Gowing Bros : 2016 Appendix 4D

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APPENDIX 4D | For the half year ended 31 January 2016

Investing together for a secure future

Gowing Bros. Limited ABN 68 000 010 471

Suite 21, Jones Bay Wharf

26 - 32 Pirrama Rd, Pyrmont NSW 2009

T: 61 2 9264 6321 F: 61 2 9264 6240

www.gowings.com

R E S U L T S F O R A N N O U N C E M E N T T O T H E M A R K E T F I N A N C I A L H I G H L I G H T S

• Net assets per share before tax on unrealised gains increased to $3.89 from $3.77 during the six months to 31 January 2016. Opening net assets per share have been restated for comparative purposes for the 1:10 bonus issue during the period.

• The increase in net assets was largely attributable to the significant realised gains on the sale of the Company's shareholding in Blackmores Limited together with an appreciation in value of the Pacific Coast Shopping Centre portfolio.

• Total shareholder returns before tax on unrealised gains of 4.8% for the six month period ended January 31 2016 was pleasing, particularly considering the volatility and general weakness in capital markets over the same period.

• Profit After Tax increased 295% to $18.6 million, up from $4.7 million in the prior corresponding period. This figure includes the capital profit from the sale of shares in Blackmores and the revaluation of the Pacific Coast Shopping Centre portfolio.

• The Equity Portfolio performed strongly with an underlying total return of 15.6% compared with the negative returns and highly volatile nature of the stock market during the period.

• Shareholders received a bonus issue of shares of 1:10 during the period, as announced in the 2015 year end accounts. The bonus shares rank equally for the interim fully franked LIC capital gains tax dividend of 6 cents, representing an effective 10% increase in total dividends for the period.

• The Company increased its cash holdings to $26 million at 31 January 2016, representing 13% of net assets at period end. Cash includes holdings of $15.6 million in Australian dollars and

$10.3 million in foreign currency.

R E S U L T S F O R A N N O U N C E M E N T T O T H E M A R K E T

The reporting period is the half year ended 31 January 2016 with the previous corresponding period being the half year ended 31 January 2015 unless otherwise stated. The results have been reviewed by the company's auditors.

D I V I D E N D S
Interim fully franked LIC capital gains tax dividend per share	0% change	6.0 cents
The record date for the interim dividend The payment date of the interim dividend	5th April 2016 28th April 2016

The interim dividend is classified as a fully franked LIC capital gains tax dividend subject to the Company's full year result.

A 1:10 bonus issue of ordinary shares was made to shareholders during the period, with the new shares ranking equally for the current interim dividend, providing shareholders with an effective 10% increase in the total dividend to be paid.

R E V E N U E Total Revenue from Ordinary Activities	Up 5%	$10.9 million
Other Income	Up 523%	$23.6 million

E A R N I N G S Profit after tax	Up 295%	$18.6 million
Earnings per share	Up 294%	34.7c

N E T T A N G I B L E A S S E T S P E R S H A R E

Before provision for tax on unrealised gains	Up 3.2%*	$3.89
After provision for tax on unrealised gains	Up 4.3%*	$3.62

* Net assets per share as at 31 July 2015 have been restated for comparative purposes to reflect the 1 for 10 bonus issue during the period.

R E S U L T S F O R A N N O U N C E M E N T T O T H E M A R K E T P R O F I T A N D L O S S S T A T E M E N T

For the half year ended	31 Jan 2016 $'000	31 Jan 2015 $'000	Movement
Revenue from Ordinary Activities
Interest income	91	145	-37%
Investment properties	9,788	9,558	2%
Equities	964	781	23%
Managed private equities	39	(91)	143%
Total Revenue from Ordinary Activities Expenses	10,882	10,393	5%
Investment and development property	3,762	3,695	2%
Borrowing cost	1,566	1,592	-2%
Administration, public company and other	2,005	1,602	25%
Total Expenses	7,333	6,889	6%
Net Income from Ordinary Activities	3,549	3,504	1%
Income tax expense - ordinary activities	(1,123)	(1,227)	8%
Net Profit after Tax on Ordinary Activities	2,426	2,277	7%
Other income	23,641	3,797	523%
Unrealised impairment on listed equities	(431)	(194)	-122%
Profit Before Tax	25,636	5,880	336%
Income tax expense - other activities	(6,995)	(1,159)	504%
Profit After Tax	18,641	4,721	295%
Other Comprehensive Income
Items that may be reclassified to profit or loss:

Transfer from unrealised reserves to realised gains after tax (Decrease) / Increase in fair value of investments net of tax

(6,778)

(765)

(1,132) na

434 na

Total Comprehensive Income 11,098 4,023 176%

C O M M E N T A R Y

The Company's focus is on growing Net Income from Ordinary Activities (i.e. interest, rent and dividends received less operating expenses) as the principal source of income used to pay ordinary dividends.

Total Revenue from Ordinary Activities of $10.9 million was 5% higher than in the prior corresponding period due to increased income from the Pacific Coast Shopping Centre portfolio as well as the Equities and Managed Private Equities portfolios. Total Expenses of $7.3 million were 6% higher than the prior corresponding period due largely due to the write off of a tenancy loan at Moonee Beach and to an increase in Administrative Expenses. Net Income from Ordinary Activities of $3.5 million before tax was 1% higher than the prior corresponding period last year primarily due to the effect of increased revenues, offset by an increase in Total Expenses.