Final Results

Herald Investment Trust PLC
12 February 2004

                     PRELIMINARY STOCK EXCHANGE ANNOUNCEMENT

                           HERALD INVESTMENT TRUST plc
                    Results for the year to 31 December 2003
                               12 February 2004

                               BOARD STATEMENT

                            CHAIRMAN'S STATEMENT



There has been a satisfactory bounce in the assets of the Trust this year from
the oversold position a year ago. Overall the fully diluted net asset value has
risen 77.4%. The borrowings of £20m taken on in November 2002 were an indication
of the Manager's belief that markets had become too cautious. The borrowings
were taken on at 2.1% in US$, at an exchange rate of $1.56 so there was the
additional benefit of hedging some US assets against $ weakness. The assets
weakened again in the first quarter reflecting pessimism about the Gulf War, but
HIT's assets bottomed 5% higher than the Autumnal low. This provided an
opportunity to borrow a further £10m at 1.85% once shareholders had approved an
increase in borrowing limits at the Annual General Meeting, and buy assets at
very cheap rates. However, by April it was clear that liquidity was limited and
the market was overdue a strong rally.



Although there has been a widespread rerating the fund has outperformed the most
relevant indices. In the UK the total return was +80.3%, whereas Techmark 100
grew 56.4% (59.5% total return), and the Hoare Govett Smaller Companies Index
grew 38.5%, albeit a weighted basket of the most relevant sectors was +57.8%. In
the US, as in the UK, small companies outperformed large and the Russell 2000
Technology index grew 63.4% in $, whereas the HIT US portfolio grew 78.9% in $.
The Asian and European performances were somewhat less, but account for a much
lower proportion of the assets. It is particularly pleasing that the fund was
able to outperform the relevant technology and media indices in the declining
markets of the previous two years, and outperform the rising market in 2003.
This reflected the move from c.£45m cash and gilts at the start of 2002 to a
geared position at the end, and the purchase of a number of very small more
highly leveraged stocks.



Whilst much of the bounce was from technically oversold positions, there has
been growing evidence of economic recovery. Businesses have reverted to more
sound principles, and profits have become fashionable again after the alarming
period in the boom around the turn of the century when the focus moved higher up
the profit and loss account to EBITDA (earnings before interest, tax,
depreciation, and amortisation) and revenues. Recovery in the US is more evident
with an astonishing 8% GDP growth in Q3. Furthermore there is margin expansion
as cost benefits are coming through, leading to some strong profit improvements.
There are already electronic component shortages, and certain semiconductors are
in short supply. Even the telecoms sector which experienced the biggest boom and
bust is seeing improvements with a stronger statement from Nokia. The economy
has to remain strong for further progress from current levels. In the short term
this is probable, albeit there are worrying structural flaws in the world
economy such as the level of consumer debt in the Anglo-Saxon world and the US
trade deficit. The weakness of the $ will have ramifications, and will not help
a number of the UK holdings.



The Trust's revenue profitability has been adversely affected by the reduced
interest income, and indeed the interest payable. The objective of the fund has
always been capital appreciation, and we are unrepentant about the income cost,
because the capital account has so clearly benefited.



In conclusion, the year has been satisfactory. We remain of the view that the
area of small young companies can outperform over the long term, but similar
strength cannot be expected this year.



Colin McCarthy has intimated that he will retire after the Annual General
Meeting in April. I would like to express my thanks for his valued contribution
to the Company over the past 10 years. Board composition is being reviewed in
the light of the revised Combined Code on Corporate Governance.



The Company's Articles of Association give shareholders the right to vote at the
Annual General Meeting on 14 April 2004 as to whether the Company should
continue to operate as an investment trust. Herald has been one of the best
performing trusts over 10 years and the Directors have every confidence that
satisfactory performance should continue. Accordingly, the Directors intend to
vote their own shareholdings in favour of the resolution for the Company to
continue as an investment trust. I encourage shareholders to give due
consideration to this important matter and express their wishes by casting their
vote. Also part of the business at the Annual General Meeting is a resolution to
increase the aggregate annual limit of Directors' fees from £70,000 to £100,000.
The current Directors' fees total £70,000 and consequently there is no scope for
increase and with the extra burdens placed on Directors nowadays it is likely
that fees will generally continue to rise. It is not the intention that
Directors' fees should increase to this limit in the forthcoming year but merely
to provide flexibility for modest increases or to add to the Board number.



