Lowland Inv. Co. LWI Final Results

  Lowland Inv. Co. (LWI) - Final Results

RNS Number : 4941R
Lowland Investment Co PLC
19 November 2012




                                                                             

                                                                             

                                                                             

                                                                             

                                                                  Page 1 of 14

                                                                             

                        LOWLAND INVESTMENT COMPANY PLC

         Annual Financial Report for the year ended 30 September 2012









This announcement contains regulated information



                                                       

                                                                            

Key Data                            30 September           30 September Change

per ordinary share                          2012                   2011      %
Net asset value ^#                      1008.4p                811.0p  +24.3
Share price^#                            991.5p                762.5p  +30.0
Net revenue return                        31.1p                 28.8p   +8.0
Total return                             229.9p                 68.3p      
First interim dividend        15.0p                 10.5p                  
Second interim dividend        7.5p                 17.5p                  
Final dividend                 8.0p                     -                  
                         ---------              ---------                  
Total dividend                            30.5p                 28.0p   +8.9
Gearing^*                                 13.8%                 14.8%      
Discount                                   1.7%                  6.0%      
Ongoing charges ^**                                     

 - excluding the
performance fee                            0.62%                  0.59%      
 - including the                                     
performance fee                            0.89%                  0.89%      

^

^# Excluding reinvested income.

 * Defined here as investments as a percentage of equity shareholders'
funds minus 100.

** Defined here as total expenses incurred by the Company expressed as an
average of shareholders' funds over the year calculated

 on a daily basis.





Total return performance       1 year 5 years 10 years

to 30 September 2012                %       %        %
Net asset value^(1)              29.1    16.8    240.5
Share price^(1)                  35.3    11.2    236.2
Peer group net asset value^(2)   19.8     8.3    146.7
FTSE All-Share Index^(3)         17.3     8.7    135.7
Increase in dividend per share    8.9    29.8     96.8



Source:

(1) Morningstar for the AIC. Using cum income fair value net asset value for
one year and capital net asset value plus income reinvested for 5 and 10
years.

(2) Morningstar for the AIC. The performance of the AIC UK Income & Growth
Sector (arithmetic average).

(3) Morningstar for the AIC (gross income reinvested).























                                                                  Page 2 of 14



                        LOWLAND INVESTMENT COMPANY PLC

         Annual Financial Report for the year ended 30 September 2012



MANAGEMENT REPORT



Commenting on the results Chairman, Peter Troughton, said:



Performance for the year to 30 September 2012

I am pleased to report that your Company had a satisfactory year with the  net 
asset value (NAV)  on a total  return basis  rising by 29.1%,  while the  FTSE 
All-Share Index total return rose 17.3%. The long-term and the analysis of the
main individual  stock  contributors  are  shown in  the  Annurla  Report  and 
Financial Statements, while a reasonable level  of gearing at around 14%  also 
contributed to the outperformance.  It needs to  be remembered that  Lowland's 
portfolio is  significantly different  from the  makeup of  the index  in  its 
weightings  of  individual  sectors  and   stocks.  It  is  this  that   makes 
outperformance possible.  We  believe that  over  the medium  term  this  will 
continue to add value, but it can lead to underperformance at times if some of
the favoured stocks or  sectors have a setback.  The share price total  return 
was 35.3%  over the  year  as the  discount to  NAV  closed. The  share  price 
finished the year on  a small discount  of 1.7%. It  should be remembered  the 
discount can widen again.



Dividends

The total dividend  for the  year will,  subject to  shareholder approval,  be 
30.5p which compares with last year's 28.0p, an increase of 8.9%. Lowland  has 
increased its dividends every year for the  last 36, except for one year  when 
it was maintained. We  explained in the  Half-Year Update that  we are in  the 
process of  moving  to  paying  four dividends  a  year.  The  proposed  final 
quarterly dividend, which is also the  Company's final for the year, has  been 
raised from 7.5p to 8.0p. If approved  by shareholders at the AGM, it will  be 
paid on 31 January 2013. The dividend is covered again this year by  earnings, 
which were  8.0%  higher than  last  year. The  Board  would like  to  provide 
shareholders with a regular flow of  income. Quarterly dividends will be  paid 
at the  end  of  April,  July  and October  and  the  final,  if  approved  by 
shareholders, will be paid at the end of January. The Company aims to minimise
the costs  of  this  change in  the  frequency  of the  dividend  payments  by 
providing consolidated tax vouchers in  the future, so that shareholders  will 
receive one tax voucher for the year with the final dividend.



