Final Results

RNS Number : 3076E

British Portfolio Trust PLC

17 December 2009

For Immediate Release 17th December 2009

BRITISH PORTFOLIO TRUST plc

RESULTS FOR THE YEAR ENDED 31ST OCTOBER 2009

The following comprises extracts from the Company's Annual Financial Report for the year ended 31st October 2009. The full Annual Financial Report is available to be viewed on or downloaded from the Company's website at www.britishportfoliotrust.co.uk. Copies will be mailed to shareholders shortly.

Chairman's Statement

A final dividend has been declared of 3.30p per Ordinary Share, which will be payable on 2nd March 2010 to shareholders on the main register at close of business on 29th January 2010.

The full impact of the recent tumultuous events on company dividends, particularly in the financial sector, has been reflected in our revenue account this year. However, the Board has decided to draw on the Company's revenue reserves to maintain the dividend at last year's level, excluding the special dividend paid in respect of the management fee VAT refund. This reserve has been built up in the past in order to be able to smooth dividend distributions in more difficult times. It is not possible to forecast with certainty the likely dividend for the year ending 31st October 2010. However, dividend distributions from the UK's largest listed companies, which feature strongly in your portfolio, are very heavily dependent on the level of sterling compared to the US dollar and also the oil price.

The net asset value per Ordinary Share increased 13.6% during the financial year and our share price increased by 16.5%. Relative to our benchmark, the FTSE All-Share Index, which returned 18.4%, the return during the period under review overall was disappointing, largely due to poor stock selection, although there has been an improvement in relative performance trend seen since February, which has been maintained since the year end. An attribution analysis showing relative performance is shown on the previous page. A more complete review of performance is set out in the Manager's Review.

During the period under review, the Company bought back 3,930,480 Ordinary Shares for cancellation. A further 188,000 Ordinary Shares have been purchased for cancellation since the year end and a further 894,000 Ordinary Shares to be held in treasury for reissue into the market at a future date. The Board intends to seek renewed authority from shareholders to buy back up to 15% of the issued share capital of the Company at the forthcoming Annual General Meeting, to be held at JPMorgan Cazenove's offices on Tuesday 9th February 2010. We continue to believe that this is an important authority which is in the interests of shareholders.

Borrowings were 3.4% of net assets at the end of October. The Company currently has a facility of £5 million with ING Bank, of which £1.5 million was drawn down at the date of this report. Gearing had a positive impact on performance this year.

For some time, and particularly in the light of recent disappointing performance, the Board has been considering the level and structure of the Manager's remuneration. As a consequence, the Board has negotiated a performance-related fee, which entails a significantly lower base management fee of 0.5%, with the objective of ensuring that shareholders will only pay a higher fee where this is merited by outperformance against the benchmark index. The Board has agreed with the Manager a rolling three-year approach to measuring performance against the benchmark and has stipulated that in the first three years of this new approach (where the performance will initially be judged on a one-year, then two-year basis, before the rolling three-year pattern is established), that the management fee should not exceed 1% of net assets, irrespective of the level of outperformance, which is equivalent to the current base management fee. Thereafter, the base management fee will remain 0.5% and performance will be rewarded by a fee referenced to a sliding scale relative to the benchmark index, which will increase from 0.25% at 1% per annum outperformance to 0.75%- a fee which is capped- if performance is more than 2.5% per annum in excess of the benchmark index. The Board believes that this new structure provides a better alignment of the interests of shareholders and the Manager, RCM, as well as ensuring that the Manager is only rewarded with the performance element to the extent that future performance against the Index is strong. Details of the changes in the management fee structure are shown in more detail in the Directors' Report on page 17 of the Annual Financial Report.

This year, three Directors, Nicholas Gold, Simon White and I are retiring, Nicholas and myself by rotation, and are offering ourselves for re-election at the Annual General Meeting. Simon White, as an employee of the Manager, is standing for annual re-election.

