Performance at Month End

Merrill Lynch Br. SmallerCo Tst PLC
13 May 2005

MERRILL LYNCH BRITISH SMALLER COMPANIES TRUST plc

All information is at 30 April 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                       -5.0%        -3.0%           13.9%          18.4%          -11.3%
Share price                           -7.5%        -2.2%           18.5%          22.0%            0.2%
FTSE Small Cap Index (ex IC's)        -3.3%        -2.6%            5.7%           9.0%          -10.9%

Sources:  Merrill Lynch Investment Managers and Datastream.

At month end
Net asset value:                                 262.26p
Share price:                                     219.00p
Discount to NAV:                                   16.5%
Net yield:                                          2.1%

Total assets:                                    £147.4m
Gearing:                                           11.1%
Ordinary shares in issue:                     50,563,523


Ten Largest Sector
Weightings                                                                                             % of Total Assets
Support Services                                                                                                    13.5
Media & Entertainment                                                                                                8.8
Software & Computer Services                                                                                         8.7
Leisure & Hotels                                                                                                     6.6
Mining                                                                                                               6.3
Construction & Building Materials                                                                                    5.7
Electronic & Electrical Equipment                                                                                    5.2
Oil & Gas                                                                                                            5.2
Speciality & Other Finance                                                                                           4.3
General Retailers                                                                                                    4.2
                                                                                                                    ----
Total                                                                                                               68.5
                                                                                                                    ----




Ten Largest Equity Investments
Company                                                                                                % of Total Assets
Aveva Group                                                                                                          2.1
Brewin Dolphin                                                                                                       2.0
Consolidated Minerals                                                                                                2.0
Dechra Pharmaceuticals                                                                                               2.0
BSS Group                                                                                                            2.0
Parkdean Holidays                                                                                                    2.0
Holidaybreak                                                                                                         1.8
Chaucer Holdings                                                                                                     1.8
Dicom Group                                                                                                          1.7
Blacks Leisure Group                                                                                                 1.7
                                                                                                                    ----
Total                                                                                                               19.1
                                                                                                                    ----



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

April was a difficult month for UK equities, and in particular smaller companies
which gave back some of their outperformance over larger companies which had
been seen earlier this calendar year. The same applies to the Company which had
a difficult month in absolute and relative terms.

In benchmark relative terms, poorer performers included Renishaw, International
Energy, Ultimate Leisure and Findel. We continue to like Renishaw but the shares
were weak on lack of news flow and given the premium valuation, which we regard
as well deserved. The Company does not hold any utility holdings such as
International Energy. Ultimate Leisure warned of weak trading and delays to its
opening programme. Findel was also weak on concerns about consumer spending; we
expect it to be more resilient than most retailers, and indeed yesterday it
delivered good full year results slightly ahead of expectations.

During the month the Company has acquired four further holdings which are
regarded as core by the MLIM UK SmallCap team. These are WSP, Mouchel Parkman,
White Young Green and Domino Printing Sciences. The first three provide
consultancy and managed services to a variety of verticals (including property,
road and rail, environmental and water), both public and private sector. Each
has very good visibility which gives them confidence about current trading.
Domino is a leading global provider of inkjet and laser printing technologies,
which has been trading very well in recent years. We have had, post results, one
to one meetings with each of these companies during the last few months.

Complete sales of the Company's holdings in Bodycote, Ricardo and LA Fitness
were made. The first two holdings were sold as we became more cautious about the
outlook for the US and European car industry, especially the US majors. Whilst
the fate of the US car majors has only a modest bearing on the fortunes of these
companies, the operational gearing for a company such as Bodycote is such that
only a slight decline in turnover expectations can have a material impact on
profit before tax. LA Fitness, the fitness clubs operator, is subject to an
offer from a private equity group, but trading has softened and we decided to
sell in the market.

In addition to these more significant portfolio changes, a number of the other
consumer facing holdings were trimmed further. Newsflow from many consumer
orientated smaller companies has continued to deteriorate, and this trend looks
likely to continue. The Company is underweight in the main consumer sectors, but
retains a number of holdings in the companies in the consumer sectors which we
regard as likely long term winners; these include Parkdean, the owner operator
of caravan parks, and Blacks Leisure, the outdoor specialists.

We continue to meet many companies, mainly those more dependent on business or
government spending, which are positive about trading prospects for the
foreseeable future. Those companies which meet our sustainable growth criteria
are particular candidates for retention or inclusion in the Company's portfolio.
Whilst stockmarkets remain nervous, we believe the quality of the Company's
portfolio continues to improve, and that this should serve the Company well in
due course.


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).

13 May 2005


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