Final Results

Merchants Trust PLC
18 March 2008





For Immediate Release                                 18 March 2008


THE MERCHANTS TRUST PLC

ANNOUNCEMENT OF PRELIMINARY RESULTS
For the year ended 31 January 2008


Highlights

  • Net dividends are 21.6p per share in 2007/08, an increase of 8.0%, the
    twenty-sixth consecutive annual increase.

  • Ordinary shares yield 5.5% at 382p, compared with 4.1% on the FTSE 100
    Index at the close of business on 17 March 2008.

  • Total return was -9.6%, compared with -8.3% for the FTSE 350 Higher Yield
    Total Return Index and -1.9% for the FTSE 100 Total Return index.
    Performance of the underlying portfolio exceeded that of the Higher Yield
    Index by 1.7%* but the Net Asset Value was adversely affected by gearing
    over the period.

  • The Net Asset Value per share fell by 13.3% compared with a fall of 12.1%
    in the FTSE 350 Higher Yield Price Index and 5.2% in the FTSE 100 Price
    Index.



Net Asset Value

The Net Asset Value per ordinary share at 31 January 2008 was 492.3p compared
with 567.5p at 31 January 2007, a decrease of 13.3%.  This compares with a
decrease of 12.1% recorded by the FTSE 350 Higher Yield Price Index and one of
5.2% recorded by the FTSE 100 Price Index.  The performance of the underlying
portfolio exceeded the return on the FTSE 350 Higher Yield Index by 1.7%*. In a
falling market, however, the net asset value per share return was adversely
impacted by the Trust's long term gearing.


Ordinary Dividend

The Board has declared a final dividend of 5.4p per share, payable on 14 May
2008 to shareholders on the register at the close of business on 11 April 2008.
This gives a total of 21.6p for the year ended 31 January 2008, an increase of
8.0% when compared with the total distribution of 20.0p paid in respect of the
previous year. The Trust has now recorded an unbroken record of dividend
increases over the last twenty-six years.


Total Return and Earnings

The Net Asset Value total return, reflecting both the decrease in capital values
and increase in dividends paid to Ordinary Shareholders in the last financial
year, was -9.6%.  The equivalent return recorded by the FTSE 350 Higher Yield
Total Return Index and the FTSE 100 Total Return Index was -8.3% and -1.9%
respectively.  Net revenue earnings per share rose from 22.17p to 22.86p or by
3.1%.  Earnings in the financial year included £0.5m from special dividends; in
the previous financial year special dividends totalled £1.3m.




Page 2


Share Buy Backs

During the financial year 946,413 shares were bought back for cancellation,
representing 0.91% of the Trust's shares in issue at the beginning of the year.
The Board will 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 Financial Report.


Market and Portfolio Background

During the year the stock market became increasingly volatile as the disruption
in credit markets spread to other asset classes.  Volatility of individual
sectors was even higher than at the level of the market as a whole.  Higher
yielding shares, which generally comprise Merchants' portfolio,  performed
particularly poorly as higher dividend yields provided little support.  This
area of the market is also heavily biased towards financials (which were very
weak) and has no mining shares (which rose significantly).  Another notable
feature was the underperformance of medium sized companies often more exposed to
the domestic economy.


Prospects

Over the coming months the disruption in the banking and credit markets is
likely to shape developments in the wider economy.  US growth is slowing rapidly
and the risks of a significant economic slowdown in the UK have increased.
Share prices are likely to remain volatile until a measure of confidence returns
to the financial markets.


Sir Bob Reid

Sir Bob Reid, who joined the Board in January 1995, will be retiring from the
Board after the AGM in May this year. Sir Bob has made an exceptional
contribution to the Trust over many years, bringing great breadth of experience
in the commercial and financial world to our discussions. We shall miss him
enormously.


Plans are well advanced to enable us to appoint at least one new director in
2008.


Annual General Meeting

The Annual General Meeting of the Company will be held on Tuesday 13 May 2008 at
12.00 noon.


