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City of London IT (CTY)

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Wednesday 03 September, 2003

City of London IT

Final Results

City of London Investment Trust PLC
03 September 2003






2 September 2003



                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2003


Total Returns                                     30 June 2003      30 June 2002

  • Net asset value per ordinary share ("NAV")          -11.1%            -11.4%

  • FTSE All-Share Index                                 -9.7%            -14.8%

  • Ordinary share price                                 -9.0%             -5.7%

Dividend (per share)                                     8.07p             7.94p

Extracts from the Chairman's Statement:-

Performance

The year under review was a difficult one for the UK stock market. The long
build-up to the war in Iraq adversely affected confidence and the rise in the
oil price increased costs for consumers and businesses. Corporate profitability
continued to be held back by global overcapacity in many industries. Share
prices also faced selling pressure from switches out of equities into bonds by
some insurance companies and pension funds. Overall, the FTSE All-Share total
return for the year to 30 June 2003 was a negative 9.7%, but there was a
significant rise from the lowest point which was reached on 12 March 2003.

Over the last year City of London's share price total return exceeded that of
the FTSE All-Share Index. In addition there was an above average yield of 4.2%.
The net asset value total return was a negative 11.1%, which was an
underperformance of 1.4% relative to the FTSE All-Share Index, but this has to
be seen against the previous year's outperformance of 3.4%.

The gearing during the period when the market was falling was the principal
reason for City of London's underperformance relative to the FTSE All-Share
Index. The Company started the year under review with gearing of 11.5% rising to
17.1% at the market low in March and falling back to 12.3% at the end of June.
The modest level of gearing was maintained in the falling market. With the
benefit of hindsight, the gearing exposure should have been reduced in
anticipation of this fall. The Board believes gearing should enhance shareholder
returns over the longer term and therefore going forward it is intended to adopt
a more proactive gearing policy whilst still limiting the maximum gearing to
approximately 20%.

The medium and long-term record remains good with City of London having
outperformed the FTSE All-Share Index over three, five and ten years.

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                                     - 2 -

                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2003





Dividends

A fourth interim dividend of 2.07p was paid on 29 August 2003, making a total
net dividend for the year of 8.07p. This is an increase of 1.6% over the
previous year.

The Company has increased its dividend every year since 1966 and the Board
recognises the continuing importance of annual dividend growth to shareholders.
For the year to 30 June 2004, the Board is forecasting a minimum increase of
2.6% in the Company's total net dividend to 8.28p, payable at the new quarterly
rate of 2.07p.

Over the years substantial revenue reserves have been built up which, together
with increased investment income this year, have not only enabled the
continuation of the policy to increase dividends to shareholders, but also put
the Company in a strong position for the future.

Expenses

The investment management fee and other non interest expenses were around 0.45%
of the Company's average assets for the year. This is a level which is very
competitive compared with most investment trusts and with other equity savings
vehicles.

The fall from the previous year's total expense ratio of 0.68% is due to no
investment performance fee being earned by the Investment Manager.

Savings

City of London sets out to be an attractive and straightforward long-term
savings vehicle for private investors. The Company is pleased to welcome the new
shareholders who elected to take City of London shares following the
reconstruction of Henderson Geared Income & Growth Trust plc in March 2003.

Over the past three years the Company's share price has of course been adversely
affected by the general fall in the UK stock market, but, taking a ten year
view, returns have been very positive. With dividends reinvested, for example
through a PEP or ISA, the total return over the ten year period from June 1993
would have been 94.6% (see below), double that obtainable from a typical bank or
building society account.

The Board is keen to offer shareholders, and potential shareholders, the widest
possible opportunities to save over the longer term and this year The City of
London Alliance Trust Pension was launched.





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                                     - 3 -

                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2003



Outlook

The cuts in interest rates over the last few months in the USA, Europe and the
UK to the lowest levels for fifty years should help to counter deflationary
forces and to stimulate economic growth over the next year. Against an improved
demand background, the progress that many companies have made in cutting costs
should lead to the growth in profits that is rewarding for investors. Further
encouraging signs are the pick-up in corporate merger and acquisition activity,
evidence from surveys of improving business confidence and the abatement of life
assurance companies selling equities. Longer term, there are concerns as to the
sustainability of the growth in UK consumers' expenditure financed by debt. On
balance, however, given the Board's view of the prospects for the year ahead,
the valuation of UK equities is attractive and therefore the Company remains
moderately geared.

