Interim Results

European Assets Trust NV
25 July 2002

To:          RNS

From:        European Assets Trust NV

Date:        25 July 2002





UNAUDITED INTERIM RESULTS - SIX MONTHS TO 30 JUNE 2002


  • Against a difficult climate for equity markets, the Company's sterling
    total return (capital performance with dividends added back) over the six
    months was (0.4) per cent

  • Net asset value total return (capital performance with dividends added
    back) of 50.6 per cent since December 1997 when the portfolio was refocused,
    compared with 11.6 per cent for the benchmark index

  • Dividends continue to be funded from capital reserves

Performance

The first six months of 2002 have been extremely difficult for equity investors.
Doubts about the strength and durability of the global economic recovery have
cast an unwelcome shadow on stockmarket investment. Add to that accounting
scandals which have come to light at leading global companies and the sharp
turnaround in the value of the US Dollar and it is hardly surprising that
investors have become more risk averse and have largely remained on the
sidelines.

There are some encouraging signs though. Interest rates remain at historically
low levels with little immediate upwards pressure. Our investment sector,
Continental European small to mid cap companies, has been relatively resilient
when compared to the European large cap sector. Over the half year to 30 June
2002, the small cap sector outperformed the large cap sector by more than 10
full percentage points in total return terms.

For the half year as a whole, the HSBC Smaller Europe (ex UK) Index actually
rose by 1.8% in total return terms. The fall in the value of sterling against
the Euro (5.6% over the period) enhanced returns for the UK investor. European
Assets Trust more or less held its value over the period, falling by a mere 0.4%
in sterling total return terms and remains the leading performer in the AITC
European Smaller Companies Sector over the past two years. Many of the portfolio
companies delivered earnings in line with or better than consensus forecasts.
This augurs well for performance when equity markets recover their composure.

Dividend

2002

A dividend of Euro 0.9 per share has been declared for the year to 31 December
2002. As previously announced, the pattern of dividend payments was changed to
benefit from Dutch tax regulations such that dividends due for the first six
months (Euro 0.45 per share) were paid out by March 2002. Monthly dividends for
the remainder of 2002 have recommenced in July 2002 at the monthly rate of Euro
0.075 per share, making Euro 0.9 per share in total for the year. Dividends
continue to be funded from capital reserves.

2003

At the time of the introduction of the high dividend policy, it was decided to
align dividend payments to the yield available on ordinary income shares of UK
split capital investment trusts. In view of the significant and well-documented
difficulties and uncertainties within the split capital investment trust sector
and material variation in yields, this yardstick is no longer appropriate and
the Company's dividend policy is restated accordingly.

In determining the rate of dividend from 2003 the Boards will have regard to the
interests and views of shareholders as a whole. As well as considering the
Company's portfolio and capital structure this will include taking account of
prevailing market conditions (presently lower interest rates and inflation) and
the level of the Company's assets and reserves, which have been reducing
reflecting adverse equity markets over the past 18 months. In 2001 and 2002 to
date dividends have been paid from accumulated capital reserves. The Boards
would like to ensure that the dividend policy is consistent with there being the
opportunity for a fund of viable size for those shareholders wishing to continue
with their investment in the Company beyond 2006. In light of the above and
subject to market conditions, the Boards are reviewing the level of the
Company's dividend yield from 2003.

Based on present tax advice, the Boards intend in 2003 again to bring forward
dividend payments, with a payment being made at the start of January 2003.

Outlook

Though we remain positive on the outlook for growth in earnings from our
portfolio companies, the weak market background has led us to maintain a
cautious stance on the gearing level. At the half year, this stood at 4.4%. We
have the borrowing facility in place and intend to draw down further amounts to
invest in quality businesses over the summer months where opportunities arise.

Many of our favoured stocks are selling at undemanding ratings. We look to take
advantage of this temporary undervaluation by adding to holdings on weak days in
the market. Further evidence of the undervaluation of the sector as a whole has
come from the cash bid for Ferretti, the Italian luxury boat builder, at a 20%
premium to the stockmarket price. This follows on from a series of cash
take-outs of portfolio companies in the latter half of 2001.

The portfolio remains focused on profitable, well financed businesses with sound
growth prospects. It is well placed to participate in an eventual recovery of
European equity markets.




