Final Results

Graphite Enterprise Trust PLC
16 March 2005


For immediate release                                         16 March 2005







                         GRAPHITE ENTERPRISE TRUST PLC

                   UNAUDITED PRELIMINARY STATEMENT OF RESULTS

                        FOR THE YEAR TO 31 DECEMBER 2004





SUMMARY



•        Net assets per share rose by 12.5%



•        Total return to shareholders was £38.2 million or 14.8%



•        The share price rose by 27.3%



•        Realisations from the investment portfolio totalled £109.3 million



•        Closing shareholders' funds were £287.6 million







FINANCIAL RESULTS


                                         2004               2003        Change



Net assets per share                   320.6p             284.9p        +12.5%
attributable to ordinary
shareholders

Share price                            283.0p             222.3p        +27.3%

FTSE All-Share Index                 2,410.75           2,207.38         +9.2%

Final dividend per share                 4.3p               4.3p           -

Special dividend per share               2.8p                  -          n/a






John Sclater, Chairman, made the following statement on the results:



Performance



The net asset value per share of Graphite Enterprise increased by 12.5% in 2004,
mainly as a result of a number of profitable disposals.  The share price
performed particularly strongly, rising by 27.3% in the year.  These increases
compare with a rise of 9.2% in our benchmark, the FTSE All-Share Index.  At the
year end shareholders' funds were £287.6 million.



Reflecting the strong share price performance, the discount of the share price
to the underlying net asset value narrowed sharply in the year from 22.0% to
11.7%.  This was the lowest the discount had been since May 2001.



The objective of Graphite Enterprise is to provide shareholders with long term
capital growth measured against our benchmark, the FTSE All-Share Index.  Equity
markets have been turbulent since the late 1990s, with most indices still
significantly below the peaks they reached in 1999 and 2000.  In the five years
to 31 December 2004, the FTSE All-Share Index fell by 25.6% while the net asset
value per share of Graphite Enterprise rose by 0.8% and its share price fell by
12.4%.



The longer term performance of Graphite Enterprise has been strong, with
increases of 285.7% in the net asset value per share and 301.4% in the share
price in the ten years to 31 December 2004.  These movements compare with an
increase of 58.5% in the FTSE All-Share Index over the same period.



Portfolio movements



In last year's annual report we commented on rising confidence and prices in the
private equity market and we anticipated that the rate of disposals from the
Graphite Enterprise portfolio would be higher in 2004.  In the event the market
remained strong and conditions for disposals were excellent.



Total proceeds from the investment portfolio were £109.3 million, realising a
surplus over opening valuations of £36.1 million or 49.4%.  As we took the view
that prices were unusually high, it was unsurprising that total new investments
of £29.4 million were considerably less than the exceptionally high level of
disposals.  This resulted in an increase in the level of liquidity in the year.
At the same time, as anticipated in last year's report, few new fund commitments
were made in a market where, in our view, there were few high quality funds
available.



Balance sheet



At 31 December 2004 £234.8 million was invested in or committed to the
investment portfolio, representing 80.3% of total net assets.  Adjusting for
further commitments of £35.9 million since the year end, this rises to 92.6%.  A
year earlier, the amount invested in or committed to the portfolio represented
112.2% of total net assets.  The change in 2004 was the result of the high level
of disposals.



The investment portfolio was valued at £151.4 million at the end of the year,
representing 51.8% of total net assets.  Cash and near-cash were £140.8 million
(48.2%) offset by £83.3 million of commitments (28.5%).  Uncommitted cash and
near-cash was therefore £57.5 million, an amount which has fallen to £21.6
million, or 7.4% of total net assets, following the commitments since the year
end.  Given the nature of our commitments, uncommitted cash and near-cash is the
best measure of liquidity.



The great majority of our commitments are to funds and are contractual, long
term and binding.  It is therefore essential to have sufficient liquidity
available to meet cash calls from funds, whether in cash or in borrowing
facilities.  Although Graphite Enterprise is currently liquid following the
successful recent disposals, looking forward we expect commitments to exceed
liquidity once again, and it is also possible that borrowing facilities will be
required.



