TIDMLWI
RNS Number : 6052G
Lowland Investment Co PLC
30 May 2017
Legal Entity Identifier: 2138008RHG5363FEHV19
LOWLAND INVESTMENT COMPANY PLC
Unaudited Results for the Half-Year Ended 31 March 2017
This announcement contains regulated information
Key Data for the Six Months to 31 March 2017
Net Asset Value Total
Return +10.5%
------------------------ -------
Benchmark Total Return +8.1%
------------------------ -------
Growth in Dividend 9%
------------------------ -------
Dividend 24p
------------------------ -------
Financial Highlights
Half-Year Ended Half-Year Ended Year Ended
31 Mar 2017 31 Mar 2016 30 Sept 2016
-------------------------------------- ---------------- ---------------- --------------
NAV Per Ordinary Share(1) 1,561p 1,333p 1,432p
-------------------------------------- ---------------- ---------------- --------------
Share Price 1,445p 1,290p 1,337p
-------------------------------------- ---------------- ---------------- --------------
Market Capitalisation GBP390m GBP349m GBP361m
-------------------------------------- ---------------- ---------------- --------------
Dividend Per Share 24.0p 22.0p 45.0p
-------------------------------------- ---------------- ---------------- --------------
Ongoing Charge Including Performance
Fee 0.6% 0.7% 0.6%
-------------------------------------- ---------------- ---------------- --------------
Ongoing Charge Excluding Performance
Fee 0.6% 0.6% 0.6%
-------------------------------------- ---------------- ---------------- --------------
Dividend Yield(2) 3.2% 3.3% 3.4%
-------------------------------------- ---------------- ---------------- --------------
Gearing 12.6% 16.7% 6.2%
-------------------------------------- ---------------- ---------------- --------------
Discount -7.4% -3.2% -6.6%
-------------------------------------- ---------------- ---------------- --------------
(1) NAV with debt at par value
(2) Based on dividends paid in respect of the previous twelve
months
Total Return Performance (including dividends reinvested and
excluding transaction costs)
6 months 1 year 3 years 5 years 10 years
% % % % %
----------------- --------- ------- -------- -------- ---------
Net Asset Value +10.5 +21.0 +21.8 +89.1 +108.2
----------------- --------- ------- -------- -------- ---------
Share Price(1) +10.0 +16.0 +11.2 +86.6 +92.7
----------------- --------- ------- -------- -------- ---------
Benchmark(2) +8.1 +22.0 +24.9 +58.7 +73.7
----------------- --------- ------- -------- -------- ---------
(1) Using Mid-Market Price
(2) FTSE All-Share Index
Sources: Morningstar, Funddata, Datastream and Janus
Henderson.
Historical Record
Year to 30 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 As at
September 31 Mar 2017
----------------- ------- ------ ------ ------ ------ ------- ------- ------- ------- ------- -------------
Net Assets(1)
(GBPm) 276 178 174 204 214 266 347 362 355 387 422
----------------- ------- ------ ------ ------ ------ ------- ------- ------- ------- ------- -------------
Per Ordinary Share
----------------------------------------------------------------------------------------------------------------------
Net Asset
Value(2) 1,044p 675p 657p 770p 811p 1,008p 1,307p 1,346p 1,318p 1,432p 1,561p
----------------- ------- ------ ------ ------ ------ ------- ------- ------- ------- ------- -------------
Share Price 1,091p 625p 610p 700p 763p 992p 1,325p 1,355p 1,287p 1,337p 1,445p
----------------- ------- ------ ------ ------ ------ ------- ------- ------- ------- ------- -------------
Net Revenue 27.9p 33.0p 22.7p 22.5p 28.8p 31.1p 36.7p 39.4p 46.4p 47.7p 16.2p
----------------- ------- ------ ------ ------ ------ ------- ------- ------- ------- ------- -------------
Net
Dividends Paid 23.5p 26.5p 26.5p 27.0p 28.0p 30.5p 34.0p 37.0p 41.0p 45.0p 24.0p(3)
----------------- ------- ------ ------ ------ ------ ------- ------- ------- ------- ------- -------------
(1) Attributable to Ordinary Shares
(2) NAV with debt at par value
(3) First Interim Dividend of 12p per Ordinary Share paid on 28
April 2017 and the Second Interim Dividend of 12p per
Ordinary Share that will be paid on 28 July 2017
Interim Management Report
Chairman's Statement
Review
Over the six months under review the Company's net asset value
total return was 10.5%, which compares with a total return of 8.1%
from the FTSE All-Share Index.
Equities rose as the UK economy proved to be resilient to the
surprise vote in favour of leaving the EU. The growth in consumer
spending has not suffered and the fall in sterling has started to
stimulate exports. Inflation began to rise as the weakness of
sterling has increased the cost of imported goods. This has not so
far caused any concerns in the Gilt market. Low interest rates at
all maturities underpin the equity market making equity dividends
relatively appealing. Companies that can increase their dividends
from a reasonable initial yield are attracting investor support.
