Final Results - NAV Up 25%

Lowland Investment Co PLC 3 November 1999 LOWLAND INVESTMENT COMPANY PLC Unaudited Preliminary Results for the year ended 30 September 1999 Financial Highlights Unaudited Year % Year ended Change ended 30 30 September September 1998 1999 Earnings per ordinary 13.86p 12.55p +10.4 share Net dividends per ordinary share: Interim paid 5.00p 4.50p +11.1 Final recommended 8.00p 7.50p +6.7 Total 13.00p 2.00p +8.3 Net asset value per 465.80p 372.60p +25.0 ordinary share Extracts from the Chairman's Statement Results During the year the Company's net asset value (NAV) per share rose from 372.60p to 465.80p, an increase over the year of 25%. This compares with a rise in the FTSE All-Share Index of 20.5%. The earnings per share for the year were 13.86p, an increase of 10.4% over last year's 12.55p. The recommended final dividend is 8p which brings the total for the year to 13p per ordinary share, compared to last year's dividend of 12p, an increase of 8.3%. Investment Background It has been a volatile year in stock markets but the sound economic backdrop of low inflation and reasonable economic growth have remained in place. The benefits of an improving economy have not been evenly felt. UK exporters have had to battle with sterling strength and the consumer has remained price and value conscious. Some famous high street names have had a difficult period. The Manager has maintained our bias towards smaller companies, searching out investments where valuations are low, but where there are prospects for solid growth. Valuations of smaller companies had become unduly depressed. This led to a high level of merger activity as well as management buyouts. Your portfolio has benefited from this trend. Share Buy Backs At an Extraordinary General Meeting held in December last year, shareholders granted the Board authority to buy back for cancellation up to 3,540,792 shares. During the year, 2,255,826 shares were bought back, which is 9.6% of the issued share capital, at an average cost of 391p. The shares were bought back at an average discount of around 15%. Purchases have enhanced the NAV per share by about 1.5%. The Board will be seeking to renew the authority to purchase up to 14.99% of the existing issued shares for cancellation at this year's Annual General Meeting. This is the maximum authority permitted by the London Stock Exchange. The Board Having served as a director since the inception of the trust in October 1963 and having attained the age of 72, I feel it is time to stand down. I shall do so by not offering myself for re-election on retiring by rotation at this year's Annual General Meeting on 15 December 1999. I am pleased that Mr Ian Trotter has agreed to take over as Chairman. Outlook In recent years the fashion for indexation has led to a concentration of capital in the shares of companies that feature heavily in the FTSE All-Share Index. This led to a neglect by investors of medium and small capitalised companies. During this year interest returned to these sectors of the market which has assisted our performance. The portfolio is well placed to benefit from further value recognition. Statement of Total Return (incorporating the revenue account) for the year ended 30 September 1999 Unaudited Audited Year ended 30 Year ended 30 September September 1999 1998 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital - 19,987 19,987 - (4,910) (4,910) gains/(losses) on investments Income from fixed asset 5,688 - 5,688 5,092 - 5,092 investments Other interest receivable 95 - 95 163 - 163 and similar income ------- ------- ------- ------- ------- ------- Gross revenue and capital 5,783 19,987 25,770 5,255 (4,910) 345 gains/(losses) Management fee (642) - (642) (585) - (585) Other administrative (190) - (190) (139) - (139) expenses ------- ------- ------- ------- ------- ------- Net return/(loss) on ordinary activities 4,951 19,987 24,938 4,531 (4,910) (379) before interest payable and taxation Interest payable (1,121) - (1,121) (787) - (787) ------- ------- ------- ------- ------- ------- Net return/(loss) on ordinary activities 3,830 19,987 23,817 3,744 (4,910) (1,166) before taxation Taxation on net return on ordinary (638) - (638) (779) - (779) activities ------- ------- ------- ------- ------- ------- Net return/(loss) on ordinary activities after taxation 3,192 19,987 23,179 2,965 (4,910) (1,945) ------- ------- ------- ------- ------- ------- Dividends Interim paid - 5.0p (1998 (1,146) - (1,146) (1,063) - (1,063) : 