Monthly Update

Lindsell Train Investment Trust PLC
20 October 2005


                                        The Lindsell Train Investment Trust PLC
                                               As at 30th September 2005

Fund Objective

To maximise long-term total returns subject to the avoidance of loss of absolute value and with a minimum objective to
maintain the real purchasing power of Sterling capital, as measured by the annual average yield on the 2.5%
Consolidated Loan Stock.

Share Price                                                           GBP 125.50
Net Asset Value                                                       GBP 127.56
Premium (Discount)                                                        (1.6%)
Market Capitalisation                                                 GBP 25.1mn
Benchmark (21/2% Con Ann Avg Yield +4.6%)                                   +0.4
Source: Bloomberg; NAV-Lindsell Train. Share Price
quoted is closing mid price. See Benchmark definition.

Performance History (based in      2000     2001        2002         2003           2004                YTD 2005
GBP)
Net Asset Value %                  n/a      +3.2        -9.6         +3.1           +23.7                +12.1*
Share Price %                      n/a     +18.5       -19.8         -8.7           +20.6                 +26.0

Source: S&P Micropal. Based in GBP. Performance years listed Jan - Dec. Launch date 22 Jan 2001. With dividends
reinvested. *Source: Lindsell Train Ltd.

Past performance is not a guide to future performance. The price of units and the income from them may go down as well
as up. Investors may not get back what they invested.


2004 Performance    Jan   Feb   Mar   Apr   May   Jun   Jul   Aug     Sep        Oct            Nov            Dec
Net Asset Value %  +1.8  +3.3  +0.3  +2.3  -0.1  +2.1  -2.0   +4.8    +3.8      +1.4*          +0.0*          +3.7
Share Price %      -2.3  +6.0  -0.6  +0.6  +2.3  +2.7  +0.5   +0.5    +8.6       +3.0          -1.9           +0.0

Source: S&P Micropal unless otherwise indicated. Based in GBP. Performance years listed Jan - Dec. Launch date 22 Jan
2001. With dividends reinvested. *Source: Lindsell Train Limited.


2005 Performance    Jan   Feb   Mar   Apr   May   Jun   Jul    Aug       Sep        Oct          Nov           Dec
Net Asset Value %  +1.4  +0.3  +1.7  +0.8  +3.0   3.0  +1.1   +0.5      +1.1*        -            -             -
Share Price %      +8.9  +3.6  -3.5  +1.8  +2.7  +9.6  +0.4   -2.4      +2.4         -            -             -

Source: S&P Micropal unless otherwise indicated. Based in GBP. Performance years listed Jan - Dec. Launch date 22 Jan
2001. With dividends reinvested. *Source: Lindsell Train Ltd.

Past performance is not a guide to future performance. The price of units and the income from them may go down as well
as up. Investors may not get back what they invested.


Industry Breakdown                                             % of NAV
Bonds                                                            23.8
Preference Shares                                                14.7
Equity - Media                                                   8.5
Equity - Banks & Investment Co.                                  4.5
Equity - Leisure & Ent.                                          10.0
Equity - Food & Beverage                                         26.7
Investment Fund                                                  21.7
Cash & Equivalent                                               (9.9)
Total                                                           100.0
Source: Lindsell Train


Top 10 Holdings                                                % of NAV
HBOS 9.25% Non Cum                                               11.3
US Gov Treasury 6.25%                                            10.6
Barr AG                                                          10.3
Lindsell Train Global Media (Dist)                                9.8
Lindsell Train Japan (Dist)                                       8.1
Cadbury Schweppes                                                 7.6
21/2% Consolidated Loan Stock                                     7.5
Diageo                                                            6.6
Wolverhampton & Dudley Breweries                                  5.9
UK Treasury 2.5%                                                  5.6
Source: Lindsell Train


Fund Exposure         Bonds      Prefs        Equity          Funds              Cash                 % of NAV
UK %                   13.2      14.7          42.2            4.3              (10.0)                  64.4
USA %                  10.6        -            1.5             -                3.6                    15.7
Europe (ex UK) %        -          -            1.8             -               (0.5)                    1.3
Japan %                 -          -            4.2            7.6              (3.0)                    8.8
Global %                -          -             -             9.8                -                      9.8
Total                  23.8      14.7          49.7            21.7             (9.9)                   100.0
Source: Lindsell
Train


Fund Manager's Comments

Our Your NAV rose 1.1% in September, taking the gain for the first three
quarters of 2005 to 10.6%, before dividends. This return comfortably exceeds
that of our benchmark (the annual average running yield on an irredeemable gilt,
which we take as a proxy for UK inflation expectations plus a risk premium),
which has delivered 3.5% to end September. By contrast, the MSCI World Equity
Index and the FT All-Share Index gained 12.6% and 13.8% respectively over the
same period, in Sterling.

