Announcements

Northern Investors Company PLC.


RNS Number : 5858U
Northern Investors Co PLC
15 May 2008

15 MAY 2008

NORTHERN INVESTORS COMPANY PLC

RESULTS FOR THE YEAR ENDED 31 MARCH 2008

Northern Investors Company PLC is an investment trust managed by NVM Private
Equity. 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 income yield.

Financial highlights - year ended 31 March 2008:
(comparative figures as at 31 March 2007 in italics):

2008 2007
* Net assets #57.8m #55.0m
* Net asset value per share 297.3p 279.1p
* Return per share: 8.0p 7.0p
Revenue 15.8p 22.6p
Capital 23.8p 29.6p
Total
* Total return per share 8.5% 11.6%
as % of opening net asset value
* Dividend per share declared 7.2p 6.7p
in respect of the year
* Mid-market share price at year 195.0p 208.5p
end
* Discount to net asset value 34.4% 25.3%


For further information, please contact:

NVM Private Equity Limited
Christopher Mellor, 0191 244 6000
Director
Website: www.nvm.co.uk
Lansons Communications
Karen Mignon 020 7294 3685


CHAIRMAN'S STATEMENT

I am pleased to report that the company has made good progress over the past
year despite the challenging conditions prevalent in the financial markets, with
a high level of new investment and realisation activity, continuing
concentration of the
portfolio, further growth in net asset value and an increase in the dividend.
The total return for the year as shown in the income statement was 23.8p,
equivalent to 8.5% of the net asset value per share at the start of the year.

Net asset value and share price
The net asset value (NAV) per share at 31 March 2008 was 297.3p, up by 6.5% from
the corresponding figure of 279.1p at 31 March 2007. Over the same period the
FTSE All-Share index fell by 10.8%. The increase in NAV has exceeded the index
in each of
the last two years, following a relatively disappointing period between 2003 and
2006.

The mid-market share price rose by 8.6% over the first half of the year but fell
back during the second half to end at 195p, a net fall of 6.5% over the year.
This price equates to a 34.4% discount to NAV, the highest level of discount
since the
company's flotation in 1990. Widening discounts have been a feature of the
private equity investment trust sector in recent months, with the majority of
our peer group now trading at discounts of over 20%. Nevertheless the directors
believe that trusts
such as Northern Investors represent an attractive and flexible way for
investors to obtain an exposure to the private equity market, and we are seeking
to improve the company's communication of this message to potential
shareholders. In the meantime it
is likely that we will continue to use the directors' share buy-back powers.

Revenue statement and dividend
The revenue return before tax rose from #1.67 million to #2.14 million, a 28%
increase of which approximately one third was attributable to an exceptional VAT
credit which is referred to below. The revenue return per share
increased by 14.3%, from 7.0p to 8.0p. The directors are pleased to be able to
recommend an increased final dividend of 5.0p per share, taking the total for
the year to 7.2p - a 7.5% increase. The annual dividend has increased by 69%
over the past five
years. The proposed final dividend will be paid on 4 July 2008 to shareholders
on the register on 13 June 2008.

Investment portfolio
The Business Review in the annual report gives detailed information about
developments in the investment portfolio during the year. There was a high level
of activity both in terms of new investments (#13.3 million, an all-time high)
and
exits from existing holdings (total proceeds of #11.4 million, equalling the
previous record). The portfolio has generally made good progress although
inevitably there have been some individual instances of below-par performance.
Since the year
end there have been further realisations (one full and one partial) and several
other companies are currently the subject of sale negotiations.

Two years ago we set our managers an objective of reducing the number of
portfolio holdings and increasing the average size of new investments, so as to
reach a position where the 20 largest venture capital holdings represented a
significantly larger
proportion of the company's assets. It is pleasing to note that since then the
total number of investments has reduced from 62 to 39 and the average value per
holding has doubled from #678,000 to #1.35 million. At 31 March 2008 the
top 20 holdings represented 77% of net assets, compared with 54% two years
earlier.

