Final Results

NEW STAR INVESTMENT TRUST PLC

PRELIMINARY ANNOUNCEMENT OF ANNUAL RESULTS

The Directors announce the unaudited statement of consolidated results for the
year ended 30 June 2004 as follows:

CONSOLIDATED STATEMENT OF TOTAL RETURN

* (incorporating the revenue account) of the Group

                               Year ended                    Year ended         
                                                                                
                              30 June 2004                  30 June 2003        
                                                                                
                      Revenue    Capital     Total  Revenue   Capital     Total 
                                                                                
                        £'000      £'000     £'000    £'000     £'000     £'000 
                                                                                
Gains/(losses) on           -     11,698    11,698        -    (4,947)   (4,947)
investments                                                                     
                                                                                
Dividend and interest     707          -       707      730         -       730 
income                                                                          
                                                                                
Gains/(losses) on                                                               
index futures                                                                   
                                                                                
contracts                   -        198       198        -      (905)     (905)
                                                                                
Investment management    (150)         -      (150)    (180)        -      (180)
fees                                                                            
                                                                                
Other expenses           (247)         -      (247)    (310)        -      (310)
                                                                                
Other exchange losses       -          -         -        -        (9)       (9)
                                                                                
Return on ordinary                                                              
activities                                                                      
                                                                                
before finance costs      310     11,896    12,206      240    (5,861)   (5,621)
and taxation                                                                    
                                                                                
Interest payable and                                                            
similar                                                                         
                                                                                
charges                    (6)         -        (6)      (9)        -        (9)
                                                                                
Return on ordinary                                                              
activities                                                                      
                                                                                
before taxation           304     11,896    12,200      231    (5,861)   (5,630)
                                                                                
Taxation on ordinary      (37)         -       (37)     (57)        -       (57)
activities                                                                      
                                                                                
Return on ordinary                                                              
activities                                                                      
                                                                                
after taxation            267     11,896    12,163      174    (5,861)   (5,687)
                                                                                
Dividends proposed in                                                           
respect                                                                         
                                                                                
of equity shares         (177)         -      (177)    (121)        -      (121)
                                                                                
Transfer to/(from)         90     11,896    11,986       53    (5,861)   (5,808)
reserves                                                                        
                                                                                

* The revenue column of this statement is the consolidated Revenue Account of
the Group.

                       pence     pence     pence    pence    pence       pence 
                                                                               
Return per Ordinary     0.38     16.75     17.13     0.22    (7.31)      (7.09)
share                                                                          
                                                                               

CONSOLIDATED BALANCE SHEET

                                            30 June 2004          30 June 2003 
                                                                               
                                                  £'000                  £'000 
                                                                               
Fixed assets                                                                   
                                                                               
Investments                                      65,662                 54,363 
                                                                               
Current assets                                                                 
                                                                               
Debtors                                             118                    269 
                                                                               
Cash at bank                                      1,615                    747 
                                                                               
                                                  1,733                  1,016 
                                                                               
Creditors: amounts falling due                                                 
                                                                               
within one year                                    (273)                  (243)
                                                                               
Net current assets                                1,460                    773 
                                                                               
Total assets less current                        67,122                 55,136 
liabilities                                                                    
                                                                               
Capital and reserves:                                                          
                                                                               
Called up share capital                             710                    710 
                                                                               
Share premium account                            21,573                 21,573 
                                                                               
Capital reserve                                 (12,298)               (24,194)
                                                                               
Special reserve                                  56,908                 56,908 
                                                                               
Revenue reserve                                     229                    139 
                                                                               
Equity shareholders' funds                       67,122                 55,136 
                                                                               
Net asset value per share                                                      
                                                                               
Ordinary shares                                   94.51p                 77.63p

CONSOLIDATED STATEMENT OF CASHFLOWS

                                              Year ended             Year ended
                                                                               
                                            30 June 2004          30 June 2003 
                                                                               
                                                   £'000                 £'000 
                                                                               
Net cash (outflow) /inflow from                     (40)                 1,875 
operating activities                                                           
                                                                               
Servicing of finance                                                           
                                                                               
Interest paid                                        (6)                    (9)
                                                                               
Taxation                                                                       
                                                                               
Taxation paid                                       (28)                  (574)
                                                                               
Capital expenditure and financial                                              
investment                                                                     
                                                                               
Purchase of investments                          (5,061)                (5,652)
                                                                               
Disposal of investments                           5,976                 35,803 
                                                                               
Gains/(losses) on index futures                     198                   (905)
contracts                                                                      
                                                                               
Revaluation of foreign currency                       -                     (9)
                                                                               
Exchange losses on settlements                      (50)                   (20)
                                                                               
Net cash inflow from capital                      1,063                 29,217 
expenditure and financial                                                      
investment                                                                     
                                                                               
Equity dividends paid                              (121)                (1,977)
                                                                               
Net cash inflow before financing                    868                 28,532 
                                                                               
Financing                                                                      
                                                                               
Redemption of shares                                  -                (30,770)
                                                                               
Net cash outflow from financing                       -                (30,770)
                                                                               
Increase/(decrease) in cash                         868                 (2,238)

Returns per share

The Group net revenue on ordinary activities after taxation amounted to £
267,000 (2003: £174,000). The basic revenue return per Ordinary share is based
on this figure and a total of 71,023,695 (2003: 80,164,748) shares, being the
weighted average number of Ordinary shares in issue during the year.

