Interim Results

Merchants Trust PLC
13 September 2004


For immediate release

13 September 2004



                            THE MERCHANTS TRUST PLC

                   Announcement of Unaudited Interim Results
                     For the six months ended 31 July 2004


Highlights
     
•    Earnings per ordinary share of 10.22p, up 4.9%.
•    Dividends per share for the first six months up 4.7%.
•    Net Asset Value of 355.1p per share, up 1.4% compared with 0.5% rise in the 
     FTSE 100 Index.
•    Historic dividend yield of 5.4% net at 327.0p per share.



Interim Results

Earnings per share

In the first six months of the current year, earnings have risen by 4.9% to
10.22p per share. As in 2003/4, we expect dividend receipts to have been
weighted towards the first half of the current financial year.

Interim Dividends

The Board is recommending a second quarterly dividend of 4.5p per share, payable
on 10 November 2004 to shareholders on the register at close of business on 8
October 2004. The total distribution for the first half of 2004/5 is 9.0p net,
an increase of 4.7% when compared with the same period last year.  In the
absence of unforeseen circumstances, the Board intends to recommend dividends
totalling 18.0p net for 2004/5, an increase of 2.3%.

Net Asset Value

The net asset value per ordinary share was 355.1p at 31 July 2004.  This
represents an increase of 1.4% when compared with the equivalent figure at 31
January 2004 - the end of the last financial year. Before taking account of the
impact of the Trust's borrowings, the underlying rise in the Trust's total
assets was also 1.4%. Over the same period the FTSE 100 Index rose by 0.5%,
whilst the FTSE Higher Yield Index rose by 3.4%.

Share Buy Backs

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


                                     - 2 -

Prospects

After the sharp recovery in UK market values recorded over most of 2003/4, there
was very little change in share prices in the first half of the current
financial year.  Nevertheless companies are still reporting useful growth in
profits and there has been a noteworthy improvement in corporate liquidity.
Despite some potential headwinds in the months ahead, the overall outlook for UK
company dividend payments is now better than for some while.


By Order of the Board
K J Salt
Secretary

155 Bishopsgate
London EC2M 3AD



                                     - 3 -


THE MERCHANTS TRUST PLC

Summary of Unaudited Results

Statement of Total Return
For the six months ended 31 July 2004

                                                                           2004
                                                              £'000s         £'000s            £'000s
                                                             Revenue        Capital             Total
                                                             (Note 2)

Net gains on investments                                           -          6,896             6,896
Income from fixed asset investments                           12,708            725            13,433
Other income                                                      79              -                79
Investment management fee                                      (355)          (654)           (1,009)
Other expenses                                                 (284)              -             (284)
Net return before finance costs and taxation                  12,148          6,967            19,115

Finance costs of borrowings                                  (1,693)        (3,111)           (4,804)
Return before taxation                                        10,455          3,856            14,311

Taxation
UK corporation tax                                                 -              -                 -
Return after taxation                                         10,455          3,856            14,311

Dividends on Preference Stock                                   (21)              -              (21)
Return attributable to Ordinary Shareholders                  10,434          3,856            14,290

Dividends on Ordinary Shares:
First Interim                  4.5p                          (4,595)               -          (4,595)
Second Interim                 4.5p                          (4,595)               -          (4,595)

                                                             (9,190)               -          (9,190)

Transfer to Reserves                                           1,244          3,856             5,100

Return per Ordinary Share (Note 1)                            10.22p          3.78p            14.00p



                                                                                                 2004
NET ASSET STATEMENT as at 31 July 2004                                                         £'000s

Fixed Asset Investments                                                                       477,847
Net Current Liabilities                                                                         (691)
                                                                                              477,156
Less: Creditors - amounts falling due after more than one year                              (113,436)
Total Net Assets                                                                              363,720

Called up Share Capital     : Ordinary                                                         25,526
                            : Preference                                                        1,178
Share Premium Account                                                                              40
Capital Redemption Reserve                                                                         56
Capital Reserves            : Realised                                                        322,467
                            : Unrealised                                                        3,284
Revenue Reserve                                                                                11,169
Shareholders' Funds                                                                           363,720

Net asset value per Ordinary Share                                                             355.1p


The net asset value is based on 102,103,936 Shares in issue at 31 July 2004.




                                     - 4 -

THE MERCHANTS TRUST PLC

Summary of Unaudited Results

Statement of Total Return
For the six months ended 31 July 2003
                                                                           2003
                                                              £'000s         £'000s            £'000s
                                                             Revenue        Capital             Total
                                                            (Note 2)

Net gains on investments                                           -         70,885            70,885
Income from fixed asset investments                           12,612              -            12,612
Other income                                                      89              -                89
Investment management fee                                      (320)          (594)             (914)
Other expenses                                                 (288)              -             (288)
Net return before finance costs and taxation                  12,093         70,291            82,384

Finance costs of borrowings                                  (1,683)        (3,124)           (4,807)
Return before taxation                                        10,410         67,167            77,577

Taxation
UK corporation tax                                                 -              -                 -
Return after taxation                                         10,410         67,167            77,577

Dividends on Preference Stock                                   (21)              -              (21)
Return attributable to Ordinary Shareholders                  10,389         67,167            77,556

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 Reserves                                           1,608         67,167            68,775

Return per Ordinary Share (Note 1)                            10.17p         65.78p            75.95p


