Preliminary announcement of 2004 Results

Preliminary announcement of final results for the year ended

31 December 2004 (audited)

The directors recommend a final dividend of 4.75p per share making a total for
the year of 7.55p. Subject to the approval of shareholders, the final dividend
will be paid on 19 April 2005 to holders on the register on the record date of
18 March 2005.

Consolidated statement of total return

for the year ended 31 December

                          Revenue Capital    Total Revenue+  Capital   Total+
                                                                             
                             2004    2004     2004     2003     2003     2003
                                                                             
                             £000    £000     £000     £000     £000     £000
                                                                             
Total capital gains from        -  30,370   30,370        -   41,945   41,945
investments                                                                  
                                                                             
Income from investments    10,607       -   10,607    9,651        -    9,651
and deposits                                                                 
                                                                             
Trustee and related        14,909       -   14,909   13,568        -   13,568
services income                                                              
                                                                             
Underwriting commission        54       -       54      136        -      136
and other income                                                             
                                                                             
Gross revenue andcapital   25,570  30,370   55,940   23,355 .41,945.   65,300
gains                                                                        
                                                                             
Administrative expenses  (11,916)       - (11,916) (12,108)        - (12,108)
                                                                             
Return, including profit                                                     
on ordinary                                                                  
                                                                             
activities before                                                            
interest payable                                                             
                                                                             
and taxation               13,654  30,370   44,024   11,247   41,945   53,192
                                                                             
Interest payable          (2,456)       -  (2,456)  (2,456)        -  (2,456)
                                                                             
Return, including profit                                                     
on ordinary                                                                  
                                                                             
activities before          11,198  30,370   41,568    8,791   41,945   50,736
taxation                                                                     
                                                                             
Taxation                  (1,106)       -  (1,106)    (718)        -    (718)
                                                                             
Return, including profit                                                     
attributable                                                                 
                                                                             
to ordinary shareholders   10,092  30,370   40,462    8,073   41,945   50,018
                                                                             
Dividends on ordinary     (8,852)       -  (8,852)  (8,061)        -  (8,061)
shares                                                                       
                                                                             
Transfer to reserves        1,240  30,370   31,610       12   41,945   41,957
                                                                             
Return per ordinary          8.62   25.95    34.57     6.91    35.91    42.82
share (pence)*                                                               

+ Restated to reflect minor reclassifications between income and administrative
expenses.

* No dilutive effect.

Notes

The revenue columns of this statement represent the profit and loss accounts of
the Group. All amounts relate to continuing operations.

Statement of total recognised gains and losses for the year ended 31 December

                           Revenue Capital   Total Revenue Capital   Total
                                                                          
                              2004    2004    2004    2003    2003    2003
                                                                          
                              £000    £000    £000    £000    £000    £000
                                                                          
Return for the financial    10,092  30,370  40,462   8,073  41,945  50,018
year                                                                      
                                                                          
Foreign exchange             (177)       -   (177)   (240)       -   (240)
                                                                          
Total gains and losses       9,915  30,370  40,285   7,833  41,945  49,778
relating to the year                                                      

Financial summary

Highlights

                              31 December   31 December   Change
                                                                
                                     2004          2003        %
                                                                
                                    pence         pence         
                                                                
Share price                        232.50        221.75      4.8
                                                                
NAV per share                      233.01        206.10     13.1
                                                                
Earnings per share                                              
                                                                
- investment trust                   5.06          4.51     12.2
                                                                
- trustee and related                3.56          2.40     48.3
services                                                        
                                                                
Group earnings per share             8.62          6.91     24.7
                                                                
Dividends per share                  7.55          6.90      9.4

Performance

                                      2004          2003
                                                        
                                         %             %
                                                        
Share price                            4.8          15.2
                                                        
NAV total return                      16.7          25.9
                                                        
FTSE Actuaries All-Share              12.8          20.9
Index total return                                      

Chairman's statement

Performance

Over the year to 31 December 2004, our net asset value total return was 16.7%
compared to a total return of 12.8% for the FTSE Actuaries All-Share Index.

