Final Results

Legg Mason Investrs AIM DistTst PLC 21 July 2003 Legg Mason Investors AIM Distribution Trust plc Preliminary announcement of unaudited results for the year ended 31 March 2003 Chairman's Statement On behalf of your Board, I present the annual report and accounts for the year ended 31 March 2003. The Company continues to be invested in a range of AIM qualifying stocks and continues to meet the requirements of VCT rules. As at 31 March 2003, qualifying investments were 87.4%, comfortably in excess of the 70% minimum. Balance sheet and net assets During the year ended 31 March 2003 the net asset value per share of the Company fell by 41.5% from 78.22p to 45.73p with the overall net asset value falling from £13.07m to £7.60m. This compares to a 35.5% fall in the FTSE AIM Index and a 50.8% fall in the FTSE techMARK 100 Index. As noted in previous reports no single index is directly comparable due to a mix of AIM, OFEX and unquoted stocks. As at 31 March 2003, 73.6% of the portfolio value of the Company was in AIM quoted stocks, 4.2% in FTSE techMARK stocks and the remainder in OFEX and unquoted investments. Revenue and dividends Revenue from investments during the period amounted to £202,979 (2002: £299,224). Expenses have exceeded income for the year and the Company has carried forward accumulated capital losses. Accordingly, the Directors do not propose to pay a dividend for the year ended 31 March 2003. The timing and level of future capital distributions will depend on a market recovery, in order to recoup the current level of unrealised capital losses and enable capital realisations. The backdrop to the performance of the Company over the year is the well-publicised decline of markets globally. In the first half of the year, corporate governance issues and increasing geopolitical risk caused equity markets to fall dramatically. This was exacerbated by: consumer spending, which had been the mainstay of growth, slipping to its slowest level since 1997; and by insurance companies having to sell equities to meet solvency requirements. In the second half of the year market volatility was high albeit with a more limited overall decline over the period. Investment activity The new issue market has been slow, particularly in the second half of the year. Despite this, and the poor market conditions, we have taken the opportunity to make 8 new qualifying investments totaling approximately £1.4m along with additions to a number of existing investments. We have fully disposed of 15 stocks which, in addition to partial disposals and matured fixed interest securities, yielded sale proceeds of approximately £1.75m. Future of the Company As noted in the interim report, the resolution that the Company should continue as a VCT for a further five years was passed at the Annual General Meeting on 21 August 2002. Shareholder relations Shareholders who wish to know the latest published net asset value or share price at any time may call Legg Mason Investments on 020 7070 7400. Investment management arrangements Following the announcement by Legg Mason Investments that it would be closing its Glasgow office and consolidating its asset management activities in London, on 6 February 2003 the Board served protective notice on the Investment Manager of the Company, to enable the Board to consider the impact of this on the investment management of the Company. The Board is actively pursuing this matter and will keep shareholders fully apprised. Future prospects It is usual that the larger cap stocks lead the market upwards when a bear market turns bullish and since the end of the reporting period, equity markets have rallied. Indeed since 31 March 2003 the FTSE 100 Index has increased by 11.6%. This has been followed by the FTSE AIM Index which is up from 542.7 at 31 March 2003 to 641.41 at 30 June 2003, an increase of 18.2%. At 30 June 2003, the Company's capital net asset value had increased to 56.49p per ordinary share (unaudited). Whether the market rally will be sustained is a matter upon which experts seem to be at odds, though most commentators predict that the bottom has probably been reached. The speed of recovery is more difficult to predict. The current low levels do present opportunities to buy shares in good companies at prices which are good value. We are hopeful that we will see a period of rising prices. Sir Aubrey Brocklebank Chairman 18 July 2003 Year ended 31 March 2003 Year ended 31 March 2002 Revenue Capital Total Revenue Capital Total £ £ £ £ £ £ Losses on - (5,330,366) (5,330,366) - (6,674,212) (6,674,212) investments Income 202,979 - 202,979 299,224 - 299,224 Investment (42,482) (127,447) (169,929) (65,203) (195,610) (260,813) management fees Movement in - - - - 318,984 318,984 provision for incentive fee Other (136,991) - (136,991) (143,587) - (143,587) expenses ----------- ------------- -------------- ------------- -------------- -------------- Return/(loss) on ordinary 23,506 (5,457,813) (5,434,307) 90,434 (6,550,838) (6,460,404) activities before finance costs and taxation Interest (1,614) - (1,614) (14) - (14) payable on ---------- ------------- -------------- ------------- -------------- -------------- bank overdrafts Return/(loss) 21,892 (5,457,813) (5,435,921) 90,420 (6,550,838) (6,460,418) on ordinary activities before taxation Taxation on - - - - - - ordinary ---------- -------------- -------------- ------------ -------------- -------------- activities Return/(loss) 21,892 (5,457,813) (5,435,921) 90,420 (6,550,838) (6,460,418) attributable to equity shareholders Dividends in - - - (58,480) - (58,480) respect of ----------- --------------- -------------- -------------- --------------- --------------- equity shares Transfer 21,892 (5,457,813) (5,435,921) 31,940 (6,550,838) (6,518,898) to/(from) ---------- -------------- -------------- ------------- -------------- -------------- reserves Return/(loss) 0.13p (32.73)p (32.60)p 0.54p (39.21)p (38.67)p per ordinary ====== ======== ======== ======= ======== ======== share In order to enable the Company to make capital distributions, the Company has revoked its investment company status and is accordingly unable to take advantage of the accounting exemptions that status permits. The results of the Company have been prepared in accordance with the requirements of Schedule IV of the Companies Act 1985, which requires that all realised gains and losses, including those arising from the disposal of investments, are included in the results for the year, and the unrealised capital gains are excluded from the profit and loss account for the year. Profit and loss account (unaudited) For the year ended 31 March 2003 Year ended Year ended 31 March 2003 31 March 2002 Notes £ £ £ £ Income received on investments 2 202,979 299,224 Administrative expenses Investment management fees (169,929) (260,813) Movement in provision for incentive - 318,984 fee Other expenses (136,991) (143,587) ------------- ------------ (306,920) (85,416) -------------- ------------- Net (loss)/revenue (103,941) 213,808 Income from fixed asset investments Losses on investments (687,483) (1,073,114) -------------- -------------- Loss before interest and taxation (791,424) (859,306) Interest payable and similar changes (1,614) (14) ------------- -------------- Loss before taxation (793,038) (859,320) Tax on ordinary activities - - -------------- -------------- Loss on ordinary activities after (793,038) (859,320) taxation -------------- -------------- Dividends Revenue 3 - (58,480) ------------ ------------- Loss for the year (793,038) (917,800) Transfer from capital reserve 814,930 949,740 ------------- ------------ Retained revenue profits 21,892 31,940 ------------ ------------ Earnings per share 4 (4.76)p (5.14)p ======= ======= All returns are derived from continuing activities Statement of total recognised gains and losses (unaudited) For the year ended 31 March 2003 Year ended 31 March 2003 Year ended 31 March 2002 £ £ Loss for the year (793,038) (859,320) Unrealised losses for the year (4,642,883) (5,601,098) Total recognised losses during the year (5,435,921) (6,460,418) Total recognised loss per share (32.60)p (38.67)p =========== ========== Notes of historical profits and losses Year ended 31 March 2003 Year ended 31 March 2002 £ £ Reported loss on ordinary activities before taxation (793,038) (859,320) Realisation of investment revaluation (losses)/gains (2,410,822) 739,242 Recognised in previous periods (3,203,860) (120,078) ------------------- ----------------- Historical cost loss for the year after taxation and (3,203,860) (178,558) dividends =========== ========= Balance sheet (unaudited) As at 31 March 2003 Notes As at 31 March 2003 As at 31 March 2002 £ £ Fixed assets Investments 5 7,476,482 12,638,260 Current assets Debtors 55,316 94,879 Cash at bank and in hand 141,583 490,291 196,899 585,170 Creditors: amounts falling due within one year (75,603) (153,976) Net current liabilities 121,296 431,194 Net assets 7,597,778 13,069,454 ========= ========= Capital and reserves Called-up share capital 4,153,675 4,177,174 Special reserve 12,292,607 12,328,362 Capital reserve - realised (652,038) 2,573,714 Capital reserve - unrealised (8,380,282) (6,148,221) Capital redemption reserve 47,249 23,750 Revenue reserve 136,567 114,675 -------------- -------------- 7,597,778 13,069,454 ======== ======== Net asset value per share Ordinary shares 6 45.73p 78.22p ======== ======== The financial statements were approved by the Board of Directors on 18 July 2003 and signed on their behalf by: Sir Aubrey Brocklebank Chairman Cash flow statements (unaudited) For the year ended 31 March 2003 Year ended 31 March 2003 Year ended 31 March 2002 £ £ Operating activities Investment