Performance at Month End

Merrill Lynch Br. SmallerCo Tst PLC
13 July 2005

MERRILL LYNCH BRITISH SMALLER COMPANIES TRUST plc

All information is at 30 June 2005 and unaudited.

Performance at month end is calculated on a capital only basis

                                      One          Three           One            Three          Five
                                      Month        Months          Year           Years          Years

Net asset value                       5.6%          0.5%           20.7%          39.9%          -12.4%

Share price                           8.3%         -4.5%           24.2%          43.5%          -13.4%

FTSE Small Cap Index (ex IC's)        3.0%         -0.4%           10.5%          24.6%          -13.2%

Sources:  Merrill Lynch Investment Managers and Datastream.

At month end

Net asset value:                                 277.51p

Share price:                                     226.00p

Discount to NAV:                                   18.6%

Net yield:                                          2.0%


Total assets:                                    £155.1m

Gearing:                                           10.5%

Ordinary shares in issue:                        50,563,523


Ten Largest Sector
Weightings                                          % of Total Assets

Support Services                                          14.9

Media & Entertainment                                      9.7

Software & Computer Services                               9.1

Construction & Building Materials                          6.9

Electronic & Electrical Equipment                          6.6

Mining                                                     5.4

Oil & Gas                                                  4.6

Engineering & Machinery                                    4.2

General Retailers                                          4.0

Health                                                     3.8

                                                          ----
Total                                                     69.2
                                                          ----


Ten Largest Equity Investments

Company

Aveva Group

Dechra Pharmaceuticals

Consolidated Minerals

Brewin Dolphin Holdings

Chaucer Holdings

BSS Group

Renishaw

Blacks Leisure Group

Dicom Group

Kier Group


Commenting on the markets, Mike Prentis, representing the Investment Manager
noted:

Smallcap stocks performed well during the month, and the Company's NAV per share
rose by 5.6% to 277.51p. The benchmark index rose by 3.0%.

The share prices of the Company's larger holdings in oil and gas producers,
Burren Energy and Venture Production, rose strongly on the back of yet higher
oil prices. The small holding in Bowleven, which is exploring for oil and gas in
offshore Cameroon, also performed well as a new 3D seismic survey suggested that
the company's licence areas could hold significant levels of hydrocarbons;
drilling begins in the late autumn.

A further good share price performance also came from Xaar, which has put out a
very positive trading update in early July. Xaar design and manufacture high
precision print heads used in inkjet printing.

Poor performers during the month were Parkdean Holidays, Local Radio Company,
and Wyndeham Press. Parkdean, which owns and operates caravan parks, indicated
that this year's early shoulder season had not sold as well as last year's on a
like for like basis, and that it still had appreciable peak season capacity to
sell on some of its Cornish caravan parks. Although we regard management highly,
given the exposure to a weak consumer environment, we have sold the Company's
holding. Local Radio has suffered from weaker advertising trends affecting all
radio station operators. Wyndeham Press produced good results but indicated
higher energy costs were beginning to have a marked impact on profits.

New holdings were started in Bloomsbury Publishing and Spice. Bloomsbury, best
know as publishers of the Harry Potter books, and a former holding, is due to
publish Harry Potter 6 in mid July. Profits continue to progress well and we had
a useful update with the company's Finance Director. The holding in Spice was
bought following a good meeting with a confident management team. Spice provides
a variety of added value services mainly to the utilities and transport sectors.

Latest information is available by typing www.mlim.co.uk/its on the internet,
'MLIMINDEX' on Reuters, 'MLIM' on Bloomberg or '8800' on Topic 3 (ICV terminal).

13 July 2005


                      This information is provided by RNS
            The company news service from the London Stock Exchange