Final Results

Merchants Trust PLC
08 March 2004


For Immediate Release                                            8 March 2004



                            THE MERCHANTS TRUST PLC

                      ANNOUNCEMENT OF PRELIMINARY RESULTS
                       For the year ended 31 January 2004

Highlights

•    The Net Asset Value per share rose by 30.7% compared with a rise of
     23.1% in the FTSE 100 Index. Before the impact of gearing and costs the 
     capital return on the Company's portfolio rose by 23.7%.

•    Earnings per share of 17.34p, up 0.5%.  Underlying growth was 4.0%
     excluding receipt of a special dividend in 2002/3.

•    Net dividends totalled 17.60p per share in 2003/04, an increase of
     2.3%. This is the twenty-second consecutive annual increase.

•    Ordinary shares yield 5.32% at 330.75p, compared with 3.16% on the
     FTSE 100 Index at the close of business on 8 March 2004.



Net Asset Value

The  net asset value per ordinary share at 31 January 2004 was 350.1p compared
with 267.8p at 31 January 2003, an increase of 30.7%.  This compares with an
increase of 23.1% recorded by the FTSE 100 Index and one of 26.1% recorded by
the FTSE Higher Yield Index.  Before allowance is made for the impact of
borrowings and costs, the capital return on the Company's portfolio was 23.7%.



Ordinary Dividend

The Board has declared a fourth quarterly dividend of 4.50p per share, payable
on 2 April 2004 to holders of record at the close of business on 19 March 2004.
This gives a total of 17.60p for the year ended 31 January 2004, an increase of
2.3% when compared with the total distribution of 17.20p paid during the
previous year.  The Board has taken the view that to pay the dividend as a
fourth quarterly dividend, in lieu of a final dividend, enables the payment to
be made before the tax credit on PEP and ISA holdings is withdrawn on 5 April
2004.  The Board believes this will benefit a significant number of
shareholders, as well as advancing the receipt of this dividend for all
shareholders.  The Trust has now recorded an unbroken record of dividend
increases over the last twenty-two years.



Earnings

Net earnings per share rose from 17.26p to 17.34p or by 0.5%.   If the impact of
special dividend receipts in 2002/3 is ignored, the underlying rate of increase
is 4.0%.



                                     Page 2





Prospects

In last year's Chairman's Statement, it was noted that UK equities were
attractive by reference to a number of historic benchmarks.  Given the scale of
the recovery in share values since then, a large proportion of this valuation
gap has now been corrected.  On the other hand,  many economic forecasters
expect the current trend in earnings growth to be maintained over the rest of
2004 and beyond.  This continued earnings growth should have positive
implications for UK company dividends, not least because of the recent
improvement in company balance sheets.  This in turn should have a beneficial
impact on the UK market at large and help sustain the widespread investor
interest in higher yielding companies in which the Trust is invested.



Annual General Meeting

The Annual General Meeting of the Company will be held at 20 Moorgate, London
EC2R 6DA on Tuesday 11 May 2004 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
K J Salt
Company Secretary


155 Bishopsgate
London EC2M 3AD


                                     Page 3



Unaudited preliminary results for the year ended 31 January 2004 were approved
for immediate release as undernoted:



RESULTS
STATEMENT OF TOTAL RETURN
for the year ended 31 January 2004
                                                                                   2004
                                                                (£000s)         (£000s)         (£000s)
                                                                Revenue         Capital          Total
                                                               (Note 3)
Net gains on investments                                              -          91,703           91,703
Income                                                           22,247               -           22,247
Investment management fee                                         (663)         (1,230)          (1,893)
Other expenses                                                    (502)               -            (502)

Net return before finance costs and taxation                     21,082          90,473          111,555

Finance costs of borrowings                                     (3,332)         (6,169)          (9,501)

Return on ordinary activities before taxation                    17,750          84,304          102,054

Taxation                                                            (5)               -              (5)

Return on ordinary activities after taxation for the             17,745          84,304          102,049
financial year

Dividends on Preference Stock                                      (43)               -             (43)

Return attributable to Ordinary Shareholders                     17,702          84,304          102,006

Dividends on Ordinary Shares (see below)                       (17,971)               -         (17,971)

Transfer (from) to reserves                                       (269)          84,304           84,035

Return per Ordinary Share (Note 1)                               17.34p          82.57p           99.91p