Our gross revenue increased over the year by 9.5% from £23.4 million to £25.6
million. Profit after tax attributable to shareholders was £10.1 million, an
increase of 25.0% over the previous year as a result of a 12.5% improvement in
the investment trust and a 48.4% improvement in trustee and related services.
Improved dividends increased the return from the investment trust and all our
trustee and related services businesses have performed well.

Earnings and dividends

Earnings per ordinary share for the year to 31 December 2004 were 8.62p, an
increase of 24.7% from last year. The board is recommending a final dividend of
4.75p per ordinary share (2003: 4.24p), which, together with the interim
dividend of 2.80p (2003: 2.66p), gives a total dividend of 7.55p (2003: 6.90p),
an increase of 9.4%. The final dividend will be paid, subject to shareholder
approval, on 19 April 2005 to holders on the register on the record date of 18
March 2005. Following two years with no growth in dividend, this recommended
increase reflects the increase in the Retail Price Index since 2001. The policy
of the company continues to be to seek growth in both capital and income.

Investment trust

Our portfolio has been managed throughout the year by James Henderson, who has
an independent, value based approach to investment. During the year the total
return of the portfolio was 15.1%, significantly ahead of the FTSE All-Share
Index.

We continue to select investments on the basis of what appears most attractive
in the conditions of the time. We will not pay unrealistically high prices but
hope to be able to buy growth shares on reasonable terms. We do not feel
obliged to hold shares of any particular type of company or industry or market,
but seek to find the best value. We aim to achieve a better return than the
FTSE All-Share Index by good stock picking. We believe that in the long term
returns on equities will exceed the cost of our long-term borrowing.
Consequently we take on a level of gearing which we believe balances risk with
the objective of increasing the return to shareholders.

Growth in the global economy has been reasonably strong, with favourable
implications for company profits and stock markets. The year was marked by
investment markets encountering a higher interest rate environment and higher
oil prices. Globally, interest rates moved up as the fear of deflation receded.
In the UK, short-interest rates rose from 3.75% to 4.75% as the Bank of England
responded to the buoyant housing market, which is responsible for the
significant increase in personal indebtedness. The Federal Reserve increased
rates in the USA from 1% to 2.25%.

In the UK, many companies have been benefiting from economic growth. Dividend
growth has been better than expected and dividend cover has increased.
Corporate debt has fallen as better profits have come through. Operating
margins for many companies have improved. In Continental Europe, however,
corporate profit performance has been less strong and our exposure to this area
has been reduced. We continue to be concerned about the laxness of US monetary
and fiscal policies, reflected in high rates of borrowing, a record current
account deficit and a weak dollar.

Trustee and related services

Our trustee and related services business increased revenue by 9.9% and profit
before tax by 52.2%. Most areas of the business have seen continued growth,
whilst our costs have been reduced. We believe trustee and related services are
well placed for growth in 2005 but that our cost base is unlikely to be reduced
further.

Commercial trusts had a busy year with a number of major appointments. Our
pension trustee business has seen growth from new and existing relationships
and we expect the Pensions Act 2004 to provide further opportunities. Corporate
services continue to grow significantly and service of process is looking to
increase the links between London, New York and Hong Kong for further
development of the business. New York trust business has achieved break even in
the second full year of operations and continues to develop in niche markets.
Hong Kong significantly improved its results and achieved a profit. Channel
Islands developed its position as an independent provider of trustee and
corporate services, resulting in a significant increase in income.

Board

Ken Inglis has decided not to seek re-election at the annual general meeting
('AGM'). He joined the board in 1995 and I should like to thank him for his
strong contribution in all areas of the company. Rob Williams stepped down from
his part-time executive role at the end of the year, but I am pleased to say
that he has agreed to remain on the board as a non-executive director.
Professor John Kay joined the board in September and his appointment stands to
be confirmed at the AGM. He has a distinguished record as an economist and we
are looking forward to working with him. He succeeds Ken Inglis as chairman of
the audit committee.

