Portfolio Update

Merrill Lynch Br. SmallerCo Tst PLC
25 April 2006


MERRILL LYNCH BRITISH SMALLER COMPANIES TRUST plc

All information is at 31 March 2006 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                            3.4%          15.2%            34.5%          172.4%           48.6%
Share price                                2.9%          17.6%            35.6%          202.8%           45.2%
FTSE Small Cap Index (ex IC's)             1.2%           9.3%            20.9%          112.9%           21.8%

Sources:  Merrill Lynch Investment Managers and Datastream.

From 30 December 2005 underlying investments are valued on a bid price basis, in
accordance with AITC guidelines.

At month end

Net asset value:                                 371.44p
Share price:                                     321.00p
Discount to NAV:                                   13.6%
Net yield:                                          1.4%
Total assets:                                    £202.6m
Gearing:                                            7.9%
Ordinary shares in issue:                        50,563,523


Ten Largest Sector

Weightings                                                                                             % of Total Assets

Support Services                                                                                                    15.9
Engineering & Machinery                                                                                              8.5
Construction & Building Materials                                                                                    8.5
Real Estate                                                                                                          7.1
Oil & Gas                                                                                                            7.1
Electronic & Electrical Equipment                                                                                    6.5
Media & Entertainment                                                                                                6.5
Software & Computer Services                                                                                         6.2
Mining                                                                                                               6.0
Speciality and other finance                                                                                         5.0
                                                                                                                    ----
Total                                                                                                               77.3
                                                                                                                    ----


Ten Largest Equity Investments

Company

Aveva Group
Brewin Dolphin Holdings
BSS Group
Charter Consolidated
Chaucer Holdings
Kier Group
Mouchel Parkman
Rathbone Brothers
Renishaw
WSP Group



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


March was a good month for the Company. The Company's NAV rose by 3.4%.  The
benchmark index rose by 1.2%.


March is a key month for results for many companies with December year ends, or
half year ends, reporting. Of our portfolio companies which did report in March,
almost all reported strong figures and a confident outlook. These included large
holdings such as Kier Group, Charter, Colliers CRE and WSP. Kier's interim
results were strong, earnings per share up 22%, and the CEO commented 'excellent
prospects for growth arise out of all our markets'. Charter produced full year
results showing earnings growth of 117% and commented that the new financial
year had started strongly and ahead of the Board's previous expectations in
terms of operating profit, cash flow and order book growth. Colliers, a major
commercial real estate consultancy, reported operating profits up 23%. The
shares had traded at a significant discount to their peers, and rose 27% during
the month to reduce the discount, but at 13.5 times current year earnings we
believe they remain good value. WSP, the engineering consultancy, produced
excellent full year results with earnings up 43%. The business remains well set
with very good visibility.


Other good performers included marine services company James Fisher, Paypoint
(the provider of local cash payment facilities), Goals Soccer which operates
5-a-side football centres around the UK, and Chaucer the Lloyds insurer which
also was confident on results. Additionally continued strong resources prices
were helpful to our holdings in Venture Production, Premier Oil and Avocet
Mining in particular.


There were no major upsets during the month. Dechra Pharmaceuticals shares were
weak; interim results were in line with expectations but the company again
talked of additional investment to get their drugs to market in the US. A visit
to their facilities in Skipton during the month was comforting. JKX Oil & Gas
shares were weak, against the sector trend, as full year results indicated
higher costs; the Ukraine election may also have been a factor. The March share
price fall has been reversed in early April.


New holdings in the month included O Twelve Estates and Keller, respectively
0.75% and 0.5% of total portfolio assets. The former is a new real estate
company, to be managed by the directors of Rugby Estates who are well known to
us. O Twelve Estates will invest in commercial property in the area around the
London Olympic site where property prices and rentals are currently depressed.
Keller is a leading international ground engineering company which we have been
tracking for some time. Full year results were strong, the business is well set
and its shares good value.


We took some profit in various holdings which had had strong runs, and reduced
some smaller holdings which we may exit in due course.


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).


25 April 2006


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