Interim Results

ALLIANCE TRUST PLC
16 August 1999


INTERIM REPORT FOR THE HALF YEAR ENDED 31 JULY 1999 (UNAUDITED)
---------------------------------------------------------------

THIS INTERIM REPORT WILL BE POSTED TO STOCKHOLDERS ON MONDAY, 23
AUGUST 1999 AND WILL ALSO BE MADE AVAILABLE TO THE PUBLIC AT THE
COMPANY'S REGISTERED OFFICE, MEADOW HOUSE, 64 REFORM STREET, DUNDEE
DD1 1TJ AND AT THE OFFICES OF THE COMPANY'S PAYING AGENTS,
COMPUTERSHARE SERVICES PLC, OWEN HOUSE, 8 BANKHEAD CROSSWAY NORTH,
EDINBURGH EH11 4BR.

FINANCIAL HIGHLIGHTS (UNAUDITED)
--------------------------------
     STOCK UNIT DATA
     ---------------

     INTERIM DIVIDEND PAYABLE 1 OCTOBER 1999       24.0P      +9.1%

     NET ASSET VALUE AT 31 JULY 1999               £35.73     +4.3%

     RETURN
     ------

     TOTAL RETURN ON COMPANY'S ASSETS                        +5.5%
     (HALF YEAR)

RESULTS
-------

MARKETS AND ECONOMIES
---------------------

THE INTEREST RATE REDUCTIONS LAST AUTUMN CONTINUED TO WORK POWERFULLY
AND MANY MARKETS FURTHER RECOVERED LOST GROUND.  ALTHOUGH STILL QUITE
FRAGILE, CONFIDENCE IN THE REAL ECONOMIES REBOUNDED SHARPLY IN ASIA
AND IN EUROPE, INCLUDING THE UK.  MEANWHILE, ECONOMIC MOMENTUM IN THE
US HAS PROVED VERY STRONG AND THE BALANCE OF PAYMENTS HAS
DETERIORATED FURTHER.  HOWEVER, THE US ECONOMY IS NOT, AS YET,
EXPERIENCING OVERT INFLATION CAUSED BY EITHER LABOUR COSTS OR A
WEAKER DOLLAR.

THE US FEDERAL RESERVE HAS JUDGED THAT THERE IS NOW ENOUGH DEMAND IN
THE WORLD ECONOMY TO ALLOW A RISE IN US INTEREST RATES.  THIS HAS
ALREADY BEGUN TO CORRECT SOME OF THE SYMPTOMS OF SPECULATIVE EXCESS.
ENCOURAGINGLY, AS THE SUPPORT OF LOW INTEREST RATES RECEDES, COMPANY
PROFITS, NOTABLY AMONG US CORPORATIONS, HAVE SHOWN STRONG GROWTH.

CAPITAL PERFORMANCE
-------------------

IN THIS ENVIRONMENT, STOCKMARKETS, MEASURED IN STERLING TERMS, SHOWED
A REMARKABLE DEGREE OF DIVERSITY. INCREASES OF 35% IN JAPAN
CONTRASTED WITH WEAKNESS IN EUROPE COMPOUNDED BY THE EURO, AN 8.5%
INCREASE IN THE UK AND A 5.3% RISE IN THE US.  OUR OWN NET ASSET
VALUE INCREASE OF 4.3% REFLECTED THE MIX OF AREAS IN WHICH WE ARE
INVESTED.  AGAINST THE BROAD INDICES, OUR STOCK PERFORMANCE WAS
GENERALLY GOOD IN THE US BUT SUFFERED IN THE UK AS THE PERFORMANCE OF
SMALLER COMPANIES AND CYCLICAL SECTORS PICKED UP AFTER MANY DULL
YEARS.

EARNINGS AND DIVIDENDS
----------------------

OUR EARNINGS HAVE BEEN DISTORTED BY SPECIAL PAYMENTS AND THE
REINVESTMENT OF CASH IN LOWER YIELDING ASSETS, BUT THE UNDERLYING
GROWTH OF DIVIDENDS REMAINS HEALTHY.  THE REDUCTION IN THE DISPARITY
BETWEEN INTERIM AND FINAL DIVIDENDS IS CONTINUED WITH AN INTERIM
DIVIDEND OF 24P PER ORDINARY STOCK UNIT.  THE BOARD EXPECTS TO
MAINTAIN A FINAL DIVIDEND OF 40.5P, PAYABLE IN MAY 2000.