Our focus on this type of company is a major contributor to the
Company's out-performance.
Dividend
The Company has long operated a progressive dividend policy,
with annual dividends having increased in every year since 1975,
except in 2009, when it was held. Since we started paying quarterly
dividends in 2013 the final quarterly dividend has been increased
each year and has set the new base level for the following three
quarterly dividends.
It is our ambition to continue this pattern of dividend increase
over the next three years should circumstances permit. The Board
would only change the pattern if it felt that it might hold back
capital growth. Capital growth over the long term is essential to
give us the base for greater dividends. The Company's annual
average rate of dividend growth over the last twenty five years has
been 7%.
The Company's revenue earnings per share ('EPS') in the six
months under review totalled 16.2p which compares with 13.7p last
year. Excluding special dividends EPS totalled 15.1p, compared to
12.6p last year. The Company paid a first interim dividend of 12p
per share at the end of April and has declared a second interim
dividend of 12p, payable at the end of July. Interim dividends in
respect of the first half of the current financial year therefore
amounted to 24p per share, an increase of 9.1% from 22p at the same
time last year. Barring unforeseen circumstances, the Board's
intention is to pay a total dividend for this financial year of
49p, an increase of 8.9% on last year's 45p.
Dividend Payments
1(st) Interim 2(nd) Interim 3(rd) Interim Final
------ -------------- -------------- -------------- ------
2014 9p 9p 9p 10p
------ -------------- -------------- -------------- ------
2015 10p 10p 10p 11p
------ -------------- -------------- -------------- ------
2016 11p 11p 11p 12p
------ -------------- -------------- -------------- ------
2017 12p 12p 12p* 13p*
------ -------------- -------------- -------------- ------
* Intention barring unforeseen circumstances.
Investment Management Agreement
I am pleased to report the following amendments to the fee
arrangements with the Investment Manager, Henderson Investment
Funds Limited. The Management Fee will continue to be charged at
the rate of 0.5% per annum on the first GBP375m of average Net
Chargeable Assets. With effect from 1 July 2017, a reduced
Management Fee of 0.4% per annum will apply to average Net
Chargeable Assets above GBP375m.
The cap on total fees, Management plus Performance Fee, of 0.75%
per annum will be replaced by a cap on the Performance Fee at its
existing level of 0.25% per annum of average Net Chargeable Assets.
The maximum fees payable will therefore be 0.75% per annum on the
first GBP375m of average Net Chargeable Assets and 0.65% per annum
in excess thereof.
The amendments have also clarified that Net Chargeable Assets
for the purpose of the fee arrangements should reflect the
unsecured loan note at fair value.
Net Chargeable Assets amounted to GBP423m at 30 April 2017.
Significant Events
On 5 January 2017 the Company issued a GBP30m senior unsecured
fixed rate loan note with an annualised coupon of 3.15% with a 20
year bullet maturity. The Company now has a blend of short and long
term borrowings. This will help keep down interest costs if
interest rates rise in the future.
Activity
During the first six months of the year the Fund Managers found
good value opportunities and invested across a broad range of
companies which took the gearing to 12.6% of net asset value from
6.2% as at 30 September 2016. New holdings included Royal Mail,
Randall & Quilter Investment Holdings, Marshall Motor Holdings
and DFS. The Fund Managers also added to the portfolio's existing
holdings in insurer Aviva and International Consolidated Airline
(which owns British Airways). The common feature of these holdings
is that they are all specialists in their area with reasonable
valuations and attractive dividend yields.
On the whole additions to the portfolio have been in
domestically focused companies. Following the vote in June 2016 to
leave the EU the valuation of these companies has fallen relative
to their more internationally focused peers. While the outlook for
the UK economy remains uncertain the Fund Managers have begun to
invest modestly in what they think are attractive long term
valuation opportunities.
Sales during the period were primarily in companies whose
valuations have risen and where the Fund Managers felt it was
prudent to reduce the holding. Sales included Weir Group, which
makes products such as pumps and valves for the oil & gas and
mining industries, miners Rio Tinto and BHP Billiton and long held
positions in Scapa and Hill & Smith.
Outlook
Inflation will continue to increase in the UK over the coming
months as the effect of sterling's devaluation works its way
through. The real level of economic growth may be muted as the
uncertainty of the UK leaving the EU impacts investment spending
plans. However, these concerns may already be reflected in share
prices with companies that have UK earnings having underperformed
those with overseas earnings.
The Fund Managers will continue to focus on companies that have
a degree of uniqueness in their product offering. It is this that
should allow them to weather any economic slowdown. The forthcoming
UK General Election may lead to volatility in the equity market and
the Fund Managers will be on the lookout for the opportunities that
may result. The Company's gearing reflects the Board's and the Fund
Managers' optimism about the long-term outlook for the companies in
the portfolio.
As at close of business on 26 May 2017, the unaudited net asset
value per share calculated in accordance with the AIC formula
(including current financial year revenue items) was 1642.1p and
the net asset value per share with debt marked at fair value was
1634.9p, a rise of 5.2% and 4.9% respectively since the period
end.
