Investment Trusts Interim Results

Cairngorm B.S. Inv Tst PLC
12 November 1999


THE CAIRNGORM BUILDING SOCIETIES INVESTMENT TRUSTS (the 'Company')

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 1999


Cairngorm No.1 Building Societies Investment Trust plc

Cairngorm No.2 Building Societies Investment Trust plc

Cairngorm No.3 Building Societies Investment Trust plc

Cairngorm No.4 Building Societies Investment Trust plc

Cairngorm No.5 Building Societies Investment Trust plc

Cairngorm No.6 Building Societies Investment Trust plc

Cairngorm No.7 Building Societies Investment Trust plc

Cairngorm No.8 Building Societies Investment Trust plc

Cairngorm No.9 Building Societies Investment Trust plc

Cairngorm No.10 Building Societies Investment Trust plc

Each  of  the  investment trusts is a separate limited company, but  otherwise
they are to all intents and purposes identical.  The information contained  in
this Interim Report including the financial statements applies equally to each
of the ten Trusts.

Objective

The  ten  Cairngorm Building Societies Investment Trusts were  established  to
provide investors with a high level of income combined with capital growth and
the  opportunity to profit from further conversions of Building Societies  and
rationalisation of the Financial Services sector.

Financial Highlights

                             Six months    Six months          Year
                               ended 30      ended 30         ended
                              September     September      31 March
                                   1999          1998          1999
                             (unaudited)   (unaudited)     (audited)
                                                   
                                                                   
Pence per ordinary share                                           
                                                                   
Net asset value-undiluted        135.17        145.95        155.83
                                                                   
Net asset value-diluted          129.65        138.66        146.96
                                                                   
Dividend                           1.40          1.40          4.60
                                                                   
Earnings                           2.56          1.99          4.73
                                                                   
Capital Return                  (22.15)          5.78         16.15
                                -------       -------       -------
Total Return-undiluted          (19.59)          7.77         20.88
                                =======       =======       =======


Dividend

An  interim dividend of 1.4p net per ordinary share has been declared, payable
on 10 December 1999, to shareholders on the register on 26 November 1999.  The
Trusts' shares will be quoted ex-dividend on 22 November 1999.

Capital Gains Tax

Apportionment for capital gains tax between ordinary shares and warrants based
on  mid-market  prices on the first day (25 April 1996)  of  dealings  in  the
ordinary shares and the warrants:

Each ordinary share              95.24p                            
                                                                   
Each warrant                     23.80p                            


Chairman's Statement

The six-month period to 30 September 1999 was impacted by uncertainty over the
direction  of  interest rates.  Some clarity has been achieved  following  the
base  rate increases of 0.25% in both September and November leaving the  base
rate at 5.5% where it is likely to stay over the festive period.  Against this
background  I  am  pleased  to be able to report that  on  the  revenue  front
earnings  for the half-year were 2.56p against earnings of 1.96p for the  half
year  to  the 30 September 1998.  This is a healthy 30.6% increase in earnings
per share although as the majority of our earnings historically are earned  in
the  second  half  we  are recommending the prudent measure  of  an  unchanged
dividend at the interim stage.

My letter of 9 August 1999 to shareholders pointed out that at the time of the
flotation  it  was envisaged that the majority of the money  raised  would  be
invested   in  permanent  interest  bearing  shares  (PIBS)  and  other   debt
securities.   It  was intended that over a period of time there  would  be  an
increase  of money invested in the shares of demutualised building  societies.
I further informed you that a decision had been made to broaden the investment
policy  to  allow  the  Trust to invest in securities  of  European  financial
institutions.   We have since invested in shares of Credit Lyonnais  and  BNP,
which represented 8% of the portfolio at 30 September.

Most  bond  and  stock markets have been hit by the uncertainty over  interest
rates  mentioned above.  As a guide to returns over the period, the  FT  Fixed
Interest  index has fallen almost 6%.  Prices of your Trusts' securities  have
not  been able to resist the gloomy sentiment during the period and a fall  in
net  asset value (NAV) to 135.17p has taken place.  This fall of 13.3% in  NAV
is  higher  than the index movement above because prices of PIBS  have  fallen
further  than  the average gilt or corporate bond.  It is satisfying  to  note
that, since the 30 September, NAV has risen to 142.35p, as of 31 October 1999.

