REG - Lowland Inv. Co. - Half-year Report
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RNS Number : 7182I Lowland Investment Co PLC 15 May 2025
JANUS HENDERSON FUND MANAGEMENT UK LIMITED
LOWLAND INVESTMENT COMPANY PLC
Legal Entity Identifier: 2138008RHG5363FEHV19
LOWLAND INVESTMENT COMPANY PLC
Unaudited results for the half-year ended 31 March 2025
This announcement contains regulated 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 by investing in a
broad spread of predominantly UK companies. The Company measures its
performance against the FTSE All-Share Index Total Return.
Investment policy
Asset Allocation
The Company invests in a combination of large, medium and smaller companies
listed in the UK. We are not constrained by the weightings of any index; we
limit risk by running a diversified portfolio, which is constructed on a
bottom-up, stock-picking basis. In normal circumstances up to half the
portfolio is invested in FTSE 100 companies; the remainder is divided between
small and medium-sized companies. The Manager may also invest a maximum of 15%
in other listed trusts.
Dividend
The Company aims to pay a progressive dividend, with each dividend equal to or
greater than its previous equivalent.
Gearing
The Board believes that debt in a closed-end fund is a valuable source of
long-term outperformance, and therefore the Company will usually be geared.
At the point of drawing down debt, gearing will not exceed 20% of the
portfolio valuation. Borrowing will be a mixture of short and long-dated debt,
depending on relative attractiveness of rates.
Key data for the six months to 31 March 2025
Net Asset Value ('NAV') Total Return -2.1%
Benchmark(1) Total Return 4.1%
Dividend in respect of the period 3.275p
(1) FTSE All-Share Index
Financial highlights
Half-year ended Half-year ended Year ended
31 Mar 2025 31 Mar 2024 30 Sept 2024
NAV per share (debt at par) 137.2p 136.3p 144.2p
NAV per share (debt at fair value) 139.9p 138.2p 146.1p
Share price(1) 129.0p 121.5p 127.0p
Market capitalisation £312m £328m £343m
Dividend per share 3.275p 3.20p 6.425p
Ongoing charge 0.71% 0.65% 0.66%
Dividend yield(2) 5.0% 5.2% 5.1%
Gearing 13.8% 13.1% 11.0%
Discount (debt at par) 6.0% 10.9% 11.9%
Discount (debt at fair value) 7.8% 12.1% 13.1%
(1) Using mid-market closing price
(2) Based on dividends paid and declared in respect of the previous twelve
month period
Total return performance (including dividends reinvested and excluding
transaction costs)
6 months 1 year 3 years 5 years 10 years 25 years
% % % % % %
NAV -2.1 5.9 14.5 85.2 50.5 636.4
Share Price(1) 2.9 11.8 12.1 86.4 55.0 818.7
Benchmark(2) 4.1 10.5 23.3 76.6 81.7 251.7
( )
(1) Using mid-market closing price
(2) FTSE All-Share Index
Sources: Morningstar Direct, Factset and Janus Henderson
http://www.rns-pdf.londonstockexchange.com/rns/7182I_4-2025-5-14.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/7182I_4-2025-5-14.pdf)
Historical record - Year to 30 September
As at 31 Mar
2025(1)
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Net assets(2) (£m) 355 387 440 439 386 279 394 313 349 390 332
NAV(3*) 131.8p 143.2p 162.8p 162.5p 142.8p 103.1p 145.9p 115.9p 129.3p 144.2p 137.2p
Share price* 128.7p 133.7p 150.4p 151.5p 128.0p 91.4p 131.5p 104.5p 113.0p 127.0p 129.0p
Net revenue* 4.64p 4.77p 4.91p 5.86p 6.80p 3.38p 4.27p 6.10p 6.71p 6.29p 2.06p
Net dividends paid per ordinary share* 4.10p 4.50p 4.90p 5.40p 5.95p 6.00p 6.025p
6.10p 6.25p 6.425p 3.275p(4)
( )
(1) Net revenue and net dividends paid are for the six month period ended 31
March 2025
(2) Attributable to ordinary shares
(3) NAV per ordinary share with debt at par value
(4) First interim dividend of 1.625p per ordinary share paid on 30 April 2025
and second interim dividend of 1.65p per ordinary share that will be paid on
31 July 2025.
* Figures for 2015 to 2021 have been restated due to the sub-division of each
ordinary share of 25p into ten ordinary shares of 2.5p each on 7 February
2022.
INTERIM MANAGEMENT REPORT
CHAIR'S STATEMENT
Overview
Against a turbulent geopolitical backdrop, Lowland's performance during the
six months to the end of March was disappointing, with the NAV falling by
2.1%, relative to a 4.1% rise in the FTSE All-Share benchmark. In share
price terms the picture was rather more positive, as the ongoing buyback
helped to narrow the discount, resulting in a rise in the share price of 2.9%.
