Interim Results - 6 Months to 31 December 1999

City of London Investment Trust PLC 27 January 2000 THE CITY OF LONDON INVESTMENT TRUST PLC UNAUDITED INTERIM RESULTS FOR THE HALF YEAR ENDED 31 DECEMBER 1999 Highlights 6 months 5 Years 10 Years % % % The City of London Investment Trust plc Net Asset Value Total Return* +2.6 +132.6 +251.3 FTSE All-Share Index Total Return* +11.3 +144.3 +266.3 Average UK Income Growth Investment Trust Net Asset Value Total Return+* +2.1 +118.2 +206.5 + size weighted average * Source: AITC Services Limited * Dividend up 3.5% over the comparable period of 1998. The Chairman's Statement: Performance During the period under review, stockmarket returns were highly polarised. Economic growth accelerated with strength both in services and manufacturing. In order to prevent inflationary pressures emerging, the Bank of England raised the base rate from 5% to 5 1/2% and ten year gilt yields also rose. Against this background, most sectors of the stockmarket failed to make progress. The main exceptions were the technology, media and telecommunications sectors which dramatically outperformed. They participated in the world wide investor enthusiasm for the internet. The surge in share prices in these sectors appeared, at times, to disregard conventional measures of valuation, such as profitability. As an investment trust with an income as well as a capital growth objective, it would have been difficult for the Company to have been fully weighted in these sectors as they all have a very low dividend yield. As a result, the Company's net asset value total return substantially underperformed the FTSE All-Share Index. The Company's performance was in line with investment trusts with similar objectives, the AITC UK Income Growth sector. The recent experience for shareholders has been worsened because the shares, which in recent years have often traded at above net asset value, have fallen to a discount. Share Buy-Backs The board intends to use the authority granted at the annual general meeting in November 1999 to buy back shares, when it is clearly in shareholders' interests so to do. Expenses Expenses remained under tight control. In the year to 30 June 2000, excluding interest but including the proportion of the management fee which is charged to capital, they are expected to amount to approximately 0.45% of assets under management. Dividends The board has declared second and third interim dividends of 1.78p per ordinary share each. These will be paid on 28 February and 31 May respectively. The underlying 3.5% increase in the dividend rate continues the Company's unbroken record of annual dividend increases since 1966. Prospects The immediate prospect is for the UK economy to grow strongly with inflation remaining low. We expect that interest rates will have to be raised further in order to forestall inflationary pressures emanating from the tight labour market. The current rating of the equity market appears to be expensive relative to corporate earnings but is exaggerated by the information technology and telecoms sectors. Share prices in these sectors are clearly not justified by conventional valuation techniques and may be ultimately vulnerable to a setback. In the light, however, of changes in the traditional bases of share valuation referred to above, your board is conscious of the need to review actively sector weightings while sustaining income growth. S J Titcomb Chairman 27 January 2000 Unaudited Interim Results for the half year ended 31 December 1999 Statement of Total Return (incorporating the revenue account) Half year ended (as restated) 31 December 1999 Half year ended 31 December 1998 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Total capital gains/ (losses) from investments - 8,631 8,631 - (15,592) (15,592) Income from fixed asset investments 8,375 - 8,375 7,408 - 7,408 Other interest receivable and similar income 119 - 119 215 - 215 Gross revenue and capital gains/ (losses) 8,494 8,631 17,125 7,623 (15,592) (7,969) Management fee (726) (363) (1,089) (630) (315) (945) Other administrative expenses (213) - (213) (181) - (181) Net return/(loss) on ordinary activities before interest payable and taxation 7,555 8,268 15,823 6,812 (15,907)(9,095) Interest payable (1,067) (1,067) (2,134) (1,068) (1,067) (2,135) Net return/(loss) on ordinary activities before taxation 6,488 7,201 13,689 5,744 (16,974)(11,230) Taxation on net return on ordinary activities (37) 37 - (60) 60 - Net return/(loss) on ordinary activities after taxation 6,451 7,238 13,689 5,684 (16,914)(11,230) Dividends: Preference and preferred ordinary stocks (95) - (95) (72) - (72) Net return/(loss) attributable to the ordinary shares 6,356 7,238 13,594 5,612 (16,914) (11,302) Dividends: Ordinary shares First interim payment of 1.78p (1998: 1.72p) (3,748) - (3,748) (3,612) - (3,612) Second interim payment of 1.78p (1998: 1.72p) (3,757) - (3,757) (3,622) - (3,622) (7,505) - (7,505) (7,234) - (7,234) Transfer (from)/ to reserves (1,149) 7,238 6,089 (1,622) (16,914)(18,536) Return/(loss) per ordinary share (note 1) 3.02p 3.43p 6.45p 2.67p (8.05)p (5.38)p The revenue columns of this statement represent the revenue accounts of the Company. Unaudited Interim Results for the half year ended 31 December 1999 Summary of Net Assets (audited) 31 December 31 December 30 June 1999 1998 1999 £'000 £'000 £'000 Investments at market value 642,904 572,992 610,398 Net current (liabilities)/assets (898) 1,373 24,030 ---------- ------------ ----------- Total assets less current liabilities 642,006 574,365 634,428 Creditors: amounts falling due after more than one year - debenture stocks (46,000) (46,000) (46,000) ---------- ------------ ---------- Total net assets 596,006 528,365 588,428 Preference and preferred ordinary stocks (2,086) (2,086) (2,086) ----------- ------------ ---------- Total net assets attributable to the ordinary shares 593,920 526,279 586,342 ----------- ------------ ---------- Net asset value per ordinary share, after deducting prior charges at par 281.35p 249.95p 278.48p Number of ordinary shares in issue 211,094,303 210,553,142 210,553,142 Notes : 1. Return/(loss) per ordinary share Revenue return per ordinary share is based on earnings attributable to the ordinary shares of £6,356,000 (1998: £5,612,000) and on the weighted average number of ordinary shares in issue during the half year of 210,709,425 (1998: 210,150,937). Capital return per ordinary share is based on net capital gains for the half year of £7,238,000 (1998: capital losses of £16,914,000) and on the weighted average number of ordinary shares in issue during the half year of 210,709,425 (1998: 210,150,937). 2. Current Taxation The Company has adopted the recently issued Financial Reporting Standard No. 16 Current Taxation under which UK franked dividend income should be accounted for net of the attributable tax credits. The comparative figures for the half year ended 31 December 1998 have been restated accordingly. 3. Accounts for the year ended 30 June 1999 The figures and financial information for the year ended 30 June 1999 have been extracted from the latest published accounts of the Company and do not constitute the statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either section 237(2) or section 237(3) of the Companies Act 1985. 4. Interim Report Copies of the Company's interim report for the half year ended 31 December 1999 will be posted to shareholders in February 2000 and will be available from the Secretary at the Registered Office, 3 Finsbury Avenue, London EC2M 2PA. 5. Dividends The second interim dividend will be paid on 28 February 2000 to shareholders on the register on 11 February 2000. The third interim dividend will be paid on 31 May 2000 to shareholders on the register on 25 April 2000. For further information please contact: Job Curtis or Vicki Staveacre/Martin Wade Portfolio Manager The Press Office The City of London Investment Trust plc Henderson Investors Telephone: 0171 410 4637 Telephone: 0171 410 4222 Alex Crooke Deputy Portfolio Manager The City of London Investment Trust plc Telephone: 0171 410 4447 Issued on behalf of The City of London Investment Trust plc Largest Investments The 80 largest investments, convertibles and all classes of equity in any one company being treated as one investment, were as follows: Market value Market value 31 December 1999 31 December 1999 £'000 £'000 British Telecommunications 45,390 Reuters 4,248 BP Amoco 33,615 Railtrack 4,160 Shell Transport & Trading 30,356 Marks & Spencer 4,127 HSBC 29,774 Anglo American 4,115 Glaxo Wellcome 22,750 National Grid 4,004 Lloyds TSB 20,137 WPP 3,924 Marconi 15,337 Unilever 3,872 Vodafone Air Touch 15,031 Thames Water 3,860 CGU 13,631 Halifax 3,810 National Westminster 13,300 Whitbread 3,753 Prudential 12,200 Carlton Communications 3,724 SmithKline Beecham 11,850 Boots 3,702 Barclays 11,138 Billiton 3,653 Cable & Wireless 10,490 Slough Estates 3,535 GKN 9,750 Kingfisher 3,435 AstraZeneca 8,988 Smith & Nephew 3,432 Rio Tinto 8,970 Premier Farnell 3,224 Legal & General 8,425 Woolwich 3,078 Abbey National 7,920 Severn Trent 3,075 Diageo 7,470 Rolls-Royce 2,996 Bank of Scotland 7,190 NFC 2,940 Pearson 7,014 National Power 2,868 Land Securities 6,940 Powell Duffryn 2,856 Tesco 6,777 Wolseley 2,849 Granada 6,066 Sainsbury 2,794 EMI 5,619 Reed International 2,781 Bass 5,522 Hilton 2,776 Norwich Union 5,502 Johnson Matthey 2,760 Allied Zurich 5,471 United Utilities 2,735 British Aerospace 5,409 British Airways 2,730 BG 5,333 Blue Circle Industries 2,698 P& O 5,165 Trinity Mirror 2,648 Dixons 5,162 Sun Life & Provincial 2,630 British American Tobacco 4,749 Imperial Chemical Industries 2,622 Scottish Power 4,690 Hammerson 2,571 BOC 4,655 Safeway 2,544 Cadbury Schweppes 4,488 Capital Shopping 2,479 Royal Bank of Scotland 4,392 Scottish & Southern Energy 2,471 Invensys 4,381 Allied Domecq 2,448 Royal & Sun Alliance 4,286 TI 2,375 These investments total £572,635,000 or 89.1% of the portfolio.

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