Robert Robertson
Chairman
30 May 2017
Performance as at 31 March 2017
The tables below show the top five contributors to and the
bottom five detractors from the Company's total return performance
over the six months under review.
Top 5 Contributors to Total Return Performance
Company Sector Contribution %
-------------------------- ------------------------------------- ---------------
Scapa Group Plc Chemicals 0.67
-------------------------- ------------------------------------- ---------------
Headlam Group plc Household Goods & Home Construction 0.47
-------------------------- ------------------------------------- ---------------
Somero Enterprises, Inc. Industrial Engineering 0.42
-------------------------- ------------------------------------- ---------------
Renold plc Industrial Engineering 0.40
-------------------------- ------------------------------------- ---------------
Elementis plc Chemicals 0.40
-------------------------- ------------------------------------- ---------------
Bottom 5 Detractors to Total Return Performance
Company Sector Contribution %
------------------------------------ --------------------------------- ---------------
International Personal Finance plc Financial Services -0.47
------------------------------------ --------------------------------- ---------------
4d Pharma PLC Pharmaceuticals & Biotechnology -0.39
------------------------------------ --------------------------------- ---------------
Interserve plc Support Services -0.32
------------------------------------ --------------------------------- ---------------
Senior plc Aerospace & Defence -0.29
------------------------------------ --------------------------------- ---------------
Novae Group plc Non-Life Insurance -0.25
------------------------------------ --------------------------------- ---------------
Sector Analysis
-------------------- ---------- ------------ ------------ --------------
% as at 31 March 2017 % as at 30 September 2016
--------------------- ------------------------ ----------------------------
Company Benchmark Company Benchmark
--------------------- ---------- ------------ ------------ --------------
Financials 30.4 25.7 27.8 23.7
--------------------- ---------- ------------ ------------ --------------
Industrials 26.4 10.9 27.0 10.6
--------------------- ---------- ------------ ------------ --------------
Consumer Services 11.5 11.4 10.7 11.5
--------------------- ---------- ------------ ------------ --------------
Oil & Gas 9.3 11.9 9.3 11.6
--------------------- ---------- ------------ ------------ --------------
Basic Materials 8.5 7.0 10.6 6.1
--------------------- ---------- ------------ ------------ --------------
Consumer Goods 6.0 15.5 6.2 17.3
--------------------- ---------- ------------ ------------ --------------
Health Care 3.9 9.4 4.4 9.9
--------------------- ---------- ------------ ------------ --------------
Telecommunications 2.0 3.8 2.2 4.4
--------------------- ---------- ------------ ------------ --------------
Utilities 1.9 3.6 1.8 4.0
--------------------- ---------- ------------ ------------ --------------
Technology 0.1 0.8 - 0.9
--------------------- ---------- ------------ ------------ --------------
Total 100.0 100.0 100.0 100.0
--------------------- ---------- ------------ ------------ --------------
Related Party Transactions
The Company's current related parties are its Directors and
Henderson. There have been no material transactions between the
Company and its Directors during the year and the only amounts paid
to them were in respect of Directors' remuneration for which there
were no outstanding amounts payable at the period end.
In relation to the provision of services by Henderson, other
than fees payable by the Company in the ordinary course of business
and the provision of sales and marketing services, there have been
no material transactions with Henderson affecting the financial
position of the Company during the year under review.
Principal Risks and Uncertainties
The principal risks and uncertainties associated with the
Company's business can be divided into various areas:
-- Investment Activity and Strategy;
-- Portfolio and Market Price;
-- Financial;
-- Gearing;
-- Operational; and
-- Accounting, Legal and Regulatory.
Information on these risks is given in the Annual Report for the
year ended 30 September 2016. In the view of the Board these
principal risks and uncertainties are as applicable to the
remaining six months of the financial year as they were to the six
months under review.
Statement of Directors' Responsibilities
The Directors confirm that, to the best of their knowledge:
(a) the set of financial statements for the half-year to 31
March 2017 has been prepared in accordance with "FRS 104 Interim
Financial Reporting";
(b) the Interim Management Report includes a fair review of the
information required by Disclosure Guidance and Transparency Rule
4.2.7R (indication of important events during the first six months
and description of principal risks and uncertainties for the
remaining six months of the year); and
(c) the Interim Management Report includes a fair review of the
information required by the Disclosure Guidance and Transparency
Rule 4.2.8R (disclosure of related party transactions and changes
therein).
