Performance at Month End

Merrill Lynch Br. SmallerCo Tst PLC
13 September 2005


MERRILL LYNCH BRITISH SMALLER COMPANIES TRUST plc

All information is at 31 August 2005 and unaudited.

Performance at month end is calculated on a capital only basis
                                      One          Three           One            Three          Five
                                      Month        Months          Year           Years          Years
Net asset value                       3.6%         14.3%           39.3%          71.2%          -17.0%
Share price                           4.7%         19.5%           42.2%          78.9%          -17.1%
FTSE Small Cap Index (ex IC's)        3.0%          9.6%           23.9%          50.1%          -12.8%

Sources:  Merrill Lynch Investment Managers and Datastream.

At month end
Net asset value:                                 300.45p
Share price:                                     249.50p
Discount to NAV:                                   17.0%
Net yield:                                          1.8%

Total assets:                                    £166.7m
Gearing:                                            9.7%
Ordinary shares in issue:                        50,563,523


Ten Largest Sector
Weightings                                                                                             % of Total Assets
Support Services                                                                                                    14.7
Software & Computer Services                                                                                        10.7
Media & Entertainment                                                                                                9.1
Electronic & Electrical Equipment                                                                                    6.9
Mining                                                                                                               6.8
Oil & Gas                                                                                                            6.1
Construction & Building Materials                                                                                    6.1
Engineering & Machinery                                                                                              5.3
Health                                                                                                               4.8
Real Estate                                                                                                          4.1
                                                                                                                    ----
Total                                                                                                               74.6
                                                                                                                    ----
Ten Largest Equity Investments
Company
Aveva Group
Brewin Dolphin Holdings
BSS Group
Chaucer Holdings
Consolidated Minerals
Dechra Pharmaceuticals
Dicom Group
Mouchel Parkman
Renishaw
WSP Group

Commenting on the markets, Mike Prentis, representing the Investment Manager
noted:

Smallcap stocks performed well during the month, and the Company's NAV per share
rose by 3.6% to 300.45p. The benchmark index rose by 3.0%.

The share prices of some of the Company's oil & gas holdings again performed
well, especially Nelson Resources, Venture Production and Bowleven. Other good
performances came from Royalblue, following confident interim results, and from
Gooch & Housego and Mears. Newsflow during the month was understandably sparse.

New holdings included Morgan Sindall, Body Shop International, JKX Oil & Gas and
Hardman Resources. Morgan Sindall's most profitable businesses are the building
of affordable housing and the fit out of commercial buildings. We met management
who presented strong interim results and a confident outlook. We like the social
housing space, a view re-inforced subsequently after again meeting the
management of Mears, another holding which specialises in the refurbishment of
social housing. We also met with the management of JKX Oil & Gas and Hardman
Resources and, given continuing strong oil & gas markets, decided to take a
holding in each. JKX produces oil & gas in the Ukraine, is benefiting from
gradually increasing gas prices in the Ukraine and has a significant exploration
programme underway.  JKX also has a very interesting net profit share in a block
in the Georgian Black Sea in which Anadarko and BP have significant stakes and
are committed to drilling at least one well during the next nine months. Hardman
has recently appointed Simon Potter as CEO; he previously held senior positions
with BP and came over very well. Hardman has a significant interest in the
offshore Mauritania blocks where the large Chinguetti field is due to come into
production early in 2006; it also has a major exploration programme over the
coming months. Body Shop is a well known, genuinely international retailer.
Trading has been stronger than most of the retail sector and Body Shop's at Home
direct retailing business is showing good profits growth. 0.5% of the Company's
assets were invested in each with the exception of Hardman, in which slightly
less has been invested.

Centaur produced a disappointing trading update in July and following a
management meeting we decided to sell the holding. Our concern was the weakening
of display advertising spending to which Centaur referred. We have also reduced
the holding in Incisive Media significantly, although we understand it continues
to trade well. The holding in Richmond Foods was sold, as were the remnants of
the holdings in Acal and Findel.

Latest information is available by typing www.mlim.co.uk/its on the internet,
'MLIMINDEX' on Reuters, 'MLIM' on Bloomberg or '8800' on Topic 3 (ICV terminal).



13 September 2005


                      This information is provided by RNS
            The company news service from the London Stock Exchange