Share buy backs



The discount of the share price to net asset value fluctuated widely during the
year, hitting a peak of 24.8% and narrowing in the last few months to end at
11.7%.  We have continued to follow the policy of enhancing shareholder returns
by buying back shares when they are available in reasonable volumes at a high
discount, while maintaining sufficient liquidity for new investments.  For a
large part of 2004, however, it was not possible, for regulatory reasons, to buy
back shares when negotiations were under way to make disposals that would be
likely to affect the share price if they completed.  Following the announcement
of these disposals, share buy-backs resumed.



A total of 1.075 million shares was bought back during the year at a cost of
£2.9 million.  Prices paid varied between 262.0p and 270.0p, with an average
price of 266.9p, and an average discount to net asset value of 15.0%.  The buy
backs enhanced net asset value per share by 0.6p.



Statement of total return and dividend



The total return for the year was £38.2 million, or 42.1p per share,
representing 14.8% of opening shareholders' funds.  The capital return was £30.4
million or 33.6p per share, and the net revenue attributable to shareholders was
£7.7 million or 8.5p per share.



Net revenue increased by £3.3 million, principally as a result of higher
dividend and interest income from portfolio investments.  The income included an
unusually large dividend of £2.1 million received from Maplin Electronics prior
to its sale.  The increase in net revenue was partly offset by a higher tax
charge and slightly higher expenses.



The exceptional level of net revenue in 2004, and in particular the receipt of
the dividend income from Maplin, allowed Graphite Enterprise to pay a special
dividend of 2.8p per share in December.  The Board is recommending an unchanged
final dividend of 4.3p per share.



International financial reporting standards (IFRS)



As a listed group which prepares consolidated accounts, Graphite Enterprise will
apply IFRS from 1 January 2005, and the first published results under IFRS will
be those for the six months ending 30 June 2005 with restatement of prior year
comparatives.



While the precise application of IFRS to investment trusts is still under
debate, it seems unlikely at this stage that it will result in any major change
to the net asset value of Graphite Enterprise.



Outlook



The UK private equity market has been unusually strong for some time, with
private company valuations at the end of 2004 higher than for many years.  The
supply of debt remains plentiful, and this encourages equity providers to offer
high prices when bidding for companies.  Conditions therefore remain good for
disposals, while it is often questionable whether the prices demanded for new
investments represent good value.  We believe that the UK private equity market
is at a cyclical peak from which it is likely to fall over the next 12 to 18
months, especially if the economy slows or interest rates rise further.
Conditions in continental European markets have generally been similar, if not
so extreme as in the UK.



Against this background, we shall remain enthusiastic sellers of mature
companies and cautious buyers until conditions change.  This may result in a
further short term increase in liquidity, leaving us well positioned to take
advantage of any downturn in the market.  In the meantime there has been a
significant change in the fund market where we expect the supply of high quality
funds to increase in 2005.  We have already made two commitments since the year
end and we are actively considering a number of others.  The raising of these
funds is well timed in relation to our view of the market, as they will be
investing over the next three or four years when conditions for new investments
are likely to be more attractive than they are at present.



For further information, please contact:


Rod Richards / William Eccles                       Tel:  [phone]

Graphite Capital









GRAPHITE ENTERPRISE TRUST PLC

Preliminary Statement (unaudited) for the year ended 31 December 2004



SUMMARY OF CONSOLIDATED BALANCE SHEET
                                                                                 At 31 December
                                                                           2004                    2003

                                                                         £'000s                  £'000s

Investments listed in Great Britain                                      17,231                  24,446
Investments listed outside Great Britain                                    210                     168
Unlisted investments at directors' valuation                            133,998                 168,467
Net current assets                                                      140,791                  69,734
Total assets less current liabilities                                   292,230                 262,815
Minority interests                                                      (4,609)                 (4,110)
Net assets attributable to ordinary shareholders                        287,621                 258,705





CONSOLIDATED STATEMENT OF TOTAL RETURN (INCORPORATING THE REVENUE ACCOUNT)


For the year ended 31 December                     2004                                2003


