Gowing Bros : 2016 Appendix 4E

APPENDIX 4E I For the year ended 31 July 2016

Est. 1868

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

RESULTS FOR ANNOUNCEMENT TO THE MARKET FINANCIAL HIGHLIGHTS

• Total shareholder return before tax on unrealised gains of 9.8% for the year ended 31 July 2016 was pleasing, considering the volatility and general weakness in investment markets during the period.

• Net assets per share before tax on unrealised gains increased to $4.02 from $3.77 during the year to 31 July 2016 after the payment of 12.0c in dividends. Opening net assets per share have been restated for comparative purposes for the 1:10 bonus issue made 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, the appreciation in the value of our investment in Boundary Bend Ltd, and the increase in the value of our Pacific Coast Shopping Centre portfolio.

• Profit After Tax increased 15% to $22 million, up from $19.1 million in the prior year. This figure includes the capital gain from the sale of shares in Blackmores and the revaluation of the Pacific Coast Shopping Centre portfolio.

• Positive returns were generated by all segments of the business with the Equity Portfolio generating a total return of 23.6%.

• Shareholders received a bonus issue of shares of 1:10 during the first half of the year, as previously announced. The bonus shares rank equally for the final fully franked LIC dividend of 6 cents, which including the interim dividend of 6 cents brings the total dividend for the year to 12 cents, an effective 10% increase in total dividends for the year.

• The Company has maintained a conservative cash balance of $21 million, representing 11% of net assets at year end.

RESULTS FOR ANNOUNCEMENT TO THE MARKET

The reporting period is the year ended 31 July 2016 with the previous corresponding period being the year ended 31 July 2015.

DIVIDEND

Final fully franked LIC capital gains tax dividend per share

0% change

6.0 cents

The record date for the final dividend

The payment date of the final dividend

6 October 2016

27 October 2016

The final dividend is classified as a fully franked LIC capital gains tax dividend.

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

REVENUE

Total Revenue from Ordinary Activities Other Income

Up 6%

Up 24%

$22.1 million

$24.9 million

EARNINGS

Profit after tax Earnings per share

Up 15%

Up 15%*

$22.0 million

40.92c

NET TANGIBLE ASSETS PER SHARE Before provision for tax on unrealised gains	Up 6.7%*	$4.02
After provision for tax on unrealised gains	Up 6.6%*	$3.70

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

This report is based on financial statements which are in the process of being audited.

RESULTS FOR ANNOUNCEMENT TO THE MARKET PROFIT AND LOSS STATEMENT For the year ended Revenue from ordinary activities

Interest income Equities

31 July 31 July 2015 Movement $'000 $'000 %

306 224 37%

1,587 1,621 -2%

Private equities	1,156	-	n/a
Investment properties	19,094	19,086	0%
Total revenue from ordinary activities	22,143	20,931	6%
Expenses Investment property expenses	7,293	7,416	-2%
Administration expenses	1,177	1,039	13%
Borrowing cost expenses	3,007	3,123	-4%
Depreciation expenses	133	124	7%
Employee benefits expense	1,718	1,427	20%
Public company expenses	609	423	44%
Total expenses	13,937	13,552	3%
Net income from ordinary activities	8,206	7,379	11%
Other income	24,879	20,067	24%
Unrealised impairment on listed equities	(1,640)	(266)	n/a
Profit before income tax expense	31,445	27,180	16%
Income tax expense	(9,455)	(8,066)	17%
Profit after tax	21,990	19,114	15%
COMMENTARY

The Company's focus is to preserve and grow the value of its underlying financial and real assets and to grow Net Income from Ordinary Activities as the principle source of income to pay ordinary dividends.

Total Revenue from Ordinary Activities of $22.1 million was 6% higher than in the prior corresponding period due to increased distributions from the Managed Private Equities portfolios. Total Expenses of $13.9 million were 3% higher than the prior corresponding period largely due to an increase in administrative, employee and public company expenses. Net Income from Ordinary Activities of $8.2 million before tax was 11% higher than the prior corresponding period primarily due to the increased distributions from private equities. Other Income of $24.9 million, was 24% higher than the prior corresponding period, and includes realised and unrealised gains and losses on the investment portfolio but excludes unrealised movements in equities. Key items of Other Income include $18.6 million of realised gains from the Equities portfolio and $7.7m of unrealised gains from the Pacific Coast Shopping Centre portfolio. Profit After Tax was $22 million, up 15% on the prior corresponding period.