Interim Results

CHAIRMAN'S STATEMENT

Results

In the first half of 2004, equity markets worldwide were less volatile than in
recent years.  In terms of total returns, the FTSE All Share Index increased by
just 2.8%, whereas Temple Bar's total assets, after management and other
expenses, including accrued income but before deducting interest payments, rose
by 7.1%.  Net assets increased by 6.2%.  Post-tax earnings for the period were
£8.95m compared with £8.83m, a rise of 1.3%.  The board has declared an interim
dividend of 8.64p, an increase of 2.5% over 2003, payable on 30 September 2004
to shareholders on the register at 17 September 2004.

Investment Background

At the start of the year, subdued inflation in major economies raised hopes
that significant interest rate rises would be delayed until economic growth was
strong enough to withstand higher borrowing costs.  However, a reassessment was
soon prompted by oil and commodity prices at higher levels than expected and,
in the US, by a reduction in surplus productive capacity.  In the UK, the
Monetary Policy Committee (MPC) expressed its concern over the effects that
house price inflation could ultimately have upon the wider economy.

Consequently, during the six months under review, it became a matter of when,
and by how much, interest rates would need to rise.  After some months of
deliberation by the MPC, UK base rate increased to 4.5%: +0.25% in May and
+0.25% in June.  The Federal Reserve followed with the first increase in US
rates since Autumn 2001: from 1% to 1.25%.

The tension between improving economic news and higher interest rates led to a
wide range of differential performance within the FTSE All Share Index.  The
strength of Reuters, Dixons, EMI and BAT were all particularly positive for the
Temple Bar portfolio, as was the absence from the portfolio of Vodafone, one of
the largest stocks in the market. Generally, Temple Bar's performance has
benefited from positions in out of favour companies, where operational progress
is reliant more on self-help than general economic strength.

Outlook

Although the Temple Bar portfolio is predominantly invested in UK equities, 
all asset markets increasingly take their lead from what is happening in the
US.  It is vital, therefore, to be aware of the changing economic outlook in
the world's largest economy.

At the start of this new cycle there is good reason to be cautious about the
short-term outlook for US equity and bond markets.  First, the preponderance of
'carry trades' in the bond market typically involves money borrowed at low
rates of interest for a short maturity, and re-investment of the proceeds in
longer-dated bonds.  With interest rates declining for most of the last decade,
these trades have proved very profitable.  However, as short-term rates
increase, and the trade becomes less attractive, a large amount of forcedbond
sales could push yields, and the costs of borrowing, higher, suppressing
economic growth.  This suggests that the Federal Reserve may seek to move
gradually when increasing rates.  However, if markets feel these moves are
being made too slowly, and inflation is likely to accelerate, bond yields could
rise.  It is not surprising that the Fed is currently talking of gradual
interest rate moves, while keeping open the option of moving faster if
necessary.

Second, although the US economy recovered strongly in the last four months of
2003, employment indicators were much less favourable.  This unusual pattern
could be attributable to a variety of factors including the growth in
international outsourcing, or the replacement of labour with capital, or even
the miscalculation of data.  Whatever the reason, it adds another layer of
economic complexity, especially as the strength of consumer spending has been
so important for the US economy in recent years.  Clearly, the Federal Reserve
would be unsettled if the labour market deteriorated in the short-term.
 Against this, the Fed would not want to be seen to be reacting to events by
letting the market dictate the timing of interest rate increases.

It is possible that fears of the unwinding of the carry trade are exaggerated
and that further increases in employment numbers and incomes will resolve the
personal debt issue.  But all eventualities must be considered when building a
portfolio.

Fortunately, these US constraints are generally not paralleled in the UK, where
the economy and financial markets appear to be less at risk. The strength of
the UK economy has encouraged full employment, but inflation remains fairly
subdued and recent interest rate increases may control house price inflation
without causing an abrupt reversal.

In recognition of our overall view that the downside risks are greater than the
upside rewards, the Temple Bar portfolio continues to be most exposed to
companies relatively less sensitive to the economic cycle and increases in
finance costs, particularly, for example, in the tobacco and utility sectors.

