Final Results and Dividends

Chairman's statement Results and Dividends After a quiet first half of 2004, UK equities moved higher in the second half to produce another year of good returns. The total return in net assets of Temple Bar during 2004 was 21.8%, which compares with a total return of 12.8% for the FTSE All-Share Index. The underlying outperformance of the portfolio was amplified by the Trust's capital gearing, which is maintained at a conservative level. The Board is recommending an increase in the final dividend of 3.3% to produce a total increase for the year of 3%, reflecting the positive dividend announcements made in 2004 by many of the companies in the portfolio. This dividend will be payable on 31 March 2005 to those shareholders on the register as at 18 March 2005. Gross revenue was lower compared with 2003, due mainly to the absence of a large special dividend received in the prior year. As a result post-tax earnings were reduced by 3.8% but still cover the increased dividend. The Board closely monitors the relationship between the price of Temple Bar's shares and their underlying net asset value and is pleased to note that the shares have traded close to asset value for much of 2004; at the year end the shares were trading at a small discount of 0.6%. The operation of a low cost Savings Scheme together with general marketing and shareholder support activities facilitate the maintenance of the discount at an acceptable level. The Board recognizes that the market ultimately determines the value of the Trust's shares and aims to maintain a good dialogue with both current and potential shareholders and to provide a presentation on the portfolio at the AGM, with a view to ensuring that the Trust's investment strategies and potential are widely understood. Board One of the Trust's directors, John Hudson, will be retiring from the Board at this year's AGM. John has served on the Board for over a decade during which time we have benefited greatly from his wise counsel and thoughtful views. We wish him well in his other pursuits. In September 2004 we were delighted to confirm the appointment to the board of Martin Riley. He has a wealth of investment trust knowledge which will be available to the board in the coming years. We expect to make a further appointment to the board over the course of this year. Debt As stated above, the Trust's capital gearing enhanced shareholder returns for the year. The board remains comfortable that the £63m of debenture debt is appropriate in current circumstances. International Financial Reporting Standards (IFRS) This will be the last occasion that our financial statements are prepared on the basis of UK Generally Accepted Accounting Principles (GAAP). For the 2005 financial year our accounts will be prepared under the requirements of IFRS in accordance with the Listing Rules. The 2005 interim accounts will be prepared under the IFRS measurement and recognition principles that will apply at the year end. The principal differences resulting from this change, based on current guidance, will be the need to adopt bid price valuations for the portfolio, which is currently valued on the basis of mid price valuations, and the requirement not to accrue for any dividends that have not been approved by shareholders at the balance sheet date. There will also be some presentational changes to the primary financial statements. None of these changes is expected to have a material impact on Temple Bar. If the accounts for the year ended 31 December 2004 had been prepared under IFRS the NAV per ordinary share would have been approximately 688.8p rather than 672.06p as stated. Outlook The last few years have proved to be an excellent environment for investing in high yielding equities. The collapse of the technology bubble left many stocks significantly undervalued and those investors willing to stand apart from the crowd have had ample opportunity to produce attractive returns. However, valuation anomalies do not persist indefinitely. The importance of dividends as a part of overall returns is now firmly re-established in investors' minds. In fact dividend yield seemed to be of pre-eminent importance in 2004. Correspondingly, investing in those companies with superior long-term growth prospects has become relatively unfashionable and, consequently, the ratings of these companies have converged with those of higher yielding stocks. Thus, while your Board and the Manager remain strong believers in the long term value of investing in high yielding out of favour companies, current market conditions suggest that we are entering a period in which we should be slightly more cautious in the application of our standard approach. Accordingly, we expect to supplement our typical holdings with investments in those companies with under-appreciated recovery prospects, undervalued growth opportunities or with assets which are likely to attract interest from competitor companies. In addition, we will be prepared to hold a higher than normal level of cash pending the identification of sufficiently attractive investments. We are confident that this approach will generate a number of interesting investment opportunities in the year ahead. 