Interim Results Correction

CORRECTION Today's announcement of The Alliance Trust PLC Interim Results contains an error. In the Consolidated Financial Statement, the title to the centre column should read "6 months to July 2003" and not "6 months to July 2004". The corrected announcement is attached. INTERIM REPORT OF THE ALLIANCE TRUST PLC FOR THE HALF YEAR ENDED 31 JULY 2004 (UNAUDITED) This interim report will be made available on the website www.alliancetrusts.com upon publication of this announcement. Copies will be posted to stockholders on Tuesday, 31 August 2004 and will also be made available to the public at the Company's registered office, Meadow House, 64 Reform Street, Dundee DD1 1TJ and at the offices of the Company's paying agents, Computershare Investor Services PLC, Lochside House, 7 Lochside Avenue, Edinburgh Park, Edinburgh EH12 9DJ. This interim report was approved on 23 August 2004. It brings stockholders up to date about the performance of the Alliance Trust over the six months to 31 July 2004, the environment in which we have been operating over this period, and how we see the outlook over the next six months, before we report to them again with the final results for the year to 31 January 2005. The figures we report are unaudited. The last audited figures are in the 2004 annual report which was sent to stockholders in March 2004 and is available for reference at www.alliancetrusts.com INCOME AND DIVIDEND Compared with the six month period to 31 July 2003, our total income increased by £2.7 million to £30.8 million. Although dividend earnings from the companies in our portfolio increased, the strength of sterling relative to the same period last year reduced the overall value of our foreign currency income. Our interest income was boosted by higher interest rates, particularly in the UK. An interim dividend of 35.5p per ordinary stock unit will be paid on 1 October 2004. We expect to be able to recommend a final dividend of at least 35.5p payable in May 2005. 2004 2003 Change Interim 35.5p 35.0p 1.4% dividend Amount payable 1 October 2004 per ordinary stock unit Ex dividend 15 September 2004 6 months 6 months year to to to January July 2004 July 2003 2004 Company income 27,591 25,479 45,504 Subsidiary income Alliance Trust 2,408 1,945 4,056 Savings * Alliance Trust 214 223 415 (Finance) _______ _______ _______ 30,213 27,647 49,975 _______ _______ _______ * Income from Alliance Trust Savings is shown net of interest paid on customer deposits. CAPITAL Approximately half of the Company's assets are invested overseas with the balance in the UK. In the six months to 31 July our net asset value grew by 0.2% in line with the increase in the FTSE All-Share Index, but exceeded the sterling-adjusted FTSE World Index which fell by 2.7%. In the same period our stock price fell by 6%. At 31 July 2004 the discount at which the Company's stock price stood relative to its net assets widened to 16.4% from 10.8% at 31 January 2004. This widening of discount affected much of the investment trust sector over the period. 31 July 31 January Change 2004 2004 Net Asset Value 2926.6p 2921.5p 0.2% Stock price 2448.0p 2605.0p -6.0% FTSE All-Share 2192.22 2187.10 0.2% Index FTSE World Index 228.93 235.38 -2.7% ex UK (sterling adjusted) SAVINGS BUSINESS Gross inflows over the six months are up 16% compared with the same period last year. Net inflows to Alliance Trust Savings ("ATS") are positive, but less than the previous year. We attribute this to a loss of confidence in equity markets, amongst some of the investing public, as well as to the reduction in the tax benefits of PEPs and ISAs following the Government's withdrawal of the tax credit reclaim in April 2004. Total assets under administration continued to rise to over £1.2 billion and the amount of the Company's stock held in the plans provided by ATS increased by 3.9%. Over 17% of the Company's ordinary stock is now held in these plans. Six months to 31 Change July 2004 Net inflow during £61m -11.6% period Receipts of cash and securities less withdrawals during the period. Change compares six months to 31 July 2003. At 31 July 2004 Change (1) Number of ATS 36,183 -0.1% customers Total customer £1,226m 2.8% assets (2) Alliance Trust 17.4% 3.9% holding (3) (1) Change is since 1 February 2004 (2) Aggregate value of assets invested in ATS products (3) % of ordinary stock of the Alliance Trust held by ATS for is customers ECONOMIC AND MARKET BACKGROUND The global economic recovery has broadened in the last six months, driven by strong demand from the US and China. Gains in production, particularly in Asia, have encouraged job creation, income growth and consumer spending. Japan's recovery has lagged the rest of the region as an overhang of bad debt, the weak labour market and deflation have all hindered domestic activity there. However, recent positive economic data has raised hopes that Japan will achieve a sustainable recovery. European economies have also trailed the upward economic cycle, but we are now seeing some encouraging signs of strengthening business confidence and structural reform to increase labour market flexibility. The economic upturn has accelerated corporate profit growth as