As we have seen before in periods of high volatility, investors have tended to
seek the safety of larger companies, and small and medium sized companies
substantially underperformed relative to the FTSE 100, as demonstrated by the
performance of the Deutsche Numis Smaller Companies Plus AIM (excluding
investment companies) Index, which fell by 7.5%.
Dividends
Lowland produced earnings per share ('EPS') in the first half of the year of
2.06p, an increase from 1.71p in the same period last year. The share buyback
was also moderately earnings enhancing. A second interim dividend of 1.65p
has been declared, representing an increase of approximately 3% on the second
interim dividend last year. We expect to maintain our quarterly progressive
dividend policy, so that the last two dividends in respect of the current year
should be at least at this rate.
Gearing
Gearing rose modestly during the period, ending at 13.8% compared to 11.0% at
our last financial year end (30 September 2024).
Share price and discount
In January the Board initiated a buyback programme for the Company's shares,
and we will continue to monitor the situation and buy back shares when we
believe it is in the best interests of shareholders. Since that time (and to
the date of this report) 38.1m shares have been bought back, at an average
discount level of 7.8%. The total cost of these purchases was £48.1m. The
discount narrowed from 13.1% at financial year end to 7.8% at the half year
end (both with debt at fair value).
Board
As previously announced, my predecessor Robbie Robertson stepped down at the
AGM. I would like to take this opportunity to thank Robbie for his many
years of exemplary leadership, his skill in steering the Company and for
putting together a strong, supportive and genuinely diverse board. We wish
him all the best for the future.
Outlook
Tariffs are currently the largest source of uncertainty in the market, and
more widely the unpredictability of the Trump administration may mean that
there is a reluctance on the part of companies to commit to any major
investment until they have greater confidence over the outlook. In the short
term this is reflected in the high level of volatility in markets, while the
longer term impact is difficult to predict with any degree of certainty but is
likely to include higher inflation and weaker economic growth.
In this environment, the best sources of protection are, in our view, modest
valuations, strong management teams and genuine diversity of holdings. The
valuation of the portfolio is low on 10x historic earnings, with the smaller
companies looking particularly cheap. On any improvement in the trading
environment, or further interest rate cuts, there remains the potential for a
recovery in both earnings and valuation levels.
From the period end to close of business on 12 May 2025, the Company's NAV had
risen 5.7%, its share price by 6.8%, and the FTSE All-Share, the Company's
benchmark, by 1.5%.
Helena Vinnicombe
Chair
14 May 2025
Equity allocation
Sector Weightings % as at 31 March 2025
Company Benchmark(1)
Basic Materials 6.3 5.5
Consumer Discretionary 9.7 7.7
Consumer Staples 4.7 14.5
Energy 7.0 10.1
Financials 30.4 27.0
Health Care 4.2 11.5
Industrials 25.4 12.0
Real Estate 5.1 2.4
Technology 1.5 4.2
Telecommunications 2.8 1.2
Utilities 2.9 3.9
Total 100.0 100.0
(1) FTSE All-Share Index
Sector Weightings % as at 30 September 2024
Company Benchmark(1)
Basic Materials 6.9 7.0
Consumer Discretionary 10.4 11.3
Consumer Staples 7.2 14.6
Energy 5.6 9.3
Financials 29.7 24.6
Health Care 3.4 11.7
Industrials 24.9 12.2
Real Estate 4.8 2.8
Technology 1.5 1.3
Telecommunications 2.6 1.2
Utilities 3.0 4.0
Total 100.0 100.0
(1) FTSE All-Share Index
Market Cap Weightings % as at 31 Mar 2025
Company Benchmark(1)
FTSE 100 48.7 86.9
FTSE 250 20.0 11.4
FTSE Small-Cap 12.1 1.7
FTSE AIM 12.8 -
FTSE Fledgling 0.3 -
Overseas 4.8 -
Other 1.3 -
Total 100.0 100.0
(1) FTSE All-Share Index
FUND MANAGERS' REPORT
Performance Review
It was a poor six month period for Lowland, with its net asset value falling
2.1%, underperforming a rise in its FTSE All-Share benchmark of 4.1%. Over the
same time period the Deutsche Numis Smaller Companies Plus AIM (excluding
investment companies) index fell 7.5%.
The underperformance of the Company relative to the FTSE All-Share benchmark
was largely as a result of investing more in smaller companies, which
substantially underperformed the largest companies listed in the FTSE 100.
When viewed in the chart below, the effect of company size on the Company's
performance can be clearly seen.
Disappointingly, stock selection was also a modest detractor, having been
positive in each of the previous two financial
years. We go into greater detail in the stock attribution section later in
this report. Share buybacks were initiated during the period and were a modest
contributor to performance, as shown in the chart below.