Following the sharp contraction in economic activity at the beginning of the year, it appears that many of the world's leading economies are now emerging from recession and that the extraordinary steps taken to stabilise the world's financial system have averted a disastrous collapse, which on occasions last year seemed a real possibility. Nevertheless, we now have very high levels of government debt, high and rising unemployment and the necessity for further refinancing in many important areas of the credit markets, in particular commercial property. There are therefore many reasons to remain cautious about pace and strength of any economic recovery. However, many of the stocks within the portfolio have been chosen by the Manager for their defensive qualities and with the prospect of a prolonged period of very low interest rates, equities may well prove to be a better investment than most of the alternatives, particularly as they have historically provided some measure of protection against inflation over the long term.

A C Barker

Chairman

17th December 2009

Investment Manager's Review

Although the UK stock market rose during British Portfolio Trust's financial year, volatility was extreme with bouts of panic in the first half, and a second half that, from the lows of early March, witnessed one of the most powerful equity market recoveries ever recorded.

Portfolio Review

Although the Trust did not match the performance of the FTSE All-Share Index this financial year, which is clearly disappointing, all of this underperformance occurred during the final two months of 2008. The poor performance during November and December occurred for the same broad reasons as in the year to 31st October 2008, notably: the performance of the small cap stocks in the portfolio, stock selection in financials, a cyclical bias and the impact of modest gearing. Across the year as a whole approximately 2.6% of the underperformance of the portfolio against the benchmark arose from stock selection and sector strategy. Sector strategy was not dominated by any particular sector, but in the round the portfolio suffered from over exposure to more cyclical sectors in the early part of the year. The fund was also underweight in the retail sector which performed surprisingly well during this period as interest rate cuts supported consumer spending.

Stock selection was most affected by the holding in Gulf of Mexico oil exploration and production company, Energy XXI, which cost performance 0.9%. During the year we re-registered the stock from a London to a US listing to improve liquidity and sold a substantial number of shares. Although Energy XXI has some sound producing assets and some exciting exploration possibilities we reduced the holding due to the high balance sheet gearing in the company and volatility of the oil price. The company is working hard to mitigate these issues through restructuring the balance sheet and adding producing assets and this has been beneficial to share price performance in recent months.

Amongst other small capitalisation stocks to impact performance were alternative energy related companies such as PV Crystalox Solar, Camco and Renewable Energy Generation, where the availability of finance to develop long duration projects evaporated with the credit crisis. In aggregate these three stocks cost 1.2% of performance. We sold PV Crystalox and Camco during the period, but continued to invest in Renewable Energy Generation, which is materially undervalued and following the sale of its Canadian assets is trading close to the value of the cash on the balance sheet.

On a more positive note, the Fund benefited from the strong performance of some of our mid cap holdings. Melrose, an industrial buy-out and restructuring vehicle, was the biggest positive contributor to performance, adding 1.2%. Here the market had been concerned about the debt level that the company was carrying, but our analysis suggested that the management would be able to extract sufficient cash cost savings from the business to bring the debt down substantially which duly occurred benefiting the shares which returned over 100% over the period. The portfolio also benefitted from the recovery in BBA Aviation and Informa which had been oversold towards the end of 2008. Finally, one theme that we identified at the beginning of the period was the potential for credit spreads to narrow from extremely wide levels. We took advantage of this by investing in the specialist credit fund managers, Ashmore and BlueBay, both of which returned over 80% during the period as spreads narrowed and they began to receive inflows into their funds.

Amongst the large capitalisation stocks in the portfolio the principal negatives were the investments in BAe Systems, Reed Elsevier and GlaxoSmithKline and the underweight in Standard Chartered. BAe Systems, which is heavily dependent on US and UK defence spending, has been de-rated as investors have focussed on companies that are dependent on government spending, which is now under pressure from expected cuts to budgets. However, our analysis suggests that BAe Systems has exposure to areas of future US Defence spending that are extremely unlikely to be cut, such as the F-35 Joint Strike Fighter. We therefore expect that the market will eventually re-rate the shares from their currently depressed valuations, although this may take some time. Reed Elsevier and GlaxoSmithKline, where we have large investments, lagged the market as it rallied, but as discussed below these are exactly the sort of companies that we believe are fundamentally undervalued in the market today and where we expect to generate future performance.