In  this  report  you  will  see that equities represented  some  27%  of  the
portfolio at 30 September.  Your Board believes that, currently, no more  than
50%  of  the portfolio should be invested in equities for reasons of  prudence
and to mitigate the impact on dividend paying capacity of the Trust.

Looking forward, there is likely to be an element of relief that interest rate
increases  are  unlikely over the festive period.  Further  assurance  may  be
taken  from  the  recent  outline budget speech from  the  Chancellor  of  the
Exchequer,  which  indicated  that good economic  growth  is  attainable  with
continued  low  inflation.  This should mean that many of the corporate  bonds
and  PIBS  that the fund invests in should look very attractive  to  investors
because  of the very good real rates of interest offered.  The recent Bank  of
England  announcement of a reduced target issuance of gilts in the  next  year
should enhance this appeal.

I  would  draw  your attention to the Cairngorm Savings Plan which  this  fund
participates  in and allows investors to acquire shares in the  Fund  free  of
commission.  We believe that the shares represent an attractive investment and
investors  can  use  the  Savings Plan as a low  cost  way  to  add  to  their
shareholdings.

Philip Court
Chairman
11 November 1999



STATEMENT OF TOTAL RETURN
(incorporating the revenue account)



                For the six months ended        For the six months ended
                   30 September 1999               30 September 1998
                      (unaudited)                     (unaudited)
                                                          
                Revenue    Capital    Total    Revenue   Capital    Total
                                                                  
                    £         £         £         £         £         £
Capital                                                                
gains on
investments
                                                                       
Net                 -      95,300    95,300       -       5,788     5,788
realised                                                               
gains
                                                                       
Unrealised          -    (399,028) (399,028)      -      86,330    86,300
(losses)/
gains of
investments
                -----      ------    ------    ------    ------    ------
                                                                     
Total               -    (303,728) (303,728)       -     92,118    92,118
capital                                             
(losses)/
gains on
investments
                                                                       
Gross                                                                  
revenue
                                                                       
Income from    94,060        -       94,060    93,891       -     93,891
investments                                                          
                                                                       
Other           1,882        -        1,882     1,714       -      1,714
interest                                                               
receivable
                -----    ------      ------    ------    ------     -----
                                                                     
Gross           95,942 (303,728)   207,786)    95,605    92,118   187,723
revenue and         
capital
gains
                                                                       
Management    (11,717)  (3,906)   (15,623)    (11,182)   (3,728)   (15,562)
fees              
                                                                       
Other         (13,922)     (564)   (14,486)   (18,137)     (652)   (18,137)
administrative                        
expenses
                -----    ------    ------    ------     ------      -----
                    
Net return     70,303  (308,198)  (237,895)   66,286    87,738    154,024
on ordinary                
activities
before
interest
payable and
taxation
                                                                       
Interest      (21,951)  (7,317)    (29,268)  (26,057)  (8,686)   (34,743)
payable                    
                -----    ------    ------    ------    ------     -----
                                                               
Net return     48,352  (315,515)  (267,163)    40,229  79,052   119,281
on ordinary                                           
activities
before
taxation
                                                                       
Taxation on    (11,549)   3,125    (14,674)  (11,666)   3,789   (7,877)
net revenue                         
on ordinary
activities
                -----    ------    ------    ------    ------     -----
                                                                     
Net return      36,806  (318,640)  (281,837)  28,563   82,841   111,404
attributable         
to
ordinary
shareholders

                                                                       
Dividend                                                               
declared
                                                                       
Interim       (20,174)       -    (20,174)  (20,129)       -    (20,129)
ordinary of       
1.4p (1998
- 1.4p) per
share
                -----    ------    ------    ------    ------     -----
                                                                   
Transfer to    16,629  (318,640)  (302,011)   8,434    82,841    91,275
reserves                                         
                =====    ======    ======    ======    ======     =====
                                                                     
                                                                       
Return per      2.56p   (22.15)p   (19.59)p     1.99p     5.78p     7.77p
ordinary                     
share-
undiluted
                                                                       
Return per      2.53p   (21.87)p   (19.34)p     1.96p     5.70p     7.66p
ordinary                     
share-fully
diluted
                =====    ======    ======    ======    ======     =====
                    

The  Revenue  column of the statement represents the revenue  account  of  the
Company.