The capital return per Ordinary share is based on net capital gains for the
year of £11,896,000 (2003: losses: £5,861,000) and on 71,023,695 (2003:
80,164,748) shares, being the weighted average number of Ordinary shares in
issue during the year.

Dividend

The Directors have declared a final dividend of 0.25p net (2003: 0.17p) per
Ordinary share payable on 26 November 2004 to shareholders on the register at
the close of business on 15 October 2004. The ex-dividend date is 13 October
2004.

Net asset value per share

The net asset value per share of 94.51p (2003: 77.63p) has been calculated by
reference to net assets of £67,122,000 (2003: £55,136,000) and 71,023,695
(2003: 71,023,695) Ordinary shares, being the number of shares in issue at the
end of the year.

The above financial information for the year ended 30 June 2004 does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985 and has been prepared on the basis of the accounting policies set out in
the statutory accounts of the Group for the year ended 30 June 2003, save that
the Group has adopted the 2003 Statement of Recommended Practice regarding the
Financial Statements of Investment Trust Companies. This preliminary statement
of results has been agreed with our auditors, Ernst & Young LLP. The
comparative financial information is based on the statutory financial
statements for the year ended 30 June 2003. Those financial statements, upon
which the auditors issued an unqualified opinion, have been delivered to the
Registrar of Companies. Statutory financial statements for the year ended 30
June 2004 will be delivered to the Registrar.

The annual report will be sent to shareholders in October and will be available
to members of the public from the Registered Office at 23 Cathedral Yard,
Exeter EX1 1HB. The Annual General Meeting of the Company will be held on 24
November 2004 at 12 noon at 1 Knightsbridge Green, London SW1X 7NE.

CHAIRMAN'S STATEMENT

Your Company's total assets rose by 21.7% to £67.1 million during the year to
30th June 2004. This compares with a 13.1% rise in the FTSE All-Share Index.

From inception in May 2000 to 30th June 2004 the net asset value has fallen
5.5% against a 25.1% fall in the FTSE All-Share Index, with your Company
outperforming in each of its four reporting periods. This out-performance was
achieved initially by having a high weighting of gilts, reflecting a cautious
stance. More recently your Company has been more fully exposed to global
stockmarkets through investment in individual equities, mutual funds and hedge
funds.

Revenue after taxation for the year under review was £267,000, which compares
with £174,000 during the previous year. Your Directors recommend the payment of
a final dividend of 0.25p net per Ordinary share (annual dividend of 0.17p in
2003). This dividend should not be taken as indicative of future dividends as
dividends do not play a central role in your Company's investment strategy.

Share prices rose strongly during the first half of the year as investors
rediscovered their risk appetites and business and consumer confidence revived
following the Iraq War victory. As economic growth resumed, corporate bonds
out-performed government bonds, small and medium-sized companies outperformed
larger companies and cyclical sectors out-performed defensive sectors. The Sars
virus outbreak delayed recovery in Asia but the region caught up once the
disease came under control.

Equity gains were, however, more modest during the closing months of the year
under review. The oil price rose in response to the deteriorating Iraqi
situation and terrorism in Saudi Arabia and elsewhere. Continental European
markets in particular were affected by the Madrid bombings in March. In
addition, expectations rose that the US monetary cycle was about to turn
upwards as a result of strong job creation figures and a rise in inflation.

Expectations of rising interest rates were confirmed in June when the Federal
Reserve raised rates by a quarter of a percentage point to 1.25%. In the UK,
the Bank of England began the year under review with a cut to 3.5% but then
pre-empted the Fed's tightening in response to signs of increasing inflation.
As a result base rates rose from 3.5% to 4.5% between November and June. Weaker
Continental European conditions, however, meant the European Central Bank left
eurozone rates unchanged at 2%.

During the first half of 2004 it became clear the volume of money available for
investment beyond that needed to support economic growth had fallen. In recent
years such 'excess liquidity' has produced successive waves of strength in
government bonds, housing and equities. This excess dried up during the spring,
however, putting pressure on asset categories that did well following the Iraq
War.

At the year end, the main focus of investor attention was on US interest rate
prospects. Although some economists believe the Fed will tighten aggressively,
the pace of rises is likely to remain measured amid signs that economic growth
may soon slow. Short and long-term interest rates within the Group of Seven
countries have already risen to a point where industrial activity is likely to
ease, with a fall in housing activity likely to lead the way. Other factors
that may depress activity include high commodity prices, tighter fiscal
policies and a downturn in the corporate stockbuilding cycle.

In such an environment, with markets likely to be influenced less by liquidity
than by profit trends, careful stock selection will be important.

Your Company's unaudited net asset value at 31st August 2004 was 93.05p.

John L Duffield

Chairman

New Star Asset Management

1st October 2004