John Reeve
20 July 2004


                                     Twenty largest holdings
                                         at 30 June 2004                                 

Company                                Valuation     % of    
                                         £'000    portfolio 
                                                               
GlaxoSmithKline                         26,755       6.46      
                                                               
BP                                      21,094       5.09      
                                                               
Shell Transport & Trading               18,850       4.55      
                                                               
British American Tobacco                16,319       3.94      
                                                               
Abbey National                          15,992       3.86      
                                                               
HSBC                                    13,515       3.26      
                                                               
BT                                      12,986       3.14      
                                                               
Lloyds TSB                              12,053       2.91      
                                                               
Scottish Power                          10,788       2.60      
                                                               
Severn Trent                            10,445       2.52      
                                                               
Prudential                              10,443       2.52      
                                                               
Dixons                                  10,280       2.48      
                                                               
Unilever                                 9,447       2.28      
                                                               
Investec UK Smaller Companies Fund       9,085       2.20      
                                                               
Gallaher                                 9,060       2.19      
                                                               
Alliance & Leicester                     9,055       2.19      
                                                               
Rentokil                                 8,967       2.17      
                                                               
Diageo                                   8,776       2.12      
                                                               
EMI                                      7,140       1.72      
                                                               
Mitchells & Butlers                      7,070       1.71      
                                                             
                                       248,120      59.91     
                                                               


                          Statement of total return (incorporating the revenue account)         
                                        for the six months ended 30 June 2004                      

                          Six months              Six months                  Year ended  
                            ended                   ended                31 December 2003
                           30 June                 30 June                                    
                            2004                     2003                     (audited) 
                         (unaudited)             (unaudited)                                                          
                                                                                               
                  Revenue Capital  Total  Revenue   Capital    Total  Revenue  Capital  Total  
                                                                                               
            Notes £'000   £'000    £'000   £'000     £'000     £'000   £'000    £'000   £'000  
                                                                                               
Gains on        4    -    18,625  18,625     -      17,204    17,204     -     56,544   56,544 
investments                                                                                    
                                                                                               
Income          5 10,362     -    10,362  10,217       -      10,217   19,301     -     19,301 
                                                                                               
Investment         (328)  (491)    (819)   (271)     (406)     (677)   (584)    (875)  (1,459) 
management                                                                                     
fee                                                                                            
                                                                                               
Other              (175)     -     (175)   (200)       -       (200)   (411)      -     (411)  
expenses                                                                                       
                                                                                               
                                                                                               
Net return         9,859  18,134  27,993   9,746    16,798    26,544   18,306  55,669   73,975 
before                                                                                         
finance                                                                                        
costs and                                                                                      
taxation                                                                                       
                                                                                               
Interest           (912)  (1,368) (2,280)  (912)    (1,368)   (2,280) (1,823)  (2,736) (4,559) 
payable                                                                                        
                                                                                               
                                                                                              
Return on                                                                                      
ordinary                                                                                       
activities         8,947                   8,834                                               
before                                                                                         
taxation                  16,766  25,713          15,430      24,264   16,483  52,933   69,416 
                                                                                               
Taxation             -    -          -       -         -         -       -        -       -    
                                                                                               
                                                                                               
                                                                                               
Return on                                                                                      
ordinary                                                                                       
activities         8,947                   8,834                                               
after                                                                                          
taxation                  16,766  25,713          15,430      24,264   16,483  52,933   69,416 
                                                                                               
Ordinary          (5,004) -       (5,004) (4,882) -           (4,882) (15,190)    -    (15,190)
dividends                                                                                      
                                                                                               
Transfer to        3,943  16,766  20,709   3,952  15,430      19,382   1,293   52,933   54,226 
reserves                                                                                       
                                                                                               
Return per        15.45p  28.95p  44.40p  15.26p  26.65p      41.91p   28.46p  91.41p  119.87p 
ordinary                                                                                       
share                                                                                          
                                                                                               
Dividend           8.64p                   8.43p                       26.23p                  
per                                                                                            
ordinary                                                                                       
share                                                                                          
                                                                                               


                                            Consolidated cash flow statement
                                         for the six months ended 30 June 2004                      

                                           30 June      30 June   31 December   
                                             2004         2003          2003   
                                             £'000       £'000         £'000   
                                          (unaudited) (unaudited)    (audited) 
                                                                               
Cash flow from operating activities          9,232       9,781        17,643  
                                                                               
Return on investments and servicing of                                         
finance                                                                        
Interest paid                               (2,280)     (2,279)      (4,559)  
                                                                               
