Portfolio Update

Merrill Lynch Br. SmallerCo Tst PLC
15 May 2007

MERRILL LYNCH BRITISH SMALLER COMPANIES TRUST plc

All information is at 30 April 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                            2.7%           7.4%            25.0%          106.9%          115.0%
Share price                                2.5%           6.8%            23.1%          119.5%          125.9%
FTSE SmallCap Index (ex IC's)              1.8%           3.3%            14.5%           51.4%           56.0%

Sources:  BlackRock and Datastream.

At month end
Net asset value:                                 476.40p
Share price:                                     405.50p
Discount to NAV:                                   14.9%
Net yield:                                          0.5%
Total assets:                                    £260.7m
Gearing:                                            9.5%
Ordinary shares in issue:                        49,993,523


Ten Largest Sector
Weightings                                                     % of Total Assets
Support Services                                                            15.4
Real Estate                                                                 11.9
Software & Computer Services                                                 9.5
General Financial                                                            7.9
Industrial Engineering                                                       6.4
Oil & Gas Producers                                                          5.2
Electronic & Electrical Equipment                                            5.0
Media                                                                        4.6
Non-Life Insurance                                                           4.3
Mining                                                                       4.3
                                                                            ----
Total                                                                       74.5
                                                                            ----




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




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



The Company's NAV rose by 2.7% in April on a capital only basis. The benchmark
index rose by 1.8% and the FTSE 100 Index by 2.2%.



Stock markets have recovered the ground lost in late February and early March,
helped by significant M & A activity particularly among FTSE 100 stocks. This
activity has rubbed off on smaller caps to an extent, and the Company's NAV has
benefited.



The main positive contributors to relative performance in April were the
Company's holdings in Domino's Pizza, Plant Health Care, Dechra Pharmaceuticals
and Clapham House. Domino's Pizza produced a very positive AGM statement which
indicated that current year like-for-like sales are running 14.6% ahead of last
year, a great performance. Plant Health Care produced additional trial data
alongside their final results and management are confident of signing further
license deals in due course. Dechra shares performed well on the back of further
consideration of the interims and the potential for Vetoryl in the US. Clapham
House shares rose strongly after a trading update and small placing to
accelerate the rollout of their successful Gourmet Burger Kitchen.



The largest negative impact on relative performance in April came from holdings
in Imperial Energy and Premier Research. Last month Imperial Energy had
announced a large increase in its Russian oil reserves following an independent
audit. This seems to have attracted the attention of certain Russian authorities
who have sought to have Imperial's license revoked. Management remain confident
that there are no legal grounds for their position to be threatened, and in
recent days has moved the company's listing from AIM to the Main List. Premier
Research produced final results which did not lead to hoped for earnings
upgrades and the shares were rapidly de-rated.



There were no new holdings of any size during the month. Universal Salvage
received a bid, recommended by management, and we decided to sell our stock in
the market.





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).



15 May 2007


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