Ongoing Charges and Fees

Ongoing charges, which are the management fee and other non-interest  expenses 
as a percentage of

shareholders' funds were 0.62% (2011: 0.59%) excluding the performance fee and
0.89% (2011:  0.89%)  including the  performance  fee. A  performance  fee  of 
£646,000 (wholly charged to  capital) was paid  in respect of  the year to  30 
September 2012. This fee, and the basic management fee of 0.5% of net  assets, 
are together capped at a total of 0.75% of net chargeable assets.



Investment Review

Profit growth, cash generation and dividend increases combined with relatively
low valuations meant equity markets  rose during the year. These  fundamentals 
countered fears about Eurozone break-up and slowing economic activity. We have
always focused on stocks rather  than economic forecasts. Lowland's  portfolio 
is a collection of holdings in shares of a diverse spread of companies: it  is 
not a proxy for  the UK or global  economy. We are wary  of trying to  predict 
economic and political events. Instead we favour a bottom-up approach focusing
on companies, regardless  of their size,  which we believe  will develop  well 
over time and whose valuation does not reflect their prospects. This means  we 
have a large  exposure to medium  and smaller sized  companies which we  blend 
with large companies to produce a balanced portfolio of companies  undertaking 
a wide range of activities.





                                                                             

                                                                             

                                                                  Page 3 of 14



                        LOWLAND INVESTMENT COMPANY PLC

         Annual Financial Report for the year ended 30 September 2012



The largest sector exposure is  to industrials where competitive UK  companies 
with excellent products are capturing global market share. We believe this  is 
set to continue.



Annual General Meeting

The Annual General  Meeting will be  held at the  offices of Henderson  Global 
Investors, 201 Bishopsgate,  London on  Monday 21  January 2013  at 12.30  pm. 
There is one new item to consider this year which is as a result of the recent
changes in the Investment Trust rules. It  is no longer a requirement for  the 
distribution of capital profits  to be prohibited by  a company's articles  of 
association in order for  it to achieve or  maintain investment trust  status. 
Whilst the Board has no immediate intention of making any distribution of  the 
Company's capital profits by  way of a dividend,  the Board believes that,  in 
order to increase flexibility, it would be appropriate to ask shareholders  to 
approve amendments to the articles of association of the Company which  remove 
this restriction. Full details of the business to be conducted at the  meeting 
are set out in the Notice of  the meeting which has been sent to  shareholders 
with this report.  As usual our  Portfolio Manager, James  Henderson, will  be 
making a presentation and all shareholders are most welcome to attend.



Outlook

In aggregate UK companies in the portfolio are in good health with debt levels
low, dividend cover  high and  costs well  controlled. When  there is  further 
sales growth, operating  margins should  improve. This can  lead to  continued 
share price appreciation.  We are  therefore retaining a  reasonable level  of 
gearing. The emphasis on UK industrial companies servicing the global  economy 
with value  added products  will be  maintained until  the valuations  are  no 
longer compelling.



