Final Results

Merchants Trust PLC
10 March 2003



For Immediate Release     10th March 2003


                            THE MERCHANTS TRUST PLC

                      ANNOUNCEMENT OF PRELIMINARY RESULTS

                      For the year ended 31st January 2003


Highlights


  • Earnings per share of 17.26p, up 3.4%, including 0.6p per share from
    special dividends. Underlying growth was 1.1%.

  • Net dividends totalled 17.20p per share in 2002/03, an increase of 2.4%.
    This is the twenty-first consecutive annual increase.

  • The Net Asset Value per share fell by 35.0% compared with a fall of 30.9%
    in the FTSE 100 Index. Before the impact of gearing the Trust's portfolio
    fell by 27.6%.

  • Ordinary shares yield 7.2% at 238p, compared with 4.1% on the FTSE 100
    Index at the close on 10th March 2003.

Net Asset Value

The Net Asset Value per Ordinary Share at 31st January 2003 was 267.8p compared
with 412.3p at 31st January 2002, a fall of 35.0%. This compares with a fall of
30.9% recorded by the FTSE 100 index. The defensive nature of the Trust's
portfolio meant that total assets fell 27.6%, less than the FTSE 100 and FTSE
350 high yield indices, although this outperformance was offset by the impact of
gearing in a falling market. The FTSE 350 High Yield Index fell by 28.7% over
the same year.

Ordinary Dividend

The Board is recommending a final dividend of 4.30p per share, payable on 13th
May 2003 to holders of record at the close of business on 22nd April 2003. This
gives a total of 17.20p for the year ended 31st January 2003, an increase of
2.4% when compared with the total distribution of 16.80p paid during the
previous year. The Trust has now recorded an unbroken record of dividend
increases over the last twenty-one years.

Earnings

Net earnings per share rose from 16.70p to 17.26p or by 3.4%. If the impact of
special dividend receipts in both years is ignored, the underlying rate of
increase is 1.1%.

Page 2


Prospects

In assessing the outlook for the current financial year it is striking that
there are still a large number of issues, both political and economic, which
could continue to depress market sentiment. Moreover US equities continue to be
relatively highly rated and this fact may well constrain progress for equities
elsewhere in the developed world. However, after three years of falling markets,
UK equities are once again attractive by reference to a number of historic
yardsticks and there is now a much broader investor interest in dividend income,
and as a consequence, in the high yielding companies in which the Trust is
invested.

Annual General Meeting

The Annual General Meeting of the Company will be held at Riverbank House, 2
Swan Lane, London EC4R 3UX on Tuesday 12th May 2003 at 12.00 noon.

Share Buy Backs

The Board has decided to recommend to shareholders that the Company takes
renewed powers to buy back its Ordinary Shares. Full details will be sent to
shareholders in the forthcoming Annual Report and Accounts.

By Order of the Board

10 Fenchurch Street     K J Salt

London EC3M 3LB     Company Secretary


                                     Page 3

Unaudited preliminary results for the year ended 31st January 2003 were approved
for immediate release as undernoted:

RESULTS

STATEMENT OF TOTAL RETURN
for the year ended 31st January 2003
                                                                              2003
                                                             (£)               (£)                 (£)
                                                           Revenue           Capital              Total
                                                           (Note 3)

Net gains on investments                                             -       (140,362,992)       (140,362,992)
Income                                                      22,100,765                   -          22,100,765
Investment management fee                                    (684,279)         (1,270,805)         (1,955,084)
Other expenses                                               (507,788)                   -           (507,788)

Net return before finance costs and taxation                20,908,698       (141,633,797)       (120,725,099)

Finance costs of borrowings                                (3,239,540)         (6,005,840)         (9,245,380)

Return on ordinary activities before taxation               17,669,158       (147,639,637)       (129,970,479)

Taxation                                                             -                   -                   -

Return on ordinary activities after taxation for the        17,669,158       (147,639,637)       (129,970,479)
financial year

Dividends on Preference Stock                                 (42,997)                   -            (42,997)

Return attributable to Ordinary Shareholders                17,626,161       (147,639,637)       (130,013,476)

Dividends on Ordinary Shares (see below)                  (17,561,877)                   -        (17,561,877)

Transfer to (from) reserves                                     64,284       (147,639,637)       (147,575,353)

Return per Ordinary Share (Note 1)                              17.26p        (144.60)p              (127.34)p

Dividends on Ordinary Shares:                                                            2003 (£)
First Interim paid                                      4.30p                           4,390,469
Second Interim paid                                     4.30p                           4,390,469
Third Interim paid                                      4.30p                           4,390,469
Final proposed payable 13th May 2003                    4.30p                           4,390,470
                                                       17.20p                          17,561,877

NET ASSET STATEMENT as at 31st January 2003                                              2003 (£)
Fixed Asset Investments                                                               391,703,740
Net Current Liabilities                                                               (5,019,861)
                                                                                      386,683,879
Less: Creditors - amounts falling due after more than one year                      (112,098,608)
Total Net Assets                                                                      274,585,271

Called up Share Capital     : Ordinary                                                 25,525,984
               : Preference                                                             1,178,000
Share Premium Account                                                                      39,809
Capital Redemption Reserve                                                                 56,250
Capital Reserves     : Realised                                                       353,215,764
               : Unrealised                                                         (115,624,254)
Revenue Reserve                                                                        10,193,718
                                                                                      274,585,271

