Interim Results

F&C Pacific Inv Tst 
10 October 2002

EMBARGOED UNTIL 7AM THURSDAY 10 OCTOBER 2002


Contact: Charles Brock, F&C Management Limited, tel: [phone]/Emma Chilvers, Lansons Communications, 
tel: [phone]



                        F&C PACIFIC INVESTMENT TRUST PLC
                   Unaudited Preliminary Statement of Results
                       for the half-year to 31 July 2002



SUMMARY OF CONSOLIDATED RESULTS


                                                            31 July 2002   31 January 2002   % change

                  Consolidated net assets                       £226.64m          £252.35m      -10.2

                  Consolidated net asset value per share         108.57p           119.65p       -9.3

                  Share price                                     88.50p            98.25p       -9.9



Commenting on these results Christopher Purvis, the Chairman said:


Objective

Your Company provides its shareholders with a broad-based exposure to equity
markets across the Pacific region. Many investors, who consider that this region
is important and attractive and would like it represented in their portfolios,
choose to invest in the region through a trust which gives coverage of all of
the major markets and whose managers make the asset allocation decision between
the various markets, as well as selecting stocks for the portfolio. Your Company
is one of a small number of trusts that provides this service.

Your Board measures the successes and failures of the Manager by comparing its
performance against an index. The market capitalisation of Japan, because of the
high level of cross-shareholdings between companies, is commonly regarded as
overstated. Nevertheless, the Japanese market is directly reflected in most of
the indices which measure the whole Pacific region and as a result Japan forms a
very high proportion of such indices. An index based purely on market
capitalisation, such as MSCI AC Asia Pacific Free, would be made up of 64.6%
Japan and 35.4% of the rest of the region. We believe that our shareholders wish
to see a diversified portfolio rather than one so concentrated on Japan. Your
Board has therefore agreed a composite index which comprises 50% Japan and 50%
the rest of the region (the 'benchmark'). It is the objective of the Company to
outperform the benchmark.


Market Environment

During the six months under review in this report, stock markets around the
world have been very weak. The FTSE World Index fell by 21.7% in sterling terms.
Your exposure to Pacific markets, while also resulting in negative returns over
the period, has provided a better performance than that of the rest of the
world. Our composite benchmark against which we measure the performance of the
Manager fell by 6.8%.


Portfolio Performance

Net asset value per share of your Company underperformed the benchmark during
the six-month period, falling by 9.3%. The main reason for this poor performance
was that your Manager, being concerned about developments in Japan at the
beginning of the period, maintained an underweight position in Japan against the
benchmark and a corresponding overweight position in other regional markets. In
the wake of the collapse of other world markets, particularly the United States,
the markets of South East Asia fell more than Japan, which, in these
circumstances, was considered by investors something of a safe haven. Japanese
market performance was also helped by the strength of the Japanese yen against
the US dollar. Although some other Asian currencies also rose against the US
dollar, as a group they fell against the Japanese yen. This harmed relative
performance due to our underweight position in our Japanese yen assets and our
Japanese yen borrowings.

Gearing had a negative impact on the performance although the net level of
gearing was reduced from 9.6% at the beginning of the period to 5.5% at the end
of the period, adjusted for subsidiary companies. Your Manager does not expect
the market environment to improve in the short term and has since reduced
effective gearing to zero.

The selection of individual stocks in Japan was successful, whilst the portfolio
in the rest of Asia performed in line with the benchmark.

Management

During the period your Board has focused particular attention on the performance
of your Manager and believes that changes made will result in improved relative
performance. Steps have been taken to reorganise and strengthen the management
team with two new senior appointments on the Pacific desk. In addition, the
Manager has recently announced the appointment of a new Chief Investment Officer
who will be working closely with the team managing your portfolio. Whilst it is
true that underlying markets have been extremely volatile over the last few
years, your Board has been concerned about the volatility of investment
performance over that period, in particular the fact that the Company's
portfolio underperformed the benchmark by such a wide margin in 2000 and 2001.
The Board has agreed with the Manager that it should take steps to reduce the
volatility of relative performance in line with the objective outlined above.

Fee Structure

In the context of our focus on the performance of the Manager your Board has
been exploring the possibility of changing the basis of remuneration to bring it
more into line with the objectives I have described above. It is our intention
to introduce a new fee structure which will come into effect from 1 February
2003. The details of the new structure will be published in the next annual
report, but I am able to tell you now that, while the Manager will have the
opportunity to earn higher fees if it does well, in the event that it performs
less well than the benchmark, the Manager will receive less than under the
present system.

Capital Structure

Since the end of the period we have decided to repay the long-term, Japanese yen
loan as we have adequate facilities in place for our anticipated future
borrowing requirements.

We continue to seek to add to shareholder value by buying back shares for
cancellation when the discount to net asset value at which your shares trade is
wide. From the beginning of the period to date, we have bought and cancelled
7,850,000 shares (3.7% of shares in issue at the beginning of the period) at an
average discount to net asset value of 18.7%.

Outlook

Global equity markets remain volatile and the economic outlook is uncertain.
Pacific markets cannot be immune from this and the global difficulties are
compounded by the serious structural issues to be addressed by policy makers and
companies in Japan. As and when these issues are addressed, there is the
potential for the Japanese market to perform extremely well. Many Japanese
companies remain world leaders in their field and generate very strong cash
flow. The recent outperformance of the Pacific region is encouraging. The
Manager remains of the view that the best investment opportunities in the region
lie outside Japan. Whilst the region is clearly affected by global trends, many
Asian economies continue to outperform in terms of growth and Asian companies
outside Japan continue to be valued by stock markets more cheaply than their
counterparts in the rest of the world. On this basis your Board believes that
the case for investing in the Asia Pacific region is stronger than it has been
for some time.


