Announcements

Northern Investors Company PLC.


RNS Number:5175I
Northern Investors Co PLC
26 November 2007

26 NOVEMBER 2007

NORTHERN INVESTORS COMPANY PLC

UNAUDITED HALF-YEARLY FINANCIAL REPORT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007


Northern Investors Company PLC is an investment trust managed by NVM Private
Equity Limited. 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 capital growth
and dividend yield.


Financial highlights - six months ended 30 September 2007:
(comparative figures as at 30 September 2006 in italics):


2007 2006

* Net assets #56,087,000 #51,437,000
* Net asset value per share 286.3p 260.8p
* Mid-market share price 226.5p 189.5p
* Share price discount to
net asset value 20.9% 27.3%
* Return per share after tax:
Revenue 3.5p 3.3p
Capital 7.9p 6.1p
Total 11.4p 9.4p
* Interim dividend per share
proposed in respect of the period 2.2p 2.0p


For further information, please contact:


NVM Private Equity Limited

Alastair Conn, Managing Director 0191 244 6000

Website: www.nvm.co.uk
Lansons Communications

Karen Mignon 020 7294 3685


HALF-YEARLY MANAGEMENT REPORT TO SHAREHOLDERS


The process of concentrating the company's portfolio on a smaller number of
investments has continued, with the top twenty holdings at 30 September 2007
representing almost 71% of net assets compared with 63% six months earlier.
Over the same period the total number of holdings has been reduced from 51 to
45, reflecting nine divestments and three new additions.


Net asset value and share price

The following table shows the net asset value (NAV) per share, mid-market share
price and discount as at 30 September 2007 compared with the corresponding
figures at 31 March 2007 and 30 September 2006:


30 September 31 March 30 September
2007 2007 2006

NAV per share 286.3p 279.1p 260.8p
Share price 226.5p 208.5p 189.5p
Share price discount to NAV 20.9% 25.3% 27.3%


During the half year to 30 September 2007 the company repurchased 127,500
ordinary shares in the market for cancellation at a cost of #281,000, an average
of 220p per share. The directors consider that the level of discount is still
excessive and will continue to make use of the company's buy-back powers as
appropriate.

The percentage movement in NAV and share price compared with the movement in the
FTSE All-Share index over the six and 12 month periods to 30 September 2007 is
as follows:


NAV per share Share price FTSE All-Share

Past six months +2.6% +8.6% +1.0%
Past 12 months +9.8% +19.5% +8.7%


Revenue and dividend

Investment income for the half year was at a similar level to the corresponding
period and, with slightly lower expenses, the revenue return per share rose from
3.3p to 3.5p. The directors have declared an interim dividend of 2.2p per
share, a 10% increase over the preceding year. No provision has been made at
this stage for any performance-related management fee which may become payable
in respect of the full year.


Investment portfolio

Additions to the portfolio in the half year totalled #8.0 million. The
principal new holdings are:

* Foreman Roberts Group (#3,914,000) - building services consultants, London

* Astbury Marsden Holdings (#2,590,000) - specialist recruitment consultancy,
London

* Promatic Group (#968,000) - manufacturer of clay target launch equipment,
Ellesmere Port

The amounts invested reflect the board's policy of increasing the average size
of new holdings.


Investment sale proceeds amounted to #5.0 million, generating a net surplus of
#0.6 million over carrying value and #1.5 million over original cost. The most
significant realisations were Ithaca Holdings, the business-to-business media
and exhibitions company, which was sold to United Business Media plc for #14
million of which our share was #1.8 million, and AIM-quoted Computer Software
Group which was sold to a cash bidder on terms which valued our holding at #1.0
million. Since 30 September 2007 our managers have completed the sales of KCS
Global Holdings to The Sage Group plc and Barony Universal Products to a private
acquirer, for #2.1 million and #1.1 million respectively. Several other
potential divestments are currently in negotiation.

Most of our portfolio holdings have continued to make good progress and this is
reflected in a net increase in the unrealised revaluation surplus over the half
year. KCS Global Holdings appreciated by #0.9 million, reflecting the terms of
the agreed sale, and amongst the top ten holdings there were also valuation
uplifts for Crantock Bakery and IG Doors. However the valuation of housebuilder
John Laing Partnership has been reduced by #0.9 million against a background of
more challenging conditions in the housing market and Nightingales Holdings, the
mail order clothing retailer, has been fully provided against at a cost in the
half year of #1.2 million after a period of disappointing trading performance
compounded by the impact of postal strikes, which eventually led to the
appointment of administrators in October 2007.

European Court of Justice judgement in the JPMorgan Claverhouse case

In June 2007 the European Court of Justice ruled against HM Revenue & Customs
(HMRC) in the long-running test case concerning the exemption of investment
trusts from payment of VAT on management fees. HMRC has subsequently made an
announcement acknowledging that fund management services supplied to investment
trusts are exempt from VAT and confirming that claims for repayment of VAT
overpaid in the past will be processed in due course, although it is not yet
clear for what period or periods repayment will be made. Our managers have
confirmed that the appropriate protective claims have been made.