PRINCIPAL RISKS AND UNCERTAINTIES



With the assistance of the Investment Manager,  the Board has drawn up a  Risk 
Map, which  identifies the  key risks  to the  Company. These  key risks  fall 
broadly under the following categories:



● Investment and Strategy

An  inappropriate  investment  strategy,  for  example,  in  terms  of   asset 
allocation or level  of gearing,  may result in  underperformance against  the 
Company's benchmark index and the companies in its peer group, and also in the
Company's shares trading on a wider discount. The Board manages these risks by
ensuring a diversification of investments and  a regular review of the  extent 
of borrowings. The Investment Manager  operates in accordance with  investment 
limits and restrictions  and policy  determined by the  Board, which  includes 
limits on the extent  to which borrowings may  be employed. The Board  reviews 
the limits and  restrictions on  a regular  basis and  the Investment  Manager 
confirms adherence to them  every month. The  Investment Manager provides  the 
Board with management information, including performance data and reports  and 
shareholder analyses. The directors monitor the implementation and results  of 
the investment process with  the Portfolio Manager at  each Board meeting  and 
monitor risk  factors in  respect  of the  portfolio. Investment  strategy  is 
reviewed at each meeting.





















                                                                             

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                        LOWLAND INVESTMENT COMPANY PLC

         Annual Financial Report for the year ended 30 September 2012





● Market

Market risk arises from uncertainty about  the future prices of the  Company's 
investments.



● Accounting, legal and regulatory

In order  to qualify  as an  investment trust,  the Company  must comply  with 
Section 1158 of the Corporation Tax Act 2011. A breach of Section 1158  could 
result in the Company  losing investment trust status  and, as a  consequence, 
realised gains in the Company's portfolio would be subject to Corporation Tax.
Compliance with  the  requirements  of  Section  1158  are  monitored  by  the 
Investment Manager and the results are reported at each Board meeting.



The Company must comply  with the provisions of  the Companies Act and,  since 
its shares are  listed on the  London Stock Exchange,  the UKLA's Listing  and 
Disclosure Rules. A breach  of the Companies Act  could result in the  Company 
and/or the directors  being fined or  the subject of  criminal proceedings.  A 
breach of  the UKLA  Rules could  result in  the suspension  of the  Company's 
shares; which  in turn  would breach  Section 1158.  The Board  relies on  its 
Company Secretary and advisers  to ensure adherence to  the Companies Act  and 
the UKLA Rules.



● Operational

Disruption to, or the failure of, the Investment Manager's accounting, dealing
or payment  systems or  the  Custodian's records  could prevent  the  accurate 
reporting or monitoring  of the Company's  financial position. The  Investment 
Manager  contracts  some  of  the  operational  functions  (principally  those 
relating to trade  processing, investment administration  and accounting),  to 
BNP Paribas Securities Services.



Details of how  the Board  monitors the  services provided  by the  Investment 
Manager and its  other suppliers,  and the  key elements  designed to  provide 
effective internal control,  are explained  further in the  Annual Report  and 
Financial Statements.



● Financial

The financial risks faced by the  Company include market price risk,  interest 
rate risk, liquidity  risk, currency  risk and credit  and counterparty  risk. 
Details of these risks and  how they are managed  are disclosed in the  Annual 
Report and Financial Statements.



RELATED PARTY TRANSACTIONS

The provision of  investment management, accounting,  company secretarial  and 
administrative services  has been  out-sourced to  Henderson Global  Investors 
Limited ("Henderson" or the  "Investment Manager"). This  is the only  related 
party arrangement currently in place. Other  than fees payable by the  Company 
in the ordinary course of business,  there have been no material  transactions 
with this related party affecting the financial position or performance of the
Company during the year under review.





                                                                  Page 5 of 14

                                                                             

                        LOWLAND INVESTMENT COMPANY PLC

         Annual Financial Report for the year ended 30 September 2012





STATEMENT OF DIRECTORS' RESPONSIBILITIES UNDER DTR 4.1.12

Each of the directors confirms that, to the best of their knowledge:



• the financial statements, which have been prepared in accordance with United
Kingdom Generally  Accepted  Accounting Practice  (United  Kingdom  Accounting 
Standards and  applicable law),  give a  true  and fair  view of  the  assets, 
liabilities, financial position and profit of the Company; and



• the Directors' Report in the Annual Report and Financial Statements includes
a fair  review of  the development  and performance  of the  business and  the 
position of the Company,  together with a description  of the principal  risks 
and uncertainties that it faces.