Attribution returns (%):
http://www.rns-pdf.londonstockexchange.com/rns/7182I_2-2025-5-14.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/7182I_2-2025-5-14.pdf)
The outperformance of the biggest companies was, in our view, a reflection of
persistent outflows from UK equities.
The ownership of UK equities is now majority overseas, and international
investors are more likely to favour large,
liquid companies. This has left smaller UK companies lowly valued versus their
history (see chart below, which
illustrates that the FTSE 100, FTSE Small Cap and FTSE 250 indices are all
trading at the low end of their historic valuation range, while the opposite
would be true for the US market).
Price/earnings multiple is lower than historic average for UK large, medium
and smaller companies:
http://www.rns-pdf.londonstockexchange.com/rns/7182I_3-2025-5-14.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/7182I_3-2025-5-14.pdf)
Source: Goldman Sachs as at 16 April 2025, 12m forward P/E percentile rank
versus 18 year history
Ten largest absolute contributors
Share price total return (%) Contribution to return (%)
Standard Chartered 46.4 1.2
HSBC 36.2 1.1
Barclays 30.5 0.8
Babcock 53.8 0.6
Natwest 36.1 0.5
Shell 19.0 0.5
BP 14.7 0.4
Aviva 14.8 0.4
Lloyds 22.6 0.3
BT 14.0 0.3
It is notable that all of the ten best performers during the period are large
companies. Within this, there is a heavy concentration in the banks sector,
where margins have benefitted from a return to more 'normal' interest rates at
a time when conservative lending practices have meant loan losses remain low.
Ten largest absolute detractors (largest detractor at the top)
Share price total return (%) Contribution to return (%)
Conduit -33.4 -0.5
STV -32.9 -0.5
Speedy Hire -46.2 -0.5
Morgan Advanced Materials -24.8 -0.4
Workspace -34.8 -0.4
Sainsbury -19.1 -0.3
Renold -22.6 -0.3
Marshalls -25.9 -0.3
Kingfisher -20.4 -0.3
Ricardo -41.7 -0.3
The majority of the worst performers saw share prices fall as a result of
subdued economic activity depressing earnings. For example, STV, a free-to-air
broadcaster and content producer, saw its share price fall on the expectation
of a weak Scottish advertising market, with business confidence impacted by
the autumn Budget. It was not solely UK end markets that were weak - retailer
Kingfisher, for example, continues to see poor trading in its French business.
While end markets are challenging, valuation levels already substantially
reflect this. For example the portfolio in aggregate traded on 10x 12 month
historic earnings as at the end of March. On any improved certainty in the
trading environment, or further reductions in interest rates, there is the
potential for a recovery in both earnings and valuation levels.
The largest detractor, reinsurer Conduit, saw its share price fall for
idiosyncratic reasons as a result of higher than expected losses from
California wildfires. The position was subsequently sold in favour of more
diversified non-life insurers that are held such as Beazley.
Activity
It is important in volatile markets to have a genuinely diverse portfolio of
holdings. This is the best way to preserve capital over time. The purchases
made in the period were therefore in a broad range of very different sorts of
companies. The one attribute that unites them is that we believe they have
very able management teams that are serving their client base well. The stocks
purchased included, amongst the larger companies, Mondi and Segro. The former
is a well invested global packaging business whilst the latter is an
investment portfolio of well-situated industrial properties. In the smaller
company area, a holding in bathroom supplier Norcros was added. We believe
that the management team will respond well to whatever problems are
encountered.
The sales were largely reductions in the holdings of companies that had seen
share price appreciation and were therefore starting to look expensive. The
reduction in holdings that fall into this category included M&S and
Barclays. We believe these remain good sound companies but they are less
undervalued than they were. The proceeds are being used for new holdings to
refresh the portfolio. The exception was Dowlais which was sold after it
received a takeover bid.
Outlook
Tariffs are the current concern for investors and if imposed as currently
suggested will lead to downgrades in economic activity and higher inflation.
The biggest losers could ironically be the American consumer so there is a
chance the tariffs will be reduced in the coming months. The UK escapes
relatively unscathed. The cheapest stocks in the UK are usually domestic
earners and these are well represented in the portfolio. They are also the
companies least affected by Trump's tariffs. They might even be indirect
beneficiaries as reduced global economic activity will bring forward interest
rate cuts. These cuts will be useful to UK businesses and should divert cash
from bank deposits into the stock market. The dividend yield from equities
coupled with low valuations may attract investment support. This is a
positive background for Lowland. We will remain focused on strong companies
that are providing excellent products or services to their clients. It is by
providing excellence that they will weather any unforeseen macro-economic
storm. A mixture of low valuations, strong management teams and expected
interest rate cuts are behind the confidence we have in running a reasonable
level of gearing and for our positive outlook for the Company.