Market Commentary

In the market overall a series of failed rallies at the end of 2008 eventually gave way to a final sell off that saw the market low on 3rd March 2009, which at that point meant the market was down 18.4% for the financial year. A decisive turn in risk appetite drove a rally of 45% from this low, providing welcome relief to battered equity investors. Taking the two years together provides a better perspective on the financial crisis and 'Great Recession', and over that period the UK market fell 25%.

The events of the fourth quarter of 2008 called into question the stability of the financial system leading to a rapid collapse in economic activity. The global economy had been slowing to recession for some time, but a period of aggressive stock reduction and cost cutting led to a sharp fall in expectations for global economic growth and rapidly rising unemployment. As companies and consumers retrenched their expenditure, profit forecasts were reduced rapidly and the focus moved to balance sheet repair, with the most distressed companies launching rescue rights issues and cutting dividends. As earnings forecasts fell, risk aversion rose, leading investors to pay lower multiples of lower earnings driving the market down.

That the situation at the end of 2008 was so desperate sowed the seeds for the equity market recovery, because governments and central banks had little choice but to invoke extreme policy measures to tackle the financial and economic crisis. In effect the excessive debts of the private sector were absorbed by the public sector as the banking system was rescued, interest rates on cash were cut close to zero, and central banks began to buy financial assets via 'quantitative easing'. Enormous fiscal stimulus packages were announced across the world and surprisingly quickly it became apparent that the rate of decline of economic growth was bottoming out. This prompted a wholesale improvement in risk appetite across equity, commodity, corporate bond and real estate markets. With the benefit of hindsight we can now see that expectations had fallen too far for both economic growth and company profits, where margins appear to have troughed at much higher levels than in previous recessions primarily as a result of proactive cost cutting. Towards the end of the year economic data confirmed the recession to be over in most countries. As we observed in our report at the end of 2008, the market was then trading on multiples of normalised or trend earnings (adjusted for the effect of the economic cycle) below valuations reached at the troughs in 1987, 1990 and 2002. This combination of rising profit forecasts, improving risk appetite and a low valuation was sufficient to ignite a recovery in equity markets that have fallen almost 50% in less than 12 months.

There has, however, been a further factor driving markets which will prove less enduring. Abundant liquidity has been finding its way into financial assets for a number of reasons. First, low interest rates on cash have led investors to seek yield in higher risk assets. The Federal Reserve has made it clear that it expects to pursue a policy of low interest rates for an extended period of time. Second, a low return on US dollar cash, in combination with a heavily indebted US government, which needs to continually refinance this deficit in the bond market, and the structural trade imbalance with the Far East, has led the US dollar to fall inexorably. Indeed, it seems likely that 'carry trades', similar to those employed before the crisis, are now to the fore, for example, borrowing in US dollars and investing the proceeds in emerging market assets, where there is a highly consensual expectation of superior economic growth. Third, it seems probable that some of the proceeds of 'quantitative easing' ("QE") have found their way via the investment banks into financial markets rather than the real economy, driving prices higher. At some point this liquidity will begin to subside as interest rates rise, the US dollar becomes undervalued and QE begins to reverse. It is also important to remember that many of the issues that confronted markets just six months ago remain germane. The banking system is still fragile with balance sheets in need of further repair and, as a result, credit available to the real economy continues to be scarce. Although most large corporates balance sheets are now strong, this is not the case for Western consumers or governments. Government budgets are approaching deficits that could lead to a loss of confidence in key currencies and it is questionable how much more fiscal stimulus is now affordable. Indeed, in the UK a period of fiscal austerity seems certain. House prices have stabilised recently in the US and UK, but they are still overvalued in the UK and a wave of foreclosures overshadows the US. Unemployment remains high in many economies, particularly those driven by consumer expenditure where greater emphasis will now be placed on saving. The cost cutting that has supported company profits has to lead to reduced consumer income and hence lower demand. So, as economic growth does return it seems likely that the recovery will be muted and it will be some time before sustainable growth approaches historic trend levels. Although it is not currently our expectation, there remains a possibility that the global economy may relapse into another recession, an outcome for which there is historical precedent.