Balance Sheet                                                                          30 June         30 June
                                                                                          2002            2001
                                                                Note                  Euro 000        Euro 000
Investments
Securities                                                       6                     159,178         221,340
Net current assets/(liabilities)                                                         3,265         (2,569)
Total assets less current assets/(liabilities)                                         162,443         218,771
Loan                                                                                  (10,000)               -

Equity shareholders funds                                                              152,443         218,771

Net asset value per share -                                      7                   Euro 8.33      Euro 12.03

Expressed in sterling                                                                     541p            726p
based on 18,303,637 shares in issue (2001 - 18,182,794)

As at 31 December 2001 (18,259,867 shares in issue)                                         Euro 9.35/569p


Revenue Account - six months to                                                30 June            30 June
                                                                                  2002               2001
                                                            Note              Euro 000           Euro 000
Income
Securities                                                                       1,588              1,845
Deposit Interest                                                                    40                221
Securities lending                                                                  92                  2
Total Income                                                  1                  1,720              2,068

Expenses and interest
Administration expenses                                      4,5                 (318)              (367)
Interest                                                                         (109)              (372)

Net Income                                                    2                  1,293              1,329

Absorbed by dividends                                         3                  7,820             13,613

Earnings per share                                          Euro                  0.07               0.07
Dividends per share                                         Euro                  0.45               0.78



Statement of Cash Flows - six months to
                                                                                30 June                  30 June
                                                                                   2002                     2001
                                                                               Euro 000                 Euro 000

Cash flow from investment activities
Interest, dividends and other income                                              1,390                    2,435
Purchases of shares                                                            (17,562)                 (48,256)
Sales of shares                                                                  22,872                   48,717
Administrative expenses and interest charges                                    (1,705)                  (1,617)

                                                                                  4,995                    1,279



Cash flows from financial activities
Dividends and tax paid                                                         (11,719)                 (15,423)
Tax on repurchase of shares                                                           -                 (23,285)

                                                                               (11,719)                 (38,708)


Cash at bank
Net decrease for the period                                                     (6,724)                 (37,429)
Balance as at 31 December                                                         2,275                   36,411

Balance as at 30 June                                                           (4,449)                  (1,018)





Notes

    1.     Income is stated after deduction of irrecoverable withholding taxes of Euro 224,020 (2001 - Euro
    279,048)


    2.     Income for the six months period should not be taken as an indication of the income for the full
    year.


    3.     Monthly dividends of Euro 0.075 per share will be paid to shareholders from July until December
    2002. These dividends are funded from capital reserves.


    4.     Shareholders agreed to an increase in the investment management fee from 0.5% to 0.8% at a General
    Meeting held on 27 April 2001. This became effective from 1 January 2001 once a three month waiting period
    ended on 14 September 2001. As the increase remained conditional until that date, the revenue account in
    2001 was charged at 0.5%. If the revised rate had been applied, the net revenue of the Company in 2001
    would have been reduced by Euro 108,853 and shareholders funds by Euro 435,414.


    5.     Administration expenses in 2001 include an amount of Euro 104,089 in respect of non-recurring
    expenditure.

    6.     The securities are valued at market price.

    7.     43,770 shares were issued during the period via the scrip dividend option.


    8.     The accounting policies applied in preparing the half-year figures at 30 June 2002 are consistent
    with those underlying the 2001 annual accounts.


    9. Dutch Withholding Tax on Dividends and Tax Surcharge.


    The Boards, through their advisers, seek to achieve the most advantageous possible treatment for the
    Company and its shareholders in respect of Dutch tax. Based on advice received the following applies:

    2002

    Dutch withholding tax did not apply to the dividends paid in respect of the seven months to July 2002 for
    any shareholders.

    For dividends payable in respect of the remaining months to 31 December 2002, Dutch withholding tax will
    not apply for almost all shareholders (since the yield threshold level of 4% has been exceeded, beyond
    which Dutch tax surcharge of 20% of the 'excessive dividends' applies instead to the Company). Where the
    relevant dividend is deemed to come out of earnings (i.e. income and current year capital gains on an
    accruals basis) rather than accumulated capital reserves, Dutch withholding tax will apply to these
    remaining 2002 dividends where shareholders either:






 a. are not residents of the Netherlands, European Union member states or countries with which the Netherlands
    has concluded a double tax treaty or

 b. own 5% or more of the Company's share capital and certain other conditions, including a 3 year holding
    period, are met

     For shareholders not included in categories (a) or (b) above, no Dutch      withholding tax applies to
     2002 dividends.


    2003

    The conditions under which Dutch withholding tax and tax surcharge apply for 2003 are expected to be the
    same as for 2002.

    The dividend intended to be payable at the start of January 2003 is not expected to attract Dutch
    withholding tax for any shareholders.

    Scrip dividends

    Shareholders can elect to receive new shares in the Company in place of the cash dividend. Scrip dividends
    are re-invested into shares of the Company at net asset value. Scrip dividends are booked against paid in
    capital and are not subject to Dutch withholding tax.





    Fuller details of tax are set out in the Company's Annual Report. Professional advice should be sought in
    respect of questions relating to taxation. Individual circumstances may affect the general tax
    consequences described above which are based on present professional advice received by the Company.















For further information, please contact:

Millar Law, Crispin Longden

Friends Ivory & Sime plc, Investment Managers          0131 465 1000





Michael Campbell

Friends Ivory & Sime plc, Company Secretary          0131 465 1000




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