For and on behalf of the Board









Peter Troughton

Director

19 November 2012

                                      

                                      

                                      

                                      

                                      

                                      

                                      

                                                                             

                                                                  Page 6 of 14

                                                                             

                        LOWLAND INVESTMENT COMPANY PLC

         Annual Financial Report for the year ended 30 September 2012



Audited Income Statement

for the year ended 30 September 2012



                   Year ended 30 September 2012  Year ended 30 September 2011
                                                 Revenue   Capital

                    Revenue   Capital     Total    Return    Return     Total
                      Return    Return
                      £'000     £'000     £'000     £'000     £'000     £'000
Gains on
investments held
at fair value
through profit or
loss                       -    53,157    53,157         -    11,112    11,112
Income from
investments (note
2)                    10,677         -    10,677     9,781         -     9,781
Other interest
receivable and
similar income
(note 3)                  97         -        97       107         -       107
                   --------- --------- --------- --------- --------- ---------
Gross revenue and
capital gains         10,774    53,157    63,931     9,888    11,112    21,000
Management fee       (1,173)         -   (1,173)   (1,024)         -   (1,024)
Performance fee            -     (646)     (646)         -     (698)     (698)
Other
administrative
expenses               (402)         -     (402)     (403)         -     (403)
                   --------- --------- --------- --------- --------- ---------
Net return on
ordinary
activities before
finance charges
and taxation           9,199    52,511    61,710     8,461    10,414    18,875
Finance charges        (911)         -     (911)     (738)         -     (738)
                   --------- --------- --------- --------- --------- ---------
Net return on
ordinary
activities before
taxation               8,288    52,511    60,799     7,723    10,414    18,137
Taxation on net
return on ordinary
activities              (62)         -      (62)     (105)         -     (105)
                   --------- --------- --------- --------- --------- ---------
Net return on
ordinary
activities after
taxation               8,226    52,511    60,737     7,618    10,414    18,032
                       =====     =====     =====     =====     =====     =====
Return per
ordinary share -

basic and diluted
(note 4)               31.1p    198.8p    229.9p     28.8p     39.5p     68.3p
                       =====     =====     =====     =====     =====     =====



The total columns of this statement  represent the Profit and Loss Account  of 
the Company. The revenue return  and capital return columns are  supplementary 
to this  and are  prepared  under guidance  published  by the  Association  of 
Investment Companies. All  revenue and  capital items in  the above  statement 
derive from  continuing operations.  The Company  had no  recognised gains  or 
losses other  than  those disclosed  in  the  Income Statement.  There  is  no 
material difference  between  the net  return  on ordinary  activities  before 
taxation and the  net return  for the financial  year stated  above and  their 
historical cost equivalents.

                                      

                                      

                                      

                                      

                                                                             

                                                                             

                                                                             

                                                                             

                                                                             

                                                                             

                                                                             

                                                                             

                                                                  Page 7 of 14

                                                                             

                        LOWLAND INVESTMENT COMPANY PLC

         Annual Financial Report for the year ended 30 September 2012



Reconciliation of Movements in Shareholders' Funds

for the years ended 30 September 2012 and 30 September 2011







                                                                            
                                      Capital                     
Year ended     Called up     Share redemption      Other                     
                   share   premium    reserve    capital    Revenue
30 September     capital   account              reserves    reserve      Total
2012               £'000     £'000      £'000      £'000      £'000      £'000
At 1 October
2011               6,604    53,561      1,007    145,400      7,679    214,251
Net return on
ordinary
activities
after taxation         -         -          -     52,511      8,226     60,737
Second interim
dividend
(17.5p) for
the year ended
30 September
2011 paid 21
December 2011          -         -          -          -    (4,624)    (4,624)
First interim
dividend
(15.0p) for
the year ended
30 September
2012 paid 19
June 2012              -         -          -          -    (3,963)    (3,963)
               --------- --------- ----------  --------- ----------  ---------
At 30
September 2012     6,604    53,561      1,007    197,911      7,318    266,401
                   =====     =====      =====     ======      =====     ======




                                                                            
                                                                  
