Interim Results

Merchants Trust PLC
10 September 2001



For immediate release     10th September 2001

                           THE MERCHANTS TRUST PLC

                  Announcement of Unaudited Interim Results

                   For the six months ended 31st July 2001


Highlights

  * Revenue per ordinary share of 9.49p per share.
  * Dividends per share up 2.4% at 8.40p per share.
  * Net Asset Value 446.1p per share, down 3.8% compared with 12.8% fall in
    the FTSE 100 Index in the Trust's first half year.
  * Prospective yield of 4.65% net at 361p per share.


Interim Results


Earnings per share


In the first six months of the current year, earnings per share have risen by
21.8% to 9.49p per share. Shareholders may recall that in the first half of
the previous financial year there was a low incidence of dividend receipts.
However, dividend receipts are likely to be higher in the first half of the
current financial year than in the second half.


Interim Dividends


The Board is recommending a second quarterly dividend of 4.2p per share,
payable on 9th November 2001 to shareholders on the register at close of
business on 12th October 2001. The total distribution for the first half of
2001/2 is 8.4p net, an increase of 2.4% over the same period last year. The
Board has forecast payments totalling 16.8p net per ordinary share for the
year ended 31st January 2002, an increase of 2.4% over the previous year's
distribution.


Net Asset Value


The net asset value per ordinary share was 446.1p at 31st July 2001. This
represents a fall of 3.8% from the equivalent figure at 31st January 2001 -
the end of the last financial year. Over the same period the FTSE 100 Index
fell by 12.8%, whilst the FTSE Higher Yield Index fell by 2.8%. The portfolio
has continued to show its resilience against a background of market weakness.


Share Buy Backs


The Trust renewed its powers to buy back its ordinary shares at the last
Annual General Meeting. In the first half of the current financial year,
50,000 shares were re-purchased.


                                    - 2 -


Outlook


On 7th September 2001, the NAV per ordinary share stood at 408.7p. Economic
growth in most of the major economies remains muted, and we expect UK Stock
Market values to be volatile. The Trust will maintain its policy of seeking
under-valued investments amongst larger UK companies.


By Order of the Board

10 Fenchurch Street                                    K J Salt

London EC3M 3LB                                        Deputy Secretary





                                    - 3 -

Summary of Unaudited Results

Statement of Total Return

For the six months ended 31st July 2001
                                                            2001
                                              (£'000s)  (£'000s)       (£'000s)
                                               Revenue   Capital          Total

                                              (Note 2)

Net losses on investments                            -  (15,252)       (15,252)
Income from fixed asset investments             11,830         -         11,830
Other income                                       182         -            182
Investment management fee                        (422)     (784)        (1,206)
Other expenses                                   (254)         -          (254)
Net return before finance costs and taxation    11,336  (16,036)        (4,700)

Finance costs of borrowings                    (1,599)   (2,942)        (4,541)
Return before taxation                           9,737  (18,978)        (9,241)

Taxation
UK corporation tax                                (25)        25              -

Return after taxation                            9,712  (18,953)        (9,241)
Dividends on Preference Stock                     (21)         -           (21)
Return attributable to Ordinary Shareholders     9,691  (18,953)        (9,262)

Dividends on Ordinary Shares:
First Interim          4.2p                    (4,290)          -       (4,290)
Second Interim         4.2p                    (4,288)          -       (4,288)
                       8.4p                    (8,578)          -       (8,578)

Transfer to (from) Reserves                      1,113  (18,953)       (17,840)

Return per Ordinary Share (Note 1)               9.49p (18.55)p         (9.06)p



NET ASSET STATEMENT as at 31st July 2001                          2001 (£'000s)

Fixed asset investments                                                 569,564
Net current liabilities                                                   (620)
                                                                        568,944
Less: Creditors - amounts falling due after more than one year        (112,084)
Total Net Assets                                                        456,860

Called up Share Capital     : Ordinary                                   25,538
                            : Preference                                  1,178
Share Premium Account                                                        40
Capital Redemption Reserve                                                   44
Capital Reserves            : Realised                                  388,302
                            : Unrealised                                 30,411
Revenue Reserve                                                          11,347
Shareholders' Funds                                                     456,860

Net asset value per Ordinary Share                                       446.1p


The net asset value is based on 102,153,936 Shares in issue at 31st July 2001.