VAT on management fees
As was reported at the half-year stage, in June 2007 the European Court of
Justice ruled against HM Revenue & Customs (HMRC) in the test case concerning
the exemption of investment trust management fees from VAT. HMRC subsequently
acknowledged
that management fees are exempt from VAT, and accordingly our manager, NVM,
ceased to charge VAT with effect from January 2008. Exemption from VAT will be a
substantial ongoing benefit to our company. NVM has also submitted claims for
repayment of VAT
overpaid in the past and these are currently being reviewed by HMRC. At this
stage the directors are reasonably certain that the VAT recoverable by Northern
Investors will be at least #600,000 and an asset of this amount has been
recognised in
the accounts as at 31 March 2008. A further update will be given in due course.

People
I would like to thank the company's directors and managers for their efforts in
the face of challenging market conditions over the past year. Michael Denny
retired as executive chairman of NVM in April 2008 but has agreed to continue as
a
non-executive director of Northern Investors, and we are delighted that we will
continue to have the benefit of his knowledge and experience.

The future
The process of rationalising the investment portfolio which commenced two years
ago is now substantially complete, and this should contribute to a continuation
of the recent upturn in performance. However there is no doubt that the current
difficulties in the world economy and financial markets will present challenges
to our investee companies, and it seems likely that in the short term the flow
of attractive new investment opportunities will be restricted. Although some #23
million has been invested in new holdings over the past two years, the portfolio
also contains a good representation of more mature companies and further
significant realisation activity can be expected in the near future. We hope to
see this healthy
condition reflected in an improvement in the share price over the next year.

Peter Haigh
Chairman


The audited financial statements for the year ended 31 March 2008 are set out
below.


INCOME STATEMENT
for the year ended 31 March 2008

Year ended 31 March 2008 Year ended 31 March 2007
Revenue Capital Total Revenue Capital Total
#000 #000 #000 #000 #000 #000
Gain on disposal of
investments - 830 830 - 868 868
Changes in fair value
of investments - 2,596 2,596 - 4,379 4,379
----- ----- ----- ----- ----- -----
- 3,426 3,426 - 5,247 5,247
Income 2,626 - 2,626 2,331 - 2,331
Investment management fee (327) (896) (1,223) (311) (1,102)
(1,413)
Recoverable VAT 166 434 600 - - -
Other expenses (329) - (329) (351) - (351)
----- ----- ----- ----- ----- -----
Return on ordinary
activities before tax 2,136 2,964 5,100 1,669 4,145
5,814
Tax on return on
ordinary activities (559) 139 (420) (296) 331 35
----- ----- ----- ----- ----- -----
Return on ordinary
activities after tax 1,577 3,103 4,680 1,373 4,476
5,849
----- ----- ----- ----- ----- -----
Return per share 8.0p 15.8p 23.8p 7.0p 22.6p 29.6p


RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
for the year ended 31 March 2008

Year ended Year ended
31 March 31 March
2008 2007
#000 #000
Equity shareholders' funds
at 1 April 2007 55,043 50,417
Return on ordinary
activities after tax 4,680 5,849
Dividends recognised
in the year (1,354) (1,223)
Shares purchased for
cancellation (614) -
------ ------
Equity shareholders' funds
at 31 March 2008 57,755 55,043
------ ------


BALANCE SHEET
as at 31 March 2008

31 March 2008 31 March 2007
#000 #000
Fixed asset investments
Unquoted 52,114 44,548
Quoted 329 2,500
------ ------
Total fixed asset investments 52,443 47,048
------ ------
Current assets:
Investments 861 5,973

Debtors 1,073 1,155
Cash at bank 3,722 1,140
------ ------
5,656 8,268
Creditors (amounts falling due
within one year) (344) (273)
------ ------
Net current assets 5,312 7,995
------ ------

