Final Results

British Empire Sec & Gen Tst PLC
18 November 2004



BRITISH EMPIRE SECURITIES AND GENERAL TRUST P.L.C.
PRELIMINARY ANNOUNCEMENT OF AUDITED ANNUAL RESULTS
for the year ended 30 September 2004
Performance comparisons 30 September 2003 - 30 September 2004 (capital return)

  • Net asset value ('NAV') increases by over 23% to an all-time high

  • NAV outperforms MSCI World Index by 17 percentage points

  • Discount continues to narrow, below 2% at the year-end


Chairman's Statement

The past year has been another excellent one for your Company with strong
performance in both absolute and relative terms. The Company's net asset value
per share increased by 24.5% on a total return basis compared to a rise in the
MSCI World total return Index of 8.9%, while the FTSE All-Share Index rose 15.7%
and the Datastream Global Growth Investment Trust Index (our benchmark) rose
12.2%.

Over 3 years the net asset value total return per share has grown by 48.2%
compared to a fall in the MSCI World Index of 1.4%.

Over 5 years the Company's performance* remains 1st out of 28 Global Growth
Trusts.

A second year of rising markets has borne out our belief two years ago that
markets were cheap and oversold. The Trust's NAV total return has risen 57.3%
during the last two financial years beating the MSCI World Index, which rose by
29.4% over the same period. The differences between the valuations of growth and
value stocks and between small cap and large cap have narrowed dramatically over
the two years. Bargains are harder to find in a world in which valuations have
converged. Our Manager has become more cautious on the direction of equity
markets in general. Nevertheless, we remain confident in their ability to
uncover attractive opportunities in our specialist area of expertise. We have
made an encouraging start to the new financial year and we shall continue to
seek out value from our portfolio, current and prospective.

The income account was very healthy largely due to higher dividends from our
investments as we re-balanced our portfolio during the year. On the back of this
the Board is pleased to recommend an increase in the final dividend from 1.15p
to 1.30p per share making a total dividend for the year of 1.70p, an increase of
almost 10%.

Last year I informed Shareholders that our Manager, Asset Value Investors (AVI),
had become employee owned. I am glad to say that the transition of the support
functions including fund administration, accounting and secretarial services has
gone smoothly. The Board was also heavily involved in implementing a new and
updated management agreement with AVI, details of which are included later in
this report.

In his second year in sole charge of the Company's investments, John Pennink has
delivered another outstanding performance and investor confidence is indicated
by the fact that the discount on which our shares trade has narrowed to just
1.8%. During the year our marketing efforts have been targeted at increasing our
retail investor base and I am pleased to report that retail investors have
increased by 21% since the start of the year. I am sure that our new investors
have been influenced by the performance of our management team and I would like
to welcome all new investors to British Empire. We would love to continue this
year's performance level going forward but it is worthwhile reminding investors
that our investment philosophy is to seek out long-term value and there will be
periods when it will not be possible to deliver such outstanding returns.
However, we do believe that our investment philosophy is proven and will
continue to deliver long-term value to Shareholders.

Modified FSA Listing Rules require each Investment Trust to make a statement in
the Annual Report affirming that the continuing appointment of the investment
manager is in the best interests of the Shareholders. Shareholders will find our
official statement in its proper form later in the report but I would just like
to say here that in view of the outstanding performance outlined above, both in
performance terms and in the day to day operations of the Trust, the Board had
no difficulty in confirming the re-appointment of our Manager.

The Board is also aware of the possible effects of the new International
Financial Reporting Standards (IFRS) on the results of your Company. Preliminary
figures suggest that reductions in asset value from moving to bid rather than
mid market prices on our investments will not be material to the overall value
of your Company with possible offsets arising from asset revaluations at some of
our investee companies as they also move to the new reporting regime.

As I indicated here last year, John Walton offered to resign as a Director
because of his concerns about potential conflicts of interest arising from the
management buy-out of AVI and his longevity on the Board. We decided then to ask
John to remain as a Director, subject to annual re-election by Shareholders, not
least because experience of more than one investment cycle can be valuable to
the Board of an investment trust. We have again discussed with John whether he
wishes to seek re-election this year but have reluctantly come to the conclusion
that we shall not be proposing this at the forthcoming Annual General Meeting.