We continue to focus earning an absolute return for shareholders, in excess of
our benchmark, while minimising, to the fullest extent we can, the risk of loss
of capital value. This objective means it is unlikely that the NAV will ever
perform similarly to the major equity indices in the short term. For instance,
we are content with the total returns earned in 2005 from the fixed interest
securities in the Trust, which range from c6.0% delivered by the gilts, to
c15.0%, in Sterling from the US Treasury bond, even though the combined
contribution is less than could have been earned from a UK equity index-tracker.
We are content, because those fixed interest returns outstripped our benchmark
hurdle, with, we judge, low risk. Meanwhile, over the nearly five years since
the establishment of the Trust, the NAV performance has in fact significantly
exceeded that of mainstream equity markets (the FT All-Share Index is still down
by 8.0% since January 2001) and we believe, looking ahead, that our investment
strategy has every chance of delivering returns that will satisfy investors in
both absolute and relative terms.

For that contention to hold, three conditions, at least, must be met. First, we
must ensure we exit our fixed interest holdings advantageously, before rising
inflation expectations and indeed, actual UK inflation cause permanent loss of
their capital value and erode the real value of the income the Trust enjoys from
them. Next, we must ensure that our growing exposure to various equities
delivers terrific returns. Finally, your investment manager must succeed in
growing the funds under management and profits of Lindsell Train Limited,
because then the Trust's 25.0% holding in that private company can be expected
to deliver a rich and increasing flow of dividends and further capital uplift.
We have comments this month on each of the three conditions.

On the first trading day of October we sold a portion of our US Treasury Bond,
amounting to c1.0% of net assets. We used the proceeds to begin an investment in
a new equity holding, discussed below. This action is consistent with our policy
of the past few years, of using our government bond holdings to finance purchase
of equity assets, where we have a high degree of confidence that the equity in
question can comfortably outperform the bond, from our entry price. The sale
should not be interpreted, though, as a change in our strategic view on Anglo-
Saxon bonds as an asset class. Of course, we cannot be as bullish about bonds as
we were when the positions were established, back in 2001, because their prices
have risen and yields fallen. However, we remain fairly much convinced that over
the next few years there is a period of spending and borrowing retrenchment to
be endured by US and UK consumers and that this pain could lead to lower short
term interest rates and lower inflation expectations. In other words, the bull
market in government bonds is maturing, but not necessarily over.

As to our equity portfolio, there were some notable features in September. The
best performer was Nintendo, up 14.0%, although this gain leaves the shares only
2.0% better for the year. Nintendo used the occasion of the Tokyo Game Show in
mid-September to reveal the specifications for its new home console, codenamed
'Revolution'. For once the hype may be justified, because the device appears
really to change the 'gaming experience' (by providing a controller which is
touch and motion sensitive, rather than button-driven). All we are sure of is
that Nintendo, still with c40.0% of its market value accounted for by its net
cash, is exceptionally undervalued if this new product catches the imagination
of gamers and delivers revenue growth.

Revenue growth was the one feature missing from A.G. Barr's otherwise
respectable set of interim results, released late in the month. Of course,
increasing sales are an important component of any equity valuation and Barr's
flat performance for its first six months is a disappointment, that left the
shares down 3.0% in September - not a trivial drop for the Trust's largest
equity holding. In partial mitigation, the performance was affected by the poor
showing of just one brand, Tizer, while the key property, IRN-BRU, saw revenues
rise by 5.0%. Decent growth from this high profit margin brand allowed Barr to
report a 6.0% increase in pre-exceptional profits, despite flat overall sales
and to increase its interim dividend by 5.4%. Barr's share price has more than
doubled since early 2003, an uplift that explains its importance in the affairs
of the Trust, but an uplift, too, that has removed the gross undervaluation that
pertained back then. Nevertheless, we find the shares still full of strategic
interest. The company has c£35.0 million of net cash, against its current stock
market value of £180 million and annual sales of £125 million. This enterprise
value/sales ratio of 1.2x appears extraordinarily low compared to the rash of
transactions in the consumer-branded goods sector during 2005 (today, for
instance, Boots announced the sale of its over the counter consumer brands,
including Strepsils and Nurofen, for 3.6x annual sales). Cadbury signalled in
September its intention to sell its European soft drinks business, a transaction
which is likely to be keenly contested and may provide an even better benchmark
for a fair value for Barr. It is not impossible that Barr could find some use
for its cash pile in the fallout from the Cadbury auction, buying the UK rights
to Orangina, for instance. The Trust earns a net dividend yield of 6.5% on its
average buying price for Barr shares, from a cash-rich company with strategic
flexibility and we can think of far worse places to commit long term capital.