James Henderson and Laura Foll
Fund Managers
14 May 2025
Related party transactions
The Company's current related parties are its Directors and Janus 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 and expenses incurred on the Company's business, for
which there were no outstanding amounts payable at the period end.
In relation to the provision of services by Janus Henderson, other than fees
payable by the Company in the ordinary course of business and the facilitation
of marketing activities with third parties, there have been no material
transactions with Janus 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:
Market, geopolitical, macroeconomic or environmental;
Global pandemic;
Investment activity and strategy;
Portfolio and market price;
Dividend income;
Financial;
Gearing;
Tax and regulatory; and
Operational.
Information on these risks and how they are managed is given in the Annual
Report for the year ended 30 September 2024. The Board has completed a
thorough review of the principal risks, and the uncertainties facing the
Company. As a result of this review, the Board considers that the principal
risks and uncertainties remain largely unchanged and that they 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 condensed set of financial statements for the half-year to 31 March
2025 has been prepared in accordance with "FRS 104 Interim Financial
Reporting" and give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company;
(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).
On behalf of the Board
Helena Vinnicombe
Chair
14 May 2025
INVESTMENT PORTFOLIO
As at 31 March 2025
Market value % of
Company Sector £'000 portfolio
HSBC Banks 14,681 3.9
BP Oil and Gas 10,684 2.8
Shell Oil and Gas 10,588 2.8
GSK Pharmaceuticals and Biotechnology 9,269 2.4
Barclays Banks 8,922 2.4
Aviva Life Insurance 8,714 2.3
FBD Non-Life Insurance (Ireland) 8,315 2.2
M&G Investment Banking and Brokerage Services 7,940 2.1
BT Group Telecommunications Service Providers 7,786 2.1
Irish Continental Industrial Transportation (Ireland) 7,220 1.9
10 largest 94,119 24.9
International Personal Finance Finance and Credit Services 7,122 1.9
Phoenix Life Insurance 6,979 1.9
Standard Chartered Banks 6,821 1.8
National Grid Gas, Water and Multi-utilities 6,734 1.8
Tesco Personal Care, Drug and Grocery Stores 6,174 1.6
Balfour Beatty Construction and Materials 6,107 1.6
Legal & General Life Insurance 6,065 1.6
Land Securities Real Estate Investment Trusts 5,775 1.5
Rio Tinto Industrial Metals and Mining 5,733 1.5
Babcock Aerospace and Defence 5,722 1.5
20 largest 157,351 41.6
Epwin ¹ Construction and Materials 5,672 1.5
Cranswick Food Producers 5,543 1.5
Clarkson Industrial Transportation 5,486 1.5
IMI Electronic and Electrical Equipment 5,256 1.4
Senior Aerospace and Defence 5,056 1.3
Lloyds Banking Banks 5,046 1.3
Prudential Life Insurance 4,957 1.3
Morgan Advanced Materials Electronic and Electrical Equipment 4,821 1.3
Hill & Smith Industrial Metals and Mining 4,752 1.3
Anglo American Industrial Metals and Mining 4,718 1.2
30 largest 208,658 55.2
J Sainsbury Personal Care, Drug and Grocery Stores 4,700 1.2
Serica Energy ¹ Oil and Gas 4,687 1.2
Smith & Nephew Medical Equipment and Services 4,609 1.2
ZIGUP Industrial Transportation 4,407 1.2
NatWest Banks 4,373 1.2
Ibstock Construction and Materials 4,345 1.2
Kingfisher Retailers 4,239 1.1
STV Media 4,199 1.1
Severn Trent Gas, Water and Multi-utilities 4,176 1.1
Renold ¹ Industrial Engineering 4,091 1.1
40 largest 252,484 66.8
Johnson Matthey Chemicals 3,906 1.0
H&T Group ¹ Finance and Credit Services 3,886 1.0
Elecosoft ¹ Software and Computer Services 3,721 1.0
Chesnara Life Insurance 3,712 1.0
Johnson Service ¹ Industrial Support Services 3,709 1.0
Beazley Non-Life Insurance 3,708 1.0
Marshalls Construction and Materials 3,614 1.0
Springfield Properties ¹ Household Goods and Home Construction 3,483 0.9
FRP Advisory Group ¹ Industrial Support Services 3,456 0.9
DCC Industrial Support Services (Ireland) 3,190 0.8
50 largest 288,869 76.4
Sabre Insurance Non-Life Insurance 3,186 0.8
Inchcape Retailers 2,914 0.8
Vertu Motors ¹ Retailers 2,910 0.8
Somero Enterprises ¹ Industrial Engineering (USA) 2,856 0.8
Shaftesbury Capital Real Estate Investment Trusts 2,808 0.8
Reach Media 2,788 0.7
Vodafone Telecommunications Service Providers 2,710 0.7
