Interim Results
Lowland Investment Co PLC
3 May 2001
2 May 2001
LOWLAND INVESTMENT COMPANY PLC
Unaudited Interim Results for the half year ended 31 March 2001
Chairman's Statement
Review
The net asset value (NAV) over the six month period has risen from 487p to
547p, an increase of 12.3%. This compares with a fall in the FTSE All-Share
Index of 10.5%. The strong relative performance of the investment portfolio is
a result of the value based approach to stock picking. It should be remembered
that this discipline adversely affected performance during the period when
technology concept companies attracted massive investor support. This mania
was partially financed by investors selling their 'old economy' holdings.
Fortunately in this period investments were made at favourable prices and as
the technology boom unravelled Lowland has benefited. Cash from take overs has
been received for holdings in Thames Water and Powell Duffryn. The money has
been used predominantly to build up existing holdings.
Dividend
Earnings per share for the half year are 5.18p compared to 3.91p in the
corresponding period last year. The earnings figure at the interim stage is
not indicative of the rate of increase that can be expected for the year as a
whole. The total earnings are traditionally biased towards the second half of
the year. The recommended dividend is 6.0p, an increase of 9% on last year's
interim dividend of 5.5p. It is the Board's intention, barring unforeseen
circumstances, at least to maintain the final dividend.
Share Buy-backs
During the period 125,000 shares were purchased by the Company for
cancellation at an average price of 412p. This enhanced the NAV and compares
with a share price of 493p at the end of the period.
Outlook
Until recently the UK economy seemed set fair with low inflation, modest
growth and public finances in a reasonably healthy position. Now there are
some real uncertainties, the full consequences of foot and mouth and the
effects of the slowdown in the US and other economies have yet to be gauged.
However, Lowland has a well diversified portfolio of shares with relatively
high dividend yields that are expected to grow over time. There are enough
opportunities in the chosen areas for the Board to be confident that the good
long term performance of the Company will continue.
Since the end of March the stock market has been volatile. The NAV was 593p at
the close of business on 1 May. The volatility is being used to increase
holdings in sound companies that the manager believes will successfully
weather the current market turbulence.
I M Trotter
Chairman
2 May 2001
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LOWLAND INVESTMENT COMPANY PLC
Unaudited Interim Results for the half year ended 31 March 2001
Statement of Total Return (incorporating the revenue account)
for the half year ended 31 March 2001
(Unaudited) (Unaudited) (Audited)
Half year ended Half year ended Year ended
31 March 2001 31 March 2000 30 September 2000
Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
------- -------- ----- ------- ------- ----- ------- ----- -----
Total capital - 11,961 11,961 - (5,273) (5,273) - 2,425 2,425
gains/(losses)
on investments
Income from 2,462 - 2,462 2,201 - 2,201 5,715 - 5,715
fixed asset
investments
Other interest 44 - 44 54 - 54 119 - 119
receivable and
similar income
------- -------- ----- ------- ------- ----- ------- ----- -----
Gross revenue 2,506 11,961 14,467 2,255 (5,273) (3,018) 5,834 2,425 8,259
and capital
gains/(losses)
Management fee (375) - (375) (334) - (334) (688) - (688)
Other (129) - (129) (151) - (151) (249) - (249)
administrative
expenses
------- -------- ----- ------- ------- ----- ------- ----- -----
Net return/
(loss) on
ordinary 2,002 11,961 13,963 1,770 (5,273) (3,503) 4,897 2,425 7,322
activities
before
interest
payable and
taxation
Interest (981) - (981) (947) - (947) (1,859) - (1,859)
payable
------- -------- ----- ------- ------- ----- ------- ----- -----
Net return/ 1,021 11,961 12,982 823 (5,273) (4,450) 3,038 2,425 5,463
(loss) on
ordinary
activities
before
taxation
Taxation on - - - - - - - - -
net return/
(loss) on
ordinary
activities
after taxation
------- -------- ----- ------- ------- ----- ------- ----- -----
Net return/
(loss) on
ordinary 1,021 11,961 12,982 823 (5,273) (4,450) 3,038 2,425 5,463
activities
after taxation
(see note 1)
Dividend (1,171) - (1,171) (1,119) - (1,119) (1,101) - (1,101)
declared
Interim of
6.00p (2000:
5.50p)
Final (2000: - - - - - - (1,685) - (1,685)
8.00p)
------- -------- ----- ------- ------- ----- ------- ----- -----
(1,171) - (1,171) (1,119) - (1,119) (2,786) - (2,786)
------- -------- ----- ------- ------- ----- ------- ----- -----
Transfer (150) 11,961 11,811 (296) (5,273) (5,569) 252 2,425 2,677
(from)/to
reserves
------- -------- ----- ------- ------- ----- ------- ----- -----
Return/
(loss) 5.18p 60.65p 65.83p 3.91p (25.07)p (21.16)p 14.79p 11.80p 26.59p
per
ordinary
share
The revenue columns of this statement represent the revenue accounts of the
Company.
