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City of London IT (CTY)

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Wednesday 04 September, 2002

City of London IT

Final Results

City of London Investment Trust PLC
04 September 2002


4 September 2002

                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2002

Highlights

  • City of London (net asset value total return down 11.4%) outperformed the
    FTSE All-Share Index (total return down 14.8%).
  • Dividends per share up 5.9%.

Extracts from the Chairman's Statement:-

This is my first year as your Chairman, following the retirement of Jim Titcomb
at the last Annual General Meeting. Jim will be a hard act to follow but I will
endeavour to deliver shareholder value through both good and difficult times.

David Hubbard, who with great distinction has served shareholders as a director
since 1989, is retiring at this year's Annual General Meeting. I would like to
thank him for the wise counsel he has given us over many years. We are delighted
that Helen Weir joined the Board in March. Helen is Group Finance Director of
Kingfisher plc.

Performance

The year under review was a testing one for investors worldwide. It could
perhaps be seen as an antidote to the optimism of the late 1990s which led to
excessive capital expenditure in the telecommunications, media and technology
sectors and disappointing subsequent returns. In addition, the loose accounting
policies and corporate scandals that have been revealed in the United States
have been a major blow to investor confidence.

Against this sombre background, City of London's performance has been relatively
good, reflecting the focus on value. A negative total return was limited to
11.4% whilst the FTSE All-Share Index negative return was 14.8%. This is the
fourth year out of the last five that City of London's performance has exceeded
the FTSE All-Share Index.

Dividends

A fourth interim dividend of 2.00p was paid on 31 August 2002, making a total
net dividend for the year of 7.94p. This is an increase of 5.9% over the
previous year, which is significantly better than the dividend growth for the
FTSE All-Share Index of around 1.5% over the same period. It also continues the
Company's unbroken record of annual dividend increases since 1966.



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                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2002



In the year to 30 June 2002, the Company's investment income decreased by
approximately 11%. This was caused by dividend cuts from a few of the companies
in which we are invested, an £0.83m fall in special dividends received and some
companies adopting a distribution policy that includes both dividends and share
buy-backs.

Shareholders should note that the Company had built up revenue reserves of
£12.27m and, in the year to 30 June 2002, £0.95m was taken from this reserve to
supplement the income received and enable the Company to pay the increased
dividend. Going forward, your Board is aware that many shareholders rely upon
annual dividend growth and will continue to consider using part of these
reserves to supplement dividend flows when income received by the Company is
disappointing.

In the current year, faced with an uncertain outlook for income into the
Company, we are forecasting a minimum increase of 0.8% in the Company's total
net dividend to 8.00p, payable at the new quarterly rate of 2.00p. The Board
will decide whether a further increase is appropriate at the time of the fourth
interim, when the total income received by the Company is known.

Management Fee and Expenses

Our new management agreement involved a reduction in the base fee, but
introduced a performance fee payable in the event of outperformance relative to
the total return on the FTSE All-Share Index. This year we have outperformed and
therefore a performance fee will become payable to our managers, Henderson
Global Investors. This has been charged to the capital account as it has been
earned from capital outperformance of the index.

For the year to 30 June 2002, excluding interest but including the proportion of
the management fees which is charged to capital, total expenses amounted to
0.68% of assets under management. Excluding the performance fee, total expenses
amounted to 0.42% of assets under management.

Savings

City of London sets out to be an attractive and straightforward long-term
savings vehicle for private investors. Over recent years we have received
excellent support for our Share Savings Plan, PEPs and ISAs.



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                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2002



Outlook

The FTSE-All Share Index has fallen by some 39% since its peak at the end of
December 1999. Part of this fall has been caused by a downgrading of profit
expectations, especially in the telecommunications, media and technology
sectors. In addition, there has been a derating of equities. This has taken
equity yields, when compared with bond yields, to a level that indicates that
equities are relatively cheap based upon differentials over the past decade. The
dividend yield for the UK stock market now appears to offer good value relative
to cash. The main threat is a further global economic downturn but this should
be countered by the easing of monetary and fiscal policy in many of the major
economies of the world, including the UK. Overall, prospects for UK corporate
profits growth are likely to improve although some sectors will be adversely
affected by tough competitive conditions.

Annual General Meeting ("AGM")

Shareholders are invited to the AGM which will take place on Friday 18 October
at 4 Broadgate, London EC2M 2DA. The AGM will start at 12.00 noon and include a
presentation from the Portfolio Manager and a buffet lunch.


