Final Results

Herald Investment Trust PLC
13 February 2003

                     PRELIMINARY STOCK EXCHANGE ANNOUNCEMENT



                           HERALD INVESTMENT TRUST plc

                    Results for the year to 31 December 2002

                               13 February 2003


                               BOARD STATEMENT


                              CHAIRMAN'S STATEMENT



The de-rating that began as the speculative period peaked in March 2000
continued throughout 2001 and into 2002. It is therefore disappointing to report
a decline in net assets per ordinary share of 34.9%, albeit after a maintained
dividend of 0.85p. Although this decline was worse than the Hoare Govett Smaller
Companies Index (down 25.8%), it was much less than the technology indices. The
Russell 2000 Technology Index is the most relevant in the US and was down 51.4%
in sterling terms, while the Techmark 100 index in the UK was down 55.9%.
However, it is noticeable that in the second half the decline in the Trust
assets overall and within the UK was lower than the Hoare Govett Smaller
Companies Index. This reflects the 'bear' market broadening to sectors outside
TMT.



More importantly there was a shock wave through the sector in the second half of
2001 and the first half of 2002 as earnings expectations declined in most
companies in the Trust's orbit, but for the last six months there has been much
more stability in trading expectations. Meanwhile the average p/e of the
investee companies in the portfolio is at the lower end of the long term range
while interest rates are low. With this background the Board supported the
Manager's request to gear up the Trust, in net terms, for the first time since
inception in 1994. A US$ based loan of c£20m was therefore in place in the first
week of November. This represents a considerably more positive stance than the
cash and gilts held at the start of the year of c£45m. The Manager's fees are
based on Shareholders' funds, in line with the historic policy.



The income statement has been adversely affected by the progressively reducing
levels of cash and gilts through the year, which generated a higher income than
the yield on equities. Although the decline was partially offset by lower costs,
this has still led to a decline in profits. However, the decision has been made
to maintain the dividend, although it is not quite covered by profits, because
many investments in the portfolio have a progressive dividend policy, while
others are paying a dividend for the first time. This should lead to a more
favourable income line in 2003. Capital gain remains the Trust's objective. The
remaining warrants that were issued when the Trust was launched can be exercised
for the last time in April.



Although the decline in assets is obviously disappointing, the Manager has
maintained a cautious stance for a long time, which has enabled the Trust to
deliver a strong performance relative to its specialist peers. This also makes
it the more exciting now that the Manager's stance is so much more positive. At
the smaller end there are now some unjustifiably low valuations in the UK, which
retail and professional investors alike are currently unwilling to correct.
There will inevitably be corporate activity if investors do not adjust
valuations upwards. In the US valuations are not as anomalous, the recovery in
trading seems more evident and the number of quality companies is enviable.
Although superficially there is less intrinsic value in US there is a vibrant
investor base, much more confidence and so many more really interesting
companies.



There remain macro uncertainties at economic, political and military levels,
which continue to affect market sentiment. We are optimistic that value at the
micro level will offset these legitimate concerns.





Martin Boase
Chairman
12 February 2003


Statistics and Performance Report


                                                                               Performance       Performance
                            At inception               At               At           since   since inception
                        16 February 1994 31 December 2001      31 December     31 December
                                                                      2002            2001

Basic NAV per share               98.7p+           322.9p           210.2p          -34.9%          +113.0%

Diluted NAV (FRS14)               98.7p+           314.5p           206.7p          -34.3%          +109.4%

Fully diluted NAV per             98.7p+           314.4p           206.0p          -34.5%          +108.7%
share

Share price                       90.9p            306.0p           177.0p          -42.2%           +94.7%

Warrant price                     45.5p            212.5p            79.0p          -62.8%           +73.6%

FTSE 100 Index                 3,417.7           5,217.4          3,940.4           -24.5%           +15.3%

HGSC Index (ext. cap           1,750.0           2,283.4          1,693.9           -25.8%            -3.2%
gains ex investment
co's)

Russell 2000 (small                83.2*            102.1             49.6          -51.4%           -40.4%
cap) Technology Index
(in sterling terms)

+ 100p is shareholders' subscription price before launch costs of 1.3p.
* 9 April 1996, being the date funds were first available for international investment.





Portfolio Performance for the 12 months to 31 December 2002


                                            Performance (total return)
Equity markets
UK                                                              -31.3%
Europe ex. UK                                                   -39.4%
Americas                                                        -56.2%
Japan                                                           +20.9%
Asia Pacific ex. Japan                                          -24.2%



                                    - ends -



For further information please contact:


Ms Katie Potts, Manager
Herald Investment Trust plc                                     020 7553 6300



Baillie Gifford & Co.
Secretaries                                                      0131 222 4000

The following is the unaudited preliminary statement for the year to 31 December
2002 which was approved by the Board on 12 February 2003.  The Directors of
Herald Investment Trust plc are recommending to the Annual General Meeting of
the Company to be held on 16 April 2003 the payment of a final dividend of 0.85p
net (0.85p net last year) per ordinary share for the year ended 31 December
2002.