Hugh Stevenson
Chairman



155 Bishopsgate
London EC2M 3AD


* Source: Wilshire

For further information, please contact:
RCM (UK) Ltd
Simon White
Head of Investment Trusts
RCM (UK) Limited
Tel: [phone]

Page 3



Unaudited preliminary results for the year ended 31 January 2008 were approved
for immediate release as undernoted:



RESULTS
INCOME STATEMENT
for the year ended 31 January 2008
                                                                           2008
                                                            Revenue         Capital          Total
                                                            Return          Return           Return
                                                            (£000s)         (£000s)         (£000s)
                                                                                            (Note 3)
Net losses on investments at fair value                               -        (72,106)         (72,106)
Income                                                           28,495               -           28,495
Investment management fee                                         (899)         (1,670)          (2,569)
Administration expenses                                           (587)             (2)            (589)

Net return before finance costs and taxation                     27,009        (73,778)         (46,769)

Finance costs: interest payable and similar charges             (3,342)         (6,117)          (9,459)

Net return on ordinary activities before taxation                23,667        (79,895)         (56,228)

Taxation                                                           (18)               -             (18)

Net return attributable to Ordinary Shareholders                 23,649        (79,895)         (56,246)


Return per Ordinary Share (Note 1)                               22.86p        (77.23)p         (54.37)p
(basic and diluted)





                                                                                                2008
BALANCE SHEET as at 31 January 2008                                                          (£000s)
Investments held at fair value through profit or loss                                        608,451
Net Current  Assets                                                                           11,150
                                                                                             619,601
Creditors : Amounts falling due after more than one year                                   (113,414)
Total Net Assets                                                                             506,187

Called up Share Capital                                                                       25,703
Share Premium Account                                                                          7,527
Capital Redemption Reserve                                                                       293
Capital Reserves             : Realised                                                      431,359
                                   : Unrealised                                               16,645
Revenue Reserve                                                                               24,660

Equity Shareholders' Funds                                                                   506,187

Net Asset Value per Ordinary Share (Note 2)                                                   492.3p


Page 4



Unaudited preliminary results for the year ended 31 January 2007 were approved
for immediate release as undernoted:



RESULTS
INCOME STATEMENT
for the year ended 31 January 2007
                                                                           2007
                                                            Revenue         Capital          Total
                                                            Return          Return           Return
                                                            (£000s)         (£000s)         (£000s)
                                                                                            (Note 3)
Net gains on investments at fair value                                -          71,441           71,441
Income                                                           27,750               -           27,750
Investment management fee                                         (961)         (1,786)          (2,747)
Administration expenses                                           (488)             (3)            (491)

Net return before finance costs and taxation                     26,301          69,652           95,953

Finance costs: interest payable and similar charges             (3,447)         (6,321)          (9,768)

Net return on ordinary activities before taxation                22,854          63,331           86,185

Taxation                                                              -               -                -

Net return attributable to Ordinary Shareholders                 22,854          63,331           86,185


Return per Ordinary Share (Note 1)                               22.17p          61.44p           83.61p
(basic and diluted)





                                                                                                2007
BALANCE SHEET as at 31 January 2007                                                          (£000s)
Investments held at fair value through profit or loss                                        695,770
Net Current  Assets                                                                            6,613
                                                                                             702,383
Creditors : Amounts falling due after more than one year                                   (113,548)
Total Net Assets                                                                             588,835

Called up Share Capital                                                                       25,940
Share Premium Account                                                                          7,527
Capital Redemption Reserve                                                                        56
Capital Reserves             : Realised                                                      401,296
                                                : Unrealised                                 131,247
Revenue Reserve                                                                               22,769

Equity Shareholders' Funds                                                                   588,835

Net Asset Value per Ordinary Share (Note 2)                                                   567.5p








Page 5



RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the year ended 31 January 2008


                        Called up     Share      Capital   Capital      Capital     Revenue     Total
                            Share   Premium   Redemption   Reserve      Reserve     Reserve
                          Capital   Account      Reserve  Realised   Unrealised
                          (£000s)   (£000s)      (£000s)   (£000s)      (£000s)     (£000s)   (£000s)

Net Assets at 31
January 2006               25,526        40           56   351,108      118,104      19,879   514,713

Revenue Return                  -         -            -         -            -      22,854    22,854

Dividends on Ordinary           -         -            -         -            -    (19,964)  (19,964)
Shares

Capital Return                  -         -            -    50,188       13,143           -    63,331

Shares issued during          414     7,487            -         -            -           -     7,901
the year

Net Assets at 31
January 2007
                           25,940     7,527           56   401,296      131,247      22,769   588,835