S M de Zoete





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                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2002

Statement of Total Return (incorporating the revenue account)

for the year ended 30 June 2002
                                                  Year ended 30 June 2002                 Year ended 30 June 2001
                                               Revenue       Capital          Total     Revenue      Capital      Total
                                                 £'000         £'000          £'000       £'000        £'000      £'000
Total capital losses from investments                -      (72,856)       (72,856)           -      (6,257)    (6,257)
Income from fixed asset investments             17,697             -         17,697      19,800            -     19,800
Other interest receivable and similar              156             -            156         217            -        217
income
                                            ----------    ----------     ----------  ----------   ----------  ----------
Gross revenue and capital losses                17,853      (72,856)       (55,003)      20,017      (6,257)     13,760
Management fees                                  (516)       (2,535)        (3,051)       (730)      (1,704)    (2,434)
Other administrative expenses                    (400)             -          (400)       (373)            -      (373)
                                            ----------   -----------     ----------  ----------  -----------  ----------
Net return/(loss) on ordinary activities
before interest payable and taxation            16,937      (75,391)       (58,454)      18,914      (7,961)     10,953
Interest payable                               (1,310)       (3,056)        (4,366)     (1,286)      (3,000)    (4,286)
                                            ----------   -----------     ----------   ---------  -----------  ----------
Net return/(loss) on ordinary activities
before taxation                                 15,627      (78,447)       (62,820)      17,628     (10,961)      6,667
Taxation on net return on ordinary                (85)            85              -       (117)          117          -
activities
                                           -----------   -----------     ---------- -----------  -----------  ----------
Net return/(loss) on ordinary activities
after taxation                                  15,542      (78,362)       (62,820)      17,511     (10,844)      6,667
Dividends :
Preference and preferred ordinary stocks         (190)             -          (190)       (190)            -      (190)
                                           -----------   -----------     ----------  ---------- ------------  ----------
Net return/(loss) attributable to the           15,352      (78,362)       (63,010)      17,321     (10,844)      6,477
ordinary shares
                                           -----------   -----------     ----------  ---------- ------------  ----------
Dividends:
Ordinary shares
Three interim payments of 1.98p (2001:        (12,192)             -       (12,192)    (11,368)            -   (11,368)
1.84p)
Fourth interim payment of 2.00p (2001:         (4,105)             -        (4,105)     (4,067)            -    (4,067)
1.98p)
                                           -----------   -----------     ---------- -----------  -----------  ----------
                                              (16,297)             -       (16,297)    (15,435)            -   (15,435)
                                           -----------   -----------     ---------- ----------- ------------  ----------
Transfer (from)/to reserves                      (945)      (78,362)       (79,307)       1,886     (10,844)    (8,958)
                                                ======        ======         ======      ======       ======     ======
Return/(loss) per ordinary share (note 1)        7.48p      (38.18)p       (30.70)p       8.40p      (5.26)p      3.14p
                                                ======        ======         ======      ======       ======     ======

The revenue columns of this statement represent the revenue accounts of the
Company.



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                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2002

Balance Sheet

at 30 June 2002
                                                                                 30 June               30 June
                                                                                    2002                  2001
                                                                                   £'000                 £'000 

                                                                                                         
Fixed asset investments
Listed at market value in the United Kingdom                                     513,924               592,747
Investment in subsidiary undertakings                                                347                   347
                                                                           -------------         -------------
                                                                                 514,271               593,094
                                                                           -------------         -------------

Current assets
Debtors                                                                            2,332                 2,100
Cash at bank                                                                          52                   544
                                                                           -------------         -------------
                                                                                   2,384                 2,644
                                                                           -------------         -------------
Creditors: amounts falling due within one year                                   (7,623)               (7,054)
                                                                           -------------         -------------
Net current liabilities                                                          (5,239)               (4,410)
                                                                           -------------         -------------

Total assets less current liabilities                                            509,032               588,684

Creditors: amounts falling due after more than one year                         (46,000)              (46,000)
                                                                           -------------         -------------
Total net assets                                                                 463,032               542,684
                                                                                 =======               =======

Capital and reserves
Called up share capital                                                           53,398                53,436
Share premium account                                                             28,249                28,249
Other capital reserves                                                           370,063               448,732
Revenue reserve                                                                   11,322                12,267
                                                                           -------------         -------------
Shareholders' funds (including non-equity interests                              463,032               542,684
of £2,086,000)
                                                                                 =======               =======

Net asset value per ordinary share                                               224.58p               263.19p
                                                                                 =======               =======




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                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2002

Cash Flow Statement

for the year ended 30 June 2002
                                                                    2002          2002          2001          2001

                                                                   £'000         £'000         £'000         £'000

Net cash inflow from operating activities                                       15,374                      17,532

Servicing of finance
Debenture interest paid                                          (4,265)                     (3,583)
Bank and loan interest paid                                         (96)                        (21)
Dividends paid on preference stock                                 (190)                       (190)
                                                              ----------                  ----------
Net cash outflow from servicing of finance                                     (4,551)                     (3,794)