Workspace Real Estate Investment Trusts 2,698 0.7
Mondi General Industrials 2,581 0.7
Castings Industrial Metals and Mining 2,566 0.7
60 largest 316,886 83.9
Smiths News Industrial Support Services 2,456 0.7
Vanquis Banking Group Finance and Credit Services 2,421 0.6
Bellway Household Goods and Home Construction 2,364 0.6
Hammerson Real Estate Investment Trusts 2,345 0.6
Conduit Non-Life Insurance 2,331 0.6
Halfords Retailers 2,323 0.6
TP ICAP Group Investment Banking and Brokerage Services 2,322 0.6
Palace Capital Real Estate Investment Trusts 2,146 0.6
Elementis Chemicals 2,132 0.6
TT Electronics Technology Hardware and Equipment 2,075 0.5
70 largest 339,801 89.9
Speedy Hire Industrial Support Services 2,042 0.5
Dunelm Group Retailers 1,999 0.5
Macfarlane General Industrials 1,894 0.5
Oxford Sciences Enterprises ² Pharmaceuticals and Biotechnology 1,840 0.5
IP Group Investment Banking and Brokerage Services 1,787 0.5
Norcros Construction and Materials 1,732 0.5
Segro Real Estate Investment Trusts 1,727 0.5
Helical Real Estate Investment and Services 1,675 0.5
Domino's Pizza Group Travel and Leisure 1,619 0.4
Ilika ¹ Electronic and Electrical Equipment 1,602 0.4
80 largest 357,718 94.7
Kier Group Construction and Materials 1,589 0.4
Coats Group General Industrials 1,580 0.4
Midwich ¹ Industrial Support Services 1,545 0.4
DFS Furniture Retailers 1,315 0.4
RWS Holdings ¹ Industrial Support Services 1,302 0.3
Aberdeen Group Investment Banking and Brokerage Services 1,160 0.3
Headlam Household Goods and Home Construction 1,123 0.3
Churchill China ¹ Household Goods and Home Construction 1,087 0.3
Airea ¹ Household Goods and Home Construction 1,072 0.3
PZ Cussons Personal Care, Drug and Grocery Stores 1,011 0.3
90 largest 370,502 98.1
Next 15 ¹ Media 862 0.2
Card Factory Retailers 852 0.2
Carclo General Industrials 797 0.2
Watkin Jones ¹ Household Goods and Home Construction 751 0.2
XP Power Electronic and Electrical Equipment 739 0.2
Flowtech Fluidpower ¹ Electronic and Electrical Equipment 651 0.2
Wynnstay ¹ Food Producers 486 0.1
River UK Micro Cap (formerly River & Mercantile) Closed End Investments 410 0.1
Ultimate Products Household Goods and Home Construction 405 0.1
Paypoint Industrial Support Services 363 0.1
100 largest 376,818 99.7
(1) AIM Stocks
(2) Unlisted Investments
Source: Janus Henderson
CONDENSED INCOME STATEMENT
(Unaudited) (Unaudited) (Audited)
Half-year ended Half-year ended Year ended
31 March 2025 31 March 2024 30 September 2024
Revenue Capital Revenue Capital Revenue Capital
return return Total return return Total return return Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
(Losses)/gains on investments held at fair value through profit or loss - (16,569) (16,569) - 23,883 23,883 - 42,550 42,550
Income from investments 6,697 - 6,697 5,849 - 5,849 19,666 - 19,666
Other interest receivable and similar income 74 - 74 68 - 68 160 - 160
--------- -------- --------- --------- -------- --------- --------- --------- ---------
Gross revenue and capital (losses)/gains 6,771 (16,569) (9,798) 5,917 23,883 29,800 19,826 42,550 62,376
Management fee (note 2) (436) (436) (872) (430) (430) (860) (867) (868) (1,735)
Other administrative (416) - (416) (360) - (360) (802) - (802)
expenses (note 2)
--------- -------- --------- --------- -------- --------- --------- --------- ---------
Net return/(loss) before finance costs and taxation 5,919 (17,005) (11,086) 5,127 23,453 28,580 18,157 41,682 59,839
Finance costs (523) (523) (1,046) (517) (517) (1,034) (1,115) (1,115) (2,230)
-------- -------- -------- --------- -------- --------- --------- --------- ---------
Net return/(loss) before 5,396 (17,528) (12,132) 4,610 22,936 27,546 17,042 40,567 57,609
taxation
Taxation on net return (2) - (2) - - - (37) - (37)
--------- -------- --------- --------- -------- --------- --------- --------- ---------
Net return/(loss) after taxation 5,394 (17,528) (12,134) 4,610 22,936 27,546 17,005 40,567 57,572
====== ====== ====== ====== ====== ====== ===== ======= ======
Return/(loss) per ordinary 2.06p (6.69p) (4.63p) 1.71p 8.49p 10.20p 6.29p 15.01p 21.30p
share - basic and diluted
(note 3)
====== ====== ====== ====== ====== ====== ===== ====== ======
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 2025
Share premium account Capital redemption Other capital reserves
Called up share capital £'000 reserve £'000 Revenue