For and on behalf of the Board
Robert Robertson
Chairman
30 May 2017
CONDENSED INCOME STATEMENT
(Unaudited) (Unaudited) (Audited)
Half-year ended Half-year ended Year-ended
31 March 2017 31 March 2016 30 September 2016
Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------- ---------- --------- ---------- ---------- --------- ---------- ---------- ---------- ----------
Gains on
investments
held at fair
value through
profit or loss - 36,742 36,742 - 6,086 6,086 - 29,331 29,331
Income from
investments 6,037 - 6,037 5,274 - 5,274 15,944 - 15,944
Other interest
receivable and
similar income 40 - 40 58 - 58 108 - 108
--------- -------- --------- --------- -------- --------- --------- --------- ---------
Gross revenue
and capital
gains 6,077 36,742 42,819 5,332 6,086 11,418 16,052 29,331 45,383
Management fee
and
performance
fee (note 2) (948) - (948) (899) (253) (1,152) (1,806) - (1,806)
Other
administrative
expenses (note
2) (276) - (276) (240) - (240) (472) - (472)
--------- -------- --------- --------- -------- --------- --------- --------- ---------
Net return on
ordinary
activities
before finance
costs and
taxation 4,853 36,742 41,595 4,193 5,833 10,026 13,774 29,331 43,105
Finance costs (398) - (398) (439) - (439) (764) - (764)
--------- -------- --------- --------- -------- --------- --------- --------- ---------
Net return on
ordinary
activities
before
taxation 4,455 36,742 41,197 3,754 5,833 9,587 13,010 29,331 42,341
Taxation on net
return on
ordinary
activities (76) - (76) (51) - (51) (117) - (117)
--------- -------- --------- --------- -------- --------- --------- --------- ---------
Net return on
ordinary
activities
after taxation 4,379 36,742 41,121 3,703 5,833 9,536 12,893 29,331 42,224
====== ====== ====== ====== ====== ====== ===== ====== =====
Return per
ordinary
share - basic
and diluted
(note 3) 16.2p 136.0p 152.2p 13.7p 21.7p 35.4p 47.7p 108.7p 156.4p
====== ====== ====== ====== ====== ====== ===== ====== ======
The total columns of this statement represent the Income
Statement of the Company, prepared in accordance with FRS 104. The
revenue and capital columns are supplementary to this and are
published under guidance from the Association of Investment
Companies.
The Company has no recognised gains or losses other than those
disclosed in the Income Statement and Statement of Changes in
Equity.
All items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the
period.
The accompanying notes are an integral part of the condensed
financial statements.
CONDENSED STATEMENT OF CHANGES IN EQUITY
(Unaudited)
Half-year ended 31 March 2017
Called Share premium Capital Other
up share account redemption capital Revenue
capital GBP'000 reserve reserves reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October 2016 6,755 61,619 1,007 304,599 12,930 386,910
Net return on ordinary
activities after taxation - - - 36,742 4,379 41,121
Third interim dividend
(11.0p) for
the year ended 30 September
2016 - - - - (2,972) (2,972)
Final dividend (12.0p)
for
the year ended 30 September
2016 - - - - (3,242) (3,242)
------------ ------------ ----------- ----------- ----------- -----------
At 31 March 2017 6,755 61,619 1,007 341,341 11,095 421,817
======= ======= ======= ====== ======= =======
(Unaudited)
Half-year ended 31 March 2016
Called Share premium Capital Other
up share account redemption capital Revenue
capital GBP'000 reserve reserves reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October 2015 6,723 59,923 1,007 275,268 11,642 354,563
Net return on ordinary
activities after taxation - - - 5,833 3,703 9,536
Third interim dividend
(10.0p) for
the year ended 30 September
2015 - - - - (2,689) (2,689)
Final dividend (11.0p)
for
the year ended 30 September
2015 - - - - (2,972) (2,972)
Ordinary shares issued 32 1,693 - - - 1,725
------------ ------------ ----------- ----------- ----------- -----------
At 31 March 2016 6,755 61,616 1,007 281,101 9,684 360,163
======= ======= ======= ======= ======= =======
(Audited)
Year-ended 30 September 2016
Called Share Capital Other
up share premium redemption capital Revenue
capital account reserve reserves reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October 2015 6,723 59,923 1,007 275,268 11,642 354,563
Net return on ordinary
activities after taxation - - - 29,331 12,893 42,224
Third interim dividend
(10.0p) for
the year ended 30 September
2015 - - - - (2,689) (2,689)
Final dividend (11.0p)
for
the year ended 30 September
2015 - - - - (2,972) (2,972)
First interim dividend
(11.0p) for the
year ended 30 September
2016 - - - - (2,972) (2,972)
Second interim dividend
(11.0p) for the
year ended 30 September
2016 - - - - (2,972) (2,972)
Ordinary shares issued 32 1,696 - - - 1,728
----------- ----------- ----------- ----------- ------------ -----------
At 30 September 2016 6,755 61,619 1,007 304,599 12,930 386,910
====== ====== ====== ====== ====== ======
The accompanying notes form an integral part of these condensed
financial statements.