Dividends on Ordinary Shares:                                              2004 (£000s)
First Interim paid                     4.30p                                      4,390
Second Interim paid                    4.30p                                      4,391
Third Interim paid                     4.50p                                      4,595
Fourth interim payable 2 April 2004    4.50p                                      4,595
                                      17.60p                                     17,971

NET ASSET STATEMENT as at 31 January 2004                                  2004 (£000s)
Fixed Asset Investments                                                         473,912
Net Current Liabilities                                                         (3,175)
                                                                                470,737
Less: Creditors - amounts falling due after more than one year                (112,117)
Total Net Assets                                                                358,620

Called up Share Capital                : Ordinary                                25,526
                                       : Preference                               1,178
Share Premium Account                                                                40
Capital Redemption Reserve                                                           56
Capital Reserves                       : Realised                               331,129
                                       : Unrealised                             (9,234)
Revenue Reserve                                                                   9,925
                                                                                358,620

Net asset value per Ordinary Share (Note 2)                                      350.1p



                                     Page 4



RESULTS
STATEMENT OF TOTAL RETURN
for the year ended 31 January 2003
                                                                              2003
                                                               (£000s)         (£000s)           (£000s)
                                                               Revenue         Capital             Total
                                                              (Note 3)
Net losses on investments                                            -       (140,363)         (140,363)
Income                                                          22,101               -            22,101
Investment management fee                                        (684)         (1,271)           (1,955)
Other expenses                                                   (508)               -             (508)

Net return before finance costs and taxation                    20,909       (141,634)         (120,725)

Finance costs of borrowings                                    (3,240)         (6,006)           (9,246)

Return on ordinary activities before taxation                   17,669       (147,640)         (129,971)

Taxation                                                             -               -                 -

Return on ordinary activities after taxation for the            17,669       (147,640)         (129,971)
financial year

Dividends on Preference Stock                                     (43)               -              (43)

Return attributable to Ordinary Shareholders                    17,626       (147,640)         (130,014)

Dividends on Ordinary Shares (see below)                      (17,562)               -          (17,562)

Transfer to (from) reserves                                         64       (147,640)         (147,576)

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



Dividends on Ordinary Shares:                                             2003 (£000s)
First Interim paid                                 4.30p                         4,390
Second Interim paid                                4.30p                         4,390
Third Interim paid                                 4.30p                         4,391
Final paid 13 May 2003                             4.30p                         4,391
                                                  17.20p                        17,562

NET ASSET STATEMENT as at 31 January 2003                                 2003 (£000s)
Fixed Asset Investments                                                        391,704
Net Current Liabilities                                                        (5,020)
                                                                               386,684
Less: Creditors - amounts falling due after more than one year               (112,099)
Total Net Assets                                                               274,585

Called up Share Capital                : Ordinary                               25,526
                                       : Preference                              1,178
Share Premium Account                                                               40
Capital Redemption Reserve                                                          56
Capital Reserves                       : Realised                              353,215
                                       : Unrealised                          (115,624)
Revenue Reserve                                                                 10,194
                                                                               274,585

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




                                     Page 5



CASH FLOW STATEMENT
For the years ended 31 January 2004 and 2003

                                                          2004 (£000s)     2004 (£000s)         2003 (£000s)

Net cash inflow from operating activities                                        20,141               19,294

Servicing of Finance
Interest paid                                                  (9,460)                               (9,266)
Preference dividends paid                                         (21)                                  (64)


Net cash outflow on servicing of finance                                        (9,481)              (9,330)

Taxation
UK income tax repaid                                                                  -                   10

Investing Activities
Payments to acquire fixed asset investments                  (148,695)                             (138,921)
Proceeds on disposal of fixed asset investments                158,188                               151,375

Net cash inflow from investing activities                                         9,493               12,454

Equity dividends paid                                                          (17,562)            (17,358))

Net cash inflow before financing                                                  2,591                5,070

Financing

Decrease in short term loan                                                       (224)                (461)

Increase in cash                                                                  2,367                4,609





                                     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 (2003 -
102,103,936).



Note 2



The net asset value is based on 102,103,936  Ordinary Shares in issue at the
year-end (2003 - 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 31 January 2004 or 31 January
2003.  The financial information for the year ended 31 January 2003 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 31 January 2004 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:

RCM (UK) Ltd
Simon White/Nigel Lanning
Tel: [phone]


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