Interim Results

Merchants Trust PLC
17 September 2002

For immediate release     17th September 2002

                            THE MERCHANTS TRUST PLC

                   Announcement of Unaudited Interim Results

                    For the six months ended 31st July 2002

Highlights

  • Earnings per ordinary share of 10.07p, up 6.1%.
  • Dividends per share up 2.4% at 8.60p.
  • Net Asset Value 341.9p per share, down 17.1% compared with 17.8% fall in
    the FTSE 100 Index in the Trust's first half year.
  • Underlying fall in the Trust's total assets was13.5%.
  • Prospective yield of 5.3% net at 326p per share.

Interim Results

Earnings per share

In the first six months of the current year, earnings have risen by 6.1% to
10.07p per share. Dividend receipts are likely to be higher in the first half of
the current financial year than in the second half, before taking account of any
special dividends.

Interim Dividends

The Board is recommending a second quarterly dividend of 4.3p per share, payable
on 7th November 2002 to shareholders on the register at close of business on
11th October 2002. The total distribution for the first half of 2002/3 is 8.6p
net, an increase of 2.4% over the same period last year.

Net Asset Value

The net asset value per ordinary share was 341.9p at 31st July 2002. This
represents a fall of 17.1% from the equivalent figure at 31st January 2002 - the
end of the last financial year. Before taking account of the impact of the
Trust's borrowings, the underlying fall in the net asset value was13.5%. Over
the same period the FTSE 100 Index fell by 17.8%, whilst the FTSE Higher Yield
Index fell by 12.2%.

Share Buy Backs

The Trust renewed its powers to buy back its ordinary shares at the last Annual
General Meeting.

Summary

At the half year end, the FTSE100 Index stood nearly 40% below its all time high
recorded at the end of 1999. It is notable that over the same period the Trust's
net asset value per share fell by just under 24%, reflecting the portfolio's
defensive nature. On 13th September 2002, the NAV per ordinary share stood at
325p.

Economic growth in most of the major economies remains muted, and this may
continue to bear down on share values in the immediate future. The Trust will
maintain its policy of seeking under-valued investments amongst larger UK
companies.

By Order of the Board

K J Salt

Deputy Secretary

10 Fenchurch Street

London EC3M 3LB



Summary of Unaudited Results

Statement of Total Return

For the six months ended 31st July 2002
                                                                              2002
                                                            £'000s               £'000s                £'000s
                                                           Revenue              Capital                 Total
                                                          (Note 2)

Net losses on investments                                        -             (69,698)              (69,698)

Income from fixed asset investments                         12,470                    -                12,470

Other income                                                   112                    -                   112

Investment management fee                                    (377)                (700)               (1,077)

Other expenses                                               (293)                    -                 (293)

Net return before finance costs and taxation                11,912             (70,398)              (58,486)

Finance costs of borrowings                                (1,608)              (2,976)               (4,584)

Return before taxation                                      10,304             (73,374)              (63,070)

Taxation

UK corporation tax                                               -                    -                     -


Return after taxation                                       10,304             (73,374)              (63,070)

Dividends on Preference Stock                                 (21)                    -                  (21)

Return attributable to Ordinary Shareholders                10,283             (73,374)              (63,091)


Dividends on Ordinary Shares:

First Interim           4.3p                               (4,390)                       -            (4,390)

Second Interim          4.3p                               (4,391)                       -            (4,391)
                        8.6p                               (8,781)                       -            (8,781)

Transfer to (from) Reserves                                  1,502             (73,374)              (71,872)

Return per Ordinary Share (Note 1)                          10.07p          (71.86)p                 (61.79)p

NET ASSET STATEMENT as at 31st July 2002                                                          2002 £'000s

Fixed asset investments                                                                               463,778

Net current liabilities                                                                               (1,397)

                                                                                                      462,381

Less: Creditors - amounts falling due after more than one year                                      (112,093)

Total Net Assets                                                                                      350,288

Called up Share Capital     : Ordinary                                                                 25,526

                            : Preference                                                                1,178

Share Premium Account                                                                                      40

Capital Redemption Reserve                                                                                 56

Capital Reserves     : Realised                                                                       373,772

                     : Unrealised                                                                    (61,915)

Revenue Reserve                                                                                        11,631

Shareholders' Funds                                                                                   350,288


Net asset value per Ordinary Share                                                                     341.9p


The net asset value is based on 102,103,936 Shares in issue at 31st July 2002.



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 2002.