                                                                         
                                      Capital                     
Year ended     Called up     Share redemption      Other                     
                   share   premium    reserve    capital    Revenue
30 September     capital   account              reserves    reserve      Total
2011               £'000     £'000      £'000      £'000      £'000      £'000
At 1 October
2010               6,604    53,561      1,007    134,986      7,326    203,484
Net return on
ordinary
activities
after taxation         -         -          -     10,414      7,618     18,032
Second interim
dividend
(17.0p) for
the year
ended 30
September 2010
paid 22
December 2010          -         -          -          -    (4,491)    (4,491)
First interim
dividend
(10.5p) for
the year ended
30 September
2011

paid 17 June
2011                   -         -          -          -    (2,774)    (2,774)
               --------- ---------  --------- ----------  --------- ----------
At 30
September 2011     6,604    53,561      1,007    145,400      7,679    214,251
                   =====     =====      =====     ======      =====     ======











                                                                             

                                                                             

                                                                             

                                                                             

                                                                             

                                                                  Page 8 of 14

                                                                             

                        LOWLAND INVESTMENT COMPANY PLC

         Annual Financial Report for the year ended 30 September 2012



Audited Balance Sheet

at 30 September 2012



                                                              2012        2011

                                                             £'000       £'000
Investments held at fair value through profit or loss
Listed at market value in the United Kingdom               270,813     220,125
Quoted at market value on AIM                               19,844      16,249
Listed at market value overseas                             11,572       8,400
Unquoted                                                       914       1,281
                                                       ----------- -----------
                                                           303,143     246,055
                                                       ----------- -----------
Current assets
Debtors                                                      1,900       1,559
Cash at bank                                                 2,177       1,297
                                                       ----------- -----------
                                                             4,077       2,856
Creditors: amounts falling due within one year            (40,819)    (34,660)
                                                       ----------- -----------
Net current liabilities                                   (36,742)    (31,804)
                                                       ----------- -----------
Total assets less current liabilities                      266,401     214,251
                                                            ======      ======
Capital and reserves
Called up share capital (note 6)                             6,604       6,604
Share premium account                                       53,561      53,561
Capital redemption reserve                                   1,007       1,007
Other capital reserves                                     197,911     145,400
Revenue reserve                                              7,318       7,679
                                                       ----------- -----------
Total Shareholders' funds                                  266,401     214,251
                                                            ======      ======
Net asset value per ordinary share - basic and diluted     1008.4p      811.0p
(note 7)
                                                            ======      ======



The Company does not have any dilutive securities, therefore the basic and
diluted returns per share are the same.

                                      

                                      

                                      

                                      

                                      

                                      















                                                                             



                                                                  Page 9 of 14

                                                                             

                        LOWLAND INVESTMENT COMPANY PLC

         Annual Financial Report for the year ended 30 September 2012



Audited Cash Flow Statement

for the year ended 30 September 2012



                                         2012       2012       2011       2011

                                        £'000      £'000      £'000      £'000
Net cash inflow from operating
activities                                         8,133                 8,163
Servicing of finance
Interest paid                           (903)                 (803)
                                   ----------            ----------
Net cash outflow from servicing of
finance                                            (903)                 (803)
Taxation
Tax recovered                              29                    63
                                   ----------            ----------
Net tax recovered                                    29                    63
Financial investment
Purchases of investments             (38,088)              (43,606)
Sales of investments                   35,532                36,992
                                   ----------            ----------
Net cash outflow from financial
investment                                       (2,556)               (6,614)
Equity dividends paid                            (8,587)               (7,265)
                                              ----------            ----------
Net cash outflow before financing
activities                                       (3,884)               (6,456)
Financing
Net loans drawndown                     4,759                 5,500
                                   ----------            ----------
                                                   4,759                 5,500
                                              ----------            ----------
Increase/(decrease) in cash                          875                 (956)
                                                  ======                ======
Reconciliation of net cash flow to
movement

in net debt
Increase/(decrease) in cash as
above                                                875                 (956)
Net cash inflow from movement in
loans                                            (4,759)               (5,500)
Exchange movements                                     5                  (29)
                                              ----------             ---------
Movement in net debt                             (3,879)               (6,485)
Net debt at 1 October                           (32,203)              (25,718)
                                              ----------            ----------
Net debt at 30 September                        (36,082)              (32,203)
                                                  ======                ======