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LOWLAND INVESTMENT COMPANY PLC
Unaudited Interim Results for the half year ended 31 March 2001
Balance Sheets
As at 31 March 2001
(Unaudited) (Unaudited) (Audited)
31 March 31 March 2000 30 September
2001
£'000 2000
£'000
£'000
------------ ------------- -------------
Fixed asset
Investments at market value 138,151 113,113 120,749
---------- --------- ----------
Current assets
Debtors 1,103 751 978
Cash at bank and in hand 21 2,494 152
---------- ---------- ----------
1,124 3,245 1,130
Creditors: amounts falling due within (25,550) (20,166) (19,446)
one year
---------- ---------- ----------
Net current assets (24,426) (16,921) (18,316)
---------- ---------- ----------
Total assets less current liabilities 113,725 96,192 102,433
Creditors: amounts falling due after (6,000) (6,000) (6,000)
more than one year
---------- ---------- ----------
Total net assets 107,725 90,192 96,433
====== ====== ======
Capital and reserves
Called-up share capital (see note 2) 4,924 5,085 4,955
Share premium account 778 778 778
Other reserves 99,484 82,188 88,011
Revenue reserve 2,539 2,141 2,689
---------- ---------- ----------
Total equity shareholders' funds 107,725 90,192 96,433
====== ====== ======
Net asset value per share (see note 3) 546.96p 443.42p 486.54p
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LOWLAND INVESTMENT COMPANY PLC
Unaudited Interim Results for the half year ended 31 March 2001
Cash Flow Statement
for the half year ended 31 March 2001
(Unaudited) (Unaudited) (Audited)
Half year Half year Year ended
ended ended
30
31 March 31 March September
2001 2000 2000
£'000 £'000 £'000
------------ ---------- -----------
Net cash inflow from operating activities 1,855 1,968 4,873
Net cash outflow from servicing of finance (968) (941) (1,876)
Net tax (paid)/recovered - (52) 13
Net cash (outflow)/inflow from financial (5,594) 4,796 3,797
investment
Equity dividends paid (1,685) (1,709) (2,810)
---------- ---------- ----------
Net cash (outflow)/inflow before financing (6,392) 4,062 3,997
Net cash inflow/(outflow) from financing 6,257 (3,492) (4,243)
---------- ---------- ----------
(Decrease)/increase in cash (135) 570 (246)
====== ====== ======
Reconciliation of operating revenue to net
cash inflow from operating activities
Net revenue before interest payable and 2,002 1,770 4,897
taxation
(Increase)/decrease in accrued income (157) 198 (1)
Decrease in other debtors 34 35 -
(Decrease)/increase in other creditors (5) (22) 17
Tax on unfranked investment income (19) (13) (40)
---------- ---------- ----------
Net cash inflow from operating activities 1,855 1,968 4,873
====== ====== ======
Reconciliation of net cash flow to movement in
net funds
(Decrease)/increase in cash as above (135) 570 (246)
Cash inflow from increase in debt (6,979) (718) (1,521)
Exchange difference 4 (13) (18)
---------- ---------- ----------
Movement in net funds (7,110) (161) (1,785)
Net debt at start of period (22,769) (20,984) (20,984)
---------- ---------- ----------
Net debt at end of period (29,879) (21,145) (22,769)
====== ====== ======
Represented by:
Cash 21 2,494 152
Debt falling due within one year (23,900) (17,639) (16,921)
Debt falling due after one year (6,000) (6,000) (6,000)
---------- ---------- ----------
(29,879) (21,145) (22,769)
====== ====== ======
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LOWLAND INVESTMENT COMPANY PLC
Unaudited Interim Results for the half year ended 31 March 2001
Notes:
1. Return per ordinary share
Revenue return per ordinary share is based on the net return on
ordinary activities after taxation of £1,021,000 (half year ended 31
March 2000: £823,000 and year ended 30 September 2000: £3,038,000) and
on a weighted average number of 19,722,953 ordinary shares in issue
during the period (half year ended 31 March 2000: 21,030,839 and year
ended 30 September 2000: 20,543,924).
Capital return per ordinary share is based on the net capital gain of
£11,961,000 (half year ended 31 March 2000: £5,273,000 loss and year
ended 30 September 2000: £2,425,000 gain) and on a weighted average
number of 19,722,953 ordinary shares in issue during the period (half
year ended 31 March 2000: 21,030,839 and year ended 30 September 2000:
20,543,924).
2. Share buy-backs
During the half year to 31 March 2001, the Company made authorised
market purchases for cancellation of 125,000 of its own issued
ordinary shares of 25p, representing 0.6% of its called up share
capital, for an aggregate consideration of £519,000. Following these
repurchases for cancellation 19,695,205 ordinary shares of 25p are in
issue.
3. Net asset value per ordinary share
The net asset value per ordinary share is based on net assets
attributable to ordinary shares of £107,725,000 (31 March 2000: £
90,192,000 and 30 September 2000: £96,433,000) and on 19,695,205
ordinary shares in issue at 31 March 2001 (31 March 2000: 20,340,205
and 30 September 2000: 19,820,205).
4. Investment company status
To enable share buy-backs to be financed out of capital profits the
Company revoked its status as an investment company under Section 266
(3) of the Companies Act 1985 (the 'Act') in February 1999. Following
a change in the law in November 1999 and amendments made to the
Company's Articles of Association at the Annual General Meeting in
December 2000, the Company reapplied to become an investment company
within the meaning of Section 266 of the Act in December 2000.
The Company continued to conduct its affairs as an investment trust
for taxation purposes under Section 842 of the Income and Corporation
Taxes Act 1988.
5. Accounts for the year ended 30 September 2000
The figures and financial information for the year ended 30 September
2000 are extracted from the latest published accounts of the Company
and do not constitute the 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 under either Section 237(2) or Section 237(3) of
the Companies Act 1985.
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LOWLAND INVESTMENT COMPANY PLC
Unaudited Interim Results for the half year ended 31 March 2001
6. Interim Report
The Company's interim report will be posted to shareholders in
mid-May.
7. Dividend
An interim dividend of 6.00p per ordinary share has been declared
payable on 8 June 2001 to shareholders on the register of members at
the close of business on 25 May 2001. The Company's shares will be
ex-dividend on 23 May 2001.
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For further information please contact :
James Henderson
Lowland Investment Company plc
Telephone: 020 7410 4370
Vicki Staveacre
Henderson Press Office
Telephone: 020 7410 4222
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