Interim Results

Scottish American Investment Co PLC
18 July 2001


                 THE SCOTTISH AMERICAN INVESTMENT COMPANY PLC

     Preliminary Results (Unaudited) for the six months to 30th June 2001


The Scottish American Investment Company PLC (SAINTS) is an international
general investment trust. The Trust's investment objective is to offer private
investors a balance between growth of capital and a reasonable level of income
by investing in successful companies in the UK and internationally. SAINTS,
which has total assets of £480 million, is managed by Stewart Ivory & Company
Limited, part of Colonial First State Investments, an active investment
management company that manages over £25 billion for retail, institutional and
private client investors worldwide.


                                   Summary

  * Second quarter dividend of 1.39p payable on 1st October 2001.

  * Net asset value total return was minus 13.1% in the first half of the
    year. This compares with a total return for SAINTS' benchmark (65% FTSE
    All-Share Index:35% FTSE WI World ex UK Index) of minus 6.3% and for the
    FTSE All-Share Index of minus 7.3%.

  * In January 2001 a third tranche of the 2022 Debenture Stock was issued.
    The bulk of the £35m raised has not yet been invested in equities, but is
    held temporarily in a short term UK gilt.

  * Since 1997, SAINTS has been buying in the Equities Index Unsecured Loan
    Stock 2004. The remaining Loan Stock was redeemed in June.


Results

Attached is a copy of the preliminary results. These are presented in a format
which summarises the information which will be given in the forthcoming Interim
Report.

For further information, please contact:

Christine Wood    Consolidated Communications               0207 208 2382



     Preliminary Results (Unaudited) for the six months to 30th June 2001

MANAGER'S REPORT

SUMMARY
                        30th June 2001      31st December 2000       % change

Asset Value per Share       255.2p              296.8p                  -14.0
Dividend per Share           2.78p*               5.53p                  +0.7+
Share Price                218.75p              254.5p                  -14.0

* For half year + Change from same period last year


INVESTMENT PERFORMANCE

Global equity markets have been weak in 2001 with most of the major indices
showing negative returns in sterling terms. For the half year the total return
on net assets per share was minus 13.1%. The total return for our benchmark
(65% FTSE All Share Index:35% FTSE WI World ex UK Index) was minus 6.3%, while
the comparable figure for the FTSE All-Share Index was minus 7.3%.

The poor returns from equity markets this year have been caused primarily by
the sharp slowdown in the US economy. This led to a deteriorating outlook for
corporate profits as companies struggled to adjust stock and capacity levels
to cope with the less buoyant economic environment. The problem has been most
acute in the information technology industry where rapid technological change
and the necessity for corporations to invest to cope with growth in use of the
Internet and possible problems over the millennium in 1999 and 2000 led to
buoyant conditions in technology markets. Many technology companies
erroneously believed such investment levels were sustainable and were
unprepared as budgets were cut when economic growth slowed. In
telecommunications significant investment in capacity has also led to falling
margins and decreases in profits. However, the difficulties problemshave not
been confined to these areas alone and the slowdown in growth has affected
companies across many sectors. Changing economic conditions in the US have
also begun to impact other Western economies and, with many quoted companies
outside the US having at least some exposure to the US economy, corporate
results and outlook statements have tended to be gloomy. Negative corporate
news was exacerbated, at least in the early part of the year, by the continued
economic and financial problems in Japan. The Japanese economy has slipped
back into recession and it will take time for the new Prime Minister to
implement the necessary radical reforms of the financial system and the
economy.

By far the most significant reason for the negative total return was the
failure of Independent Insurance, which has cost the portfolio £9.5m over the
last six months. However, to put this in context, since Independent Insurance
floated in 1993, SAINTS has realised over £25m from the sale of shares in the
company compared to a purchase cost of under £2m. Over the long term the
investment has been very profitable for SAINTS.

Apart from Independent Insurance the SAINTS portfolio has been adversely
affected by its relatively high level of exposure to the telecommunications
and technology sectors, notably in the UK and Europe. A number of our
companies in various sectors have underperformed even when forecasts for
profits and earnings growth have remained unchanged. However Wwe believe,
however, that sustainable profits and earnings growth will continue to drive
share prices over the long term and we are confident that these companies we
are invested in will start to outperform again.