Net Assets at 31
January 2007               25,940     7,527           56   401,296      131,247      22,769   588,835

Revenue Return                  -         -            -         -            -      23,649    23,649

Dividends on Ordinary           -         -            -         -            -    (21,758)  (21,758)
Shares

Capital Return                  -         -            -    34,707    (114,602)           -  (79,895)

Shares repurchased          (237)         -          237   (4,644)            -           -   (4,644)
during the year

Net Assets at 31           25,703     7,527          293   431,359       16,645      24,660   506,187
January 2008
                           




Page 6


CASH FLOW STATEMENT
For the years ended 31 January 2008 and 2007

     
                                                                 2008             2008                  2007
                                                               (£000s)          (£000s)               (£000s)

Net cash inflow from operating activities                                        33,678               28,262


Servicing of Finance
Interest paid                                                  (9,553)                               (9,530)
Dividends on Preference Stock                                     (43)                                  (43)


Net cash outflow from servicing of finance                                      (9,596)              (9,573)


Investing Activities
Purchases of fixed asset investments                         (188,448)                             (236,518)
Sales of fixed asset investments                               189,710                               238,513

Net cash inflow from investing activities                                         1,262                1,995

Equity dividends paid                                                          (21,758)             (19,964)

Net cash inflow before financing                                                  3,586                  720

Financing
Purchase of Ordinary shares for cancellation                                    (4,644)                    -

Cash transferred from Allianz Dresdner Income Growth                                  -                  908
Investment Trust Plc in connection with the issue of
Ordinary Shares
Increase in cash                                                                (1,058)                1,628





Page 7


Note 1

The Returns per Ordinary Share have been calculated using a weighted average
number of shares in issue during the year of 103,451,633 shares (2007 -
103,083,890).


Note 2

The net asset value is based on 102,813,464 Ordinary Shares in issue at the
year-end (2007 - 103,759,877).


Note 3

The total 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.

A Statement of Total Recognised Gains and Losses is not required as all gains
and losses of the Company have been reflected in the Income Statement.

Included in the cost of investments are transaction costs on purchases amounting
to £1,176,671 (2007: £1,502,518) and transaction costs on sales amounting to
£291,295 (2007: £369,855).


Note 4

Dividends paid on Ordinary Shares in respect of earnings for each period are as
follows:


                                                                        Year to                   Year to
                                                                31 January 2008           31 January 2007
                                                                                      
                                                                         £'000s                    £'000s
Third Interim dividend 5.1p paid 16 February 2007 (2006                   5,292                     4,901
- 4.8p)
Final dividend 5.1p paid 16 May 2007 (2006 - 4.8p)                        5,292                     4,901
First Interim dividend 5.4p paid 16 August 2007 (2006 -                   5,597                     5,084
4.9p)
Second Interim dividend - 5.4p paid 15 November 2007                      5,577                     5,084
(2006 - 4.9p)
Unpaid dividends from prior years                                             -                       (6)
                                                                         21,758                    19,964






Page 8


Dividends payable at the year end are not recognised as a liability under FRS 21
'Events after the Balance Sheet Date'.  Details of these dividends are set out
below.


                                                                         Year to                Year to
                                                                 31 January 2008        31 January 2007

                                                                          £'000s                 £'000s
Third Interim dividend 5.4p paid 13 February 2008 (2007 -                  5,552                  5,292
5.1p)
Final proposed dividend 5.4p payable 14 May 2008 (2007 -                   5,552                  5,292
5.1p)
                                                                          11,104                 10,584


The total cash cost of the proposed final dividend is based on the number of
shares in issue at the year end.  However, the dividend payable will be based on
the number of shares in issue on the record date and will reflect any purchases
and cancellations of shares by the Company settled subsequent to the year end.


Note 5

The financial information set out in this announcement does not constitute the
Company's statutory accounts for the years ended 31 January 2008 or 31 January
2007.  The financial information for the year ended 31 January 2007 has been
extracted from the audited statutory accounts for that year. 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 2008 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.


Note 6

The annual report will be sent to shareholders in mid April 2008 and will be
available to members of the public on the website  www.merchantstrust.co.uk or
from the Company's registered office at 155 Bishopsgate, London EC2M 3AD.




                      This information is provided by RNS
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