                                                                                                 2003
NET ASSET STATEMENT as at 31 July 2003                                                         £'000s

Fixed Asset Investments                                                                       463,437
Net Current Liabilities                                                                       (7,969)
                                                                                              455,468
Less: Creditors - amounts falling due after more than one year                              (112,107)
Total Net Assets                                                                              343,361

Called up Share Capital          : Ordinary                                                    25,526
                                 : Preference                                                   1,178
Share Premium Account                                                                              40
Capital Redemption Reserve                                                                         56
Capital Reserves                 : Realised                                                   336,494
                                 : Unrealised                                                (31,735)
Revenue Reserve                                                                                11,802
Shareholders' Funds                                                                           343,361

Net asset value per Ordinary Share                                                             335.0p


The net asset value is based on 102,103,936 Shares in issue at 31 July 2003.



                                     - 5 -


THE MERCHANTS TRUST PLC

STATEMENT OF TOTAL RETURN
for the year ended 31 January 2004
                                                                         2004
                                                             £'000s          £'000s            £'000s
                                                            Revenue         Capital             Total
                                                           (Note 2)

Net gains on investments                                          -          91,703            91,703
Income from fixed asset investments                          22,049               -            22,049
Other income                                                    198               -               198
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
Overseas tax                                                    (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:
First Interim                                  4.3p         (4,390)                -          (4,390)
Second Interim                                 4.3p         (4,391)                -          (4,391)
Third Interim                                  4.5p         (4,595)                -          (4,595)
Fourth Interim (in lieu of final)              4.5p         (4,595)                -          (4,595)
                                              17.6p        (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


                                                                                                 2004
NET ASSET STATEMENT as at 31 January 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
Shareholders' Funds                                                                           358,620

Net asset value per Ordinary Share                                                             350.1p

The net asset value is based on 102,103,936 Shares in issue at 31 January 2004.



                                     - 6 -


THE MERCHANTS TRUST PLC

Cash Flow Statement
for the six months ended 31 July 2004 and comparative periods

                                                    Six Months to 31     Six Months to 31               Year to
                                                           July 2004            July 2003       31 January 2004
                                                            (£'000s)             (£'000s)              (£'000s)

Net cash inflow from operating activities                     11,306               10,959                20,141

Servicing of Finance
Interest paid                                                (4,795)              (4,684)               (9,459)
Dividends paid on preference stock                              (43)                 (21)                  (21)
Net cash outflow on servicing of finance                     (4,838)              (4,705)               (9,480)

Financial Investment
Purchase of fixed asset investments                         (66,869)             (71,147)             (148,696)
Sale of fixed asset investments                               67,959               70,296               158,188
Net cash inflow (outflow) from financial investment            1,090                (851)                 9,492

Equity dividends paid                                        (9,189)              (8,780)              (17,562)

Net cash (outflow) inflow before financing                   (1,631)              (3,377)                 2,591

Financing
Decrease in short term loans                                       -                (224)                 (224)
Net cash outflow from financing                                    -                (224)                 (224)

(Decrease) increase in cash                                  (1,631)              (3,601)                 2,367




                                     - 7 -



THE MERCHANTS TRUST PLC
Twenty Largest Equity Holdings as at 31 July 2004


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

BP                                        44,118          9.25      Oil and gas production
HSBC Holdings                             31,896          6.68      Banking
GlaxoSmithKline                           29,601          6.20      Pharmaceuticals
Shell                                     22,236          4.66      Oil and gas production
Royal Bank of Scotland                    21,799          4.57      Banking
Barclays                                  18,676          3.91      Banking
HBOS                                      16,388          3.43      Banking
BT                                        15,572          3.26      Telecommunications
Lloyds TSB                                13,852          2.90      Banking
Slough Estates                            10,058          2.11      Real estate
Land Securities                            9,857          2.07      Real estate
Scottish & Southern Energy                 9,700          2.03      Electricity
Aviva                                      9,660          2.02      Life assurance
Diageo                                     8,519          1.79      Beverages
Alliance & Leicester                       8,480          1.78      Banking
Imperial Tobacco                           8,372          1.75      Tobacco
Bradford & Bingley                         8,315          1.74      Banking
Rio Tinto                                  8,168          1.71      Mining
Legal & General                            7,857          1.65      Life and general insurance
Rank Group                                 7,837          1.64      Leisure and gaming
                                         310,961         65.15


* Total Assets include current liabilities



The Merchants Trust PLC
Portfolio Analysis as at 31 July 2004
                                                    UK               Other               Total
                                                     %                   %                   %

Listed equities                                  100.1                   -               100.1
Unlisted equities                                    -                   -                   -
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 102,103,936 shares.  (31 July
2003 - 102,103,936 shares; 31 January 2004 - 102,103,936 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 nor reviewed by the Company's
auditors.  The interim statement has been prepared using the same accounting
policies as those adopted in the annual accounts for the year ended 31 January
2004.  The financial information for the year ended 31 January 2004 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 Interim Report will be sent to Shareholders shortly and made available to
the public at the Registered Office of the Company, 155 Bishopsgate, London,
EC2M 3AD.



For further information, please contact:

RCM (UK) Limited
Simon White, Head of Investment Trusts
Tel: [phone]

or

RCM (UK) Limited
Nigel Lanning, Fund Manager
Tel: [phone]


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