EQUITY INVESTMENTS AS % OF SHAREHOLDERS' FUNDS

                                     30th June 2001       31st December 2000

                                            %                     %

United Kingdom                             67                    66*
North America                              21                    18
Continental Europe                          9                    10
Japan                                       4                     4
Pacific Asia/Emerging Markets               6                     4
Unquoted                                    2                     2
                                          109+                  104+

* Net of Equities Index Unsecured Loan Stock

+ The amount by which equity investments exceed 100 per cent of
  shareholders' funds is the level by which the Trust is geared to equity
  markets. The gearing is financed by long term borrowing.



DIVIDEND

SAINTS will pay a second interim of 1.39p per share on 1st October 2001 making
a total for the year to date of 2.78p compared with 2.76p last year.

GEARING

SAINTS has been buying in the Equities Index Unsecured Loan Stock since 1997
and replacing it with conventional fixed rate borrowings which have become
more attractive as a result in the decline of interest rates. This process was
completed in June with the redemption of the remaining Loan Stock. An
equivalent value of UK shares were sold, so as to leave unchanged the
effective level of investment in UK shares. A third tranche of the 2022
Debenture Stock had been issued in January as was reported in the annual
report. The bulk of the £35m raised has not yet been invested in equities but
is held temporarily in a short term gilt.

OUTLOOK

After a weak 2000 and further falls during the first quarter we became more
positive on equity markets and started to gear the portfolio to reflect this.
Equities were weak in 2000 and have fallen again in 2001. However, we are
positive on the outlook and have started to gear the portfolio to equity
markets to reflect this. Equities have recovered to a small degree over the
last few months and we remain optimistic that they will make up further ground
over the course of the rest of the year.

Central banks have been cutting interest rates around the world and this
should continue, although US and UK interest rates may now be close to the low
point in the current interest rate cycle. Monetary easing has helped to
stabilise equity markets and should give them upward momentum once it becomes
clear that economic slowdown is levelling off. Having made little progress
over the last two years, a period in which profits in general have moved
upwards, equities also look reasonable value relative to bonds. In the short
termnegative corporate surprises poor corporate results may continue to affect
sentiment but as the year progresses attention will focus increasingly on 2002
when lower interest rates should lead to an acceleration in economic growth
rates and a much brighter outlook for corporate profits.

Markets we prefer include the UK, where consumer sentiment has remained
resilient and inflation is under control. We have also been increasing the
weighting in US equities because the Federal Reserve has cut interest rates
aggressively in the face of sharply slowing economic growth and the economy
should benefit from personal tax rebates in the second half of the year. At
the same time we have been reducing exposure to Europe as the European Central
Bank has been slow to cut interest rates and may continuee to desist from
doing so this stance while inflation remains above target, despite evidence
that the main European economies are now slowing down. Within the portfolio as
a whole wWe continue to favour companies which offer above average profits and
earnings growth prospects over the long term. We have maintained exposure to
stocks in the pharmaceuticals and oil sectors, which display these
characteristics, and have increased exposure to consumer orientated companies
over the last six months as consumer spending has held up in the US and UK. We
believe their qualities will become more highly valued in what will remain a
testing economic environment.



SUMMARISED STATEMENT OF TOTAL RETURN (UNAUDITED)

for the six months to 30th June 2001

                                      6 months         6 months         Year to
                                  to 30th June     to 30th June   31st December
                                          2001             2000         2000(1)
                                         £'000            £'000           £'000
                                          
Dividends and interest                   6,264            6,256          10,839
 receivable

Other income                             1,128            1,225          2,507

                                         7,392            7,481          13,346

Expenses                                (686)            (1,119)         (1,910)

Interest payable                        (1,053)          (1,682)         (2,855)
        

Income before tax                        5,653            4,680           8,581
        
Tax                                     (689)            (338)           (787)
        

Income attributable to                   4,964            4,342           7,794
 shareholders

Dividends*                              (4,272)          (4,319)         (8,662)



Surplus / (deficit) for                  692              23             (868)
 the period

Return attributable to shareholders:

Income                                   4,964            4,342           7,794

Capital                                (66,588)         (22,376)        (42,654)

Total                                  (61,624)         (18,034)        (34,860)

Total return per share                 (39.61p)         (11.11p)        (21.79p)


* Total dividend per share of 2.78p for the period (2.76p for the first half of
2000 and 5.53p for the year 2000)



SUMMARISED BALANCE SHEET (UNAUDITED)
As at 30th June 2001

                                                                              
                             30th June       30th June    31st December  
                                2001            2000         2000(1)            
                               £'000           £'000        £'000       
       