Pending clarification of the basis and timing of dealing with repayment claims,
no provision has been made in these half-yearly accounts for any potential VAT
recovery. On the basis of the information presently available to them the
directors consider that the eventual benefit, net of tax, is likely to be at
least an amount equivalent to 1% of the company's net assets. Future management
fees payable to NVM Private Equity will be exempt from VAT.


Board of directors

As indicated in the last annual report, Martin Hamilton-Sharp and Matt Ridley
retired from the board at the conclusion of the annual general meeting on 27
June 2007 with our thanks for their contribution over many years. Frank Neale,
an experienced venture capitalist who was formerly a partner in Phildrew
Ventures, was appointed to the board on 19 April 2007.


Prospects

The process of creating a more focussed portfolio is now well advanced and we
believe the benefits will be seen in the company's future performance. Economic
conditions for small and medium-sized businesses in the UK seem likely to become
more difficult in the short term as a result of recent events in the US and
elsewhere. The portfolio, whilst more concentrated than before, covers a broad
range of activities and remains sufficiently diversified to give a measure of
protection against fluctuations in individual industry sectors. The new
investment market is competitive but our managers' deal flow has held up well.
With a number of prospective realisations in progress, we expect to generate
further gains during the second half of the year.


On behalf of the Board

Peter Haigh
Chairman


The unaudited half-yearly financial statements for the six months ended 30
September 2007 are set out below.


INCOME STATEMENT
(unaudited) for the six months ended 30 September 2007


Six months ended Six months ended
30 September 2007 30 September 2006
Revenue Capital Total Revenue Capital Total
#000 #000 #000 #000 #000 #000

Gain on disposal of
Investments - 630 630 - 1,084 1,084
Unrealised adjustments
to fair value of
of investments - 1,279 1,279 - 425 425
----- ----- ----- ----- ----- -----
- 1,909 1,909 - 1,509 1,509
Income 1,158 - 1,158 1,179 - 1,179
Investment management
Fee (169) (396) (565) (186) (434) (620)
Other expenses (182) - (182) (179) - (179)
----- ----- ----- ----- ----- -----
Return on ordinary
activities before tax 807 1,513 2,320 814 1,075 1,889
Tax on return on
ordinary activities (120) 48 (72) (166) 125 (41)

----- ----- ----- ----- ----- -----
Return on ordinary
activities after tax 687 1,561 2,248 648 1,200 1,848
----- ----- ----- ----- ----- -----
Return per share 3.5p 7.9p 11.4p 3.3p 6.1p 9.4p


Year ended
31 March 2007
Revenue Capital Total

#000 #000 #000
Gain on disposal of
investments - 868 868
Unrealised adjustments
to fair value of
of investments - 4,379 4,379
----- ----- -----
- 5,247 5,247
Income 2,331 - 2,331
Investment management fee (311) (1,102) (1,413)
Other expenses (351) - (351)
----- ----- -----
Return on ordinary
activities before tax 1,669 4,145 5,814
Tax on return on
ordinary activities (296) 331 35
----- ----- -----
Return on ordinary
activities after tax 1,373 4,476 5,849
----- ----- -----
Return per share 7.0p 22.6p 29.6p


RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
(unaudited) for the six months ended 30 September 2007

Six months ended Six months ended Year ended
30 September 30 September 31 March
2007 2006 2007
#000 #000 #000
Equity shareholders' funds
at 1 April 2007 55,043 50,417 50,417
Return on ordinary
activities after tax 2,248 1,848 5,849
Dividends recognised
in the period (923) (828) (1,223)
Shares purchased for
cancellation (281) - -
------ ------ ------
Equity shareholders' funds
at 30 September 2007 56,087 51,437 55,043
------ ------ ------


BALANCE SHEET
(unaudited) as at 30 September 2007

30 September 30 September 31 March
2007 2006 2007
#000 #000 #000
Fixed asset investments
Unquoted 51,406 38,399 44,548
Quoted 593 3,210 2,500
------ ------ ------
Total fixed asset investments 51,999 41,609 47,048
------ ------ ------
Current assets:
Investments 2,222 6,817 5,973
Debtors 854 648 1,155
Cash at bank 1,113 2,439 1,140
------ ------ ------
4,189 9,904 8,268
Creditors (amounts falling due
within one year) (101) (76) (273)
------ ------ ------
Net current assets 4,088 9,828 7,995
------ ------ ------

Net assets 56,087 51,437 55,043
------ ------ ------
Capital and reserves
Called-up equity share capital 4,898 4,930 4,930
Share premium 12,694 12,694 12,694
Capital redemption reserve 257 225 225
Capital reserve - realised 27,010 26,091 26,180
Capital reserve - unrealised 9,282 5,645 8,832
Revenue reserve 1,946 1,852 2,182
------ ------ ------
Total equity shareholders' funds 56,087 51,437 55,043
------ ------ ------
Net asset value per share 286.3p 260.8p 279.1p