INVESTMENT CHANGES
------------------

               VALUATION                                  VALUATION
               31 JANUARY                      APPRCN     31 JULY
               1999        PURCHASES   SALES   (DEPRCN)   1999
£M

OIL AND
MINERALS          116           4       (3)       53          170

GENERAL
INDUSTRIAL        207          20      (20)       14          221
CONSUMER
GOODS             316           9       (5)      (15)         305

SERVICES          630          58      (26)       14          676

UTILITIES          44           -        -        (5)          39

FINANCIALS        314          30      (20)       16          340

FIXED INTEREST     24           8       (5)       (1)          26
                ------        ----     ----      ----       ------
                1,651         129      (79)       76        1,777
                ------        ----     ----      ----       ------

INVESTMENT
----------

HAVING TAKEN A CAUTIOUS STANCE THROUGH THE AUTUMN CRISIS OF 1998, WE
MADE A NET INVESTMENT OF £50M TO GAIN FULLER EXPOSURE TO IMPROVING
MARKETS.  THIS TOOK OUR LIQUIDITY DOWN FROM 5 PER CENT TO 2 PER CENT.
GEOGRAPHICALLY, THIS WAS APPLIED MAINLY IN EUROPE, IN ANTICIPATION OF
RECOVERY IN THE CORE ECONOMIES LATER IN THE YEAR AND IN THE FAR EAST
AND JAPAN TO REBUILD WEIGHTINGS FOR SIMILAR REASONS.

IN TERMS OF SECTOR FOCUS, ONLY LIMITED ADDITIONS WERE MADE TO
TECHNOLOGY AND PHARMACEUTICAL STOCKS FOLLOWING PRICE FALLS AS FURTHER
NEGATIVE REACTION TO HIGH VALUATIONS WAS EXPECTED.

WE ALLOCATED £7.5M FURTHER CAPITAL TO  ALLIANCE TRUST SAVINGS (ATS)
PRIOR TO ITS BECOMING AN AUTHORISED INSTITUTION UNDER THE BANKING ACT
1987.  THIS WAS DONE IN ANTICIPATION OF THE TRANSITION TO INDIVIDUAL
SAVINGS ACCOUNTS (ISAS) AND UNIFIED REGULATION.

SAVINGS PRODUCTS
----------------

ATS HAS HAD AN EXCEPTIONALLY BUSY SIX MONTHS WITH THE END OF PEP
SUBSCRIPTIONS, THE START OF ISAS AND A NUMBER OF RELATED CHANGES.
PEP RECEIPTS IN THE FINAL TWO MONTHS SHOWED A 28% INCREASE ON THE
EQUIVALENT PERIOD LAST YEAR AND ATS CONTINUED TO SEE SIGNIFICANT
GROWTH IN ITS INVESTMENT AND PENSION PLANS.  BY THE END OF JULY
INVESTORS' ASSETS TOTALLED £885M, AN INCREASE OF 15% OVER JANUARY
1999.

ATS HAS INTRODUCED TO ITS PRODUCT RANGE A STOCKS AND SHARES ISA, A
CASH ISA AND THE ONLY INVESTMENT TRUST CAT STANDARD ISA.  THESE HAVE
BEEN VERY WELL RECEIVED.

INVESTMENT OUTLOOK
------------------

THE WORLD'S KEY POLICY MAKERS ARE LIKELY TO AIM FOR SUSTAINABLE
GROWTH AND STAND READY, AS THEY DID LAST AUTUMN, TO RESPOND TO
NEGATIVE EVENTS.  MARKETS HAVE ALREADY BEGUN TO ANTICIPATE QUITE
SUBSTANTIAL TIGHTENING IN SHORT TERM INTEREST RATES IN THE US, AND IT
CAN BE TAKEN AS A MAJOR SOURCE OF COMFORT THAT THE AUTHORITIES ARE
INCREASING THEIR ABILITY TO TAKE SUPPORTIVE ACTION IN ANOTHER
EMERGENCY.

CORPORATE PROFITS COULD CONTINUE TO BENEFIT FROM THE BETTER GLOBAL
ECONOMIC OUTLOOK.  GLOBALISATION AND MERGERS, IN PURSUIT OF COST
CONTAINMENT AND MARGIN CONTROL, ARE LIKELY TO REMAIN AS A SIGNIFICANT
RESPONSE TO THE VERY COMPETITIVE ENVIRONMENT WHICH IS EXPECTED TO
PERSIST.

