Final Results

Capital Gearing Trust PLC
5 June 2000


CAPITAL GEARING TRUST P.L.C - Preliminary Results

Chairman's Statement

Capital  Gearing  Trust provided a sound but relatively  subdued
return  in  the year to 5th April, 200 with an increase  in  net
asset  value  per share of 9.7 per cent.  This may  be  compared
with  a rise in the FTSE All Share Index of 4.1 per cent.  while
our  benchmark index, the FT Investment Trust Index, rose by  no
less  than  31.0  per  cent.  Over the year,  investment  trusts
generally  benefited  from  strong equity  markets  particularly
overseas,  and  a  rather greater appetite amongst  the  private
investors  for  the sector.  As a trust whose  objective  is  to
achieve   capital  growth  principally  through   investing   in
investment  trusts, we have supported the AITC's  Its  campaign.
The  industry  has itself reacted creatively to changes  in  the
savings   market,  and  this  process  is  likely  to  continue.
However, the institutional overhang remains, as is evident  from
the  discount at which many investment trusts shares trade.  The
obverse of this coin is the interesting opportunities that exist
for long-term investors.

The  Trust has now completed its first full year since the major
review of its management arrangements and accounting approach in
1998 including the decision to charge 80 per cent. of investment
management  costs to capital.  Earnings per share for  the  year
come  out  at 8.66p and the directors now recommend a first  and
final  dividend  of  7.00p,  more than  meeting  the  indication
previously given to shareholders.

Last year I reported we were planning how best to reorganise our
secretarial   and   administrative  requirements,   increasingly
important  in  today's regulatory environment.  I am  please  to
report  that  we  have reached agreement with Capel  Cure  Sharp
Holdings  Ltd.  to  take  on  much of  the  administrative  work
currently  undertaken in Belfast and to provide the  Trust  with
full  secretarial  services following  the  conclusion  of  this
year's AGM.

Manager's Report And Portfolio Analysis

The past year has been one of mixed fortunes.  The first half of
our  fiscal  year  saw stock markets depressed,  but  aggressive
additions of liquidity by the central banks under the leadership
of  the Federal Reserve led to a dramatic turnaround in October.
This monetary stimulation encouraged more rapid economic growth,
with   its   associated  increase  in  corporate  profits.    As
importantly,  it  gave credence to the idea  of  the  'Greenspan
put',  the naive belief that equity investment entailed  limited
risk,  since  the Federal Reserve would always ensure  that  any
incipient  bear market would be offset by substantial injections
of   liquidity.   The  result  was  an  enthusiasm  for  shares,
particularly  in  the areas of telephone, media and  technology,
that  can  only  be described as manic.  Your company  benefited
from  substantial rises in Fleming India, North Atlantic Smaller
Companies,  Lloyds  Smaller Company capital shares,  which  were
sold  before  the year end, and Scottish Value whose  perceptive
management  exploited trusts with exposure in New Japan  and  in
high  technology.  The shares more than doubled and our  holding
was  markedly  reduced in the early part  of  2000.   Profitable
reconstruction occurred in Commodities Trust, Value Realisation,
Martin   Currie  Smaller  Companies  Trust,  Venturi,   Aberdeen
Development and just after the year end, Five Arrows Chile.

Overall,  though,  a  cautious attitude was  adopted  throughout
because  of  the exceptionally poor valuation of equity  markets
relative  to history and to bond and cash interest rates.   High
exposures were maintained to the zero preference market,  which,
however,  produced  a  very modest return; issuance  overwhelmed
demand.   Our  portfolio  is of short duration  and  now  offers
highly attractive returns for little risk in particular holdings
in  the portfolio.  The bond holdings were mixed.  The US Index-
Linked Treasuries ('TIPS') benefited from a higher rating and  a
strong currency, but bonds denominated in Euros suffered.  Latin
American  Extra  Yield, a trust that owns Brady Bonds,  saw  its
discount narrow in anticipation of reconstruction, but the Asian
High  Yield  Bond Fund saw the discount actually widen  to  over
50%;  prospective  returns  seem  quite  exciting.   Performance
attribution therefore would credit almost the whole increase  in
assets of 9.7% to the 30% of the portfolio held in equities.