                                    - 4 -

Summary of Unaudited Results

Statement of Total Return

For the six months ended 31st July 2000
                                                            2000
                                              (£'000s) (£'000s)        (£'000s)
                                               Revenue  Capital           Total

                                              (Note 2)

Net gains on investments                             -   54,789          54,789
Income from fixed asset investments             10,325        -          10,325
Other income                                       219        -             219
Investment management fee                        (401)    (745)         (1,146)
Other expenses                                   (351)        -           (351)
Net return before finance costs and taxation     9,792   54,044          63,836

Finance costs of borrowings                    (1,640)  (3,006)         (4,646)
Return before taxation                           8,152   51,038          59,190

Taxation
UK corporation tax                               (159)      159               -

Return after taxation                            7,993   51,197          59,190
Dividends on Preference Stock                     (22)        -            (22)
Return attributable to Ordinary Shareholders     7,971   51,197          59,168

Dividends on Ordinary Shares:
First Interim          4.1p                    (4,195)         -        (4,195)
Second Interim         4.1p                    (4,195)         -        (4,195)
                       8.2p                    (8,390)         -        (8,390)

Transfer (from) to Reserves                      (419)   51,197          50,778

Return per Ordinary Share (Note 1)               7.79p  50.03p           57.82p



NET ASSET STATEMENT at 31st July 2000                             2000 (£'000s)

Fixed asset investments                                                 552,004
Net current assets                                                        2,373
                                                                        554,377
Less: Creditors - amounts falling due after more than one year        (112,104)
Total Net Assets                                                        442,273

Called up Share Capital     : Ordinary                                   25,582
                            : Preference                                  1,178
Share Premium Account                                                        40
Capital Reserves            : Realised                                  366,368
                            : Unrealised                                 39,116
Revenue Reserve                                                           9,989
Shareholders' Funds                                                     442,273

Net asset value per Ordinary Share                                       431.1p


The net asset value is based on 102,328,936 Shares in issue at 31st July 2000.


                                    - 5 -

STATEMENT OF TOTAL RETURN

for the year ended 31st January 2001
                                                               2001
                                                   (£'000s) (£'000s)    (£'000s)
                                                    Revenue Capital       Total

                                                   (Note 2)
Net gains on investments                                  -  91,011      91,011
Income from fixed asset investments                  21,219       -      21,219
Other income                                            328       -         328
Investment management fee                             (827) (1,536)     (2,363)
Other expenses                                        (643)       -       (643)

Net return before finance costs and taxation         20,077  89,475     109,552

Finance costs of borrowings                         (3,135) (5,724)     (8,859)

Return on ordinary activities before taxation        16,942  83,751     100,693

Taxation                                              (184)     184           -

Return on ordinary activities after taxation for     16,758  83,935     100,693
the financial year

Dividends on preference stock                          (43)       -        (43)

Return attributable to Ordinary Shareholders         16,715  83,935     100,650

Dividends on Ordinary Shares:
First Interim            4.1p                        (4,196)        -    (4,196)
Second Interim           4.1p                        (4,194)        -    (4,194)
Third Interim            4.1p                        (4,190)        -    (4,190)
Final                    4.1p                        (4,190)        -    (4,190)
                        16.4p                       (16,770)        -   (16,770)

Transfer (from) to reserves                            (55)    83,935    83,880

Return per Ordinary Share (Note 1)                   16.35p    82.09p    98.44p



NET ASSET STATEMENT as at 31st January 2001                       2001 (£'000s)
Fixed asset investments                                                 591,211
Net current liabilities                                                 (4,222)
                                                                        586,989
Less: Creditors - amounts falling due after more than one year        (112,082)
Total Net Assets                                                        474,907

Called up Share Capital     : Ordinary                                   25,551
                            : Preference                                  1,178
Share Premium Account                                                        40
Capital Redemption Reserve                                                   31
Capital Reserves            : Realised                                  384,849
                            : Unrealised                                 53,024
Revenue Reserve                                                          10,234
Shareholders' Funds                                                     474,907

Net asset value per Ordinary Share                                       463.5p

The net asset value is based on 102,203,936 Shares in issue at 31st January
2001.