                                                                             

                                                                             

                                                                             

                                                                             

                                                                             

                                                                             

                                                                             

                                                                 Page 10 of 14

                                                                             

                        LOWLAND INVESTMENT COMPANY PLC

         Annual Financial Report for the year ended 30 September 2012



Notes to the Accounts:



1. Accounting policies
   The financial statements have  been prepared on a  going concern basis  and 
   under the historical cost basis of  accounting, as modified to include  the 
   revaluation of investments. The financial statements have been prepared  in 
   accordance with United Kingdom  Generally Accepted Accounting Practice  and 
   with the  Statement of  Recommended Practice  ("the SORP")  for  investment 
   trusts issued by  the Association  of Investment Companies  ("the AIC")  in 
   January 2009. All of the Company's  operations are of a continuing  nature. 
   The Company's accounting policies are consistent with the prior year.



                                2012     2011

2. Income from investments       £'000    £'000
   UK dividends:
   Quoted investments           8,967    8,451
   Unquoted                        44       43
                              --------  -------
                                 9,011    8,494
                              --------  -------
   Non UK dividends:
   Overseas dividend income     1,335    1,192
   Property income dividends      131       92
   Interest income                200      3
                              -------- --------
   Non UK dividends             1,666    1,287
                              -------- --------
                                10,677    9,781
                                 =====    =====



   
                                                        2012             2011
   Other interest  receivable and  similar 
3. income                                               £'000            £'000
   Deposit interest                                         -                1
   Stock lending commission                                47               42
   Income from underwriting                                50               64
                                                     --------          -------
                                                           97              107
                                                        =====            =====
   At 30 September 2012 the total value  of securities on loan by the  Company 
   for stock  lending  purposes  was  £16,188,000  (2011:  £5,300,000).  The 
   maximum aggregate value of securities on  loan at any time during the  year 
   ended 30 September 2012 was £23,500,000 (2011: £13,200,000). The Company's
   agent holds collateral comprising FTSE  100 stocks with a collateral  value 
   of £17,157,000 (2011:  £5,892,000) amounting  to a minimum  of 105%  (2011: 
   minimum 105%) of the market value of any securities on loan. Stock lending
   commission has been shown net of brokerage fees of £20,000 (2011: £15,000).





                                                                 Page 11 of 14

                                                                             

                        LOWLAND INVESTMENT COMPANY PLC

         Annual Financial Report for the year ended 30 September 2012



Notes to the Accounts (continued):



4. Return per ordinary share - basic and diluted
   The return per ordinary  share is based on  the net return attributable  to 
   the ordinary shares  of £60,737,000 (2011:  £18,032,000) and on  26,417,427 
   ordinary shares (2011:  26,417,427) being  the weighted  average number  of 
   ordinary shares in issue during the year. The return per ordinary share can
   be further analysed between revenue and capital, as below.
                                                       2012               2011

                                                      £'000              £'000
   Net revenue return                                 8,226              7,618
   Net capital return                                52,511             10,414
                                                   --------          ---------
   Net total return                                  60,737             18,032
                                                      =====              =====
   Weighted average number of ordinary           26,417,427         26,417,427
   shares in issue during the year
   Revenue return per ordinary share                  31.1p              28.8p
   Capital return per ordinary share                 198.8p              39.5p
                                                   --------           --------
   Total return per ordinary share                   229.9p              68.3p
                                                      =====              =====
   The Company  does not  have any  dilutive securities,  therefore basic  and 
   diluted returns per share are the same.