15 February 2005 John Reeve Twenty largest investments as at 31 December 2004 Company Valuation % of £'000 Total assets GlaxoSmithKline 29,217 6.30 Shell 20,679 4.46 BP 19,911 4.29 British American Tobacco 17,145 3.69 Vodafone 14,805 3.19 HSBC 14,456 3.11 BT 13,264 2.86 Royal Bank of Scotland 13,136 2.83 Severn Trent 12,695 2.74 Prudential 11,632 2.51 Investec UK Smaller Companies Fund 10,146 2.19 Legal & General 9,878 2.13 Rentokil Initial 9,137 1.97 Unilever 8,938 1.93 Diageo 8,771 1.89 Mitchells & Butlers 8,647 1.86 Lloyds TSB 8,479 1.83 HBOS 7,918 1.71 Barclays 7,839 1.69 United Utilities 7,131 1.54 253,824 54.72 Consolidated Statement of total return (incorporating the revenue account) of the group for the year ended 31 December 2004 2004 2003 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - 60,416 60,416 - 56,544 56,544 Income 18,760 - 18,760 19,301 - 19,301 Investment management fee (684) (1,026) (1,710) (584) (875) (1,459) Other expenses (402) - (402) (411) - (411) Net return before finance costs and taxation 17,674 59,390 77,064 18,306 55,669 73,975 Interest payable (1,823) (2,736) (4,559) (1,823) (2,736) (4,559) Return on ordinary activities before taxation 15,851 56,654 72,505 16,483 52,933 69,416 Taxation - - - - - - Return on ordinary activities after taxation 15,851 56,654 72,505 16,483 52,933 69,416 Ordinary dividends (15,648) - (15,648) (15,190) - (15,190) Transfer to reserves 203 56,654 56,857 1,293 52,933 54,226 Return per ordinary share 27.37p 97.83p 125.20p 28.46p 91.41p 119.87p Dividends per ordinary 27.02p 26.23p share The revenue column of this statement is the profit and loss account of the Group. All principal activities of the Group are continuing operations as defined by Financial Reporting Standard 3. No operations were acquired or discontinued in the period. Consolidated cash flow statement 2004 2003 £'000 £'000 £'000 £'000 Net cash inflow from 16,523 17,643 operating activities Return on investments and servicing of finance Interest paid (4,559) (4,559) Net cash outflow from return on investments and servicing of finance (4,559) (4,559) Capital expenditure and financial investment Purchases of investments (125,049) (163,564) Sales of investments 152,779 151,726 Net cash inflow/(outflow) from capital expenditure and financial investment 27,730 (11,838) Equity dividends paid (15,312) (14,940) Cash inflow/(outflow) before management of liquid resources and financing 24,382 (13,694) Management of liquid resources Short term money market deposits (placed)/ withdrawn (20,993) 11,850 3,389 (1,844) Financing Gross proceeds from issue of - 49 shares Increase/(decrease) in cash 3,389 (1,795) Reconciliation of net cash flow to movement in net debt Increase/(decrease) in cash 3,389 (1,795) Short term money market deposits placed/(withdrawn) 20,993 (11,850) Exchange movements (179) - Change in net debt 24,203 (13,645) Net debt at 1 January (61,722) (48,077) Net debt at 31 December (37,519) (61,722) Reconciliation of operating revenue to net cash inflow from operating activities 2004 2003 £'000 £'000 Return on ordinary activities before finance costs and taxation 17,674 18,306 Scrip dividends (194) (235) Decrease in accrued income (225) 97 (Increase)/decrease in debtors 29 (25) Increase in creditors 90 86 Management fees charged to capital (1,026) (875) Effective yield adjustment 175 289 Net cash inflow from operating activities 16,523 17,643 Consolidated balance sheet 2004 2003 £'000 £'000 £'000 £'000 Fixed Assets Investments 435,090 402,895 Current Assets Debtors 3,489 2,874 Cash at bank 25,481 1,278 28,970 4,152 Creditors: amounts falling 11,862 11,706 due within one year Net current assets/ 17,108 (7,554) (liabilities) Total assets less current 452,198 395,341 liabilities Creditors: amounts falling due after more than one year 63,000 63,000 Net Assets 389,198 332,341 Capital and Reserves Called up share capital 14,478 14,478 Share premium account 2,193 2,193 Other reserves Capital reserve - 284,976 266,019 realised Capital reserve - 74,608 36,911 unrealised Revenue reserves 12,943 12,740 Total shareholders' funds 389,198 332,341 Dividend The directors will recommend to shareholders at the annual general meeting to be held on 29 March 2005 that a final dividend of 18.38p per ordinary share be paid on 31 March 2005 to shareholders on the Register at the close of business on 18 March 2005. Net Assets 2004 2003 (audited) (audited) Net asset value per ordinary share 672.06p 573.88p Notes The figures set out above are derived from the audited consolidated accounts of Temple Bar Investment Trust Plc and its subsidiaries for the years ended 31 December 2003 and 31 December 2004. The 2004 accounts will be sent to shareholders shortly. The financial information contained in this announcement does not constitute full accounts within the meaning of section 254 of the Companies Act 1985. The 2004 accounts, on which the report of the auditors is unqualified, will be filed with the Registrar of Companies in due course. The audited accounts for the year ended 31 December 2003, on which the report of the auditors was unqualified and did not contain a statement under either Section 237(2) or 237 (3) of the Companies Act 1985, have been filed with the Registrar of Companies. 15 February 2005 Contact: Alastair Mundy Telephone 020 7597 2166 Investec Investment Management Limited

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