  Total Investments          483,363          630,467      526,238            
  Net Current Assets         (2,145)          19,973       17,013             

  Total Assets less          481,218          650,440      543,251            
  Current Liabilities                                                         
  Creditors due after one    (91,018)         (159,272)    (78,471)           
  year                                                                        

  Equity Shareholders'       390,200          491,168      464,780            
  Funds                                                                       
 
  Net asset value per share  255.2p           309.7p        296.8p 
  Share price                218.75p          256.0p        254.5p 





        CASH FLOW STATEMENT (UNAUDITED)

        AS AT 30TH JUNE 2001

                             Six months  Six months to 30th     Year to 31st
                             to 30th June     June 2000       December 2000(1)
                                2001
                               £'000           £'000              £'000
                                
Cash and deposits at the     20,654            66,005            66,005
start of the year

Income

Dividends received           4,323             4,900             8,851
Interest received            1,659             1,050             1,845
Underwriting commission and  1,222             1,210             2,778
other income
Investment management fee    29                (168)             (294)
Other administrative         (633)             (988)             (1,783)
expenses paid
Income less administrative   6,600             6,004             11,397
expenses

Interest paid on borrowings  (1,874)           (1,653)           (3,423)
Dividends paid to            (4,341)           (4,602)           (8,994)
shareholders
Cash paid in respect of      (6,215)           (6,255)           (12,417)
interest and dividends

Tax (paid) / received        (654)             267               712
Cash (paid) / received in    (269)             16                (308)
respect of income
transactions

Capital

Purchases of investments     (211,525)         (151,052)         (271,369)
Sales of investments         188,866           147,544           352,004
                             (22,659)          (3,508)           80,635

Repurchase of Ordinary share (6,199)           (26,623)          (31,586)
capital
Issue of 8% Debenture Stock  36,085            (160)             (31)
2022
Repayment of Equities Index  (20,802)          (9,036)           (90,203)
Unsecured Loan Stock 2004
Performance fee              322               -                 -
Investment management fee    249               (505)             (658)
Interest paid on borrowings  (1,717)           (1,331)           (2,826)
Currency gains/(losses)      90                90                (374)
Cash paid in respect of      (14,631)          (41,073)          (45,043)
capital transactions
Total cash paid              (14,900)          (41,057)          (45,351)
Cash and deposits at end of  5,754             24,948            20,654
the period



Notes                                                                       

  a) Reconciliation of total income as shown                             
     in the Statement of Total Return to                                 
     income less administrative expenses in                              
     the Cash Flow Statement                                             

     Total income per the
     Statement of Total      7,392             7481              13,346  
     Return                                                              

     Total expenses per the
     Statement of
     Total Return            (686)             (1,119)          (1,910) 
                                                             
                              6,706             6,362            11,436  

    (Increase)/Decrease in
     dividends accounted for
     but for which cash had  (267)              (274)            138     
     not been received at
     the year end                                   

     Decrease/(Increase) in
     other debtors            169               (55)            (407)   

    (Decrease)/Increase 
     in creditors            (8)                (29)             230     

     Income less administrative
     expenses per             6,600              6,004           11,397  
     Cash Flow Statement                                                 


b) Analysis of changes in net debt.

                                                                              
                    At the       Cash Flows   Other Changes          At the   
                    start of                                         end of   
                    the period                                       the period 
                    £'000        £'000        £'000                  £'000    

  Cash              20,654       (14,900)     -                      5,754      
  Equities Index                                                              
  Unsecured                                                                   
  Loan Stock 2004   (22,650)     20,802       1,848                  -          
  8% Debenture      (55,345)     (35,465)     268                   (90,542)    
  Stock 2022                                                                  
  4% Irredeemable   (476)        -            -                     (476)       
  Debenture Stock                                                             
                    (57,817)     (29,563)     2,116                 (85,264)    
       
 
Notes:

                                                                              
  (1)   The results for the year to 31st December 2000 and the position as at 
        that date are an abridged version of the full accounts for that year, 
  (2)   which received an unqualified audit report and which have been filed  
  (3)   with the Registrar of Companies.                                      
        The accounting policies applied in preparing these accounts are       
        consistent with those applied in the latest published annual accounts.
        The terms of the Interim Report were approved by the Board on 18th    
        July 2001.