CONDENSED STATEMENT OF FINANCIAL POSITION
(Unaudited) (Unaudited) (Audited)
Half-year ended Half-year Year-ended
31 March ended 30 September
2017 31 March 2016
GBP'000 2016 GBP'000
GBP'000
Fixed assets
Investments held at fair value through
profit or loss (note 4) 475,098 420,312 411,017
----------- ----------- -----------
Current assets
Debtors 2,857 2,430 2,129
Cash at bank 2,288 1,432 2,178
----------- ----------- -----------
5,145 3,862 4,307
Creditors: amounts falling due within
one year (28,678) (64,011) (28,414)
----------- ----------- -----------
Net current liabilities (23,533) (60,149) (24,107)
----------- ----------- -----------
Total assets less current liabilities 451,565 360,163 386,910
----------- ----------- -----------
Creditors: amounts falling due after
more than one year (note 5) (29,748) - -
----------- ----------- -----------
Net assets 421,817 360,163 386,910
====== ====== =======
Capital and reserves
Called up share capital 6,755 6,755 6,755
Share premium account 61,619 61,616 61,619
Capital redemption reserve 1,007 1,007 1,007
Other capital reserves 341,341 281,101 304,599
Revenue reserve 11,095 9,684 12,930
----------- ----------- -----------
Total shareholders' funds 421,817 360,163 386,910
====== ====== =======
Net asset value per ordinary share
- basic and diluted (note 7) 1,561.2p 1,333.0p 1,432.0p
======= ======= =======
The accompanying notes form an integral part of these condensed
financial statements.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
(Unaudited) Half-year (Audited)
Half-year ended ended Year-ended
31 March 31 March 30 September
2017 2016 2016
GBP'000 GBP'000 GBP'000
------------------------------------------ ----------------- ------------ --------------
Cash flows from operating activities
Net return on ordinary activities
before taxation 41,197 9,587 42,341
Add back: finance costs 398 439 764
Amortisation of unsecured notes -
issue costs 3 -
Less gains on investments held
at fair value through profit or
loss (36,742) (6,086) (29,331)
Withholding tax on dividends deducted
at source (96) (55) (136)
Increase in debtors (311) (228) (374)
Decrease in creditors (30) (99) (827)
----------------- ------------ --------------
Net cash inflow from operating
activities 4,419 3,558 12,437
Cash flows from investing activities
Purchase of investments (46,864) (29,701) (67,620)
Sale of investments 18,620 30,992 102,719
----------------- ------------ --------------
Net cash (outflow)/inflow from
investing activities (28,244) 1,291 35,099
Cash flows from financing activities
Equity dividends paid (net of refund
of unclaimed distributions and
reclaimed distributions) (6,214) (5,661) (11,605)
Proceeds from issue of ordinary
shares - 1,725 1,728
Issue of senior unsecured notes
(net of issue expenses) 29,745 - -
Net loans drawn down/(repaid) 574 270 (35,418)
Interest paid (171) (430) (832)
----------------- ------------ --------------
Net cash inflow/(outflow) from
financing activities 23,934 (4,096) (46,127)
Net increase in cash and cash equivalent 109 753 1,409
Cash and cash equivalents at start
of year 2,178 669 669
Effect of foreign exchange rates 1 10 100
----------------- ------------ --------------
Cash and cash equivalents at end
of year 2,288 1,432 2,178
----------------- ------------ --------------
Comprising:
Cash at bank 2,288 1,432 2,178
--------- --------- ---------
2,288 1,432 2,178
===== ===== ====
The accompanying notes are an integral part of these condensed
financial statements.
Notes to the Financial Statements
1. Accounting policies - basis of preparation
The condensed set of financial statements has been prepared
in accordance with FRS 104, Interim Financial Reporting, issued
in March 2015, the revised reporting standard for half-year
reporting that was issued following the introduction of FRS
102, the Financial Reporting Standard applicable in the UK and
Republic of Ireland, which is effective for periods commencing
on or after 1 January 2015. The Statement of Recommended Practice
for "Financial Statements of Investment Trust Companies and
Venture Capital Trusts", in accordance with which the Company's
financial statements are also prepared, was reissued by the
Association of Investment Companies in November 2014 to comply
and updated in January 2017 with consequential amendments.
The condensed set of financial statements has been neither audited
nor reviewed by the Company's auditors.
2. Expenses
All expenses with the exception of the performance fee are charged
wholly to revenue. Expenses which are incidental to the purchase
or sale of an investment are included in the cost or deducted
from the proceeds of sale of the investment. A provision of
GBPnil (31 March 2016: GBP253,000; 30 September 2016: actual
GBPnil) has been made for a performance fee based on the Company's
performance relative to the FTSE All-Share Index (the benchmark)
over the thirty months to 31 March 2017. Any performance fee
payable will be calculated based on the actual relative performance
for the thirty-six months to 30 September 2017 and will be equal
to 15% of any outperformance (on a total return basis) of the
FTSE All-Share Index by more than 10% (the 'hurdle rate'). The
cap on total fees (management plus performance fee) was previously
0.75% per annum, but as explained in the amendments to the fee
arrangements set out in the Chairman's Statement, this will
be replaced with effect from 1 July 2017 by a cap on the performance
fee at its existing level of 0.25% per annum of average Net
Chargeable Assets.
No performance fee will be payable if the net asset value per
share on the last day of the relevant calculation period is
lower than the net asset value per share on the first day of
the calculation period.