Much of the recent move in equity markets has been driven by deep value, heavily indebted or super cyclical shares that were previously priced for a depression or, in some cases, bankruptcy. Many of the larger capitalisation defensive growth companies have not partaken in the rally, despite the fact that they can also be expected to benefit from any economic recovery. Indeed, we currently see the most absolute value in these defensive growth companies, most of which have high and sustainable free cash flow yields. Moreover it is likely that any pause or setback in the profile of economic recovery should see a period of relative outperformance for defensive growth companies relative to the cyclical sectors that have already rallied hard, and in some cases trade on valuations that already imply an economic recovery. Timing a turn in the risk appetite in favour of defensive growth stocks is difficult, particularly as equity markets remain in the 'sweet spot' of improving fundamentals and abundant liquidity. As a result we have spent the last six months or so gradually adjusting the portfolio into areas of the market that we feel are better placed for the challenges of the next year or two. This has meant quite a significant change in the constituents of the portfolio with 17 complete sales and 13 new purchases over the period. The Trust now has very low exposure to the smaller capitalisation shares that impacted performance during 2008 and is less biased to cyclical or leveraged companies. In their place we have for the most part bought larger, higher yielding, defensive stocks with some long term growth potential such as Tesco, Diageo, Experian, Reckitt Benckiser, RSA Insurance and Bunzl. In general we used the rapid rally in markets to make these changes at more favourable prices. The portfolio is now significantly underweight bank and mining shares.

After the rapid move in markets long term valuation measures suggest that in aggregate the US is now at fair value, but UK and European markets remain somewhat undervalued. British Portfolio Trust was modestly geared through 2008 and in the months when markets collapsed this detracted from performance. However we maintained the gearing through the lows in the market, and as markets have recovered in recent months we have gradually reduced the borrowing levels such that the Fund is now only marginally geared, which we believe is appropriate given the uncertain outlook. Although we recognise the challenges confronting markets into 2010, we are excited about the prospects for a very healthy number of the companies in the portfolio which remain attractively valued. The close correlations between different companies within sectors seen over the last 18 months are beginning to break down and the leadership of the market is subtly changing. We see plenty of opportunities to buy shares in good companies at attractive prices.

Jeremy Thomas

17th December 2009

Principal Risks and Uncertainties

The principal risks and uncertainties fall broadly under the following categories:

Investment and Strategy: An inappropriate investment strategy, for example asset allocation or the level of gearing, may lead to underperformance against the Company's benchmark index and peer companies, resulting in a fall in the Company's share price and the Company's shares trading on a wider discount. The Board manages these risks by diversification of investments through its investment restrictions and guidelines which are monitored and reported on. RCM provides the Directors with timely and accurate management information, including performance data and attribution analyses, revenue estimates, liquidity reports and shareholder analyses. The Board monitors the implementation and results of the investment process with the Investment Manager, who attends all Board Meetings, and reviews data which shows statistical measures of the Company's risk profile. The Investment Manager employs the Company's gearing tactically, within a strategic range set by the Board. The Board holds periodic meetings devoted to strategy.

Market: Market risk arises from the uncertainty about the future prices of the Company's investments. It represents the potential loss the Company might suffer through holding investments in the face of negative market movements. The Board considers asset allocation, stock selection and levels of gearing on a regular basis and has set investment restrictions and guidelines which are monitored and reported on by RCM ("RCM"). The Board monitors the implementation and results of the investment process with the Investment Manager.

