Performance at Month End

Merrill Lynch Br. SmallerCo Tst PLC
10 March 2005

MERRILL LYNCH BRITISH SMALLER COMPANIES TRUST plc

All information is at 28 February 2005 and unaudited.

Performance at month end is calculated on a capital only basis

                                      One          Three           One            Three          Five
                                      Month        Months          Year           Years          Years
Net asset value                       4.2%         17.3%           22.5%          42.5%          -7.2%
Share price                           2.2%         14.6%           28.3%          46.9%          -7.2%
FTSE Small Cap Index (ex IC's)        2.0%          9.9%            9.8%          29.5%           1.6%

Sources:  Merrill Lynch Investment Managers and Datastream.

At month end
Net asset value:                                 281.87p
Share price:                                     229.00p
Discount to NAV:                                   18.8%
Net yield:                                          2.0%

Total assets:                                    £159.0m
Gearing:                                           10.2%
Ordinary shares in issue:                        51,163,523


Ten Largest Sector
Weightings                                                                                             % of Total Assets
Support Services                                                                                                     9.6
Software & Computer Services                                                                                         9.5
Media & Entertainment                                                                                                8.4
Construction & Building Materials                                                                                    6.7
Leisure & Hotels                                                                                                     6.6
Mining                                                                                                               6.1
Oil & Gas                                                                                                            5.4
General Retailers                                                                                                    5.1
Engineering & Machinery                                                                                              4.0
Speciality & Other Finance                                                                                           4.0
                                                                                                                    ----
Total                                                                                                               65.4
                                                                                                                    ----




Ten Largest Equity Investments
Company                                                                                                % of Total Assets
Aveva Group                                                                                                          2.3
Brewin Dolphin                                                                                                       2.3
Consolidated Minerals                                                                                                2.2
BSS Group                                                                                                            2.1
Blacks Leisure Group                                                                                                 2.0
Parkdean Holidays                                                                                                    2.0
Dechra Pharmaceuticals                                                                                               2.0
Chaucer Holdings                                                                                                     1.8
Holidaybreak                                                                                                         1.7
Dicom Group                                                                                                          1.5
                                                                                                                    ----
Total                                                                                                               19.9
                                                                                                                    ----



Commenting on the markets, Mike Prentis, representing the Investment Manager
noted:



During February the Trust's NAV per share rose by 4.2% to 281.9 pence, compared
to a 2.0% increase in the benchmark index. The Trust's share price rose by 2.2%
to 229 pence.  This was the sixth consecutive month of rises in the smallcap
sector.



Amongst larger holdings, strong share price performances were seen in
Consolidated Minerals, again, Burren Energy, SCS Upholstery, after confirming
strong trading post Christmas, ITE, Gooch and Housego, and Royalblue. Royalblue
management have been very cautious over the last few years, but talked of a
distinct improvement in the spending outlook for their investment banking
customers. At the smaller end, Subsea Resources shares were strong as it
confirmed it is on track to commence salvage from the first of the wrecks it has
identified.



Poor performances were seen by Plasmon and Huveaux. Plasmon has developed new
high capacity UDO storage drives and media, which are attracting significant
global interest from the likes of HP and IBM. However, sales through the key
reseller channels have been slower than hoped, but continue to build; we believe
medium term prospects remain attractive but the next 6 to 12 months will be hard
work. Huveaux announced that profits would be below market expectations.
However, the political publications business has a dominant market position and
should continue to do well long term. The principal problem lies with the
training business, and action is now, belatedly being taken to address this.



New holdings during the month included RPC, Brammer, Neutec Pharma, and First
Quantum. RPC management have an excellent long term record in the plastics
packaging industry, and are confident for various reasons, one of which is the
winning of some exciting new business with Kraft to make coffee capsules for use
with Tassimo coffee makers. Brammer, a former holding, having sold their
Livingstone business, are now focusing on their core business and trading
conditions are improving. Neutec Pharma is favoured by the MLIM UK team, and one
of few biotechnology stocks owned by the Trust. First Quantum is a copper
producer, with sharply increasing production and cash generation. The stock is
also owned by various other Merrill Lynch funds including those managed by the
World Mining team.



Various holdings have been trimmed during the month.  The only complete sale was
of our small holding in Invox, after a disappointing update with management.



The Trust's strategy, gearing policy and confidence levels have not changed over
the month.





Latest information is available by typing www.mlim.co.uk/its on the internet,
'MLIMINDEX' on Reuters, 'MLIM' on Bloomberg or '8800' on Topic 3 (ICV terminal).



10 March 2005




                      This information is provided by RNS
            The company news service from the London Stock Exchange