Taxation
UK income tax recovered/(paid)                                        18                       (783)
                                                              ----------                  ----------
Net tax recovered/(paid)                                                            18                       (783)

Financial investment
Purchases of investments                                        (71,264)                    (80,434)
Sales of investments                                              76,411                      90,023
                                                              ----------                  ----------
Net cash inflow from financial investment                                        5,147                       9,589

Equity dividends paid                                                         (16,259)                    (15,202)
                                                                            ----------                  ----------
Net cash (outflow)/inflow before financing                                       (271)                       7,342

Financing
Cost of repurchases of ordinary shares                             (345)                     (7,145)
                                                              ----------                  ----------
Net cash outflow from financing                                                  (345)                     (7,145)
                                                                            ----------                  ----------
(Decrease)/increase in cash                                                      (616)                         197
                                                                                ======                    ========


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                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2002

Notes:
1.     Return/(loss) per Ordinary Share
       Revenue return per ordinary share is based on earnings attributable to the ordinary shares of £15,352,000 (2001:
       £17,321,000) and on the weighted average number of ordinary shares in issue during the year of 205,261,977 (2001:
       206,295,670).

       Capital loss per ordinary share is based on the net capital losses for the year of £78,362,000 (2001: loss of
       £10,844,000) and on the weighted average number of ordinary shares in issue during the year of 205,261,977 (2001:
       206,295,670).

2.     Issued Share Capital
       There were 205,251,018 ordinary shares of 25p in issue at 30 June 2002 (30 June 2001: 205,401,018) for the
       purpose of calculating the net asset value per ordinary share.

3.     Share Buy-Backs
       During the year the Company purchased in the market for cancellation 150,000 of its own issued ordinary shares at
       a total cost of £345,000, leaving a balance of 205,251,018 ordinary shares for the purpose of the calculation of
       the net asset value per ordinary share.

4.     2002 Accounts
       The preliminary figures for the year ended 30 June 2002 are compiled from an extract of the latest accounts and
       do not constitute statutory accounts as defined by section 240 of the Companies Act 1985. These accounts have not
       yet been delivered to the Registrar of Companies, nor have the auditors yet reported on them.
5.     2001 Accounts
       The figures and financial information for the year ended 30 June 2001 are compiled from an extract of the latest
       published accounts 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.

6.     Annual Report
       The full annual report and accounts will be posted to shareholders in September 2002 and copies will be available
       thereafter from the Secretary at the Company's Registered Office, 4 Broadgate, London EC2M 2DA. The Annual
       General Meeting will be held on Friday 18 October 2002 at 12.00 noon.



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                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2002

The 40 largest equity investments (convertibles and all classes of equity in any
one company being treated as one investment) were as follows :

                                           Valuation at                                                  Valuation at
                                           30 June 2002                                                  30 June 2002
                                                  £'000                                                         £'000

BP                                               34,437       Anglo American                                    5,455
GlaxoSmithKline                                  29,778       BAE Systems                                       5,363
Shell Transport & Trading                        29,700       Cadbury Schweppes                                 4,915
HSBC                                             26,030       Scottish & Southern Energy                        4,867
Royal Bank of Scotland                           21,353       BG                                                4,854
Barclays                                         17,664       Six Continents                                    4,776
Vodafone                                         14,400       Lattice                                           4,702
AstraZeneca                                      14,395       Reckitt Benckiser                                 4,601
Diageo                                           12,780       National Grid                                     4,194
Lloyds TSB                                       11,754       Boots                                             4,001
British American Tobacco                         11,280       Wolseley                                          3,990
HBOS                                             10,650       GUS                                               3,916
Land Securities                                   8,630       Allied Domecq                                     3,872
Tesco                                             8,586       Imperial Tobacco                                  3,719
Aviva                                             8,440       Smith & Nephew                                    3,640
Rio Tinto                                         6,616       Johnston Press                                    3,636
Legal & General                                   6,537       Slough Estates                                    3,625
BT                                                6,048       Associated British Ports                          3,600
Prudential                                        6,000       Compass                                           3,582
Unilever                                          5,980       Hammerson                                         3,321

These investments represent 73.10% of the portfolio.

                                    - ENDS -

For further information please contact :

Job Curtis

Portfolio Manager, The City of London Investment Trust plc

Telephone: 020 7818 4367



Stephen Westwood

Head of Investment Trusts, Henderson Global Investors

Telephone: 020 7818 5517



Stephen Phillips

Investor Relations Manager, Henderson Global Investors

Telephone: 020 7818 6417

or

Mark Vickery

Henderson Press Office

Telephone: 020 7818 4222



               Issued by The City of London Investment Trust plc


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