3. Return per ordinary share - basic and diluted
(Unaudited) (Unaudited)
Half-year ended Half-year (Audited)
31 March ended Year-ended
2017 31 March 30 September
GBP'000 2016 2016
GBP'000 GBP'000
----------------------------------- ------------------ ------------ --------------
The return per ordinary
share is based on the following
figures:
Net revenue return 4,379 3,703 12,893
Net capital return 36,742 5,833 29,331
---------- ---------- ----------
Net total return 41,121 9,536 42,224
====== ====== ======
Weighted average number
of ordinary shares in issue
for each period 27,018,565 26,965,491 26,992,028
Revenue return per ordinary
share 16.2p 13.7p 47.7p
Capital return per ordinary
share 136.0p 21.7p 108.7p
---------- ---------- ----------
Total return per ordinary
share 152.2p 35.4p 156.4p
====== ====== ======
The Company does not have any dilutive securities; therefore
basic and diluted returns per share are the same.
4. Investments held at fair value through profit of loss
The table below analyses fair value measurements for investments
held at fair value through profit or loss. These fair value
measurements are categorised into different levels in the fair
value hierarchy based on the valuation techniques used and are
defined as follows under FRS 102:
Level 1: valued using quoted prices in active markets for identical
assets
Level 2: valued by reference to valuation techniques using observable
inputs other than quoted prices included in Level 1
Level 3: valued by reference to valuation techniques using inputs
that are not based on observable market date
Investments held at fair value Level Level Level Total
through profit or loss at 31 1 2 3 GBP'000
March 2017 (unaudited) GBP'000 GBP'000 GBP'000
-------------------------------- --------- --------- --------- ---------
Investments 472,997 - 2,101 475,098
Investments held at fair value Level Level Level Total
through profit or loss at 31 1 2 3 GBP'000
March 2016 (unaudited) GBP'000 GBP'000 GBP'000
-------------------------------- --------- --------- --------- ---------
Investments 418,133 - 2,179 420,312
Investments held at fair value Level Level Level Total
through profit or loss at 30 1 2 3 GBP'000
September 2016 (audited) GBP'000 GBP'000 GBP'000
-------------------------------- --------- --------- --------- ---------
Investments 408,916 - 2,101 411,017
The Company has early adopted the amendments to FRS 102, in
respect of fair value hierarchy disclosures, as published in
March 2016 which is applicable to accounting periods beginning
on or after 1 January 2017, with early adoption being permitted.
There have been no transfers between levels of the fair value
hierarchy during the period.
The valuation techniques used by the Company are explained in
the accounting policies note in the Company's Annual Report
for the year ended 30 September 2016.
5. Senior unsecured loan note
On 5 January 2017, the Company issued GBP30m in senior unsecured
fixed rate loan notes at an annualised coupon of 3.15% with
a 20 year bullet maturity. The proceeds net of issue costs were
GBP29,745,000. The loan notes are measured in the Condensed
Statement of Financial Position at amortised cost with the issue
costs amortised over the life of the loan by way of an effective
interest rate. The fair value of the loan notes as at 31 March
2017 was GBP31,949,000 and is calculated using a discount rate
which reflects the yield on a UK Gilt of a similar maturity
plus a suitable credit spread.
Transaction costs
Purchase transaction costs for the half-year ended 31 March
2017 were GBP160,000, (half-year ended 31 March 2016: GBP139,000;
year ended 30 September 2016: GBP332,000). Sale transaction
costs for the half-year ended 31 March 2017 were GBP17,000 (half-year
ended 31 March 2016: GBP28,000; year ended 30 September 2016:
6. GBP81,000). These comprise mainly stamp duty and commission.
7. Net asset value per ordinary share - basic and diluted
The net asset value per ordinary share is based on the net assets
attributable to the ordinary shares of GBP421,817,000 (31 March
2016: GBP360,163,000; 30 September 2016: GBP386,910,000) and
on 27,018,565 ordinary shares (31 March 2016: 27,018,565; 30
September 2016: 27,018,565) being the number of ordinary shares
in issue at the end of each period.
8. Dividend
On 28 April 2017, a first interim dividend of 12p per ordinary
share was paid in respect of the year ended 30 September 2017.
A second interim dividend of 12p per ordinary share for the
year ended 30 September 2017 has been declared and will be paid
on 28 July 2017 to shareholders on the register of members at
the close of business on 30 June 2017. The ex-dividend date
is 29 June 2017. Based on the number of shares in issue on 30
May 2017 of 27,018,565, the cost of the dividend will be GBP3,242,000.
9. Going concern
The assets of the Company consist of securities that are readily
realisable and, accordingly, the Directors believe that the
Company has adequate resources to continue in operational existence
for at least twelve months from the date of approval of the
financial statements. Having assessed these factors and the
principal risks, the Board has determined that it is appropriate
for the financial statements to be prepared on a going concern
basis.