We have now begun accumulating our second new equity holding of 2005. The first,
Heineken, has, so far, been satisfactory, gaining just under 10.0% since
purchase. Any setback in its price will encourage us to add to the current 2.0%
holding. The prime factor in Heineken's recent bounce has been the rally in the
US Dollar, to which the company is very exposed. That consideration also
influenced our, so far, tentative new investment in Pearson, which, if anything,
is even more exposed to the US Dollar than Heineken (the company is probably
marginally loss-making on its Sterling business interests, meaning that over
100.0% of current profits are Dollar denominated). The undoubted currency drag
on Pearson's profits during the Dollar's bear market against Sterling is
certainly one of the factors that has reduced the company to its, we think,
unreasonably low valuation and could provide an unlooked for boost to earnings
if Sterling's weakness continues. Another factor in our interest in Pearson,
although like the currency, a contributory rather than clinching factor, is the
dividend yield we are able to access on its shares. At a fraction under 4.0%
net, Pearson's equity yields some 33.0% more than the FT All-Share and in line
with that of a long-dated gilt (net), meaning that the Trust sacrifices little
or no income when switching into it out of a bond, but gains the prospect of a
continuation of the company's dividend growth, up 85.0% over the past 10 years.
At the heart of the investment decision, though, is our conviction that
Pearson's roughly £5.0 billion of market value is too low, compared to the
roughly £4.0 billion of annual sales. We can see circumstances where investors
might be happy to value Pearson's revenues at more like 3.0x and circumstances
where the revenues themselves might have grown to materially more than £4.0
billion, implying a possible tripling of the stock over the next, say, 5 years.
In particular, we think investors today underestimate the value of a number of
Pearson's assets and some of its growth opportunities. The Financial Times is an
obvious example, currently loss-making, as the financial services industry
emerges from recession. Pearson's Longman imprint, which is China's leading
'English as a foreign language' teaching tool, is, we think, an underplayed
source of growth, as the world adopts American as its lingua franca. Pearson's
60.0% stake in Interactive Data Corporation, a NASDAQ quoted company, is valued
by US investors at an implied £710 million, or 14.0% of Pearson's own market
value - yet we suspect most UK investors are not even aware of the existence of
the asset, sitting as a minority in the FT group. Similarly, Pearson's 50.0%
interest in The Economist is lost as an item in its accounts, as part of 'joint
ventures', but the magazine has recently reached a record weekly circulation of
over 1 million and must be worth £100's of millions, if it were ever extricated
from the group. We understand investors' frustration with Pearson as a business
and an investment and recognise that capital has been poorly allocated, at
times, by the current management. However, disenchantment, combined with unique
assets present opportunities and we are prepared to accumulate shares,
preferably into falling prices.

Finally, reverting to Lindsell Train Limited, we are pleased to report a new
segregated account, of some £60 million, invested in UK equities, replicating
our core UK portfolio Finsbury Growth and Income Trust. This award lifts LTL's
funds under management to £300 million, compared to £157 million in September
2004. New FUM are highly accretive for LTL's profitability and we hope that
future satisfactory performance for this and our existing clients will lead to
other opportunities, whose value will also be shared with Trust shareholders.


Fund Manager                            Launch Date                             Denomination
Nick Train                              22 Jan 2001                             GBP
Year End                                Dividend                                Benchmark
31st Mar                                Ex Date: June                           The annual average yield on the 21/2%
                                        Payment: August                         Consolidated Loan Stock.
The Board                               Management Fees                         Registered Address
Rhoddy Swire                            Standard Fee: 0.65%                     Lindsell Train Investment Trust
Michael Mackenzie                       Performance Fee: 10% of annual increase Springfield Lodge, Colchester Road
Donald Adamson                          in the share price, plus dividend,      Chelmsford
                                        above the gross annual yield of the 2   ESSEX  CM2 5PW
                                        1/2% Consolidated Loan Stock.
ISIN                                    Secretary                               Listing
GB0031977944                            Phoenix Administration Services Limited London Stock Exchange
Bloomberg
LTI LN

Disclaimer

This document is intended for use by persons who are authorised by the UK
Financial Services Authority ('FSA') and those who are permitted to receive
such information in the UK. The information contained in this document does not
constitute an offer or invitation to buy or sell any investments. Nothing in
this document constitutes investment, legal, tax or other advice. Lindsell Train
and/or persons connected with it may have an interest in this investment.

The value of any investment in securities or funds and the income generated from
them may go down as well as up and are not guaranteed. Past performance cannot
be used as a guide or guarantee of future performance. You may not get back the
original amount you have invested. Changes in foreign exchange rates may cause
the value of your investment to go up or down. Some funds with higher gearing
may be subject to higher volatility and the investment value may change
substantially. The net asset value (NAV) performance of an investment trust is
not the same as its market share price performance.

Issued by Lindsell Train Limited
Authorised and regulated by the Financial Services Authority
18 Oct 2005 LTL 000-030-3b

                                                Lindsell Train Limited
                                          35 Thurloe Street, London  SW7 2LQ
                                     Tel. [phone]  Fax. [phone]
                                   [e-mail]  www.lindselltrain.com
                Lindsell Train Limited is authorised and regulated by the Financial Services Authority.





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