Performance at Month End

Merrill Lynch Br. SmallerCo Tst PLC
11 August 2005


MERRILL LYNCH BRITISH SMALLER COMPANIES TRUST plc

All information is at 31 July 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                       4.5%         10.6%           32.2%          67.1%          -12.0%

Share price                           5.4%          8.8%           31.8%          72.6%          -17.8%

FTSE Small Cap Index (ex IC's)        3.2%          6.3%           19.1%          43.8%          -11.1%


Sources:  Merrill Lynch Investment Managers and Datastream.


At month end

Net asset value:                                 290.05p

Share price:                                     238.25p

Discount to NAV:                                   17.9%

Net yield:                                          1.9%

Total assets:                                    £161.4m

Gearing:                                           10.1%

Ordinary shares in issue:                        50,563,523


Ten Largest Sector
Weightings                                                                         % of Total Assets

Support Services                                                                                14.7

Media & Entertainment                                                                            9.2

Software & Computer Services                                                                     8.9

Electronic & Electrical Equipment                                                                7.8

Construction & Building Materials                                                                6.8

Mining                                                                                           5.7

Health                                                                                           4.7

Engineering & Machinery                                                                          4.7

Real Estate                                                                                      3.9

Oil & Gas                                                                                        3.9
                                                                                                ----
Total                                                                                           70.3
                                                                                                ----




Ten Largest Equity Investments

Company

Aveva Group

Brewin Dolphin Holdings

BSS Group

Chaucer Holdings

Consolidated Minerals

Dechra Pharmaceuticals

Dicom Group

Mouchel Parkman

Renishaw

WSP Group




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



Smallcap stocks performed well during the month, and the Company's NAV per share
rose by 4.5% to 290.05p. The benchmark index rose by 3.2%.



The share prices of some of the Company's larger resources holdings again
performed well, most notably First Quantum Minerals, Nelson Resources and
Venture Production, all of which are producers. Other good performances came
from WSP, Chloride and Xaar, each of which announced positive trading updates,
and Severfield-Rowen, the leading supplier of structural steel, and a likely
strong beneficiary from the London 2012 Olympic win. CSR produced first half
results significantly above expectations and has a confident outlook.
Additionally Broadcastle announced an agreed bid by Siemens.



Poor performers during the month were Incisive Media, Centaur and Armor Group
International. Centaur gave a trading update which disappointed the market; they
indicated that display advertising had weakened over the prior three to four
months. This spilled over to the share price of Incisive Media, which has many
similar drivers. Armor Group International referred to increased costs in
providing security for its own staff in Iraq in its half year trading update.



New holdings included Gyrus, Premier Research, Ultra Electronics, XL Tech Group
and Avocet Mining.  0.5% of the Company's assets have been placed in each of the
last four stocks and 1.0% was put into Gyrus. Gyrus raised equity to purchase a
major endoscope business in the US and we think the combination of the
businesses looks highly attractive; Gyrus shares have already responded well.
Premier Research provides research facilities to many pharmaceutical companies
to assist with their drug trials; we were impressed with management.  The
company placed a small block of shares also to finance a US acquisition. Ultra
Electronics used to be one of the Company's largest holdings and we decided to
take a position again in anticipation of further good news. XL Tech Group
management have a record of coming up with good ideas for new businesses,
starting them and then spinning them off highly profitably; the latest spinoff
is Agcert, which provides systems to help reduce methane emissions and global
warming. Avocet Mining produces gold in the Far East and former Russian states.
Production is running at an annualised rate in excess of 200,000 ounces,
exploration prospects look interesting and the market cap is only about £75
million.



The Company has sold its holding in Burren Energy, which has performed very well
indeed since IPO. Other complete sales include the holdings in Autologic, which
has struggled in France, and Pipex. The holding in Findel, a mail order
retailer, has also been substantially reduced.




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).



11 August 2005




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