                                        Revenue     Capital       Total     Revenue     Capital       Total

                                         £'000s      £'000s      £'000s      £'000s      £'000s      £'000s

Gains and losses on investments               -      38,256      38,256           -      26,319      26,319
Income (see Note 1)                      11,681           -      11,681       7,537           -       7,537
Investment management charges           (1,209)     (3,626)     (4,835)     (1,076)     (3,229)     (4,305)
Other expenses                            (874)         181       (693)       (770)       (152)       (922)
Net return before finance costs and
tax
                                          9,598      34,811      44,409       5,691      22,938      28,629
Interest payable and similar                (1)           -         (1)        (15)           -        (15)
charges
Return on ordinary activities                                                 5,676      22,938      28,614
before tax
                                          9,597      34,811      44,408
Tax on ordinary activities              (1,864)       1,864           -     (1,242)       1,245           3
Return on ordinary activities after
tax
                                          7,733      36,675      44,408       4,434      24,183      28,617
Minority interests                            -     (6,232)     (6,232)           -     (1,406)     (1,406)
Return attributable to equity
shareholders
                                          7,733      30,443      38,176       4,434      22,777      27,211
Dividends in respect of ordinary
shares  (equity)
Proposed final dividend                 (3,858)           -     (3,858)     (3,904)           -     (3,904)
Special dividend                        (2,512)           -     (2,512)           -           -           -
Transfer to reserves                      1,363      30,443      31,806         530      22,777      23,307
Return per ordinary share                 8.54p      33.61p      42.15p       4.88p      25.08p      29.96p







SUMMARY OF CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 December                                               2004               2003
                                                                           £'000s
                                                                                              £'000s
Net cash inflow from operating activities                                   2,720                943
Net cash outflow from servicing of finance                                    (1)               (15)
Net cash inflow from tax                                                        -                544
Net cash inflow/(outflow) from investing activities                        79,890              (865)
Equity dividends paid                                                     (6,417)            (3,904)
Net cash (outflow)/inflow from movement in liquid resources              (52,792)             18,500
Net cash outflow from financing                                           (8,610)            (1,321)
Increase in cash                                                           14,790             13,882





Reconciliation of net cash flow to movement in net liquid funds


                                                               2004                     2003
                                                           £'000s     £'000s       £'000s        £'000s


Net liquid funds at 1 January                                         73,528                     76,635
Increase in cash as above                                  14,790                 13,882

Purchase/(sale) of institutional sterling funds            52,792                (18,500)
Change in net liquid funds resulting from cash flows       67,582                 (4,618)
Exchange difference                                           269                    (39)
Capitalised income                                          2,435                   1,550
Movement of net liquid funds                                          70,286                    (3,107)
Net liquid funds at 31 December                                      143,814                     73,528








Note 1



Analysis of Income
                                                                             2004               2003
                                                                           £'000s             £'000s
Dividends                                                                   3,556              1,682
Interest from investments                                                   3,852              3,152
Income from current asset investments                                       2,435              1,550
Other income                                                                1,838              1,153
                                                                           11,681              7,537







The Directors propose a final dividend of 4.3p (2003 - 4.3p) per share payable
on 25 May 2005 to shareholders registered on 22 April 2005.



The Annual General Meeting will be held at 11.30 a.m. on 18 May 2005 at The
Richmond Room, The Washington Mayfair Hotel, 5/7 Curzon Street, London W1.  The
registered office of the Company is 4th Floor, Berkeley Square House, Berkeley
Square, London W1J 6BQ.



The above financial information comprises non-statutory accounts within the
meaning of Section 240 of the Companies Act 1985.  The financial information for
the year ended 31 December 2003 has been extracted from published accounts for
the year ended 31 December 2003 which have been delivered to the Registrar of
Companies and on which the report of the auditors was unqualified.  For the year
ended 31 December 2004 copies of the audited Report and Accounts will be posted
to shareholders on or about 15 April 2005 and copies may be obtained during
normal business hours from the Company's registered office thereafter.


                                                          By order of the Board

                                            Graphite Capital Management Limited
                                                  
                                                                      Secretary

                                                                  16 March 2005









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