Net assets 57,755 55,043
------ ------


Capital and reserves:
Called-up equity share capital 4,856 4,930
Share premium 12,694 12,694
Capital redemption reserve 299 225
Capital reserve - realised 27,177 26,180
Capital reserve - unrealised 10,324 8,832
Revenue reserve 2,405 2,182
------ ------
Total equity shareholders' funds 57,755 55,043
------ ------
Net asset value per share 297.3p 279.1p


CASH FLOW STATEMENT
for the year ended 31 March 2008

Year ended Year ended
31 March 2008 31 March 2007
#000 #000 #000 #000
Cash flow statement
Net cash inflow from
operating activities 1,407 125
Taxation:
Corporation tax paid - -
Financial investment:
Purchase of investments (13,336) (9,572)
Sale/repayment of
investments 11,367 9,805
------ ------
Net cash inflow/(outflow)
from financial investment (1,969) 233
Equity dividends paid (1,354) (1,223)
----- -----
Net cash outflow before use of
liquid resources and financing (1,916) (865)
Financing:
Purchase of ordinary shares for (614) -
cancellation
----- -----
Net cash outflow before use of
liquid resources (2,530) (865)
Net cash inflow/(outflow) from
management of liquid resources 5,112 (2,236)
----- -----
Increase/(decrease) in cash at bank 2,582 (3,101)
----- -----
Reconciliation of revenue return
before tax to net cash flow from
operating activities
Revenue return on ordinary
activities before tax 2,136 1,669
Increase in debtors (232) (648)
Increase/(decrease) in creditors (35) 206
Management fees charged to capital reserve (462) (1,102)
----- -----
Net cash inflow from
operating activities 1,407 125
----- -----
Reconciliation of movement
in net funds
1 April 2007 Cash flows 31 March 2008
#000 #000 #000
Cash at bank 1,140 2,582 3,722
Short-term investments 5,973 (5,112) 861
----- ----- -----
7,113 (2,530) 4,583
----- ----- -----


INVESTMENT PORTFOLIO SUMMARY
as at 31 March 2008

Valuation % of net assets
#000 by value
Fixed asset investments:

Product Support (Holdings) 5,734 9.9
Foreman Roberts Group 3,914 6.8
Britspace Holdings 3,176 5.5
Weldex (International) Offshore 2,990 5.2
Astbury Marsden Holdings 2,590 4.5
Axial Systems Holdings 2,301 4.0
CGI Group 2,225 3.8
Paladin Group 2,021 3.5
Promanex Group Holdings 1,974 3.4
John Laing Partnership 1,958 3.4
------ -----
Ten largest investments 28,883 50.0

Crantock Bakery 1,913 3.3
Optilan Group 1,900 3.3
Envirotec 1,795 3.1
Liquidlogic 1,743 3.0
TFB Group 1,506 2.6
Longhirst Venues 1,432 2.5
Stainton Metal Company 1,394 2.4
Pivotal Laboratories Holdings 1,337 2.3
DxS 1,188 2.1
IG Doors 1,185 2.1
------ -----
Twenty largest investments 44,276 76.7
Other investments 8,167 14.1
------ -----
Total fixed asset investments 52,443 90.8
Net current assets 5,312 9.2
------ -----
Net assets 57,755 100.0
------ -----


The above summary of results for the year ended 31 March 2008 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.
Statutory financial
statements will be filed with the Registrar of Companies in due course; the
independent auditors' report on those financial statements under Section 235 of
the Companies Act 1985 is unqualified and does not contain a statement under
Section 237(2) or (3)
of the Companies Act 1985.
The proposed final dividend of 5.0p per share for the year ended 31 March 2008
will, if approved by shareholders, be paid on 4 July 2008 to shareholders on the
register at the close of business on 13 June 2008.
The full annual report including financial statements for the year ended 31
March 2008 is expected to be posted to shareholders on 23 May 2008 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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