WE MAY NOW BE ENTERING A LONG-AWAITED PHASE WHERE EQUITY VALUES MOVE
FROM BEING LED PRIMARILY BY FALLING INFLATION AND BOND YIELDS, TO
BEING PREDOMINANTLY PROFIT DRIVEN.  IT IS POSSIBLE THAT THIS
TRANSITION, ALTHOUGH UNLIKELY TO BE EASY OR PERFECTLY SMOOTH, COULD
BE SOMEWHAT LESS TRAUMATIC THAN EARLIER FEARED.  NEVERTHELESS, FOR
THE SHORT TERM WE ARE CAUTIOUS.  WE ARE ALLOWING LIQUIDITY TO
REBUILD, AND WE CONTINUE TO TAKE OPPORTUNITIES TO SELL STOCKS WHERE
VALUATIONS ARE UNJUSTIFIED.

GEOGRAPHICAL SPREAD
-------------------

               UK                    51%
               USA                   25%
               EUROPE                14%
               JAPAN                  5%
               REST OF WORLD          3%
               CASH                   2%

YEAR 2000
---------

PREPARATIONS FOR THE TRANSITION TO THE YEAR 2000 ARE COMPLETE IN ALL
MATERIAL RESPECTS.

MARKETING
---------

THE ALLIANCE TRUST FOCUSES ON PROVIDING INVESTMENT PERFORMANCE FOR
ITS STOCKHOLDERS AND ATS FOCUSES ON PROVIDING CUSTOMERS WITH
ADDITIONAL VALUE THROUGH ITS PRODUCTS.  MARKETING IS THUS CARRIED OUT
BY ATS WITH A VIEW TO GROWING ITS BUSINESS AND RAISING THE PUBLIC
AWARENESS OF THE ALLIANCE TRUSTS.  TO DATE, GROWTH HAS LARGELY COME
BY WORD OF MOUTH RECOMMENDATION AND MARKETING EXPENSE HAS BEEN
MINIMAL.

THERE HAS BEEN MUCH COMMENT IN THE PRESS ABOUT THE MARKETING OF
INVESTMENT TRUSTS AND A GENERIC CAMPAIGN, SPONSORED BY THE
ASSOCIATION OF INVESTMENT TRUST COMPANIES, WILL COMMENCE IN THE
AUTUMN. WE ARE NOT PARTICIPATING IN THIS CAMPAIGN AS THE COST TO US
IS HIGH IN RELATION TO OUR OVERALL EXPENSES AND THE RETURNS ARE TOO
UNCERTAIN.  OUR RESOURCES ARE DEVOTED TO IMPROVING PRODUCTS AND
SERVICE TO INVESTORS AND PROMOTIONAL EXPENDITURE IS ONLY INCURRED
WHERE WE JUDGE THIS TO BE EFFECTIVE AND WORTHWHILE.  THERE REMAINS
CONSIDERABLE SCOPE FOR GROWTH IN OUR ESTABLISHED MARKETS AND ATS WILL
CONTINUE TO CONCENTRATE ON THESE.

FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------

CONSOLIDATED             SIX MONTHS       SIX MONTHS      YEAR TO
------------             TO               TO              31 JANUARY

£000                     31 JULY 1999     31 JULY 1998    1999

REVENUE RETURN
--------------

INCOME
DIVIDENDS AND INTEREST      26,784           24,455         46,241
OTHER INCOME                 1,420            1,550          2,366
                            ------           ------         ------
TOTAL INCOME                28,204           26,005         48,607
EXPENSES                    (2,429)          (2,240)        (4,182)
                            ------           ------         ------
NET RETURN BEFORE
INTEREST PAYABLE AND
TAXATION                    25,775           23,765         44,425

INTEREST PAYABLE              (704)            (630)        (1,292)
                            ------           ------         ------
RETURN BEFORE TAXATION      25,071           23,135         43,133
TAXATION                    (4,464)          (4,747)        (9,070)
                            ------           ------         ------
                            20,607           18,388         34,063
MINORITY INTEREST -
EQUITY                        (245)            (267)          (503)
                            ------           ------         ------
REVENUE AFTER TAXATION      20,362           18,121         33,560

DIVIDEND ON PREFERENCE
STOCK - NON-EQUITY             (49)             (34)           (83)
                             ------           ------         ------
REVENUE RETURN
ATTRIBUTABLE TO EQUITY
STOCKHOLDERS                20,313           18,087         33,477
                            ------           ------         ------
REVENUE RETURN PER
ORDINARY STOCK UNIT         40.30P           35.89P         66.42P

CAPITAL RETURN
--------------

REALISED GAINS ON
INVESTMENTS                 25,712           56,647         85,687

INCREASE IN UNREALISED
APPRECIATION                49,701           91,958         78,190

FOREIGN EXCHANGE LOSSES       (749)            (182)          (429)
                            ------           ------         ------
                            74,664          148,423        163,448