10. Comparative Information
The financial information contained in this half-year report
does not constitute statutory accounts as defined in section
434 of the Companies Act 2006. The figures and financial information
for the year ended 30 September 2016 are extracted from the
latest published accounts 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 independent auditors,
which was unqualified and did not include a statement under
either section 498(2) or 498(3) of the Companies Act 2006.
11. Manager
Henderson Investment Funds Limited ('HIFL') is appointed to
act as the Company's Alternative Investment Fund Manager. HIFL
delegates investment management services to Henderson Global
Investors Limited. References to Henderson within these results
refer to the services provided by both entities.
12. General information
Investment Objective
The Company aims to give shareholders a higher than average
return with growth of both capital and income over the medium
to long term, through a broad spread of predominantly UK Companies.
The Company measures its performance against the FTSE All-Share
Index.
Company Status
The Company is a UK domiciled investment trust company.
The London Stock Exchange Daily Official List SEDOL number is
0536806 and ISIN number is GB0005368062.
The London Stock Exchange (EPIC) Code is LWI.
The Global Intermediary Identification Number (GIIN) is 2KBHLK.99999.SL.826.
The Legal Entity Identifier Number (LEI) is 2138008RHG5363FEHV19
Directors
The Directors of the Company are Robert Robertson (Chairman),
Duncan Budge, Kevin Carter, Gaynor Coley and Karl Sternberg.
Corporate Secretary
Henderson Secretarial Services Limited, represented by Hannah
Blackmore ACIS.
Registered Office and Number
201 Bishopsgate, London EC2M 3AE. Registered number 670489.
Website
Details of the Company's share price and net asset value, together
with general information about the Company, monthly factsheets
and data, copies of announcements, reports and details of general
meetings can be found at www.lowlandinvestment.com.
13. Half-year report
The half-year report will be available in typed format on the
Company's website or from the Company's registered office, 201
Bishopsgate, London EC2M 3AE. An update extracted from the Company's
half-year report will be posted to shareholders in early June
2017 and will be available on the Company's website thereafter.
Portfolio Information
as at 31 March 2017
Market Value % of
Company Sector GBP'000 Portfolio
--------------------------------- ------------------------------------- --------------- ---------------------
Royal Dutch Shell Oil & Gas Producers 24,133 5.1
Phoenix Life Insurance 14,170 3.0
HSBC Banks 14,026 2.9
Hiscox Non-Life Insurance 13,034 2.7
Prudential Life Insurance 10,959 2.3
Senior Aerospace & Defence 10,305 2.2
Standard Chartered Banks 10,139 2.1
GKN Automobiles & Parts 9,228 1.9
Headlam Household Goods & Home Construction 8,892 1.9
Irish Continental (Ireland) Travel & Leisure 8,376 1.8
10 Largest 123,262 25.9
------------------------------------------------------------------------ --------------- ---------------------
Aviva Life Insurance 8,246 1.7
Hill & Smith Industrial Engineering 7,333 1.5
Rio Tinto Mining 7,221 1.5
Low & Bonar Construction & Materials 7,211 1.5
Relx Media 7,038 1.5
Direct Line Non-Life Insurance 6,948 1.5
BP Oil & Gas Producers 6,634 1.4
DS Smith General Industrials 6,512 1.4
Conviviality Retail(1) Food & Drug Retailers 6,493 1.4
Standard Life Life Insurance 6,449 1.4
20 Largest 193,347 40.7
------------------------------------------------------------------------ --------------- ---------------------
Johnson Service(1) Support Services 6,378 1.3
Elementis Chemicals 6,362 1.3
GlaxoSmithKline Pharmaceuticals & Biotechnology 6,223 1.3
Rolls-Royce Aerospace & Defence 6,221 1.3
Croda Chemicals 6,169 1.3
International Consolidated
Airline Travel & Leisure 6,084 1.3
Oil Equipment Services &
Cape Distribution 5,781 1.2
CRH (Ireland) Construction & Materials 5,620 1.2
Renold Industrial Engineering 5,586 1.2
BAE Systems Aerospace & Defence 5,140 1.1
--------------------------------- ------------------------------------- --------------- ---------------------
30 Largest 252,911 53.2
------------------------------------------------------------------------ --------------- ---------------------
Castings Industrial Engineering 4,996 1.1
Barclays Banks 4,952 1.1
Novae Non-Life Insurance 4,884 1.0
Marshalls Construction & Materials 4,869 1.0
Clarkson Industrial Transportation 4,845 1.0
Mondi Forestry & Paper 4,817 1.0
Carclo Chemicals 4,809 1.0
Henderson Opportunities
Trust Equity Investment Instruments 4,760 1.0
Churchill China(1) Household Goods & Home Construction 4,708 1.0
Scapa(1) Chemicals 4,599 1.0
--------------------------------- ------------------------------------- --------------- ---------------------
40 Largest 301,150 63.4