Accounting, Legal and Regulatory: In order to qualify as an investment trust, the Company must comply with Section 842 of the Income and Corporation Taxes Act 1988 ("Section 842"). Details of the Company's approval are given under "Competitive and Regulatory Environment" on page 13. Should the Company breach Section 842, it may lose investment trust status and as a consequence realised chargeable gains within the Company's portfolio would be subject to Corporation Tax. The Section 842 qualification criteria are monitored by RCM and results reported to the Board at each Board Meeting. The Company must also comply with the provisions of the Companies Acts 1985 and 2006 and, as its shares are listed on the London Stock Exchange, the UKLA Listing Rules. A breach of the Companies Act could result in the Company and/or the Directors being fined or the subject of criminal proceedings. A breach of the UKLA Listing Rules may result in the Company's shares being suspended from listing which in turn would breach Section 842. The Board has ultimate responsibility but relies on its Company Secretary and its professional advisers to ensure compliance with the Companies Acts 1985 and 2006 and the UKLA Listing Rules and Disclosure and Transparency Rules.

Corporate Governance and Shareholder Relations: Details of the Company's compliance with Corporate Governance best practice, including information on relations with shareholders, are set out in the Corporate Governance Report on pages 21 to 24.

Operational: Disruption to, or failure of, RCM's accounting, dealing or payments systems or the custodian's records may prevent accurate reporting and monitoring of the Company's financial position. Details of how the Board monitors the services provided by RCM and other suppliers and the key elements designed to provide effective internal control are included within the Internal Control section of the Corporate Governance Report on pages 21 to 24.

Financial: The financial risks faced by the Company are disclosed in Note 17 on pages 40 to 44.

A detailed explanation of the principal risks and uncertainties can be found on pages 14 and 15 of the Annual Financial Report, which will be available shortly on the Company's website.

Related Parties' Transactions

During the financial year, no transactions with related parties have taken place, which have materially affected the financial position or the performance of the Company during the period.

Directors' Responsibilities

The Directors each confirm to the best of their knowledge that:

a) the financial statements have been prepared in accordance with applicable UK accounting standards, and
     give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

b) the Annual Financial Report, to be published shortly, includes a fair review of the development and
     performance of the business and the position of the Company, together with a description of the principal
     risks and uncertainties that it faces.

155 Bishopsgate For and on behalf of the Board

London EC2M 3AD A C Barker

17th December 2009 Chairman

INCOME STATEMENT

For the year ended 31st October 2009

	Revenue	Capital	Total Return
	£'000s	£'000s	£'000s

Net gains on investments at fair value	-	5,364	5,364
Income	2,000	-	2,000
Investment management fee	(157)	(322)	(479)
Investment management fee VAT refund	9	27	36
Administration expenses	(204)	(4)	(208)

Net return before finance costs and taxation	1,648	5,065	6,713
Finance costs: interest payable and similar charges	(41)	(122)	(163)

Net return on ordinary activities before taxation	1,607	4,943	6,550

Taxation	-	-	-


Net return attributable to Ordinary Shareholders	1,607	4,943	6,550


Return per Ordinary Share (Note B)	4.42p	13.61p	18.03p

BALANCE SHEET

as at 31st October 2009

	£'000s
Investments held at fair value through profit or loss	45,388
Net current liabilities	(1,024)
Total assets less current liabilities	44,364
Creditors: Amounts falling due after more than one year	-
Total Net Assets	44,364

Called up Share Capital	386
Share Premium Account	14,819
Capital Redemption Reserve	163
Special Reserve	34,500
Capital Reserve	(8,145)
Hedging Reserve	-
Revenue Reserve	2,641
Shareholders' Funds (all equity interests)	44,364

Net asset value per Ordinary Share	127.8p

The Net Asset Value is based on 34,712,820 Ordinary Shares in issue at the year end.