4.5p) Final proposed - 8.0p (1,709) - (1,709) (1,772) - (1,772) (1998 : 7.5p) ------- ------- ------- ------- ------- ------- (2,855) - (2,855) (2,835) - (2,835) ------- ------- ------- ------- ------- ------- Transfer to/(from) 337 19,987 20,324 130 (4,910) (4,780) reserves ====== ====== ====== ====== ====== ====== Return/(loss) per 13.86p 86.82p 100.68p 12.55p (20.79p)(8.24p) ordinary share ====== ====== ====== ====== ====== ====== The revenue columns of this statement represent the revenue accounts of the Company. Summary of Net Assets at 30 September 1999 Audited 30 30 September September 1999 1998 £'000 £'000 Investments at market value 122,716 100,443 At directors' valuation 1,033 1,255 ----------- ----------- 123,749 101,698 Net current liabilities (18,229) (7,685) ----------- ----------- Total assets less current 105,520 94,013 liabilities Creditors : amounts falling due (6,000) (6,000) after more than one year ----------- ----------- Net assets attributable to ordinary 99,520 88,013 shares ======== ======== Number of ordinary shares in issue 21,365,205 23,621,031 ======== ======== Net asset value per ordinary share 465.80p 372.60p ======== ======== Notes : 1. Share Buy Backs During the year the Company made authorised market purchases for cancellation of 2,255,826 ordinary shares of 25p. 2. Loss of Investment Company Status As a result of the share buy backs during the year which were paid for out of capital profits, the Company ceased to be an investment company within the meaning of Section 266 of the Companies Act 1985. However, it continued to conduct its affairs as an investment trust for taxation purposes under Section 842 of the Income and Corporation Taxes Act 1988, and the Articles of the Company prohibit capital profits from being distributed by way of dividend. As such, the directors consider it necessary to continue to present the accounts in accordance with the SORP. Under the SORP, the financial performance of the Company is presented in a statement of total return in which the revenue column is the profit and loss account of the Company. The revenue column excludes net profit on disposals of investments of £8,636,000 (1998: £6,150,000) as calculated by reference to their previous carrying amounts. The Companies Act and/or FRS3 would ordinarily require this amount to be included in the profit and loss account. However, in the opinion of the directors, this would be misleading because it would obscure and distort both the revenue and capital performance of the Company, and would not show clearly the revenue profits emerging to be distributable by way of dividend. The directors therefore consider that these departures from the specific provisions of Schedule 4 of the Companies Act relating to Unaudited Preliminary Results for the year ended 30 September 1999 the form and content of accounts for companies other than investment companies and these departures from accounting standards are necessary to give a true and fair view. The departures have no effect on total return or on the balance sheet. 3. Dividend The recommended final dividend of 8.0p net per ordinary share, subject to approval at the Annual General Meeting, is payable on 16 December 1999 to shareholders on the register of members at the close of business on 26 November 1999. The Company's shares will be quoted ex dividend on 22 November 1999. 4. Return per Ordinary Share Revenue return per ordinary share is based on the net return on ordinary activities after taxation of £3,192,000 (1998: £2,965,000) and on the weighted average 23,022,097 ordinary shares in issue during the year (1998: 23,621,631). Capital return/(loss) per ordinary share is based on net capital gains of £19,987,000 (1998: £4,910,000 loss) and on the weighted average 23,022,097 ordinary shares in issue during the year (1998: 23,621,031). 5. 1999 Accounts The preliminary figures for the year ended 30 September 1999 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. 6. 1998 Accounts The figures and financial information for the year ended 30 September 1998 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. 7. Annual General Meeting The Annual General Meeting will be held on Wednesday, 15 December 1999 at 2.15pm at 3 Finsbury Avenue, London, EC2M 2PA. For further information please contact : James Henderson/Norman Brown Henderson Investors Telephone: 0171 410 4100 Vicki Staveacre Henderson Press Office Telephone: 0171 410 4222

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