                                      

5. Dividends paid and payable on the ordinary shares
   
                                                              2012      2011
   Dividends on ordinary
   shares                       Record Date   Payment Date     £'000     £'000
   Second interim
   dividend (17.0p)

    for the year ended                        22 December
   30 September 2010        3 December 2010           2010         -     4,491
   First interim
   dividend (10.5p)

    for the year ended
   30 September 2011            27 May 2011   17 June 2011         -     2,774
   Second interim
   dividend (17.5p)
    for the year ended                       21 December
   30 September 2011        2 December 2011           2011     4,624         -
   First interim
   dividend (15.0p)
    for the year ended
   30 September 2012            1 June 2012   19 June 2012     3,963         -
                                                          --------  --------
                                                               8,587     7,265
                                                               =====     =====
   The second interim dividend and final for the year ended 30 September  2012 
   have not been included as a  liability in these financial statements.  The 
   total dividends payable in  respect of the financial  year, which form  the 
   basis of one of the retention  tests under Section 1158 of the  Corporation 
   Tax Act 2011, are set out below.
                                                                          2012

                                                                         £'000
   Revenue available for distribution  by way of  dividend 
   for the year                                                          8,226
   First interim dividend  (15.0p) for the  year ended  30 
   September 2012                                                      (3,963)
   Second interim dividend  (7.5p) for the  year ended  30 
   September 2012                                                      (1,981)
   Final dividend (8.0p) for  the year ended 30  September 
   2012 (based on 26,417,427  ordinary shares in issue  at 
   19 November 2012)                                                   (2,113)
                                                                    ----------
   Revenue Surplus                                                         169
                                                                        ======
   For section 1158 purposes the Company's undistributed
   revenue represents 1.6% of

   the income from investments.









                                                                 Page 12 of 14

                                                                             

                        LOWLAND INVESTMENT COMPANY PLC

         Annual Financial Report for the year ended 30 September 2012



Notes to the Accounts (continued):



                                                                          

                                                               2012   2011

6. Called up share capital                                      £'000  £'000
   Allotted and fully paid
   26,417,427 (2011: 26,417,427) ordinary shares of 25p each  6,604  6,604
                                                               ====== ======



   

7. Net asset value per ordinary share
   The net asset value per ordinary share is based on the net assets
   attributable to the ordinary shares of £266,401,000 (2011: £214,251,000)
   and on 26,417,427 (2011: 26,417,427) shares in issue on 30 September 2012.

   

   The movements during the  year of the assets  attributable to the  ordinary 
   shares were as follows:



                                                               2012       2011

                                                              £'000      £'000
 Total net assets at 1 October                              214,251    203,484
 Total net return on ordinary activities after taxation      60,737     18,032
 Net dividends paid in the year: Ordinary shares            (8,587)    (7,265)
                                                         ---------- ----------
 Net assets attributable  to the ordinary  shares at  30               214,251
 September                                                  266,401
                                                             ======     ======

                                      

8. Going Concern Statement
   The directors believe that it is appropriate to continue to adopt the going
   concern basis in preparing  the financial statements as  the assets of  the 
   Company consist  mainly of  securities which  are readily  realisable  and, 
   accordingly, it has adequate financial resources to continue in operational
   existence for the foreseeable future. In  reviewing the position as at  the 
   date  of  the  Annual  Report  and  Financial  Statements,  the  Board  has 
   considered the "Going Concern and Liquidity Risk: Guidance for Directors of
   UK Companies 2009", published by the Financial Reporting Council in October
   2009.



9. 2012 Annual Financial Statements
   The figures and financial information for the year ended 30 September  2012 
   are extracted  from  the Company's  annual  financial statements  for  that 
   period and  do not  constitute statutory  accounts. The  Company's  annual 
   financial statement for the year to 30 September 2012 have been audited but
   have not yet been delivered to  the Registrar of Companies. The  auditors' 
   report on the  2012 annual  financial statements was  unqualified, did  not 
   include a reference  to any  matter to  which the  auditors drew  attention 
   without qualifying the  report, and  did not contain  any statements  under 
   section 498 of the Companies Act 2006.



10. 2011 Financial Information
    The figures and financial information for the year ended 30 September 2011
    are compiled from an extract of  the published accounts for that year  and 
    do not constitute statutory accounts. 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  sections 
    498(2) or 498(3) of the Companies Act 2006.





