INCOME STATEMENT

For the year ended 31st October 2008


	Revenue	Capital	Total Return
	£'000s	£'000s	£'000s

Net losses on investments at fair value	-	(35,945)	(35,945)
Income	2,858	-	2,858
Investment management fee	(229)	(538)	(767)
Investment management fee VAT refund	104	313	417
Administration expenses	(191)	(6)	(197)

Net return before finance costs and taxation	2,542	(36,176)	(33,634)
Finance costs: interest payable and similar charges	(93)	(272)	(365)

Net return on ordinary activities before taxation	2,449	(36,448)	(33,999)

Taxation	(2)	-	(2)

Net return attributable to Ordinary Shareholders	2,447	(36,448)	(34,001)


Return per Ordinary Share (Note B)	6.08p	(90.61)p	(84.53)p

BALANCE SHEET

as at 31st October 2008

	£'000s
Investments held at fair value through profit or loss	48,437
Net current liabilities	(4,975)
Total assets less current liabilities	43,462
Creditors: Amounts falling due after more than one year	-
Total Net Assets	43,462

Called up Share Capital	425
Share Premium Account	14,819
Capital Redemption Reserve	124
Special Reserve	38,192
Capital Reserve	(13,088)
Hedging Reserve	(6)
Revenue Reserve	2,996
Shareholders' Funds (all equity interests)	43,462

Net asset value per Ordinary Share	112.5p

The Net Asset Value is based on 38,643,300 Ordinary Shares in issue at the year end.

RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

For the year ended 31st October 2009

	Called up Share Capital (£000s)	Share Premium Account (£000s)	Capital Redemption Reserve (£000s)	Special Reserve (£000s)	Capital Reserve (£000s)	Hedging Reserve (£000s)	Revenue Reserve (£000s)	Total (£000s)
Net Assets at 31st October 2007	436	14,819	113	43,215	23,360	(56)	2,082	83,969

Amortisation of Hedging Reserve	-	-	-	-	-	50	-	50

Revenue Return	-	-	-	-	-	-	2,447	2,447

Shares repurchased during the year	(11)	-	11	(5,023)	-	-	-	(5,023)

Dividends on Ordinary Shares	-	-	-	-	-	-	(1,533)	(1,533)

Capital Return	-	-	-	-	(36,448)	-	-	(36,448)

Net Assets at 31st October 2008	425	14,819	124	38,192	(13,088)	(6)	2,996	43,462

	Called up Share Capital (£000s)	Share Premium Account (£000s)	Capital Redemption Reserve (£000s)	Special Reserve (£000s)	Capital Reserve (£000s)	Hedging Reserve (£000s)	Revenue Reserve (£000s)	Total (£000s)
Net Assets at 31st October 2008	425	14,819	124	38,192	(13,088)	(6)	2,996	43,462

Amortisation of Hedging Reserve	-	-	-	-	-	6	-	6

Revenue Return	-	-	-	-	-	-	1,607	1,607

Shares repurchased during the year	(39)	-	39	(3,692)	-	-	-	(3,692)

Dividends on Ordinary Shares	-	-	-	-	-	-	(1,962)	(1,962)

Capital Return	-	-	-	-	4,943		-	4,943

Net Assets at 31st October 2009	386	14,819	163	34,500	(8,145)	-	2,641	44,364

CASH FLOW STATEMENT

For the year ended 31st October 2009 and 31st October 2008

	2009	2008
	£'000s	£'000s

Net cash inflow from operating activities	1,206	2,223

Returns on investments and servicing of finance
Interest paid	(156)	(359)

Capital expenditure and financial investments
Purchases of fixed asset investments	(11,752)	(43,601)
Sales of fixed asset investments	20,637	47,359

Net cash inflow from capital expenditure and financial investments	8,885	3,758

Equity dividends paid	(1,962)	(1,533)