Outlook

With  an  overheated  economy as well as a highly  valued  stock
market,  the outlook for the US is poor.  The economy  has  been
allowed  to  grow  at above trend rates because  of  an  initial
absence  of  inflation, but this has been  achieved  by  a  huge
expansion of credit; a soft landing seems difficult to  achieve.
Unfortunately, if a general bear market does develop in the  US,
as  opposed to a correction in the NASDAQ, the effects  will  be
felt  in  all equity markets.  We therefore continue to  believe
that risk aversion is appropriate for long term private funds.

Within the equity holdings, Siam Selective and Five Arrows Chile
are  in  the process of liquidating and Electra will tender  for
25%  of  its  own  shares.  Fleming Income  Growth  capital  has
already  been  repaid.  The largest holding is  in  Tor  Capital
shares, which are due to mature in July 2001 and there is a good
investment in British Assets Growth shares and Investors Capital
Growth  shares  where corporate developments are  likely  in  or
before   September  2001.   In  short,  the  opportunities   for
shareholders to benefit from narrowing discounts in trusts  with
good quality assets remain attractive.

In  the  fixed  interest  portfolio,  a  weaker  sterling  might
increase the gains made from eventually lower interest rates  as
economies  cool down in 2001.  The zero preference portfolio  is
of good quality and should produce a return of about 8%.

Statement of Total Return
(incorporating the revenue account)
For the year ended 5 April 200                                                  
                                             2000                         1999
                      Revenue     Capital    Total  Revenue   Capital     Total

                            £           £        £        £        £          £
Realised gains on 
investments                 -  1,585,803 1,585,803        - 1,579,978 1,579,948
Realised gains on life
assurance policies                     -         -        -    11,111    11,111
Net change in unrealised
appreciation                -    605,416   605,416        - (705,696) (705,696)
Income                 36,947          -   336,947  295,339         -   295,339

Gross Return          336,947  2,191,219 2,528,166  295,339   885,363 1,180,702

Investment 
management fees      (37,318)  (149,668) (186,986) (12,411)  (49,644)  (62,055)
Other expenses       (95,577)         -   (95,577)(103,972)  (85,452) (189,424)

Return on ordinary 
activities Before 
Taxation              204,052 2,041,551  2,245,603 178,956    750,267   929,223

Tax on ordinary 
activities            (2,250)         -    (2,250) (21,076)         -  (21,076)

Return attributable 
to equity 
shareholders          201,802 2,041,551  2,243,353  157,880   750,267   908,147

Dividends on ordinary shares:
 Dividend payable - 7p per
 Ordinary Share 
 (1999 - 5p)        (163,163)         -  (163,163) 116,545)         - (116,545)

Transfer to 
reserves               38,639 2,041,551 2,080,190   41,335    750,267   791,602

Return per ordinary 
share*                  8.66p    87.58p    96.24p    7.06p     33.57p    40.63p

*  There was no dilution of the above return in either year.

The revenue column of this statement is the profit and loss
account of the company.

All revenue and capital items in the above statement derive from
continuing operations.


Cash Flow Statement
For the year ended 5 April 2000
                                                     2000          1999
                                                        £             £

Net cash inflow from operating activities         348,797       246,458

Taxation

Corporation tax recovered/(paid)                   12,921      (13,187)

Capital expenditure and financial investment

Payments to acquire investments               (12,323,954) (14,364,605)
Receipts from sale of investments              11,235,875    13,561,068
Maturity of life assurances policies                    -       621,471

                                              (1,088,079)     (182,066)

Equity dividends paid                           (116,545)      (61,350)

Financing

Issue of ordinary share capital                        -        920,500

(Decrease)/increase in cash                    (843,206)        910,355

Net asset value per share                         998.9p         909.7p


The financial information set out above does not constitute the
company's statutory accounts for the years ended 5 April 1999
and 2000 but is derived from those accounts.  Statutory accounts
for 1999 have been delivered to the Registrar of companies and
those for 2000 will be delivered following the company's Annual
General Meeting.  The auditors have reported on those accounts;
their reports were unqualified and did not contain statements
under Section 237 (2) or (3) of the Companies Act 1985.