                         HERALD INVESTMENT TRUST plc

                           STATEMENT OF TOTAL RETURN
               (unaudited and incorporating the revenue account*)


                                           for the year ended                      for the year ended
                                            31 December 2002                        31 December 2001
                                      Revenue     Capital        Total         Revenue     Capital       Total
                                        £'000       £'000        £'000           £'000       £'000       £'000


Losses on investments                      -     (95,509)     (95,509)              -    (103,929)   (103,929)
Unrealised gain on loans                   -         582          582               -         341         341
Currency losses                            -        (146)        (146)              -         (61)        (61)

Income (note 1 )                       3,539           -        3,539           4,728           -       4,728
Investment management fee             (2,470)          -       (2,470)         (3,205)          -      (3,205)
Other administrative expenses           (262)          -         (262)           (272)          -        (272)


Net return before finance costs
and taxation                             807     (95,073)     (94,266)          1,251    (103,649)   (102,398)
Finance costs of borrowings             (149)          -         (149)            (75)           -        (75)


Return on ordinary activities            658     (95,073)     (94,415)          1,176    (103,649)   (102,473)
before taxation
Tax on ordinary activities               (31)          -          (31)            (31)           -        (31)

Return on ordinary activities            627     (95,073)     (94,446)          1,145    (103,649)   (102,504)
after taxation
Ordinary dividend payable               (718)          -         (718)           (718)           -       (718)
(note 2)


Transfer (from)/to reserves              (91)    (95,073)     (95,164)            427    (103,649)   (103,222)


Return per Ordinary share (note 3)

Basic                                   0.74p   (112.55p)    (111.81p)           1.36p   (123.01p)   (121.65p)
Diluted (FRS14)                         0.73p   (110.16p)    (109.43p)           1.32p   (119.45p)   (118.13p)
Dividend per Ordinary share             0.85p                                    0.85p



* The revenue column of this statement is the revenue account of the Company.

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

HERALD INVESTMENT TRUST plc



                            SUMMARISED BALANCE SHEET
                              at 31 December 2002
                                  (unaudited)


                                                                      31 December 2002          31 December 2001
                                                                                 £'000                     £'000
NET ASSETS

Investments at market value                                                   191,988                   258,901
Net liquid assets                                                               7,912                    16,723
Total assets (before deduction of bank loans)                                 199,900                   275,624
Bank loans (note 4)                                                           (22,310)                   (2,892)
                                                                              177,590                   272,732


CAPITAL AND RESERVES
Called-up share capital                                                        21,119                    21,113
Capital reserves                                                              154,423                   249,480
Revenue reserve                                                                 2,048                     2,139
EQUITY SHAREHOLDERS' FUNDS                                                    177,590                   272,732



Net asset value per ordinary share (note 5)
Basic                                                                          210.23p                   322.94p
Diluted (FRS14)                                                                206.68p                   314.53p
Fully diluted                                                                  206.04p                   314.42p

Ordinary shares in issue                                                    84,475,145               84,453,686





                            DISTRIBUTION OF ASSETS
                              at 31 December 2002
                                  (unaudited)


                                                                      31 December 2002          31 December 2001
                                                                                     %                         %


Equities:              United Kingdom                                             62.9                      51.0
                       Continental Europe                                          6.4                       5.7
                       Americas                                                   18.2                      21.7
                       Japan                                                       0.5                       0.2
                       Asia Pacific                                                8.0                       5.7
                                                                                  96.0                      84.3
UK bonds                                                                             -                       9.6
Net liquid assets                                                                  4.0                       6.1
Total assets (before deduction of bank loans)                                    100.0                     100.0


                              HERALD INVESTMENT TRUST plc
                             SUMMARISED CASH FLOW STATEMENT
                                       (unaudited)


                                                                 for the year ended        for the year ended
                                                                 31 December 2002          31 December 2001
                                                                 £'000       £'000           £'000       £'000

NET CASH INFLOW FROM OPERATING ACTIVITIES                                     790                       1,571
NET CASH OUTFLOW FROM SERVICING OF FINANCE                                    (84)                        (79)
FINANCIAL INVESTMENT
Purchase of investments                                       (99,858)                   (124,980)
Sale of investments                                            69,514                     130,695
Currency movement                                                (146)                        (61)
NET CASH (OUTFLOW)/INFLOW FROM FINANCIAL INVESTMENT                       (30,490)                      5,654
EQUITY DIVIDEND PAID                                                         (718)                       (713)
NET CASH (OUTFLOW)/INFLOW BEFORE USE OF LIQUID RESOURCES                  (30,502)                      6,433
AND FINANCING
MANAGEMENT OF LIQUID RESOURCES
Decrease in term deposits                                                       -                       4,000
FINANCING
Issue of Ordinary shares                                           22                         580
Loans drawn down                                               20,000                            -