Capital expenditure and financial                                              
investment                                                                     
                                                                               
Purchases of investments                   (69,923)    (72,719)    (163,564) 
                                                                               
Sales of investments                        81,840      85,557       151,726  
                                                                               
                                            11,917      12,838       (11,838) 

                                                                               
Equity dividends paid                      (10,308)    (10,058)      (14,940) 
                                                                               
                                                                               
                                                                               
Cash inflow/(outflow) before management of                                     
liquid resources and financing                8,561     10,282       (13,694) 
                                                                               
Management of liquid resources                                                 
Money market deposits (placed) /withdrawn   (8,882)    (10,072)       11,850  
                                                                               
Financing                                                                      
Gross proceeds from issue of shares              -          49           49    
                                                                               
(Decrease)/increase in cash                   (321)        259        (1,795)  
                                                                               
                                                                               
                                                                               
Reconciliation of net cash flow to movement                                    
in net debt                                                                    
                                                                               
(Decrease)/increase in cash                   (321)        259        (1,795)  
                                                                               
Cash used to increase/(decrease) liquid                                        
resources                                     8,882     10,072       (11,850) 
                                                                               
                                                                              
Change in net debt                            8,561     10,331       (13,645) 
Net debt at 1 January                       (61,722)   (48,077)      (48,077) 
                                                                               
Net debt at 30 June                         (53,161)   (37,746)      (61,722) 
                                                                               


                                        Consolidated summary balance sheet
                                                 at 30 June 2004                                 

                                     30 June 2004   30 June 2003   31 December 2003
                                          £'000          £'000              £'000      
                                      (unaudited)    (unaudited)          (audited)    
                                                                               
Investments                             414,133        338,967            402,895     
                                                                               
Net current assets/(liabilities)          1,917         21,530             (7,554)     
                                                                               
Amounts falling due after one year      (63,000)       (63,000)           (63,000)   
                                                                               
Net assets                              353,050        297,497            332,341     
                                                                               
Attributable to ordinary                                                       
shareholders                            353,050        297,497            332,341     
                                                                               
Net asset value per ordinary share:      609.64p        513.71p            573.88p     
                                                                               
Number of shares in issue            57,911,367     57,911,367         57,911,367   
                                                                               

Notes to the interim results

1. Principal activity

The principal activity of the Company remains that of an investment trust.  The
principal activity of its trading subsidiary is investment dealing.

2. Recharges to capital and accounting policies

40% (2003, 40%) of the management fee and interest payable on the debenture
stocks is charged to the revenue account and 60% (2003, 60%) is charged to
capital reserves, net of corporation tax relief and inclusive of any related
irrecoverable value added tax.

The unaudited interim financial statements have been prepared on a basis
consistent with the statutory financial statements for the year ended 31
December 2003.

3. Dividend

The interim dividend of 8.64p (2003: 8.43p) per ordinary share will absorb £
5,004,000 and will be paid on 30 September 2004 to shareholders registered on
17 September 2004.

4. Gains on investments

                               30 June        30 June       31 December
                                  2004           2003              2003                      
                                 £'000          £'000             £'000                                
                                                                              
Net realised gains/(losses)     11,792         (7,898)              711
on sales                                                                      
                                                                              
Net increase in unrealised                                                    
appreciation                     6,833         25,102            55,833
                                                                             
Gains on investments            18,625         17,204            56,544
                                                                              


5. Income

                                        30 June         30 June     31 December
                                           2004            2003            2003
                                          £'000           £'000           £'000
                                                                               
UK dividends net of tax credits           9,535           8,942          17,148
                                                                               
Income from UK fixed interest                                                  
securities                                  471             721           1,362
                                                                               
Scrip dividends                             194             188             235
                                                                               
Bank interest                               162             277             465
                                                                               
Underwriting commission                       -               -               2
                                                                               
Dealing profit                                -              89              89
                                                                              
                                         10,362          10,217          19,301
                                                                               

Comparative figures

The information for the year ended 31 December 2003 does not constitute
statutory accounts, but has been extracted from the latest published audited
accounts, which have been filed with the Registrar of Companies.  The report of
the auditors on those accounts contained no qualification or statement under
section 237(2) or (3) of the Companies Act 1985.

Publication

This interim report is being sent to shareholders and copies will be made
available to the public at the registered office of the Company.