income received 189,442 218,540 Deposit interest received 9,759 78,077 Underwriting commission received - 193 Investment management fees paid (190,398) (473,095) Other expenses paid (130,815) (149,091) ___________ ___________ Net cash outflow (122,012) (325,376) ___________ ___________ Servicing of finance Interest paid (1,614) (14) ___________ ___________ Taxation Income tax recovered 25,448 237,414 ___________ ___________ Capital expenditure and financial investment Purchase of investments (1,901,928) (7,274,739) Disposal of investments 1,745,973 7,618,166 ___________ ___________ Net cash (outflow)/inflow (155,955) 343,427 ___________ ___________ Dividends Equity dividends paid (58,820) (1,670,870) ___________ ___________ Net cash outflow before financing (312,953) (1,415,419) ___________ ___________ Financing Cost of share repurchase (35,755) - ___________ ___________ Net cash outflow from financing (35,755) - ___________ ___________ Decrease in cash (348,708) (1,415,419) ========== ========== Notes to the financial statements (unaudited) 1. Investments Investments are treated as fixed assets and are shown in the balance sheet at Directors' valuation on the following basis: Listed investments, including those traded on the Alternative Investment Market ('AIM') and off-exchange ('OFEX'), are valued at mid-market price as at the balance sheet date. The Directors are conscious of the fact that because shares are traded on AIM and OFEX this does not guarantee their liquidity. The nature of AIM and OFEX investments is such that the prices can be volatile and realisation may not achieve current book value, especially when such a sale represents a significant proportion of the Company's market capital. Nevertheless, on the grounds that the investments are not intended for immediate realisation, they regard mid-market price as the most objective and appropriate method of valuation. In determining the valuation of unquoted investment the Directors adopt the mid- market price where a dealing facility exists and apply a discount if considered appropriate. Where no dealing facility exists the factors which the Directors have regard to include, inter alia, the earnings record and growth prospects of the security, the rating of comparable companies, the yield of the security where appropriate and any recent transactions. 2. Income 2003 2002 £ £ Income from investments Dividends 78,628 115,976 Interest 118,777 128,603 ------------- ------------- 197,405 244,579 ------------ ------------ Other income Deposit interest 5,574 54,452 Underwriting commission - 193 ------------- ------------- Total income 202,979 299,224 ========= ========= 3. Dividends 2003 2002 £ £ Revenue dividend on equity shares Final: £nil (2002: 0.35p per share) - 58,480 ===== ====== 4. Earnings per share Basic revenue loss per ordinary share is based on the loss on ordinary activities after taxation of £793,038 (2002: loss of £859,320) and on 16,676,250 (2002: 16,708,698) ordinary shares, being the weighted average number of ordinary shares in issue during the year. 5. Investments 2003 2002 £ £ Investments listed on the London Stock Exchange 1,457,697 3,350,762 Investments in companies traded on AIM 5,406,362 8,283,146 Investments in companies traded on OFEX 559,143 654,432 Unlisted companies 53,280 349,920 -------------- -------------- 7,476,482 12,638,260 ======== ======== 6. Net asset value Basic net asset value per share is based on the net assets attributable to ordinary shareholders of £7,597,778 (2002: £13,069,454) and on 16,614,701 (2002: 16,708,698) ordinary shares in issue at the year end. 7. Post balance sheet events There were no significant post balance sheet events. 8. 2003 Accounts The figures and financial information for the year ended 31 March 2002 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 include a statement under either Section 237(2) or Section 237(3) of the Companies Act 1985. The above financial information for the year ended 31 March 2003 does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 March 2003 will be delivered to the Registrar of Companies in due course. The Annual General Meeting will be held on 3 September 2003 at 10.00 am at the offices of Teather & Greenwood Limited, Beaufort House, 15 St Botolph Street, London, EC3A 7QR. The annual report will be sent to shareholders in July 2003 and will be available to members of the public from the Company's registered office at 55 Moorgate, London EC2R 6PA. For further information, please contact: Susan Venables BNP Paribas Secretarial Services Limited Tel: 020 7410 5971 Please contact Zoe Burton of Legg Mason Investments (Europe) Limited Tel: 020 7070 7474 Email: z.burton@leggmason.co.uk 21 July 2003 END This information is provided by RNS The company news service from the London Stock Exchange

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