Summary of Net Assets

                                  At 30         At 31         At 30
                              September         March     September
                                   1999          1999          1998
                             (unaudited)     (audited)   (unaudited)
                                                                 
                                      £             £             £
                                                                   
Fixed asset investments                                            
                                                                   
Listed on a recognised        2,762,306     3,166,488     2,997,165
investment exchange
                                                                   
Net current                   (814,510)     (925,979)     (898,648)
assets/(liabilities)
                                 ------        ------        ------
Total net assets              1,947,796     2,240,509     2,098,517
                                                                   
Net asset value per share-      135.17p       155.83p       145.95p
undiluted
                                                                   
Net asset value per share-      129.65p       146.96p       138.66p
fully diluted

Notes:

1.   The  Company  has  adopted  the  recommendations  of  the  Statement   of
     Recommended Practice 'Financial Statements of Investment Trust Companies'
     (SORP).   A  statement of total return is presented above which  combines
     the  revenue account and the statement of realised and unrealised capital
     gains  to give a 'total return'.  A separate revenue account is therefore
     not required.

2.   All  expenses  are charged to the revenue account with the  exception  of
     management  fees and interest charges on borrowings, one  half  of  which
     less the appropriate tax is charged to capital.

3.   The return per ordinary share is based upon the following figures:

     Revenue return                                           £38,803
     Capital return                                         £(318,640)
     Weighted average number of ordinary shares in issue 
     during the period - undiluted                          1,438,867
     Weighted average number of ordinary shares in issue 
     during the Period - fully diluted                      1,456,904

4.   The  net  asset  value  per  ordinary share is  calculated  on  1,441,020
     ordinary shares being the number of ordinary shares in issue at  the  end
     of  the  period.   On 31 July 1999 3,230 warrants were  exercised,  3,230
     ordinary  shares being issued.  At 30 September 1999 there  were  268,260
     warrants  in issue.  Each warrant confers the right, exercisable normally
     on  31 July in any of the years 1999 to 2010 inclusive, to subscribe  for
     one new ordinary share at £1.00 per share.

5.   The  figures and financial information for the period ended 31 March 1999
     are  extracted from the latest published accounts of the Company  and  do
     not  constitute statutory accounts for the period.  Those  accounts  have
     been  delivered to the Registrar of Companies and include the  report  of
     the auditors which was unqualified and did not contain a statement either
     under section 237(2) or 237(3) of the Companies Act 1985.


Twenty largest holdings at 30 September 1999

                                                              Market
                                                               value
                                                                    
£90,000      Leeds & Holbeck Building Society 13  3/8%      £168,750
             PIBS
£90,000      Britannia Building Society 13% PIBS            £165,600
£112,000     Halifax plc 9 3/8% Perpetual Subordinated      £149,240
             Bonds
7,670        Credit Lyonnais Ordinary Shares NPV            £137,343
£80,000      Coventry Building Society 12 1/8% PIBS         £136,000
16,000       Alliance & Leicester plc 50p Shares            £134,960
£70,000      Bradford  & Bingley Building Society  13%      £130,900
             PIBS
£70,000      Skipton Building Society 12 7/8% PIBS          £129,850
£100,000     BUPA  Finance  plc  10 1/2%  Subordinated      £124,750
             Guaranteed Bonds 2018
£80,000      First   Active  plc  11.75%  Subordinated      £118,400
             Bonds
10,480       Abbey National plc Ordinary 10p Shares         £112,974
34,000       Woolwich plc Ordinary 10p Shares               £111,435
£65,000      Halifax  plc  12% Perpetual  Subordinated      £101,725
             Bonds
£85,000      NPI Finance plc 9 5/8% Subordinated Bonds       £90,100
£60,000      National   Westminster  Bank  plc   11.5%       £89,550
             Undated Subordinated Notes
£85,000      Friends  Provident  Finance  plc  9  1/8%       £88,400
             Subordinated Bond
£75,000      Scottish Life Finance plc 9% Subordinated       £77,813
             Bond
1,583        Banque Nationale de Paris Ordinary Shares       £76,948
10,600       Irish   Permanent  plc  Ordinary  IR£0.25       £72,875
             Shares
£50,000      Lloyds  TSB  Group  plc 12%  Subordinated       £68,875
             Bonds 2011

(PIBS - Permanent Interest Bearing Shares)

Portfolio analysis

Equity investments               25.75%      £711,243
                                                     
Non-equity investments           74.25%    £2,051,063
                              ---------     ---------
                                100.00%    £2,762,306
                              =========     =========

12 November 1999