relatively high levels of labour productivity and improved pricing power have boosted margins. However, most major equity markets ended the six months unchanged or weaker, reflecting increased investor concerns that higher oil prices could dampen demand and spur inflation. One notable exception has been Japan where better prospects for a domestic recovery and improved levels of profitability have attracted investors. INVESTMENT ACTIVITY We started our financial year fully invested, but concerns about the impact on corporate margins of higher oil prices and rising interest rates led us to use periods of market strength to raise cash, particularly in the US and UK where personal debt levels are high. Asian economies are vulnerable to the price of oil and to any significant short-term drop in activity in China, but we remain positive about the region over the longer term and have recently increased our exposure to Japan. On a global basis, the growth in dividends reported in recent months is encouraging. OUTLOOK The upswing in world activity is expected to continue over the next six months since US fiscal and monetary policy will remain relatively loose ahead of the Presidential election in November. Once the electoral campaign is over, however, the key to consumer confidence and spending will be the strength of the US labour market. There are some signs that income and employment will grow in Japan and Europe, which is necessary to achieve sustainable recoveries. UK exporters could gain from this increase in world activity. However, although UK domestic demand is buoyant at present it could be vulnerable to any sharp correction in the housing market. Investors' concerns centre on the risks of slower growth, rising inflation, especially if the oil price rises further, and the ballooning US budget and trade deficits. Further dollar weakness is possible particularly if US interest rate increases are less than anticipated. Such concerns have already brought equities back to more realistic valuations relative to other asset classes. Higher levels of corporate activity may help to boost returns from here. We expect profits to continue to grow but at a more moderate pace over the next few months. We will use periods of market weakness to continue adding to our holdings in Asia. Our focus remains on strong, well-managed companies with good prospects for the medium and longer term. The Portfolio by Geography figures as at 31 July 2004 £m UK 818 Europe 142 North America 298 Japan 75 Rest of World 142 _____ Total 1,475 _____ The Portfolio by Sector £m Resources and Basic 303 Industries Capital Goods 158 Consumer Goods and 232 Products Services 319 Financials 334 Investment Companies 32 Fixed Income and Other 97 Net Assets ______ Total 1,475 ______ CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) RETURNS £000 6 6 year to months months January to to 2004 July July 2004 2003 Revenue Return Dividend and interest 29,239 26,888 48,336 Other income 1,608 1,307 2,714 ------- ------- ------- --- --- --- Total income 30,847 28,195 51,050 Expenses (4,646) (3,734) (7,297) ------- ------- ------- --- --- --- Net revenue before interest 26,201 24,461 43,753 payable and taxation Interest payable (672) (587) (1,152) ------- ------- ------- --- --- --- Revenue before taxation 25,529 23,874 42,601 Taxation (3,152) (2,550) (4,103) ------- ------- ------- --- --- --- Revenue after taxation 22,377 21,324 38,498 Minority interest - equity (91) (80) (260) ------- ------- ------- --- --- --- 22,286 21,244 38,238 Dividend on preference (49) (49) (97) stock - non-equity ------- ------- ------- --- --- --- Revenue return attributable 22,237 21,195 38,141 to ordinary stockholders ------- ------- ------- --- --- --- Revenue return per ordinary 44.12p 42.05p 75.68p stock unit Capital Return Realised gains(losses) on 37,715 (7,170) (2,915) investments Unrealised (34,871 208,027 268,118 (depreciation)appreciation ) Surplus on revaluation of - - 50 office premises Foreign exchange (281) 2,592 2,427 (losses)gains ------- ------- ------- --- --- --- 2,563 203,449 267,680 Minority interest - equity 35 18 73 ------- ------- ------- --- --- --- Capital return attributable 2,598 203,467 267,753 to ordinary stockholders ------- ------- ------- --- --- --- Capital return per ordinary 5.15p 403.70p 531.26p stock unit Total Return Total return attributable 24,835 224,662 305,894 to ordinary stockholders ------- ------- ------- --- --- --- Total return per ordinary 49.27p 445.75p 606.94p stock unit SUMMARISED BALANCE SHEET 31 July 31 July 31 £000 2004 2003 January 2004 Investments at valuation 1,403,3 1,390,1 1,466,1 87 77 43 Net current assets 85,088 28,622 19,676 ------- ------- ------- ----- ----- ----- Total assets less current 1,488,4 1,418,7 1,485,8 liabilities 75 99 19 Long term liabilities and (13,454 (13,273 (13,396 prior charges ) ) ) ------- ------- ------- ----- ----- ----- Ordinary stockholders' 1,475,0 1,405,5 1,472,4 funds 21 26 23 ------- ------- ------- ----- ----- ----- Net asset value per £29.27 £27.89 £29.21 ordinary stock unit CASHFLOW STATEMENT £000 6 6 year to months months to to July July January 2004 2003 2004 Net cash inflow from 30,755 32,826 53,769 operating activities Servicing of finance (721) (848) (1,462) Taxation paid (1,977) (1,893) (3,827) Investment purchases (97,011 (85,080 (178,06 settled ) ) 7) Investment sales settled 162,059 55,547 127,957 Equity dividends paid (17,892 (20,412 (38,052 ) ) ) Financing 4,000 - - ------- ------- ------- ----- ----- ----- Increase(decrease) in cash 79,213 (19,860 (39,682 ) ) ------- ------- ------- ----- ----- ----- NOTES TO FINANCIAL STATEMENTS 1 These results are unaudited. They should not be taken as a guide to the full year and do not constitute the statutory accounts. 