Net asset value per Ordinary Share (Note 2)                                                267.8p



                                     Page 4

                                    RESULTS

STATEMENT OF TOTAL RETURN
for the year ended 31st January 2002

                                                                                 2002

                                                             (£)               (£)                 (£)
                                                           Revenue           Capital              Total
                                                           (Note 3)
Net losses on investments                                            -        (45,049,190)        (45,049,190)
Exchange rate differences                                            -            (47,836)            (47,836)
Income                                                      21,595,671                   -          21,595,671
Investment management fee                                    (805,463)         (1,495,860)         (2,301,323)
Administration expenses                                      (588,430)                   -           (588,430)

Net return before finance costs and taxation                20,201,778        (46,592,886)        (26,391,108)

Finance costs of borrowings                                (3,068,058)         (5,682,815)         (8,750,873)

Return on ordinary activities before taxation               17,133,720        (52,275,701)        (35,141,981)

Taxation                                                      (39,079)              39,079                   -

Return on ordinary activities after taxation for the        17,094,641        (52,236,622)        (35,141,981)
financial year

Dividends on Preference Stock                                 (42,997)                   -            (42,997)

Return attributable to Ordinary Shareholders                17,051,644        (52,236,622)        (35,184,978)

Dividends on Ordinary Shares (see below)                  (17,155,611)                   -        (17,155,611)

Transfer from reserves                                       (103,967)        (52,236,622)        (52,340,589)

Return per Ordinary Share (Note 1)                              16.70p         (51.15)p               (34.45)p

Dividends on Ordinary Shares:                                                            2002 (£)
First Interim paid                                      4.20p                           4,290,465
Second Interim paid                                     4.20p                           4,290,465
Third Interim paid                                      4.20p                           4,288,365
Final paid 14th May 2002                                4.20p                           4,288,365
Prior year over accrual                                                                   (2,049)
                                                       16.80p                          17,155,611

NET ASSET STATEMENT as at 31st January 2002                                              2002 (£)
Fixed Asset Investments                                                               546,771,665
Net Current Liabilities                                                              (12,523,567)
                                                                                      534,248,098
Less: Creditors - amounts falling due after more than one year                      (112,087,474)
Total Net Assets                                                                      422,160,624

Called up Share Capital     : Ordinary                                                 25,525,984
               : Preference                                                             1,178,000
Share Premium Account                                                                      39,809
Capital Redemption Reserve                                                                 56,250
Capital Reserves     : Realised                                                       385,653,373
               : Unrealised                                                             (422,226)
Revenue Reserve                                                                        10,129,434
                                                                                      422,160,624

Net asset value per Ordinary Share (Note 2)                                                412.3p



                                     Page 5

                              CASH FLOW STATEMENT

For the years ended 31st January 2003 and 2002
                                                                 2003 (£)           2003 (£)          2002 (£)

Net cash inflow from operating activities                                         19,294,289        19,433,017

Servicing of Finance
Interest paid                                                 (9,265,619)                          (8,745,854)
Preference dividends paid                                        (64,496)                             (42,997)

Net cash outflow on servicing of finance                                         (9,330,115)       (8,788,851)

Taxation
UK income tax repaid (paid)                                                            9,669         (660,987)

Investing Activities
Payments to acquire fixed asset investments                 (138,920,574)                        (221,291,887)
Proceeds on disposal of fixed asset investments               151,375,089                          227,689,157

Net cash inflow from investing activities                                         12,454,515         6,397,270

Equity dividends paid                                                           (17,357,668)      (16,959,605)

Net cash inflow (outflow) before financing                                         5,070,690         (579,156)

Financing
Decrease in short term loan                                     (461,460)                            (802,368)
Purchase of Ordinary Shares for cancellation                            -                            (405,520)

Net cash outflow from financing                                                    (461,460)       (1,207,888)

Increase (decrease) in cash                                                      4,609,230         (1,787,044)




                                     Page 6

Note 1

The Returns per Ordinary Share have been calculated using a weighted average
number of shares in issue during the year of 102,103,936 shares (2002 -
102,131,744).

Note 2

The net asset value is based on 102,103,936 Ordinary Shares in issue at the
year-end (2002 - 102,103,936).

Note 3

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

All revenue and capital items derive from continuing operations. No operations
were acquired or discontinued in the year.

Note 4

The financial information set out in this announcement does not constitute the
Company's statutory accounts for the years ended 31st January 2003 or 31st
January 2002. The financial information for the year ended 31st January 2002 has
been extracted from the statutory accounts for that year which have been
delivered to the Registrar of Companies. The auditors report on those accounts
was unqualified and did not contain a statement under either Section 237(2) or
Section 237(3) of the Companies Act 1985. The statutory accounts for the year
ended 31st January 2003 will be finalised on the basis of the financial
information presented by the directors in this preliminary announcement and will
be delivered to the Registrar of Companies following the Company's Annual
General Meeting.

For further information, please contact:

Allianz Dresdner Asset Management (UK) Ltd

Simon White/Nigel Lanning

Tel: [phone]


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