Net cash inflow before financing	7,973	4,089

Financing
Purchase of Ordinary Shares for cancellation and holding in treasury	(3,692)	(5,023)
Repayment of medium term loan Repayment of short term loan	- (4,500)	(6,000) -
Drawdown of short term loan	-	6,000

Net cash outflow from financing	(8,192)	(5,023)

Decrease in cash	(219)	(934)

BRITISH PORTFOLIO TRUST PLC

LISTED HOLDINGS at 31st October 2009

	Value (£'000s)	Sector
GlaxoSmithKline	3,449	Pharmaceuticals and Biotechnology
Vodafone Group	3,416	Mobile Telecommunications
Royal Dutch Shell "B" Shares	2,987	Oil and Gas Producers
HSBC Holdings	2,625	Banks
BP	2,575	Oil and Gas Producers
BG Group	2,179	Oil and Gas Producers
Unilever	2,178	Food Producers
Compass Group	1,450	Travel and Leisure
Rio Tinto	1,365	Mining
Centrica	1,219	Gas, Water and Multiutilities
BAE Systems	1,154	Aerospace and Defence
Melrose	1,064	Industrial Engineering
Reed Elsevier	1,023	Media
Cobham	996	Aerospace and Defence
Reckitt Benckiser Group	910	Household Goods and Home Construction
Xstrata	856	Mining
Diageo	843	Beverages
Prudential	827	Life Insurance
AstraZeneca	795	Pharmaceuticals and Biotechnology
Lancashire Holdings	735	Non-Life Insurance
Tesco	725	Food and Drug Retailers
SABMiller	711	Beverages
BHP Billiton	706	Mining
Bunzl	625	Support Services
Whitbread	591	Travel and Leisure
International Power	560	Electricity
RSA Insurance Group	533	Non-Life Insurance
Aviva	532	Life Insurance
Experian	491	Support Services
Spirent Communications	487	Technology Hardware and Equipment
Informa	476	Media
Carillion	476	Support Services
Barclays	464	Banks
Dana Petroleum	458	Oil and Gas Producers
3i Group	437	Financial Services
Intermediate Capital Group	411	Financial Services
Energy XXI	395	Oil and Gas Producers
Bluebay Asset Management	327	Financial Services
Partygaming	295	Travel and Leisure
Ashmore Group	289	Financial Services
Henry Boot	287	Construction and Materials
Laird	285	Electronic and Electrical equipment
BBA Aviation	269	Industrial Tranportation
TUI Travel	268	Travel and Leisure
Tullett Prebon	265	Financial Services
Lloyds Banking Group	249	Banks
Carnival	247	Travel and Leisure
Serco Group	243	Support Services
Renewable Energy	239	Electricity
Resolution	234	Life Insurance
Wellstream Holdings	127	Oil Equipment, Services and Distribution
Laird (Rights)	40	Electronic and Electrical Equipment
Total Investments	45,388

Note A

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of investments, and in accordance with United Kingdom law and United Kingdom Generally Accepted Accounting Principles (UK GAAP) and the Statement of Recommended Practice - Financial Statements of Investment Trust Companies and Venture Capital Trusts (SORP) issued in January 2009 by the Association of Investment Companies.

Note B

The return per Ordinary Share is based on a weighted average number of shares in issue during the year of 36,330,832 (2008- 40,227,697).

Note C

The financial information set out in this announcement does not constitute the Company's statutory accounts for the years ended 31st October 2009 or 31st October 2008. The financial information for the year ended 31st October 2008 has been extracted from the statutory accounts for that year, which were filed with the Registrar of Companies on 1st May 2009. The auditors' report on those accounts was unqualified and did not contain a statement under either section 237(2) or (3) of the Companies Act 1985. The statutory accounts for the year ended 31st October 2009 will be finalised on the basis of the financial information presented by the Directors in this announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.