Christopher Purvis
October 2002



Unaudited Consolidated Balance Sheet
                                                             31 July 2002     31 July 2001   31 January 2002
                                                                               (restated)*            £'000s
                                                                   £'000s           £'000s
Fixed assets
Tangible assets                                                         -            1,206                 -
Investments                                                       237,749          298,296           278,046
                                                                  237,749          299,502           278,046

Current assets
Investments - freehold land held for resale                             -            7,865                 -
Debtors                                                             3,407            3,002             3,855
Cash at bank and short-term deposits                               26,616           31,770            14,180
                                                                   30,023           42,637            18,035

Current liabilities
Creditors: amounts falling due within one year
Foreign currency loans                                                  -         (19,646)                 -
Other                                                             (1,040)          (3,626)           (4,060)
                                                                  (1,040)         (23,272)           (4,060)

Net current assets                                                 28,983           19,365            13,975

Total assets less current liabilities                             266,732          318,867           292,021
Creditors: amounts falling due
after more than one year
Foreign currency loans                                           (40,089)         (42,140)          (39,670)
Provision for liabilities and charges                                   -             (37)                 -
                                                                 (40,089)         (42,177)          (39,670)

Net assets                                                        226,643          276,690           252,351

Capital and Reserves
Called up share capital                                            52,187           54,167            52,725
Capital redemption reserve                                          5,384            3,404             4,846
Share premium                                                           5                5                 5
Capital reserves                                                  160,306          207,964           186,202
Revenue reserve                                                     8,761           11,150             8,573
Total equity shareholders' funds                                  226,643          276,690           252,351

Net asset value per ordinary share - pence                         108.57           127.70            119.65


* Restated to comply with FRS19 'Deferred Tax'.


The geographical distribution of total assets less current liabilities
(excluding loans) at 31 July 2002 was: Japan - 45.2%; Australasia - 15.7%; South
Korea - 8.2%; Hong Kong - 7.9%; Taiwan - 5.9%; Singapore - 5.6%; Other - 11.5%.


Unaudited Consolidated Statement of Total Return (incorporating the Revenue
Account*) for the 6 months to 31 July

                                                                                                                      
                                                                           2002                                   2001

                                            Revenue          Capital      Total    Revenue       Capital         Total
                                             £'000s           £'000s     £'000s              (restated)+   (restated)+
                                                                                    £'000s        £'000s        £'000s

  Gains on tangible fixed assets                  -                -          -          -            21            21

  Losses on fixed asset investments               -         (22,425)   (22,425)          -      (63,524)      (63,524)

  Other (losses)/gains                         (40)            (986)    (1,026)      (189)          (52)         (241)

  Income                                      2,550                -      2,550      4,218             -         4,218

  Management fee                            (1,307)                -    (1,307)    (1,411)             -       (1,411)

  Other expenses                              (414)             (56)      (470)    (1,061)          (36)       (1,097)

  Net return before finance costs and           789         (23,467)   (22,678)      1,557      (63,591)      (62,034)
  taxation                                                                                                            

  Interest payable and similar charges        (396)                -      (396)      (887)             -         (887)

  Return on ordinary activities before          393         (23,467)   (23,074)        670      (63,591)      (62,921)
  taxation                                                                                                            

  Taxation on ordinary activities             (205)            (264)      (469)      (385)           303          (82)

  Return attributable to equity                 188         (23,731)   (23,543)        285      (63,288)      (63,003)
  shareholders                                                                                                        

  Dividend on ordinary shares                     -                -          -          -             -             -

  Amount transferred                            188         (23,731)   (23,543)        285      (63,288)      (63,003)
  to/(from) reserves                                                                                                  

  Return per ordinary share - pence            0.09          (11.31)    (11.22)       0.13       (28.91)       (28.78)


* The revenue column of this statement is the profit and loss account of the
Group.


+ Restated to comply with FRS19 'Deferred Tax'.

All revenue and capital items in the above statement derive from continuing
operations.


Unaudited Summarised Consolidated Cash Flow Statement for the 6 months to 31 July


                                                                                    2002                   2001
                                                                                  £'000s                 £'000s


Net cash inflow from operating activities                                            845                  1,408
Interest paid                                                                      (399)                  (759)
Total tax paid                                                                     (237)                  (392)
Net cash inflow from financial investment                                         18,428                 27,659
Equity dividends paid                                                            (2,214)                (2,307)
Net cash inflow before use of liquid resources and
financing                                                                         16,423                 25,609
(Increase)/decrease in short-term deposits                                         (379)                  3,547
Net cash outflow from financing                                                  (2,165)               (20,955)
Increase in cash during the period                                                13,879                  8,201


The Interim financial statements have been prepared on the basis of the
accounting policies set out in the Company's financial statements at 31 January
2002.

The Board recommends that no interim dividend payment be made.

The Report and Accounts will be posted to shareholders in late October 2002.
Copies may be obtained during normal business hours from the Company's

Registered Office, Exchange House, Primrose Street, London EC2A  2NY.

By order of the Board

F&C Management Limited, Secretary

9 October 2002


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