Announcements

Northern Investors Company PLC.


RNS Number:2686U
Northern Investors Co PLC
17 November 2005

17 NOVEMBER 2005

NORTHERN INVESTORS COMPANY PLC

UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2005


Northern Investors Company PLC is an investment trust managed by Northern
Venture Managers. Launched in 1984 and listed on the London Stock Exchange
since 1990, it invests mainly in unquoted venture capital holdings and aims to
provide high long-term returns to shareholders through a combination of income
yield and capital growth.


Financial highlights (comparative figures as at 30 September 2004 in italics):

2005 2004
(as re-stated)

* Net assets #47,822,000 #47,475,000

* Net asset value per share 242.5p 240.7p

* Share price 210.5p 217.5p

* Share price discount to
net asset value 13.2% 9.6%

* Investment income #1,159,000 #1,177,000

* Revenue return before tax #812,000 #845,000

* Revenue return per share 3.3p 3.3p

* Interim dividend per share
proposed in respect of the period 1.8p 1.5p


For further information, please contact:


Northern Venture Managers Limited

Alastair Conn, Managing Director 0191 244 6000

Website: www.nvm.co.uk
Lansons Communications

Alison Boucher 020 7294 3616


CHAIRMAN'S STATEMENT


The Chairman of Northern Investors Company PLC, Peter Haigh, included the
following points in his statement to shareholders:


I am delighted to make my first report to shareholders as chairman of Northern
Investors. At the extraordinary general meeting of shareholders on 29 June the
company's life was extended for a further five year period. This gives your
board a firm foundation on which to plan for the future.


Net asset value and share price

At the extraordinary general meeting shareholders approved a proposal aimed at
improving the marketability of the company's shares by dividing each existing #1
ordinary share into four 25p ordinary shares, a change which took effect on 7
July. The financial information in this report is based on the 'new' issued
capital of 19,720,940 25p shares, comparative figures being adjusted as
appropriate.


The net asset value (NAV) per share at 30 September 2005 was 242.5p and the
share price 210.5p, a discount of 13.2%. Over the half year the NAV per share
rose by 0.4% whilst the share price fell by 9.5%, the latter perhaps in part a
reaction to the position reached at 31 March 2005 when the discount to NAV was
only 2.5%. Over the five year period since September 2000 our NAV and share
price total return performance have broadly kept pace with the FTSE All-Share
total return index, despite the rapid rise in the stock market over the past
year. Our unquoted investment portfolio currently has a relatively high
weighting of recent investments, which we expect to show satisfactory value
growth in the medium term.


Revenue and dividend

Income generation from the venture capital portfolio remained healthy in the
half year to 30 September 2005. The revenue return per share was unchanged at
3.3p. The directors have declared an interim dividend of 1.8p per share,
representing a 20% increase over the corresponding figure of 1.5p; the increase
is intended mainly to achieve a better balance between the level of interim and
final payments but we expect that the total dividend for the year will be at
least maintained at last year's level of 5.25p per share.


Investment portfolio

Additions to the portfolio in the half year totalled #3.4 million. The
principal new holdings are:

* Ithaca Holdings (#656,000) - integrated business-to-business
media and exhibitions company, London

* Abermed Industrial Doctors (#800,000) - provider of medical
and occupational heath services, Aberdeen

* KCS Global Holdings (#754,000) - developer of human resources
and payroll software and outsourcing services, London

* Pivotal Laboratories (#1,000,000) - provider of laboratory
analysis services for clinical trials, York

Small additional investments were made in three existing portfolio companies.


Investment disposals in the half year are summarised in the following table:


Original Sale Realised
cost proceeds gain/(loss)
#000 #000 #000

Unquoted
Cambridge Biotechnology 551 430 (121)

Crabtree of Gateshead 467 799 332

Widney (loan stock) 233 233 -

Others 261 412 151
Quoted
Ark Therapeutics Group 252 423 171

John Wood Group* 278 1,280 1,002

Reg Vardy* 26 154 128

Others 103 162 59
Total 2,171 3,893 1,722

*Part disposal


The carrying value at 31 March 2005 of the investments realised was #3.7
million, giving rise to a realised surplus over carrying value of #0.2 million.
As well as exiting outright from Cambridge Biotechnology (trade sale) and
Crabtree of Gateshead (secondary management buy-out), we have continued to
reduce our quoted shareholdings in order to generate funds for new unquoted
investment.