2 The revenue returns statement is the profit and loss account of the Group. 3 Expenses comprise £2,539,000 (£2,066,000) incurred by the Alliance Trust, and £2,107,000 (£1,668,000) incurred by subsidiary companies. 4 The accounting policies are consistent with those applied in the preparation of the annual statutory accounts. In the interim statements, net current assets are stated after the provision of £17,892,000 (£17,640,000) for payment of the interim dividend and £4,325,000 (£3,555,000) being the balance of revenue attributable to ordinary stockholders. 5 The figures for 31 January 2004 are extracted from the full accounts which have been filed with the registrar of companies and which contain an unqualified report from the auditor. Dividend Interim dividend of 35.5p per ordinary stock unit. The interim dividend on the Company's ordinary stock and half year dividends on its preference stocks are payable on Friday, 1 October 2004 to holders on the register on 17 September 2004 and the ex dividend date for all ordinary and preference stocks is 15 September 2004. Issued Stock No. of Units Ordinary stock units of 25p 50,400,00 0 4% 'A' Cum. Pref. stock of £1 100,000 4% Cum. Pref. stock of £1 650,000 4.25% Cum. Pref. stock of £1 700,000 5% Cum. Pref. stock of £1 750,000 4.5% Debenture stock 1956 or £1,648,60 After 0 The press release summarising these interim results follows and questions should be addressed to Mr. Alan Harden or Mr. Alan Young (Tel. 01382 201700). PRESS RELEASE THE ALLIANCE TRUST PLC PRESS RELEASE 23 August 2004 For immediate release HALF-YEAR CAPITAL AND INCOME UP AT ALLIANCE TRUST - Capital growth in dull markets - Income rose £2.7m to £30.8m for six months ending 31 July 2004 - Alliance Trust Savings (ATS), our financial services subsidiary, saw income grow by 23.8% The Alliance Trust PLC, the third-largest UK investment trust by assets*, today (Monday) announced that its income rose by £2.7m to £30.8m in the first half of its financial year. Higher interest rates, particularly in the UK, a broadening global recovery and rising dividend earnings boosted income at the Trust, which has been investing since 1888. Half-year earnings also climbed 2.07p to 44.12p for the six months to July 31 this year, compared to the same period last year, although the strength of the pound affected foreign currency income. Dundee-based Alliance Trust said it would pay an interim dividend of 35.5p per stock unit. Chief Executive Alan Harden said, "As a long-term global investor, we believe this solid performance in capital appreciation and increase in income shows the benefits of Alliance Trust's commitment to seek quality investments. Investors will be pleased to see that our earnings have also gone up by 4.9%. Around half of our assets are invested overseas and our investment performance has compared favourably with the FTSE world index." Harden said, "We are disappointed with the widening of the discount of share prices to Net Asset Values in the core investment trust sector. We attribute this to the fact that confidence has not yet been restored since the split- capital crisis, institutional selling and general slowdown in demand for equities." Alliance Trust owns 75% of ATS, which has been growing in importance as a supplier of pensions and other investment wrapper products renowned for its good value, free choice and straightforward approach. Through ATS a route is offered directly to invest in UK equities including investment trusts. ATS now has more than £1.2bn of assets under administration and its half-yearly income rose to £2.4m from £1.9m." In the half-year to the end of July 2004, Alliance Trust's Net Asset Value per ordinary stock unit rose 0.2% to £29.27. Alliance Trust Investment Director Alan Young said, "Concerns about the impact on corporate margins of higher oil prices and rising interest rates led us to increase our allocation to cash, having started the half-year almost fully invested." Young said, "Equity markets have not reflected better company profits lately and may begin to appear more competitively valued if economic strength and profitability can be maintained. We are also strengthening our investment team in order to ensure we have expertise across a broader range of assets to help manage future opportunities." Note to editors *The Alliance Trust PLC is listed as the third-largest UK investment trust by size in latest performance figures from Standard & Poor's. For more information contact: Jane Holligan Media Relations Manager Alliance Trusts Phone: (01382) 201700 Email: jane.holligan@alliancetrusts.com ENDS

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