£'000 £'000 reserve Total
£'000 £'000
At 1 October 2024 6,755 61,619 1,007 310,618 9,634 389,633
Net return after taxation - - - (17,528) 5,394 (12,134)
Buyback of shares for treasury - - - (36,699) - (36,699)
Third interim dividend (1.60p) for
the year ended 30 September 2024 - - - - (4,323) (4,323)
Final dividend (1.625p) for
the year ended 30 September 2024 - - - - (4,391) (4,391)
Return of unclaimed dividends - - - - 22 22
------------ ------------ ----------- ----------- ----------- -----------
At 31 March 2025 6,755 61,619 1,007 256,391 6,336 332,108
======= ======= ======= ====== ======= =======
(Unaudited)
Half-year ended 31 March 2024
Called up share capital Share premium account Capital redemption Other capital reserves
£'000 £'000 reserve £'000 Revenue
£'000 reserve Total
£'000 £'000
At 1 October 2023 6,755 61,619 1,007 270,051 9,913 349,345
Net return after taxation - - - 22,936 4,610 27,546
Third interim dividend (1.60p) for
the year ended 30 September 2023 - - - - (4,323) (4,323)
Final dividend (1.60p) for
the year ended 30 September 2023 - - - - (4,323) (4,323)
Return of unclaimed dividends - - - - 8 8
------------ ------------ ----------- ----------- ----------- -----------
At 31 March 2024 6,755 61,619 1,007 292,987 5,885 368,253
======= ======= ======= ====== ======= =======
(Audited)
Year ended 30 September 2024
Share Capital Other capital reserves
Called up share capital premium redemption £'000 Revenue reserve
£'000 account reserve £'000 Total
£'000 £'000 £'000
At 1 October 2023 6,755 61,619 1,007 270,051 9,913 349,345
Net return after taxation - - - 40,567 17,005 57,572
Third interim dividend (1.60p) for
the year ended 30 September 2023 - - - - (4,323) (4,323)
Final dividend (1.60p) for
the year ended 30 September 2023 - - - - (4,323) (4,323)
First interim dividend (1.60p) for the
year ended 30 September 2024 - - - - (4,323) (4,323)
Second interim dividend (1.60p) for the
year ended 30 September 2024 - - - - (4,323) (4,323)
Return of unclaimed dividends - - - - 8 8
----------- ----------- ----------- ----------- ------------ -----------
At 30 September 2024 6,755 61,619 1,007 310,618 9,634 389,633
======= ======= ======= ======= ======= =======
____________________
The accompanying notes form an integral part of these condensed financial
statements.
CONDENSED STATEMENT OF FINANCIAL POSITION
(Unaudited) (Unaudited) (Audited)
As at As at As at
31 March 2025 31 March 2024 30 September 2024
£'000 £'000 £'000
Fixed assets
Investments held at fair value through profit or loss (note 4)
377,870 416,381 432,617
----------- ----------- -----------
Current assets
Debtors 2,976 2,713 2,428
Cash at bank 3,119 1,487 5,161
----------- ----------- -----------
6,095 4,200 7,589
Creditors: amounts falling due within one year
(22,026) (22,510) (20,749)
----------- ----------- -----------
Net current liabilities (15,931) (18,310) (13,160)
----------- ----------- -----------
Total assets less current liabilities 361,939 398,071 419,457
----------- ----------- -----------
Creditors: amounts falling due after more than one year
(29,831) (29,818) (29,824)
----------- ----------- -----------
Net assets 332,108 368,253 389,633
====== ====== =======
Capital and reserves
Called up share capital 6,755 6,755 6,755
Share premium account 61,619 61,619 61,619
Capital redemption reserve 1,007 1,007 1,007
Other capital reserves 256,391 292,987 310,618
Revenue reserve 6,336 5,885 9,634
----------- ----------- -----------
Total shareholders' funds 332,108 368,253 389,633
====== ====== =======
Net asset value per ordinary share - basic and diluted (note 7)
137.2p 136.3p 144.2p
======= ======= =======
The accompanying notes form an integral part of these condensed financial
statements.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited) (Unaudited) (Audited)
Half-year ended Half-year ended 31 March 2024 Year ended
31 March 2025 £'000 30 September 2024
£'000 £'000
Cash flows from operating activities
Net (loss)/gain before taxation (12,132) 27,546 57,609
Add back: finance costs 1,046 1,034 2,230
Add: losses/(gains) on investments held at fair value through profit or loss 16,569 (23,883)
(42,550)
Withholding tax on dividends deducted at source (2) 54 16
(Increase)/decrease in debtors (262) 39 324
(Decrease)/increase in creditors (465) 48 541
----------- ----------- -----------
Net cash inflow from operating activities 4,754 4,838 18,170