In October 2005 the steel pressings manufacturer VPTA (previously known as
Tolwood) went into administration shortly after the emergence of significant
discrepancies between the company's actual performance and that which had been
reported to its board and investors. Investigations into the circumstances are
currently in progress. Pending clarification of the outcome of the
administration, full provision has been made against our investment of #1.16
million.


Board of directors

Robert Dickinson retired from the board at the annual general meeting in June,
after over 20 years' service as a director and 15 years as chairman. Robert
took over the chair from Paul Nicholson shortly before the Stock Exchange
flotation of Northern Investors in 1990 and guided the company through a period
in which net assets increased from #7 million to almost #50 million. I would
like to take this opportunity to thank him once more on behalf of his board
colleagues and the company's shareholders.


Accounting policies

The company's accounting policies have been revised for the current financial
year in order to comply with new UK Financial Reporting Standards introduced for
accounting periods beginning after 1 January 2005. The main changes are that

* quoted investments are valued at bid rather than mid-market price

* dividends payable to shareholders no longer appear in the statement of total
return, and

* dividends are not recognised as a balance sheet liability until they have
been formally declared (dividends are usually declared after the end of the
period to which they relate).

An explanation of the accounting changes and their financial impact is set out
in the notes which follow the unaudited financial statements. Comparative
figures have been re-stated as appropriate.


Prospects

The board continues to keep the company's investment strategy under close
review. Our managers are seeking to increase the average size of new
investments and to focus on well-established, profitable and cash-generative
businesses which can provide an attractive income yield and capital growth
potential. We believe that the portfolio is well placed to produce good income
and capital returns to shareholders in the future.


Peter Haigh

Chairman


The unaudited interim financial statements for the six months ended 30 September
2005 are set out below.


STATEMENT OF TOTAL RETURN (INCORPORATING THE REVENUE ACCOUNT)
(unaudited) for the six months ended 30 September 2005

Six months ended Six months ended
30 September 2005 30 September 2004 (re-stated)
Revenue Capital Total Revenue Capital Total

#000 #000 #000 #000 #000 #000
Gains/(losses) on investments:
Realised on disposal - 164 164 - 1,148 1,148
Unrealised revaluation movements - 380 380 - (764) (764)
------ ------ ------ ------ ------ ------
- 544 544 - 384 384
Income 1,159 - 1,159 1,177 - 1,177
Investment management fee (186) (434) (620) (184) (429) (613)
Other expenses (161) - (161) (148) - (148)
------ ------ ------ ------ ------ ------
Return on ordinary activities
before tax 812 110 922 845 (45) 800

Tax on ordinary activities (161) 161 - (186) 186 -
------ ------ ------ ------ ------ ------
Return on ordinary activities
after tax attributable to
equity shareholders 651 271 922 659 141 800
------ ------ ------ ------ ------ ------
Return per share 3.3p 1.4p 4.7p 3.3p 0.7p 4.0p


Year ended 31 March 2005
(re-stated)
Revenue Capital Total

#000 #000 #000
Gains on investments:
Realised on disposal - 1,644 1,644
Unrealised revaluation movements - (871) (871)
------ ------ ------
- 773 773
Income 2,021 - 2,021
Investment management fee (367) (857) (1,224)
Other expenses (310) - (310)
------ ------ ------
Return on ordinary activities
before tax 1,344 (84) 1,260
Tax on ordinary activities (287) 287 -
------ ------ ------
Return on ordinary activities
after tax attributable to
equity shareholders 1,057 203 1,260
------ ------ ------
Return per share 5.4p 1.0p 6.4p