Staff

The trustee and related services businesses performed strongly during the year
and made a significant contribution to our income. Their success is dependent
upon the professionalism and commitment of our people, whom I should like to
thank for their hard work and efforts during the year.

Douglas McDougall

Balance sheet

as at 31 December

                                               Group          Corporation
                                                                         
                                       2004    2003*        2004     2003
                                                                         
                                       £000     £000        £000     £000
                                                                         
Fixed assets                                                             
                                                                         
Tangible                              1,048    1,327           -        -
                                                                         
Investments                         304,609  280,573     299,929  276,014
                                                                         
                                    305,657  281,900     299,929  276,014
                                                                         
Current assets                                                           
                                                                         
Debtors                               7,395    8,461       6,641    5,660
                                                                         
Short term cash investments          13,842    3,167       4,949      289
                                                                         
Bank balances and short term         10,491   11,099       2,048       50
deposits                                                                 
                                                                         
                                     31,728   22,727      13,638    5,999
                                                                         
Creditors                                                                
                                                                         
Amounts failing due within one     (16,463) (14,516)    (55,310) (54,923)
year                                                                     
                                                                         
Net current assets/(liabilities)     15,265    8,211    (41,672) (48,924)
                                                                         
Total assets less current           320,922  290,111     258,257  227,090
liabilities                                                              
                                                                         
Creditors                                                                
                                                                         
Amounts failing due after more     (48,222) (48,914)       (285)    (321)
than one year                                                            
                                                                         
Provisions for liabilities and            -     (77)           -        -
charges                                                                  
                                                                         
Net assets                          272,700  241,120     257,972  226,769
                                                                         
Capital & reserves                                                       
                                                                         
Called up share capital               5,875    5,862       5,875    5,862
                                                                         
Share capital redemption reserve          8        8           8        8
                                                                         
Own shares held                       (927)    (567)           -        -
                                                                         
Share premium account                 7,026    6,532       7,026    6,532
                                                                         
Capital reserves - realised         167,476  167,467     167,827  167,856
                                                                         
Capital reserves - unrealised        78,066   47,705      73,504   43,214
                                                                         
Revenue reserves                     15,176   14,113       3,732    3,297
                                                                         
Shareholders' funds - equity        272,700  241,120     257,972  226,769
                                                                         

* Restated in accordance with UITF38 to show own shares held as a deduction
from shareholders' funds. Own shares held were previously included in fixed
asset investments. With this exception there have been no changes in accounting
policies. Reclassifications have been made to capital reserves and revenue
reserves in respect of foreign exchange differences and goodwill.

Group cash flow statement

for the year ended 31 December

                                          2004      2004      2003     2003
                                                                           
                                          £000      £000      £000     £000
                                                                           
Net cash inflow from operating                    14,412             12,674
activities                                                                 
                                                                           
Servicing of finance                                                       
                                                                           
Debenture interest paid                (2,450)             (2,450)         
                                                                           
Bank interest paid                         (6)                 (6)         
                                                                           
                                                 (2,456)            (2,456)
                                                                           
Tax                                                (236)              (510)
                                                                           
Financial investment                                                       
                                                                           
Purchase of own shares                   (360)               (567)         
                                                                           
Purchase of investments               (49,917)            (46,318)         
                                                                           
Sales of investments                    56,444              40,237         
                                                                           
                                                   6,167            (6,648)
                                                                           
Capital expenditure                                                        
                                                                           
Purchase of tangible fixed assets         (57)               (334)         
                                                                           
Sales proceeds from tangible fixed           1                   -         
assets                                                                     
                                                                           
                                                    (56)              (334)
                                                                           
Equity dividends paid                            (8,238)            (8,066)
                                                                           
Management of liquid resources                                             
                                                                           
Cash (placed)/withdrawn on short term           (10,676)              7,323
deposit                                                                    
                                                                           