John's wisdom and passion for investing will be missed by all the Board but
John, in his role as Chairman of AVI, will remain available to the Board as we
deem fit and, in particular, he will join us for our annual strategy session
when we review the long-term direction of the Trust. It was John's vision that
started British Empire on its path of searching for 'undervalued assets' all
those years ago. The philosophy is now well proven and robust and Shareholders
have benefited tremendously from his insights and hard work. The Board is sure
that Shareholders would like to join us in thanking him for his remarkable 20
year contribution to the Company.

I should like to welcome John May who joined the Board on 15 December 2003 and
has already made a very positive contribution to our deliberations. I would also
like to thank my fellow Directors for their support and particularly for meeting
the extra demands on their time during this transitional year.

* Cazenove (Total Return NAV)

Iain Samuel Robertson CBE
Chairman
17 November 2004


Statement of Total Return of the Group for the year ended 30 September 2004

                                                      2004        2004        2004        2003        2003          2003
                                                   Revenue     Capital       Total     Revenue     Capital         Total
                                                     £'000       £'000       £'000       £'000       £'000         £'000

Gains on investments                                     -      86,347      86,347           -      71,502        71,502
Realised exchange (losses) / gains                       -       (630)       (630)           -           8             8
Realised loss on buyback 10 3/8% Deb Stk 2011            -       (792)       (792)           -           -             -
Losses on Index Stock                                    -       (767)       (767)           -       (740)         (740)
Income                                               9,168           -       9,168       8,162       1,003         9,165
Investment management fee (incl. irrecoverable     (1,146)     (2,667)     (3,813)     (1,373)       (709)       (2,082)
VAT)
Other expenses (incl. irrecoverable VAT)           (1,107)           -     (1,107)     (1,002)           -       (1,002)
Net return before finance costs and taxation         6,915      81,491      88,406       5,787      71,064        76,851
Finance costs                                      (2,682)         (7)     (2,689)     (2,704)         (7)       (2,711)
Return on ordinary activities before taxation        4,233      81,484      85,717       3,083      71,057        74,140
Taxation on ordinary activities                      (582)         361       (221)       (357)       (395)         (752)
Return attributable to equity shareholders           3,651      81,845      85,496       2,726      70,662        73,388
Dividends in respect of equity shares              (2,721)           -     (2,721)     (2,481)           -       (2,481)
Transfer to reserves                                   930      81,845      82,775         245      70,662        70,907
Return per Ordinary Share
Basic                                                2.28p      51.13p      53.41p       1.70p      44.14p        45.84p

The revenue column of this statement represents the revenue account of the 
Group.

No operations were acquired or discontinued during the year.


Balance Sheets As at 30 September 2004
                                                                           Company                      Group
                                                                          2004          2003         2004           2003
                                                                         £'000         £'000        £'000          £'000
Fixed assets
Investments - Securities                                               463,576       386,946      461,541        382,106
Current assets
Investments held by dealing subsidiary                                       -             -            5              6
Debtors                                                                  4,646         1,435        4,651          1,435
Cash at bank and on deposit                                                 56         1,158           58          1,159
                                                                         4,702         2,593        4,714          2,600
Creditors: amounts falling due within one year                         (6,843)       (7,915)      (4,820)        (3,070)
Net current liabilities                                                (2,141)       (5,322)        (106)          (470)
Total assets less current liabilities                                  461,435       381,624      461,435        381,636
Creditors: amounts falling due after more than one year               (30,334)      (33,246)     (30,334)       (33,246)
Provision for liabilities and charges                                        -          (64)            -           (64)
Net assets                                                             431,101       348,314      431,101        348,326
Capital and reserve
Called-up share capital
Ordinary shares                                                         16,008        16,008       16,008         16,008
Reserves
Capital redemption reserve                                               2,927         2,927        2,927          2,927
Share premium account                                                   28,078        28,078       28,078         28,078
Capital reserve - realised                                             246,363       225,100      246,363        224,827
- unrealised                                                            87,707        27,115       85,922         23,762
Merger reserve                                                          41,406        41,406       41,406         41,406
Revenue reserve                                                          8,612         7,680       10,397         11,318
Equity shareholders' funds                                             431,101       348,314      431,101        348,326
Net asset value per Share                                              269.30p       217.59p      269.30p        217.59p