CASH FLOW STATEMENT
(unaudited) for the six months ended 30 September 2007

Six months ended Six months ended Year ended
30 September 30 September 31 March
2007 2006 2007
#000 #000 #000 #000 #000 #000
Cash flow statement
Net cash inflow from
operating activities 468 172 125
Taxation:
Corporation tax paid - - -
Financial investment:
Purchase of investments (8,035) (3,204) (9,572)
Sale/repayment of
investments 4,993 5,138 9,805
----- ----- -----
Net cash inflow/(outflow)
from financial investment (3,042) 1,934 233
Equity dividends paid (923) (828) (1,223)
----- ----- -----
Net cash inflow/(outflow)
before use of liquid
resources and financing (3,497) 1,278 (865)
Net cash inflow/(outflow) from
management of liquid resources 3,751 (3,080) (2,236)
Net cash inflow/(outflow)
from financing:
Purchase of shares
for cancellation (281) - -
----- ----- -----
Increase/(decrease) in
cash at bank (27) (1,802) (3,101)
----- ----- -----
Reconciliation of revenue return
before tax to net cash flow from
operating activities
Revenue return on ordinary
activities before tax 807 814 1,669
(Increase)/decrease in debtors 229 (217) (648)
Increase/(decrease) in creditors (172) 9 206
Management fee charged to capital (396) (434) (1,102)

----- ----- -----
Net cash inflow from
operating activities 468 172 125
----- ----- -----
Reconciliation of movement
in net funds
1 April 30 September 2007

2007 Cash flows
#000 #000 #000
Short-term investments 5,973 (3,751) 2,222
Cash at bank 1,140 (27) 1,113
----- ----- -----
Net funds 7,113 (3,778) 3,335
----- ----- -----


INVESTMENT PORTFOLIO SUMMARY

as at 30 September 2007


Company Valuation % of net assets

#000 by valuation
Foreman Roberts Group 3,914 7.0
Product Support (Holdings) 3,703 6.6
John Laing Partnership 3,397 6.1
Astbury Marsden Holdings 2,590 4.6
CGI Group 2,561 4.6
Envirotec 2,235 4.0
KCS Global Holdings 2,094 3.7
Promanex Group Holdings 1,974 3.5
Crantock Bakery 1,889 3.4
IG Doors 1,824 3.2
------ -----
Ten largest investments 26,181 46.7
DMN 1,718 3.1
Weldex (International) Offshore 1,673 3.0
Liquidlogic 1,531 2.7
Longhirst Venues 1,432 2.5
TFB Group 1,370 2.4
Paladin Group 1,265 2.3
Develop Training 1,254 2.2
Pivotal Laboratories Holdings 1,172 2.1
Stainton Metal Company 1,100 2.0
Barony Universal Products 1,097 1.9
------ -----
Twenty largest investments 39,793 70.9
Other investments 12,206 21.8
------ -----
Total fixed asset investments 51,999 92.7
Net current assets 4,088 7.3
------ -----
Net assets 56,087 100.0
------ -----


The above half-yearly financial statements for the six months ended 30 September
2007 do not constitute statutory financial statements within the meaning of
Section 240 of the Companies Act 1985 and have not been delivered to the
Registrar of Companies. The figures for the year ended 31 March 2007 have been
extracted from the audited financial statements for that year, which have been
delivered to the Registrar of Companies; the independent auditors' report on
those financial statements under Section 235 of the Companies Act 1985 was
unqualified. The half-yearly financial statements have been prepared on the
basis of the accounting policies set out in the annual financial statements for
the year ended 31 March 2007.

The directors confirm that to the best of their knowledge the half-yearly
financial statements have been prepared in accordance with the Statement '
Half-yearly financial reports' issued by the UK Accounting Standards Board and
the half-yearly financial report includes a fair review of the information
required by (a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an
indication of important events that have occurred during the first six months of
the financial year and their impact on the condensed set of financial
statements, and a description of the principal risks and uncertainties for the
remaining six months of the year, and (b) DTR 4.2.8R of the Disclosure and
Transparency Rules, being related party transactions that have taken place in
the first six months of the current financial year and that have materially
affected the financial position or performance of the entity during that period,
and any changes in the related party transactions described in the last annual
report that could do so.

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 19,640,134 (2006
19,720,940) ordinary shares, being the weighted average number of shares in
issue during the period.

The proposed interim dividend of 2.2p for the year ending 31 March 2008 will be
paid on 4 January 2008 to shareholders on the register at the close of business
on 7 December 2007.

A copy of the half-yearly financial report for the six months ended 30 September
2007 is expected to be posted to shareholders on 30 November 2007 and will be
available to the public at the registered office of the company at
Northumberland House, Princess Square, Newcastle upon Tyne NE1 8ER and on the
NVM Private Equity Limited website, www.nvm.co.uk.


ENDS


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

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