Martin Boase
Chairman
11 February 2004



                                               Statistics and Performance Report

                            At inception               At               At     Performance      Performance
                        16 February 1994 31 December 2002      31 December           since  since inception
                                                                      2003     31 December
                                                                                      2002

Basic NAV per share               98.7p+           210.2p           365.4p          +73.8%          +270.2%
Diluted NAV (FRS14)               98.7p+           206.7p           365.4p          +76.8%          +270.2%
Fully diluted NAV per             98.7p+           206.0p           365.4p          +77.4%          +270.2%
share
Share price                       90.9p            177.0p           325.3p          +83.8%          +257.9%
Warrant price                     45.5p             79.0p                -               -                -
FTSE 100 Index                 3,417.7           3,940.4           4,476.9          +13.6%           +31.0%
HGSC Index (ext. cap           1,750.0           1,693.9           2,346.7          +38.5%           +34.1%
gains ex investment
co's)
Russell 2000 (small                83.2*             49.6             72.9          +47.0%           -12.4%
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 2003
                                          

Equity markets                               Performance (total return)
UK                                                              +80.3%
Europe ex. UK                                                   +52.5%
Americas                                                        +60.8%
Japan                                                           +44.0%
Asia Pacific ex. Japan                                          +33.9%



                                    - ends -



For further information please contact:

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

Baillie Gifford & Co.
Secretaries                                                    0131 275 2000

The following is the unaudited preliminary statement for the year to 31 December
2003 which was approved by the Board on 11 February 2004.  The Directors of
Herald Investment Trust plc are recommending to the Annual General Meeting of
the Company to be held on 14 April 2004 the payment of a final dividend of 0.30p
net (0.85p net last year) per ordinary share for the year ended 31 December
2003.





                         HERALD INVESTMENT TRUST plc

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


                                           for the year ended                      for the year ended
                                            31 December 2003                        31 December 2002
                                      Revenue     Capital        Total         Revenue     Capital       Total
                                        £'000       £'000        £'000           £'000       £'000       £'000

Gains/(losses) on investments              -     136,680      136,680               -     (95,509)    (95,509)
Exchange difference on loans               -       3,169        3,169               -         582         582
Currency gains/(losses)                    -         100          100               -        (146)       (146)
Income (note 1)                        3,882           -        3,882           3,539           -       3,539
Investment management fee             (2,727)          -       (2,727)         (2,470)          -      (2,470)
Other administrative expenses           (259)          -         (259)           (262)          -        (262)

Net return before finance costs
and taxation                             896     139,949      140,845             807     (95,073)    (94,266)
                                         
Finance costs of borrowings             (591)          -         (591)           (149)          -        (149)


Return on ordinary activities                    
before taxation                          305     139,949      140,254             658     (95,073)    (94,415)


Tax on ordinary activities               (29)          -          (29)            (31)          -         (31)

Return on ordinary activities            276     139,949      140,225             627     (95,073)    (94,446)
after taxation
Ordinary dividend payable               (263)          -         (263)           (718)          -        (718)
(note 2)

Transfer to/(from) reserves               13     139,949      139,962             (91)    (95,073)    (95,164)


Return per Ordinary share (note
3)

Basic                                   0.32p     161.39p      161.71p           0.74p   (112.55p)   (111.81p)
Diluted (FRS14)                         0.32p                                    0.73p
Dividend per Ordinary share             0.30p                                    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 2003
                                  (unaudited)

                                                                      31 December 2003          31 December 2002
                                                                                 £'000                     £'000
NET ASSETS
Investments at market value                                                    331,497                  191,988
Net liquid assets                                                               18,712                    7,912
Total assets (before deduction of bank loans)                                  350,209                  199,900
Bank loans (note 4)                                                           (29,325)                  (22,310)
                                                                               320,884                  177,590
CAPITAL AND RESERVES
Called-up share capital                                                         21,952                   21,119
Capital reserves                                                               296,871                  154,423
Revenue reserve                                                                  2,061                    2,048
EQUITY SHAREHOLDERS' FUNDS                                                     320,884                  177,590

Net asset value per ordinary share (note 5)
Basic                                                                          365.44p                   210.23p
Diluted (FRS14)                                                                365.44p                   206.68p
Fully diluted                                                                  365.44p                   206.04p

Ordinary shares in issue                                                    87,807,348                84,475,145






                           DISTRIBUTION OF ASSETS
                             at 31 December 2003
                                  (unaudited)
                                                                      31 December 2003          31 December 2002
                                                                                     %                         %

