS - For further information please contact : James Henderson Lowland Investment Company plc Telephone: 020 7818 4370 Stephen Westwood Head of Investment Trusts Henderson Global Investors Telephone: 020 7818 5517 Stephen Phillips Investor Relations Manager Henderson Global Investors Telephone: 020 7818 6417 or Mark Vickery Henderson Press Office Telephone: 020 7818 4222 This information is provided by RNS The company news service from the London Stock Exchange XFSELXAFFE

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