BALANCE SHEET
(unaudited) as at 30 September 2005
30 September 2005 30 September 2004 31 March 2005
#000 (re-stated) (re-stated)
#000 #000
Fixed asset investments:
Unquoted 38,399 33,060 36,914
Quoted 5,207 6,393 6,683
------- ------- -------
Total fixed asset investments 43,606 39,453 43,597
------- ------- -------
Current assets:
Investments 1,658 4,918 2,606
Debtors 302 118 241
Cash at bank 2,290 3,049 1,259
------- ------- -------
4,250 8,085 4,106
Creditors (amounts falling due
within one year) (34) (63) (64)
------- ------- -------
Net current assets 4,216 8,022 4,042
------- ------- -------

Net assets 47,822 47,475 47,639
------- ------- -------
Capital and reserves
Called-up equity share capital 4,930 4,930 4,930
Share premium 12,694 12,694 12,694
Capital redemption reserve 225 225 225
Capital reserve:
Realised 24,857 24,607 23,408
Unrealised 3,406 3,323 4,584
Revenue reserve 1,710 1,696 1,798
------- ------- -------
Total equity shareholders' funds 47,822 47,475 47,639
------- ------- -------
Net asset value per share 242.5p 240.7p 241.6p


STATEMENT OF CHANGES IN EQUITY
(unaudited) for the six months ended 30 September 2005

Capital Capital Capital
Share Share redemptn reserve - reserve - Revenue
capital premium reserve realised unrealised reserve Total

#000 #000 #000 #000 #000 #000 #000
At 1 April 2005 (as
previously reported 4,930 12,694 225 23,408 4,689 1,059 47,005
Prior year adjustments - - - - (105) 739 634
------ ------- ------ ------- ------ ------ -------
At 1 April 2005 (as re-stated) 4,930 12,694 225 23,408 4,584 1,798 47,639
Return on ordinary activities
after tax for the period - - - (109) 380 651 922
Previously recognised gains
now realised - - - 1,558 (1,558) - -
Equity dividends paid - - - - - (739) (739)
------ ------- ------ ------- ------ ------ -------
At 30 September 2005 4,930 12,694 225 24,857 3,406 1,710 47,822
------ ------- ------ ------- ------ ------ -------


CASH FLOW STATEMENT
(unaudited) for the six months ended 30 September 2005

Six months ended Six months ended Year ended
30 September 2005 30 September 2004 31 March 2005
(re-stated) (re-stated)
#000 #000 #000 #000 #000 #000
Cash flow statement
Net cash inflow from
operating activities 287 967 916
Taxation:
Corporation tax recovered - 1 1
Financial investment:
Purchase of investments (3,358) (5,130) (10,765)
Sale/repayment of investments 3,893 9,536 11,416
------ ------ ------
Net cash inflow from
financial investment 535 4,406 651
Equity dividends paid (739) (690) (986)
------ ------ ------
Net cash inflow before use
of liquid resources and financing 83 4,684 582
Net cash inflow/(outflow) from
management of liquid resources 948 (3,485) (1,173)
Net cash inflow from financing - - -
------ ------ ------
Increase/(decrease) in cash at bank 1,031 1,199 (591)
------ ------ ------
Reconciliation of net revenue before
taxation to net cash flow from

operating activities
Net revenue from ordinary activities
before tax 812 845 1,344
(Increase)/decrease in debtors (61) 538 415
Increase/(decrease) in creditors (30) 13 14
Management fees charged to capital (434) (429) (857)
------ ------ ------
Net cash inflow from
operating activities 287 967 916
------ ------ ------

Reconciliation of movement
in net funds
1 April 2005 Cash flows 30 September 2005
#000 #000 #000
Cash at bank 1,259 1,031 2,290
Short-term investments 2,606 (948) 1,658
------ ------ ------
Net funds 3,865 83 3,948
------ ------ ------


INVESTMENT PORTFOLIO SUMMARY
as at 30 September 2005
Valuation % of net assets
#000 by valuation