Equities:         United Kingdom                                                  63.4                      62.9
                  Continental Europe                                               6.0                       6.4
                  Americas                                                        17.8                      18.2
                  Japan                                                            0.6                       0.5
                  Asia Pacific                                                     6.9                       8.0
                                                                                  94.7                      96.0
Net liquid assets                                                                  5.3                       4.0
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 2003          31 December 2002
                                                                 £'000       £'000           £'000       £'000
NET CASH INFLOW FROM OPERATING ACTIVITIES                                     827                         790
NET CASH OUTFLOW FROM SERVICING OF FINANCE                                   (580)                        (84)
FINANCIAL INVESTMENT
Purchase of investments                                       (77,543)                    (99,858)
Sale of investments                                            74,274                      69,514
Currency movement                                                 100                        (146)
NET CASH OUTFLOW FROM FINANCIAL INVESTMENT                                 (3,169)                    (30,490)
EQUITY DIVIDEND PAID                                                         (718)                       (718)
NET CASH OUTFLOW BEFORE FINANCING                                          (3,640)                    (30,502)
FINANCING
Issue of Ordinary shares                                        3,332                          22
Loans drawn down                                               37,902                      20,000
Loans repaid                                                  (27,718)                          -

NET CASH INFLOW FROM FINANCING                                             13,516                      20,022
INCREASE/(DECREASE) IN CASH                                                 9,876                     (10,480)

RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Increase/(decrease) in cash in period                                       9,876                     (10,480)
Increase in bank loans                                                    (10,184)                    (20,000)
Exchange movement on loans                                                  3,169                         582
MOVEMENT IN NET DEBT IN PERIOD                                              2,861                     (29,898)
NET (DEBT)/FUNDS AT 1 JANUARY                                             (13,547)                     16,351
NET DEBT AT 31 DECEMBER                                                   (10,686)                    (13,547)




                         HERALD INVESTMENT TRUST plc

                                    NOTES

                                                        31 December 2003                31 December 2002
                                                        £'000                         £'000
1.   Income

     Income from investments and interest receivable                3,875                      3,521
     Other income                                                       7                         18

2.   The proposed final dividend will be paid on 20 April 2004 to all shareholders on the register at the
     close of business on 26 March 2004.

3.   Return per ordinary share
     Revenue return                                                   276                        627
     Capital return                                               139,949                   (95,073)

     The basic return per ordinary share is based on the above totals of revenue and capital and on
     86,711,829 ordinary shares (2002 - 84,468,090) being the weighted average number of ordinary shares in
     issue during the year.



     The diluted revenue return per ordinary share is calculated on the revenue return above 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 87,358,935 (2002 - 86,300,599) shares.


4.   The Company has arranged multi-currency loan facilities with The Royal Bank of Scotland plc and ING
     Bank N.V.  The facilities with the Royal Bank of Scotland plc comprise a five year £3 million facility
     which expires on 7 January 2004 and a 364 day £20 million facility which expired on 31 October 2003.
     The ING Bank N.V. facility comprises a 364 day £30 million facility which expires on 26 October 2004.



     At 31 December 2003 the Company had borrowings totaling £29,325,000 (US$47,350,000 and yen
     551,550,000) (2002 - £22,310,000 (US$ 31,268,000 and yen 551,550,000)).


5.   Net asset value per ordinary share is based on net assets of £320,884,000 (2002 - £177,590,000) and
     87,807,348 (2002 - 84,475,145) ordinary shares, being the number of ordinary shares in issue at each
     date.



     When the warrants were in existence the diluted net asset value per ordinary share was calculated in
     accordance with Financial Reporting Standard 14 (FRS 14). At 31 December 2002 this was based on net
     assets of £177,590,000 and on 85,924,748 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 the share price of 177.0p at that date.



     The fully diluted net asset value per ordinary share was calculated on the assumption that the
     warrants in issue were fully exercised at 31 December 2002 at 100p each, resulting in net assets of
     £180,922,000 and 87,807,348 ordinary shares in issue.



     The final date for the exercise of warrants was 30 April 2003 and in accordance with the terms and
     subject to the conditions of the warrants 3,332,203 ordinary shares were allotted in respect of
     warrants on which the subscription rights had been exercised.  At 31 December 2003 there were no
     warrants in issue (31 December 2002 - 3,332,203).


6.   At the Annual General Meeting held in April 2003 the Company was granted authority to purchase up to
     12,662,824 ordinary shares (equivalent to 14.99% of its issued share capital at that date).   No
     ordinary shares were bought back during the year and therefore at 31 December 2003 the Company's
     authority to buy back shares remained unchanged at 12,662,824.



                         HERALD INVESTMENT TRUST plc

                                 NOTES (Cont'd)


7.   The financial statements for the year to 31 December 2003 have been prepared on the basis of the
     accounting policies set out in the Company's financial statements at 31 December 2002.



     The financial information set out above does not constitute the Company's statutory accounts for the year
     ended 31 December 2003.  The financial information for 2002 is derived from the statutory accounts for
     2002 which have been delivered to the Registrar of Companies.  The Auditors have reported on the 2002
     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 2003 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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