STATEMENT OF TOTAL RETURN

for the year ended 31st January 2002
                                                                              2002
                                                            £'000s               £'000s                £'000s
                                                           Revenue              Capital                 Total
                                                          (Note 2)

Net losses on investments                                        -             (45,097)              (45,097)

Income from fixed asset investments                         21,317                    -                21,317

Other income                                                   279                    -                   279

Investment management fee                                    (806)              (1,496)               (2,302)

Other expenses                                               (588)                    -                 (588)


Net return before finance costs and taxation                20,202             (46,593)              (26,391)

Finance costs of borrowings                                (3,068)              (5,683)               (8,751)

Return on ordinary activities before taxation               17,134             (52,276)              (35,142)

Taxation

UK corporation tax                                            (39)                   39                     -

Return on ordinary activities after taxation for            17,095             (52,237)              (35,142)
the financial year

Dividends on preference stock                                 (43)                    -                  (43)

Return attributable to Ordinary Shareholders                17,052             (52,237)              (35,185)

Dividends on Ordinary Shares:

First Interim            4.2p                              (4,290)                       -            (4,290)

Second Interim           4.2p                              (4,290)                       -            (4,290)

Third Interim            4.2p                              (4,288)                       -            (4,288)

Final                    4.2p                              (4,288)                       -            (4,288)

                        16.8p                             (17,156)                       -           (17,156)

Transfer from reserves                                       (104)             (52,237)              (52,341)

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

NET ASSET STATEMENT as at 31st January 2002                                                       2002 £'000s

Fixed asset investments                                                                               546,772

Net current liabilities                                                                              (12,524)

                                                                                                      534,248

Less: Creditors - amounts falling due after more than one year                                      (112,088)

Total Net Assets                                                                                      422,160

Called up Share Capital     : Ordinary                                                                 25,526

                            : Preference                                                                1,178

Share Premium Account                                                                                      40

Capital Redemption Reserve                                                                                 56

Capital Reserves     : Realised                                                                       385,653

                     : Unrealised                                                                       (422)

Revenue Reserve                                                                                        10,129

Shareholders' Funds                                                                                   422,160

Net asset value per Ordinary Share                                                                     412.3p

The net asset value is based on 102,103,936 Shares in issue at 31st January
2002.

Cash Flow Statement

for the six months ended 31st July 2002 and comparative periods

                                                       Six Months to 31       Six Months to 31                   Year to
                                                              July 2002              July 2001
                                                                                                         31 January 2002
                                                               (£'000s)               (£'000s)                  (£'000s)

Net cash inflow from operating activities                        10,039                 11,408                    19,433

Servicing of Finance

Interest paid                                                   (4,389)                (4,380)                   (8,746)

Dividends paid on preference stock                                 (21)                   (21)                      (43)

Net cash outflow on servicing of finance                        (4,410)                (4,401)                   (8,789)

Taxation

UK income tax paid                                                    -                  (661)                     (661)

Financial Investment

Purchase of fixed asset investments                            (75,610)               (99,698)                 (221,292)

Sale of fixed asset investments                                  84,002                107,287                   227,689

Net cash inflow from financial activities                         8,392                  7,589                     6,397

Equity dividends paid                                           (8,577)                (8,379)                  (16,960)

Net cash inflow (outflow) before financing                        5,444                  5,556                     (580)

Financing

Increase (decrease) in short term loans                           1,010                  (391)                     (802)

Purchase of Ordinary Shares for cancellation                          -                  (207)                     (405)

Net cash (outflow) inflow from financing                          1,010                  (598)                   (1,207)

Increase (decrease) in cash                                       6,454                  4,958                   (1,787)



THE MERCHANTS TRUST PLC

Twenty Largest Equity Holdings as at 31st July 2002

                                              Valuation                  % of
                                               31.07.02                 Total
                                                 £'000s               Assets*            Principal Activities

BP                                               33,672                  7.28            Oil and Gas

HSBC                                             30,576                  6.61            Banking

Shell Transport & Trading                        24,329                  5.26            Oil and Gas

GlaxoSmithkline                                  23,990                  5.19            Pharmaceuticals

Royal Bank of Scotland                           15,837                  3.43            Banking

HBOS                                             12,420                  2.69            Banking

Barclays                                         12,225                  2.64            Banking

BT                                               11,788                  2.55            Telecommunications

Abbey National                                   11,685                  2.53            Banking

Gallaher                                         11,200                  2.42            Tobacco

Imperial Tabacco                                 10,780                  2.33            Tobacco

Lloyds TSB                                       10,488                  2.27            Banking

Alliance & Leicester                              9,720                  2.10            Banking

Scottish & Newcastle                              8,574                  1.85            Brewing and leisure

Bradford & Bingley                                7,895                  1.71            Banking

Vodafone                                          7,469                  1.61            Telecommunications

United Utilities                                  7,386                  1.60            Water and electricity

Boots                                             7,293                  1.58            Retailing

BPB                                               7,022                  1.52            Building materials

Sainsbury                                         7,018                  1.52            Food retailing.

                                                271,367                 58.69

* Total Assets include current liabilities


The Merchants Trust PLC

Portfolio Analysis as at 31st July 2002
                                                     UK            Other             Total
                                                      %                %                 %

Listed equities                                   100.3                -             100.3

Net Current Liabilities                           (0.3)                -             (0.3)

Total Assets                                      100.0                -             100.0

Note 1

The Returns per Ordinary Share have been calculated using a weighted average
number of shares in issue during the period of 102,103,936 shares. (31st July
2001 - 102,155,870 shares; 31st January 2002 - 102,131,744 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 interim statement has been neither audited not reviewed by the Company's
auditors. The interim statement has been prepared using the accounting policies
as those adopted in the annual accounts for the year ended 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 auditor's 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.



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