----------- ----------- -----------
Cash flows from investing activities
Purchase of investments (23,114) (38,942) (78,497)
Sale of investments 60,907 38,828 80,668
----------- ----------- -----------
Net cash inflow/(outflow) from investing activities 37,793 (114) 2,171
Cash flows from financing activities
Equity dividends paid (net of refund of unclaimed distributions and reclaimed
distributions)
(8,692) (8,638) (17,284)
Share buybacks for treasury (36,261) - -
Loans drawn down 23,260 71,282 37,736
Loans repaid (21,772) (67,782) (36,378)
Interest paid (1,128) (1,022) (2,177)
----------- ----------- -----------
Net cash outflow from financing activities (44,593) (6,160) (18,103)
Net (decrease)/increase in cash and cash equivalents
(2,046) (1,436) 2,238
Cash and cash equivalents at start of year 5,161 2,926 2,926
Effect of foreign exchange rates 4 (3) (3)
----------- ----------- -----------
Cash and cash equivalents at end of year 3,119 1,487 5,161
====== ====== ======
Comprising:
Cash at bank 3,119 1,487 5,161
====== ====== ======
The accompanying notes are an integral part of these condensed financial
statements.
NOTES TO THE FINANCIAL STATEMENTS
The half-year financial statements cover the period from 1 October 2024 to 31
March 2025 and have not been audited or reviewed by the Company's auditors.
1. Accounting policies - basis of preparation
The condensed set of financial statements has been prepared in accordance with
FRS 104, Interim Financial Reporting, FRS 102, the Financial Reporting
Standard applicable in the UK and Republic of Ireland, and the Statement of
Recommended Practice for "Financial Statements of Investment Trust Companies
and Venture Capital Trusts" which was issued by the Association of Investment
Companies in July 2022.
The accounting policies applied are consistent with those of the most recent
annual financial statements for the year ended 30 September 2024.
2. Expenses
Management fees and finance costs are charged 50% to revenue and 50% to
capital. All other administrative expenses 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.
3. Return/(loss) per ordinary share - basic and diluted
(Unaudited) (Unaudited) (Audited)
Half-year ended Half-year ended Year ended
31 March 2025 31 March 2024 30 September 2024
£'000 £'000 £'000
The return per ordinary share is based on the following figures:
Net revenue return 5,394 4,610 17,005
Net capital (loss)/return (17,528) 22,936 40,567
---------- ---------- ----------
Net total (loss)/return (12,134) 27,546 57,572
====== ====== ======
Weighted average number of ordinary shares in issue for each period
261,890,869 270,185,650 270,185,650
Revenue return per ordinary share
2.06p 1.71p 6.29p
Capital (loss)/return per ordinary share
(6.69p) 8.49p 15.01p
---------- ---------- ----------
Total (loss)/return per ordinary share
(4.63p) 10.20p 21.30p
====== ====== ======
The Company does not have any dilutive securities; therefore, basic and
diluted returns per share are the same.
4. Fair value of financial assets and liabilities
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:
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 data
Investments held at fair value through profit or loss at Level 1 Level 2 Level 3 Total
31 March 2025 (unaudited) £'000 £'000 £'000 £'000
Investments 375,715 - 2,155 377,870
Investments held at fair value through profit or loss at Level 1 Level 2 Level 3 Total
31 March 2024 (unaudited) £'000 £'000 £'000 £'000
Investments 414,153 - 2,228 416,381
Investments held at fair value through profit or loss at Level 1 Level 2 Level 3 Total
30 September 2024 (audited) £'000 £'000 £'000 £'000
Investments 430,340 - 2,277 432,617
A reconciliation of movements within Level 3 is set out below:
2025
£'000
Opening balance 2,277
Total loss included in the Income Statement
- on investments held (122)
Closing balance 2,155
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
2024.
The fair value of the senior unsecured loan notes at 31 March 2025 has been
estimated to be £23,465,000 (31 March 2024: £24,682,000; 30 September 2024:
£24,672,000). The fair value of the senior unsecured loan notes is calculated
using a discount rate which reflects the yield on a UK Gilt of similar
maturity plus a suitable credit spread.
The senior unsecured loan notes are categorised as level 3 in the fair value
hierarchy.