NET CASH INFLOW FROM FINANCING                                             20,022                         580
(DECREASE)/INCREASE IN CASH                                               (10,480)                     11,013
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/
(DEBT)
(Decrease)/increase in cash in period                                     (10,480)                     11,013
Decrease in short term investments                                              -                      (4,000)
Increase in bank loans                                                    (20,000)                          -
Exchange movement on loans                                                    582                         341
MOVEMENT IN NET FUNDS IN PERIOD                                           (29,898)                      7,354
NET FUNDS AT 1 JANUARY                                                     16,351                       8,997
NET (DEBT)/FUNDS AT 31 DECEMBER                                           (13,547)                     16,351


                              HERALD INVESTMENT TRUST plc

                                          NOTES


                                                             31 December 2002                31 December 2001
                                                              £'000                           £'000
1.   Income


     Income from investments and interest receivable                        3,521                     4,724
     Other income                                                              18                         4

2.   The proposed final dividend will be paid on 22 April 2003 to all shareholders on the register at the
     close of business on 28 March 2003.

3.   Return per ordinary share
     Revenue return                                                           627                     1,145
     Capital return                                                      (95,073)                 (103,649)

     The basic return per ordinary share is based on the above totals of revenue and capital and on
     84,468,090 ordinary shares (2001 - 84,262,972) being the weighted average number of ordinary shares in
     issue during the year.



     The diluted returns per ordinary share are calculated on the above totals of revenue and capital and
     using the weighted average number of warrants in issue during the year adjusted by the difference
     between the average price of the ordinary shares during the year and the subscription price of 100p,
     to give a weighted average of 86,300,599 (2001 - 86,769,677) shares.


4.   The Company has arranged multi-currency loan facilities with The Royal Bank of Scotland plc.  These
     comprise a 364 day £20 million facility which expires on 31 October 2003 and a five year £3 million
     facility which expires on 7 January 2004.



     At 31 December 2002 the Company had borrowings totaling £22,310,000 (US$31,268,000 and yen
     551,550,000) (2001 - £2,892,000 (yen 551,550,000)).


5.   Net asset value per ordinary share is based on net assets of £177,590,000 (2001 - £272,732,000) and
     84,475,145 (2001 - 84,453,686) ordinary shares, being the number of ordinary shares in issue at each
     date.



     The diluted net asset per ordinary share, calculated in accordance with Financial Reporting Standard
     14 (FRS 14) is 206.68p (2001 - 314.53p).  This is based on net assets of £177,590,000 (2001 -
     £272,732,000) and on 85,924,748 (2001 - 86,711,381) ordinary shares, being the number of ordinary
     shares in issue at the year end plus the notional number of ordinary shares that would have been
     issued for no consideration using a year end share price of 177.0p (2001 - 306.0p).



     The fully diluted net asset value per ordinary share has been calculated on the assumption that the
     warrants in issue were fully exercised at the year end at 100p each, resulting in net assets of
     £180,922,000 (2001 - £276,086,000) and 87,807,349 (2001 - 87,807,349) ordinary shares in issue.



     During the year 21,459 warrants were exercised at 100p.  The number of outstanding warrants at 31
     December 2002 was 3,332,204 (2001 - 3,353,663).


6.   At the Annual General Meeting held in April 2002 the Company was granted authority to purchase up to
     12,659,607 ordinary shares (equivalent to 14.99% of its then issued share capital).   No ordinary
     shares were bought back during the year and therefore at 31 December 2002 the Company's authority to
     buy back shares remained unchanged at 12,659,607.










                          HERALD INVESTMENT TRUST plc

                                     NOTES (Ctd)



7.   The financial statements for the year to 31 December 2002 have been prepared on the basis of the
     accounting policies set out in the Company's financial statements at 31 December 2001.



     The financial information set out above does not constitute the Company's statutory accounts for the year
     ended 31 December 2002.  The financial information for 2001, is derived from the statutory accounts for
     2001 which have been delivered to the Registrar of Companies.  The Auditors have reported on the 2001
     accounts, their report was unqualified and did not contain a statement under section 237(2) or (3) of the
     Companies Act 1985.  The statutory accounts for 2002 will be finalised on the basis of the financial
     information presented in this preliminary announcement and will be delivered to the Registrar of
     Companies following the Company's Annual General Meeting.












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