Consolidated Statement of Cash Flows For the year ended 30 September 2004

                                                                        2004          2004          2003            2003
                                                                       £'000         £'000         £'000           £'000
Net cash inflow from operating activities                                            4,548                         3,931
Servicing of finance
Interest paid                                                        (2,774)                     (2,707)
Net cash outflow from servicing of finance                                         (2,774)                       (2,707)
Taxation
UK tax paid less recovered                                               122                           -
WHT recovered                                                            246                         110
Tax recovered                                                                          368                           110
Capital expenditure and financial investment
Purchase of investments                                            (276,103)                   (140,795)
Sale of investments                                                  280,449                     142,482
Capital dividends                                                          -                         617
Net cash inflow from investing activities                                            4,346                         2,304
Equity dividends paid                                                              (2,481)                       (3,041)
Net cash inflow before financing                                                     4,007                           597
Financing
Share buybacks                                                             -                     (2,189)
Buyback of Index Stock                                                 (318)                       (412)
Buyback of 10 3/8% Debenture Stock 2011                              (4,160)                           -
Net cash outflow from financing                                                    (4,478)                       (2,601)
Decrease in cash                                                                     (471)                       (2,004)
Reconciliation of net cash flow to movements in net debt
Decrease in cash as above                                                            (471)                       (2,004)
Buyback of Index Stock                                                                 318                           412
Buyback of 10 3/8% Debenture Stock 2011                                              4,160                             -
Changes in net debt resulting from cash flows                                        4,007                       (1,592)
Currency (losses) / gains                                                            (630)                             8
Amortisation of Debenture issue expenses                                               (7)                           (7)
Increase in value of Index Stock                                                     (767)                         (740)
Increase in value of 10 3/8% Debenture Stock 2011                                    (792)                             -
Movement in net debt in year                                                         1,811                       (2,331)
Net debt at 1 October                                                             (32,087)                      (29,756)
Net debt at 30 September                                                          (30,276)                      (32,087)
Notes:
     
1.   The Board proposes a final dividend of 1.30p per Ordinary share which, if 
     approved, will be paid on 7 January 2005 to Shareholders on the Register as 
     at 3 December 2004.

2.   Basic revenue return per Ordinary Share is based on Group revenue after 
     taxation of £3,651,000 (2003: £2,726,000) and on 160,080,089 (2003: 
     160,080,089) Ordinary Shares, being the weighted average number of 
     Ordinary Shares in issue during the year.

3.   Basic capital return per Ordinary Share is based on net gains for the 
     financial year of £81,845,000 (2003: £70,662,000) and on 160,080,089 
     (2003: 160,080,089) Ordinary Shares, being the weighted average number of 
     Ordinary Shares in issue during the year.

4.   Basic net asset value per Ordinary Share is based on net assets and on 
     160,080,089 (2003: 160,080,089) Ordinary Shares being the number of 
     Ordinary Shares in issue at the year end.

     At the year end the net asset value per share adjusted to include the 
     Debenture Stocks at market value rather than par was 265.71p (2003: 
     213.42p).

5.   The financial information set out in the announcement does not constitute 
     the Company's statutory accounts for the years ended 30 September 2004 or 
     2003. The financial information for the year ended 30 September 2003 is 
     derived from the statutory accounts for that year which have been delivered 
     to the Registrar of Companies. The auditors reported on those account; 
     their report was unqualified and did not contain a statement under s237 (2) 
     or (3) of the Companies Act 1985. The statutory accounts for the year ended 
     30 September 2004 will be finalised on the basis of the financial 
     information presented by the Directors in the preliminary announcement and 
     will be delivered to the Registrar of Companies in due course. The 
     preliminary announcement is prepared on the same basis as set out in the 
     previous year's annual accounts.

6.   Copies of the Annual Report will be posted to shareholders in due course 
     and further copies may be obtained from the Registered Office, Bennet 
     House, 54 St James's Street, London SW1A 1JT. The Annual General Meeting 
     will be held at 12 noon on Thursday 16 December 2004.

Phoenix Administration Services Limited

Company Secretary

17 November 2004


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