5. Share capital
At 31 March 2025 there were 270,185,650 ordinary shares of 2.5p each in issue,
of which, 28,177,897 were held in treasury (31 March 2024: 270,185,650 shares
in issue, with no shares in treasury; 30 September 2024: 270,185,650 shares in
issue, no shares in treasury). Voting rights were therefore 242,007,753 (31
March 2024 and 30 September 2024: 270,185,650 voting rights). During the
half-year ended 31 March 2025, no shares were issued and 28,177,897 shares
were bought back into treasury at a total cost of £36,699,000 (31 March 2024
and 30 September 2024: no shares were issued or bought back). Since the
period end, the Company has bought back 9,939,939 shares for treasury for a
total cost of £12,835,000.
6. Transaction costs
Purchase transaction costs for the half-year ended 31 March 2025 were
£125,000 (31 March 2024: £147,000; 30 September 2024: £337,000). Sale
transaction costs for the half-year ended 31 March 2025 were £22,000 (31
March 2024: £16,000; 30 September 2024: £32,000). These comprise mainly
stamp duty and commission.
7. Net asset value per ordinary share - basic and diluted
The net asset value per ordinary share of 137.2p (31 March 2024: 136.3p; 30
September 2024: 144.2p) is based on the net assets attributable to the
ordinary shares of £332,108,000 (31 March 2024: £368,253,000; 30 September
2024: £389,633,000) and on 242,007,753 ordinary shares (31 March 2024 and 30
September 2024: 270,185,650), being the number of ordinary shares in issue
(excluding shares held in treasury) at the end of each period.
8. Dividend
On 30 April 2025, a first interim dividend of 1.625p (2024: 1.60p) per
ordinary share was paid in respect of the year ending 30 September 2025. A
second interim dividend of 1.65p (2024: 1.60p) per ordinary share for the year
ending 30 September 2025 has been declared and will be paid on 31 July 2025 to
shareholders on the register of members at the close of business on 27 June
2025. The ex-dividend date will be 26 June 2025. Based on the number of shares
in issue (excluding shares held in treasury) on 14 May 2025 of 232,067,814,
the cost of the dividend will be £3,829,000 (second interim dividend for the
year ended 30 September 2024: £4,323,000).
9. Going concern
The Directors have considered the liquidity of the portfolio and concluded
that the assets of the Company consist of securities that are readily
realisable. The Directors have also considered the impact of the wars in
Ukraine and Israel and changes in the international political landscape, along
with all other risks, including revenue forecasting, and a review of covenant
compliance including the headroom above the most restrictive covenants. They
have concluded that they are able to meet their financial obligations as they
fall due 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 financial information for the half-years ended 31 March 2025 and 31
March 2024 has not been audited nor reviewed by the Company's auditor.
The figures and financial information for the year ended 30 September 2024 are
extracted from the latest published accounts and do not constitute the
statutory accounts for that year. Those accounts have been delivered to the
Registrar of Companies and included the report of the independent auditors,
which was unqualified and did not include a statement under either section
498(2) or 498(3) of the Companies Act 2006.
A glossary of terms and details of alternative performance measures can be
found in the Annual Report for the year ended 30 September 2024.
11. Manager
Janus Henderson Fund Management UK Limited ('JHFM') is appointed to act as the
Company's Alternative Investment Fund Manager. JHFM delegates investment
management services to Janus Henderson Investors UK Limited. References to
Janus Henderson within these results refer to the services provided by both
entities.
12. General information
Company Status
The Company is a UK-domiciled investment trust company. The registered number
is 670489.
The London Stock Exchange Daily Official List SEDOL number is BNXGHS2.
The ISIN number is GB00BNXGHS27.
The London Stock Exchange (TIDM) 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 Helena Vinnicombe (Chair), Gaynor Coley
(Audit Committee Chair), Duncan Budge, Mark Lam and Thomas Walker.
Corporate Secretary
Janus Henderson Secretarial Services UK Limited.
Email: ITSecretariat@janushenderson.com
(mailto:ITSecretariat@janushenderson.com)
Registered Office
201 Bishopsgate, London EC2M 3AE.
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 shortly be available on the Company's website or in
hard copy from the Company's registered office. An abbreviated version of
the half-year report, the 'Update', will be posted to shareholders in June
2025. The Update will also be available on the Company's website, and hard
copies will be available at the Company's registered office, 201 Bishopsgate,
London EC2M 3AE.
For further information, please contact:
James Henderson and Laura Foll
Fund Managers
Lowland Investment Company plc
Tel: 020 7818 4370/6364
Dan Howe
Head of Investment Trusts
Janus Henderson Investors
Tel: 020 7818 4458
Harriet Hall
PR Director, Investment Trusts
Janus Henderson Investors
Telephone: 020 7818 2919
Neither the contents of the Company's website nor the contents of any website
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incorporated into, or form part of, this announcement.
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