------------------------------------------------------------------------ --------------- ---------------------
Avon Rubber Aerospace & Defence 4,567 1.0
Park(1) Financial Services 4,530 1.0
Vodafone Mobile Telecommunications 4,304 0.9
Royal Mail Industrial Transportation 4,250 0.9
Stobart Industrial Transportation 4,140 0.9
National Grid Gas, Water & Multiutilities 4,054 0.8
Consort Medical Health Care Equipment & Services 4,047 0.8
IMI Industrial Engineering 3,920 0.8
St Modwen Properties Real Estate 3,872 0.8
Shoe Zone(1) General Retailers 3,819 0.8
--------------------------------- ------------------------------------- --------------- ---------------------
50 Largest 342,653 72.1
------------------------------------------------------------------------ --------------- ---------------------
Chesnara Life Insurance 3,807 0.8
Balfour Beatty Construction & Materials 3,791 0.8
Provident Financial Financial Services 3,746 0.8
Morgan Advanced Materials Electronic & Electrical Equipment 3,720 0.8
Herald Investment Trust Equity Investment Instruments 3,700 0.8
Renewi Support Services 3,581 0.8
Epwin(1) Construction & Materials 3,575 0.8
Marstons Travel & Leisure 3,523 0.7
FBD (Ireland) Non-Life Insurance 3,451 0.7
Daily Mail & General
Trust Media 3,422 0.7
--------------------------------- ------------------------------------- --------------- ---------------------
60 Largest 378,969 79.8
------------------------------------------------------------------------ --------------- ---------------------
H&T Group(1) Financial Services 3,417 0.7
Somero Enterprises(1)
(Ireland) Industrial Engineering 3,403 0.7
Inmarsat Mobile Telecommunications 3,402 0.7
Greencore (Ireland) Food Producers 3,399 0.7
IP Group Financial Services 3,298 0.7
McColl's Retail Food & Drug Retailers 3,223 0.7
International Personal
Finance Financial Services 3,134 0.7
Numis(1) Financial Services 3,081 0.7
TT Electronics Electronic & Electrical Equipment 3,022 0.6
Randall & Quilter(1) Non-Life Insurance 2,949 0.6
--------------------------------- ------------------------------------- --------------- ---------------------
70 Largest 411,297 86.6
------------------------------------------------------------------------ --------------- ---------------------
Ibstock Construction & Materials 2,861 0.6
Gibson Energy (Canada) Oil & Gas Producers 2,792 0.6
Velocys(1) Chemicals 2,697 0.6
Mucklow Real Estate 2,692 0.5
4D Pharma(1) Pharmaceuticals & Biotechnology 2,672 0.5
BHP Billiton Mining 2,468 0.5
Quarto Media 2,401 0.5
Horizon Discovery(1) Pharmaceuticals & Biotechnology 2,289 0.5
Findel General Retailers 2,206 0.5
Pennon Gas, Water & Multiutilities 2,205 0.5
--------------------------------- ------------------------------------- --------------- ---------------------
80 Largest 436,580 91.9
------------------------------------------------------------------------ --------------- ---------------------
Centrica Gas, Water & Multiutilities 2,170 0.5
AstraZeneca Pharmaceuticals & Biotechnology 2,161 0.5
Interserve Support Services 2,114 0.4
Virgin Money Holding
8.75% Banks 2,064 0.4
Weir Industrial Engineering 1,917 0.4
Palace Capital(1) Real Estate 1,878 0.4
Pearson Media 1,877 0.4
Indus Gas(1) Oil & Gas Producers 1,765 0.4
Marshall Motor(1) General Retailers 1,670 0.3
Manx Telecom(1) Fixed Line Telecommunications 1,602 0.3
--------------------------------- ------------------------------------- --------------- ---------------------
90 Largest 455,798 95.9
------------------------------------------------------------------------ --------------- ---------------------
DFS Furniture General Retailers 1,437 0.3
Oxford Sciences Innovation(2) Pharmaceuticals & Biotechnology 1,333 0.3
Moss Bros General Retailers 1,263 0.3
Eleco(1) Construction & Materials 1,261 0.3
Airea(1) Personal Goods 1,238 0.3
Itaconix(1) Chemicals 1,185 0.2
Carillion Support Services 1,115 0.2
Carr's Group Food Producers 1,084 0.2
Mercantile Ports & Logistics(1) Industrial Transportation 1,000 0.2
Atlantis Resources(1) Alternative Energy 993 0.2
--------------------------------- ------------------------------------- --------------- ---------------------
100 Largest 467,707 98.4
------------------------------------------------------------------------ --------------- ---------------------
(1) AIM Stocks
(2) Unlisted Investments
For further information please contact:
James Henderson
Fund Manager of Lowland Investment Company plc
Tel: 020 7818 4370
Laura Foll
Fund Manager of Lowland Investment Company plc
Tel: 020 7818 6364
James de Sausmarez
Director and Head of Investment Trusts, Janus Henderson
Investors, Tel: 020 7818 3349
Sarah Gibbons-Cook
Investor Relations and PR Manager, Janus Henderson Investors,
Tel: 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKKDDPBKDPPN
(END) Dow Jones Newswires
May 30, 2017 11:17 ET (15:17 GMT)
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