Financing                                                                  
                                                                           
Proceeds of increase in share capital                507                402
                                                                           
(Decrease)/increase in cash                        (576)              2,385
                                                                           
Reconciliation of the movement in net                                      
debt                                                                       
                                                                           
(Decrease)/ increase in cash as above              (576)              2,385
                                                                           
Cash inflow/(outflow) from liquid                 10,676            (7,323)
resources                                                                  
                                                                           
                                                  10,100            (4,938)
                                                                           
Exchange movements                                 (177)              (242)
                                                                           
Amortisation of debenture costs                     (27)               (27)
                                                                           
Net debt brought forward                        (24,910)           (19,703)
                                                                           
Net debt carried forward                        (15,014)           (24,910)

Segmental Analysis

                                           Investment   Trustee     Total
                                                                         
                                                trust       and      2004
                                                        related          
                                                                         
                                                       services          
                                                                         
2004                                             £000      £000      £000
                                                                         
Revenue                                         9,716    14,909    24,625
                                                                         
Administrative expenses                       (1,487)  (10,429)  (11,916)
                                                                         
                                                8,229     4,480    12,709
                                                                         
Interest (net)                                (2,151)       640   (1,511)
                                                                         
Return, including profit on ordinary            6,078     5,120    11,198
activities before taxation                                               
                                                                         
Taxation                                        (153)     (953)   (1,106)
                                                                         
Return, including profit attributable to        5,925     4,167    10,092
shareholders                                                             
                                                                         
Net assets                                    257,972    14,728   272,700
                                                                         
Return per ordinary share (pence)                5.06      3.56      8.62
                                                                         
                                           Investment   Trustee     Total
                                                            and          
                                                trust   related      2003
                                                       services          
                                                                         
2003                                             £000      £000      £000
                                                                         
Revenue                                         8,976    13,568    22,544
                                                                         
Administrative expenses                       (1,391)  (10,717)  (12,108)
                                                                         
                                                7,585     2,851    10,436
                                                                         
Interest (net)                                (2,157)       512   (1,645)
                                                                         
Return, including profit on ordinary            5,428     3,363     8,791
activities before taxation                                               
                                                                         
Taxation                                        (163)     (555)     (718)
                                                                         
Return, including profit attributable to        5,265     2,808     8,073
shareholders                                                             
                                                                         
Net assets                                    226,769    14,351   241,120
                                                                         
Return per ordinary share (pence)                4.51      2.40      6.91

Changes in geographical distribution

                 Valuation Purchases    Sales  Appreciation/ Investments
                                                                        
                        31      £000 Proceeds (depreciation) 31 December
                  December                                              
                                         £000           £000        2004
                      2003                                              
                                                                    £000
                      £000                                              
                                                                        
United Kingdom     197,740    23,831 (24,962)         27,447     224,056
                                                                        
North America       19,349    18,018 (19,390)            966      18,943
                                                                        
Europe              35,171     8,068 (12,092)          1,671      32,818
                                                                        
Japan                8,795         -        -            572       9,367
                                                                        
Other Pacific       19,518         -        -           (93)      19,425
                                                                        
                   280,573    49,917 (56,444)         30,563     304,609

This preliminary announcement does not comprise statutory accounts within the
meaning of Section 240 of the Companies Act 1985. The statutory accounts for
the year ended 31 December 2004 will be filed with the Registrar of Companies
in due course together with the auditors' report thereon. The information for
the year ended 31 December 2003 is an extract from the statutory accounts to
that date which have been filed with the Registrar of Companies. Those accounts
included an audit report which was unqualified and which did not contain a
statement under section 237(2) or (3) of the Companies Act 1985.

By order of the board

Law Debenture Corporate Services Limited

Secretary

28 February 2005

Copies of the annual report will be available from the Corporation's registered
office.

The Law Debenture Corporation p.l.c. www.lawdeb.com