                                    - 6 -

Cash Flow Statement

for the six months ended 31st July 2001 and comparative periods

                                   Six Months to      Six Months to     Year to
                                       July 2001          July 2000     January
                                                                           2001
                                        (£'000s)           (£'000s)    (£'000s)

Net cash inflow from operating            11,408              8,579      17,748
activities

Servicing of Finance
Interest paid                            (4,380)            (4,387)     (8,850)
Dividends paid on preference                (21)               (21)        (43)
stock
Net cash outflow on servicing            (4,401)            (4,408)     (8,893)
of finance

Taxation
UK income tax (paid) repaid                (661)                426         865

Financial Investment
Purchase of fixed asset                 (99,698)          (155,076)   (334,876)
investments
Sale of fixed asset investments          107,287            171,508     340,272
Net cash inflow from financial             7,589             16,432       5,396
activities

Equity dividends paid                    (8,379)            (8,284)    (16,677)

Net cash inflow (outflow)                  5,556             12,745     (1,561)
before financing

Financing
(Decrease) Increase in short               (391)              1,878       1,488
term loans
Purchase of Ordinary Shares for            (206)                  -       (469)
cancellation
Expenses associated with share               (1)                (4)           -
buy back
Net cash (outflow) inflow from             (598)              1,874       1,019
financing

Increase (decrease) in cash                4,958             14,619       (542)




                                    - 7 -


THE MERCHANTS TRUST PLC

Twenty Largest Equity Holdings as at 31st July 2001

                                       Valuation    % of
                                        31.07.01   Total
                                          £'000s  Assets  Principal Activities
                                                       *
BP                                        42,887    7.54  Oil and Gas
Shell Transport & Trading                 28,191    4.96  Oil and Gas
GlaxoSmithkline                           26,267    4.62  Pharmaceuticals
Royal Bank of Scotland                    20,379    3.58  Banking
British Telecom                           20,008    3.52  Telecommunications
Lloyds TSB                                16,211    2.85  Banking
HSBC Holdings                             15,966    2.81  Banking
Imperial Tobacco                          14,008    2.46  Tobacco
Bank Of Scotland                          13,753    2.42  Banking
Scottish & Southern Energy                12,123    2.13  Electricity
Vodafone Group                            11,819    2.08  Telecommunications
Halifax Group                             11,382    2.00  Banking
Alliance & Leicester                      11,193    1.97  Banking
CGNU                                      10,444    1.84  Insurance
Royal & Sun Alliance                      10,400    1.83  Insurance
Prudential                                10,175    1.79  Life and general
                                                          insurance
Scottish & Newcastle                       9,468    1.66  Brewing and leisure
Sainsbury                                  9,020    1.59  Food retailing
Gallaher Group                             8,505    1.49  Tobacco
Great Universal Stores                     8,424    1.48  Retailing
                                         310,623   54.62
* Total Assets include current
liabilities

The Merchants Trust PLC

Portfolio Analysis as at 31st July 2001
                                                  UK                      Total
                                                   %                          %
Listed equities                                100.1                      100.1
Unlisted equities                                  -                          -
Total equities                                 100.1                      100.1
Net Current Liabilities                        (0.1)                      (0.1)
Total Assets                                   100.0                      100.0




                                    - 8 -


Note 1


The Returns per Ordinary Share have been calculated using a weighted average
number of shares in issue during the period of 102,155,870 shares. (31st July
2000 - 102,328,936 shares; 31st January 2001 - 102,250,726 shares).


Note 2


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 period.


Note 3


The financial information set out in this announcement does not constitute the
Company's statutory accounts for the years ended 31st January 2001. The
financial information for the year ended 31st January 2001 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.


For further information, please contact:

Dresdner RCM Global Investors (UK) Ltd

Tessa Murray, Head of Corporate Communications

Tel: [phone]

or

Dresdner RCM Global Investors (UK) Ltd

Simon White or Nigel Lanning

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