MINORITY INTEREST -
EQUITY                         173               32           (155)
                            ------           ------         ------
CAPITAL RETURN
ATTRIBUTABLE TO ORDINARY
STOCKHOLDERS                74,837          148,455        163,293
                            ------          -------        -------

CAPITAL RETURN PER
ORDINARY STOCK UNIT         148.49P          294.55P        324.00P

TOTAL RETURN
------------

REVENUE RETURN
ATTRIBUTABLE TO
ORDINARY STOCKHOLDERS       20,313           18,087         33,477

CAPITAL RETURN
ATTRIBUTABLE TO
ORDINARY STOCKHOLDERS       74,837          148,455        163,293
                            ------          -------        -------
TOTAL RETURN
ATTRIBUTABLE TO
ORDINARY STOCKHOLDERS       95,150          166,542        196,770
                            ------          -------        -------
TOTAL RETURN PER
ORDINARY STOCK UNIT         188.79P          330.44P        390.42P


SUMMARISED BALANCE SHEET
------------------------
                            31 JULY          31 JULY       31 JANUARY

                            1999             1998          1999

INVESTMENTS AT
VALUATION                   1,776,808        1,642,934     1,651,282



NET CURRENT ASSETS             37,607           77,257        85,936

                            ---------        ---------     ---------

TOTAL ASSETS LESS
CURRENT LIABILITIES         1,814,415        1,720,191     1,737,218


LONG TERM LIABILITIES
AND PRIOR CHARGES             (13,541)         (10,969)      (11,181)

                            ---------        ---------     ---------

ORDINARY STOCKHOLDERS'
FUNDS                       1,800,874        1,709,222     1,726,037

                            ---------        ---------     ---------

NET ASSET VALUE PER
ORDINARY STOCK UNIT         £35.73           £33.91        £34.25


NOTES TO FINANCIAL STATEMENTS
-----------------------------

1.     THE REVENUE RETURN STATEMENT IS THE PROFIT AND LOSS ACCOUNT OF
       THE GROUP.

2.     OTHER INCOME INCLUDES INCOME ARISING IN SUBSIDIARY COMPANIES
       OF £1,329,000 (£1,265,000).  EXPENSES INCLUDE £1,083,000
       (£1,011,000) INCURRED BY THE SUBSIDIARY COMPANIES.

3.     THESE RESULTS SHOULD NOT BE TAKEN AS A GUIDE TO THE FULL
       YEAR AND DO NOT CONSTITUTE THE GROUP'S STATUTORY ACCOUNTS.

4.     THE ACCOUNTING POLICIES ARE CONSISTENT WITH THOSE APPLIED
       IN THE PREPARATION OF THE ANNUAL STATUTORY ACCOUNTS.  IN
       THE INTERIM STATEMENTS, NET CURRENT ASSETS ARE STATED AFTER
       THE PROVISION OF £12,096,000 (£11,088,000) FOR PAYMENT OF
       THE INTERIM DIVIDEND AND £8,217,000 (£6,999,000) BEING
       THE BALANCE OF REVENUE ATTRIBUTABLE TO ORDINARY
       STOCKHOLDERS.

5.     THE FIGURES FOR 31 JANUARY 1999 ARE EXTRACTED FROM THE
       FULL ACCOUNTS WHICH HAVE BEEN FILED WITH THE REGISTRAR
       OF COMPANIES AND WHICH CONTAINS AN UNQUALIFIED REPORT
       FROM THE AUDITOR.

THE DIVIDENDS ON THE COMPANY'S PREFERENCE STOCKS ARE ALSO PAYABLE ON
1 OCTOBER 1999 TO HOLDERS ON THE REGISTER ON 6 SEPTEMBER 1999.

THE PRESS RELEASE SUMMARISING THESE INTERIM RESULTS FOLLOWS AND
QUESTIONS SHOULD BE ADDRESSED TO MR GAVIN SUGGETT OR MR ALAN YOUNG
(TEL [phone] - EXTENSION 2410 AFTER HOURS).

PRESS RELEASE
-------------

      INTERIM DIVIDEND UP 9.1% TO 24.0P PER ORDINARY STOCK UNIT

      NET ASSET VALUE UP 4.3% TO £35.73 PER ORDINARY STOCK UNIT

      TOTAL RETURN ON COMPANY'S ASSETS FOR HALF YEAR UP 5.5%

      ALLIANCE LAUNCHES THE FIRST INVESTMENT TRUST CAT STANDARD ISA

      THE FULL TEXT OF THE INTERIM REPORT FOLLOWS