       
  Page 13 of
                                                                      14

                                                                             

                        LOWLAND INVESTMENT COMPANY PLC

         Annual Financial Report for the year ended 30 September 2012



Notes to the Accounts (continued):



11. Dividend
    The final dividend of 8.0p per ordinary share, will be paid on 31  January 
    2013 to shareholders on the register  of members at the close of  business 
    on 4 January 2013.  The Company's shares will  be traded ex-dividend on  2 
    January 2013.



12. Annual Report
    The Annual Report and Financial Statements will be posted to  shareholders 
    in late  November 2012  and will  be available  on the  Company's  website 
    (www.lowlandinvestment.com) or  in hard  copy  format from  the  Company's 
    Registered Office, 201 Bishopsgate, London, EC2M 3AE.



13. Annual General Meeting
    The Annual General  Meeting will  be held on  Monday, 21  January 2013  at 
    12.30 pm at 201 Bishopsgate, London, EC2M 3AE.

                                      

                                      

                                      

                                      

                                                                             

                                                                             

                                                                             

                                                                             

                                                                             


                                                               Page 14 of 14

                                                                             

                        LOWLAND INVESTMENT COMPANY PLC

         Annual Financial Report for the year ended 30 September 2012



Notes to the Accounts (continued):

Twenty Largest Holdings as at 30 September 2012



                                                                                   

                            Valuation                                   Valuation

Rank   Rank                        2011   Purchases      Sales Appreciation       2012

(2012) (2011) Company              £'000       £'000      £'000        £'000      £'000
1      (1)    Carclo              15,223           -    (5,290)        5,621     15,554
2      (2)    Senior              11,560           -    (2,042)        4,783     14,301
              Royal Dutch
3      (3)    Shell               10,563           -    (1,108)          986     10,441
4      (5)    Hiscox               6,485           -          -        2,058      8,543
5      (4)    Glaxosmithkline      7,332           -       (28)          547      7,851
6      (6)    Interserve           6,298           -          -        1,332      7,630
7      ( * )  DS Smith             3,513       2,011    (1,590)        2,058      5,992
8      (16)   Hill & Smith         3,873           -          -        1,935      5,808
9      (8)    BP                   5,051           -          -          624      5,675
10     (12)   GKN                  4,573           -          -        1,012      5,585
11     (15)   Amlin                3,909           -          -        1,648      5,557
12     ( * )  Elementis            2,594         307          -        2,551      5,452
              International
              Personal
13     ( * )  Finance              2,822       1,008          -        1,457      5,287
              Provident
14     ( * )  Financial            3,765           -          -        1,384      5,149
15     (14)   Phoenix              3,960         739          -          264      4,963
16     (9)    Croda                4,950           -    (2,137)        2,037      4,850
17     ( * )  Diageo               3,425           -          -        1,411      4,836
18     (11)   Aviva                4,581           -          -          200      4,781
19     ( * )  IMI                  3,021         665          -        1,044      4,730
20     ( * )  Weir                 2,324       1,524          -          572      4,420
                              ---------- ----------- ----------    --------- ----------
                                 109,822       6,254   (12,195)       33,524    137,405
                                  ======      ======     ======       ======     ======



At 30 September 2012 these investments  totalled £137,405,000 or 45.3% of  the 
portfolio.



* Not in the top 20 largest investments last year.



For further information please contact:

                                                 
James H Henderson                                 James de Sausmarez
Portfolio Manager                                 Head of Investment Trusts
Lowland Investment Company plc Henderson Global Investors
Telephone: 020 7818 4370                          Telephone: 020 7818 3349
                                                 
Sarah Gibbons-Cook                                
Investor Relations and PR Manager                 
Henderson Global Investors                        
Telephone: 020 7818 3198                          

                                      

Neither the contents of the Company's website nor the contents of any  website 
accessible from hyperlinks on the Company's website (or any other website)  is 
incorporated into, or forms part of, this announcement.

                                   - ENDS -

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


FR EAKFNFLPAFFF -0- Nov/19/2012 16:56 GMT
 
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