Portfolio Update

Merrill Lynch Br. SmallerCo Tst PLC
18 April 2007

MERRILL LYNCH BRITISH SMALLER COMPANIES TRUST plc

All information is at 31 March 2007 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                            3.0%           7.2%            24.8%          102.9%          110.4%
Share price                                0.7%           6.5%            23.2%          110.4%          128.0%
FTSE SmallCap Index (ex IC's)              0.9%           2.4%            12.4%           47.8%           55.0%

Sources:  BlackRock and Datastream.
At month end
Net asset value:                                 463.74p
Share price:                                     395.50p
Discount to NAV:                                   14.7%
Net yield:                                          1.2%
Total assets:                                    £254.0m
Gearing:                                            9.6%
Ordinary shares in issue:                        49,993,523


Ten Largest Sector
Weightings                                                     % of Total Assets
Support Services                                                            16.0
Real Estate                                                                 11.5
Software & Computer Services                                                 8.7
General Financial                                                            7.7
Industrial Engineering                                                       6.5
Oil & Gas Producers                                                          5.5
Electronic & Electrical Equipment                                            5.1
Media                                                                        4.9
Non-Life Insurance                                                           4.6
Mining                                                                       4.3
                                                                            ----
Total                                                                       74.8
                                                                            ----




Ten Largest Equity Investments (in alphabetical order)
Company
Aveva Group
Brewin Dolphin
BSS Group
Dechra Pharmaceuticals
Domino Printing
ITE Group
Rathbone Brothers
Speedy Hire
Victrex
WSP Group




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



The Company's NAV rose by 3.0% in March on a capital only basis.  The benchmark
index rose by 0.9%.



Stock markets fell sharply at the end of February and in the first week of
March, but have since recovered much of the lost ground.  The Company's NAV has
benefited from this recovery.



The main positive contributors to relative performance in March were our
holdings in Imperial Energy, Rathbone Brothers and Paypoint.  Imperial Energy
announced a massive increase in its Russian oil reserves following an
independent audit.  Rathbone's shares responded well to good final results and a
confident outlook from management.  Paypoint put out a strong trading statement
which indicated revenues are well ahead of expectations - this should be very
positive for profits.



The largest negative impact on relative performance in March came from holdings
in Aveva Group and Civica.  Aveva shares have been great performers over the
last year and succumbed to a bout of profit taking during the recent setback.
An April trading statement has confirmed trading conditions remain very good and
has led to further earnings upgrades.  Civica shares suffered as the company's
CEO sold his entire shareholding - he does however own a large number of options
which have vested, are exercisable and have significant value.  Meanwhile we
believe trading at Civica to be good.



The main new holdings in the month were Marylebone Warwick Balfour ('MWB'),
Inland and Scott Wilson.  MWB management impressed us on meeting and have
successfully grown their three businesses over recent years.  MWB owns and
operates the Malmaison and Hotel du Vin hotel chains across the UK.  The Group
also owns and operates the Liberty store on London's Regent Street, and owns the
Liberty of London brand. Through its 68% owned listed subsidiary, MWB Business
Exchange Plc, MWB owns and operates serviced office centres in the UK's major
cities.  Inland is a February IPO, and is run by a team that have created
significant value within the UK housebuilding sector before.  Inland buys
brownfield land and takes it through the planning stages, where management have
particular expertise, before selling on to housebuilders or other developers.
Scott Wilson is an international engineering consultancy focused on
transportation, property, environment and natural resources.  This is an area we
like with existing larger holdings in WSP, White Young Green and Hyder
Consulting.



We sold the holding in Wolfson Microelectronics where our confidence levels are
not high given the volatility of demand over the short term.





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



18 April 2007


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