Fifteen largest venture capital investments:
DMN Installations 2,832 5.9
Longhirst Group 1,777 3.7
Omnico Plastics 1,721 3.6
AFI Aerial Platforms 1,702 3.6
CGI Group 1,480 3.1
Stainton Metal Company 1,276 2.7
Weldex (International) Offshore 1,268 2.7
Crantock Bakery 1,241 2.6
IG Doors 1,185 2.5
Alaric Systems 1,175 2.5
Arrow Industrial Group 1,151 2.4
John Laing Partnership 1,125 2.3
Envirotec 1,008 2.1
Pivotal Laboratories 1,000 2.1
Interlube Systems 983 2.0
------- ------
20,924 43.8
Other investments 22,682 47.4
------- ------
Total fixed asset investments 43,606 91.2
Net current assets 4,216 8.8
------- ------
Net assets 47,822 100.0
------- ------


The above summary of results for the six months ended 30 September 2005 does not
constitute statutory financial statements within the meaning of Section 240 of
the Companies Act 1985 and has not been delivered to the Registrar of Companies.
The figures for the year ended 31 March 2005 have been extracted from the
audited financial statements for that year and re-stated as described below;
those audited financial statements have been delivered to the Registrar of
Companies and the independent auditors' report on under Section 235 of the
Companies Act 1985 was unqualified.

The company is required to comply with the requirements of a number of new UK
Financial Reporting Standards (FRS), which now represent UK Generally Accepted
Accounting Principles (UK GAAP), in presenting its financial statements for the
year ending 31 March 2006. These Standards have been introduced as part of the
process of aligning UK accounting principles with International Accounting
Standards. The unaudited interim financial statements for the six months ended
30 September 2005 have been prepared in compliance with the new Standards, with
the result that the accounting policies differ from those used in preparing the
annual financial statements for the year ended 31 March 2005 in the following
respects:

* Quoted investments are valued at bid price rather than mid-market price, as
required by FRS 26 'Financial instruments: Measurement'

* Dividends to shareholders are accounted for in the period in which the
company is liable to pay them, rather than in the period in respect
of which they are declared, as required by FRS 21 'Events after the Balance
Sheet Date'.

* The unrealised gain or loss resulting from the revaluation of fixed asset
investments held at fair value is now required by FRS 25 '
Financial Instruments: Disclosure and Presentation' to be recognised in the
company's profit and loss account. Consequently the Total column in the
Statement of Total Return now represents the company's profit and loss
account.

The comparative figures for the six months ended 30 September 2004 and the year
ended 31 March 2005 have been re-stated accordingly.

The effect of the above changes on the reported net assets and net asset value
per share of the company is as follows:

30 September 2005 30 September 2004 31 March 2005

Net asset Net asset Net asset
Net value per Net value per Net value per
assets share assets share assets share
#000 p #000 p #000 p

As reported under previous UK GAAP 47,564 241.2 47,290
239.8 47,005 238.4
Adjustment in valuation of
quoted investments to bid price (97) (0.5) (111) (0.6) (105) (0.5)
Proposed dividends not accounted for
until declared and paid 355 1.8 296 1.5 739 3.7
------- ------ ------- ------ ------- ------
As reported under revised UK GAAP 47,822 242.5 47,475 240.7 47,639 241.6
------- ------ ------- ------ ------- ------


The calculation of the revenue and capital return per share is based on the
return on ordinary activities after tax for the period and on 19,720,940
ordinary shares, being the number of shares in issue following the 4-for-1
sub-division of ordinary shares in July 2005.

The proposed interim dividend of 1.8p for the year ending 31 March 2006 will be
paid on 6 January 2006 to shareholders on the register at the close of business
on 9 December 2005.

A copy of the interim report is expected to be posted to shareholders on 25
November 2005 and will be available to the public at the registered office of
the company at Northumberland House, Princess Square, Newcastle upon Tyne NE1
8ER.

ENDS


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

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