S M de Zoete

2 September 2003




Source: - Association of Investment Trust Companies. The bank / building society
return is the average return with interest reinvested for deposits of £25,000
and over in a representative sample of 20 UK banks and building societies
calculated by Micropal.


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                                     - 4 -

                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2003

Statement of Total Return (incorporating the revenue account)
for the year ended 30 June 2003


                                                          Unaudited                               Audited

                                                   Year ended 30 June 2003                Year ended 30 June 2002
                                               Revenue       Capital      Total          Revenue     Capital       Total
                                                 £'000         £'000      £'000            £'000       £'000       £'000
Total capital losses from investments                -      (63,399)   (63,399)                -    (72,856)    (72,856)
Income from fixed asset investments             18,657             -     18,657           17,697           -      17,697
Other interest receivable and similar              170             -        170              156           -         156
income
                                            ----------    ---------- ----------       ----------  ----------  ----------
Gross revenue and capital losses                18,827      (63,399)   (44,572)           17,853    (72,856)    (55,003)
Management fees                                  (426)         (994)    (1,420)            (516)     (2,535)     (3,051)
Other administrative expenses                    (526)             -      (526)            (400)           -       (400)
                                            ----------   ----------- ----------       ---------- -----------  ----------
Net return/(loss) on ordinary activities
before interest payable and taxation            17,875      (64,393)   (46,518)           16,937    (75,391)    (58,454)
Interest payable                               (1,339)       (3,125)    (4,464)          (1,310)     (3,056)     (4,366)
                                            ----------   ----------- ----------       ---------- -----------  ----------
Net return/(loss) on ordinary activities
before taxation                                 16,536      (67,518)   (50,982)           15,627    (78,447)    (62,820)
Taxation on net return on ordinary                (81)             -       (81)             (85)          85           -
activities
                                           -----------   ----------- ----------      ----------- -----------  ----------
Net return/(loss) on ordinary activities
after taxation                                  16,455      (67,518)   (51,063)           15,542    (78,362)    (62,820)
Dividends:
Preference and preferred ordinary stocks         (190)             -      (190)            (190)           -       (190)
                                           -----------   ----------- ----------      ----------- -----------  ----------
Net return/(loss) attributable to the           16,265      (67,518)   (51,253)           15,352    (78,362)    (63,010)
ordinary shares
                                           -----------   ----------- ----------      ----------- -----------  ----------
Dividends:
Ordinary shares
Three interim payments of 2.00p (2002:        (12,373)             -   (12,373)         (12,192)           -    (12,192)
1.98p)
Fourth interim payment of 2.07p (2002:         (4,343)             -    (4,343)          (4,105)           -     (4,105)
2.00p)
                                           -----------   ----------- ----------      ----------- -----------  ----------
                                              (16,716)             -   (16,716)         (16,297)           -    (16,297)
                                           -----------   ----------- ----------      ----------- -----------  ----------
Transfer from reserves                           (451)      (67,518)   (67,969)            (945)    (78,362)    (79,307)
                                                ======        ======     ======           ======      ======      ======
Return/(loss) per ordinary share (note 1)        7.87p      (32.66)p   (24.79)p            7.48p    (38.18)p    (30.70)p
                                                ======        ======     ======           ======      ======      ======

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




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                                     - 5 -

                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2003

Balance Sheet
at 30 June 2003
                                                                               Unaudited               Audited
                                                                                 30 June               30 June
                                                                                    2003                  2002
                                                                                   £'000                 £'000
Fixed asset investments
Listed at market value in the United Kingdom                                     440,922               513,924
Listed at market value overseas                                                    9,753                     -
Investment in subsidiary undertakings                                                347                   347
                                                                           -------------         -------------
                                                                                 451,022               514,271
                                                                           -------------         -------------

Current assets
Debtors                                                                            2,113                 2,332
Cash at bank                                                                       2,599                    52
                                                                           -------------         -------------
                                                                                   4,712                 2,384
                                                                           -------------         -------------
Creditors: amounts falling due within one year                                   (6,470)               (7,623)
                                                                           -------------         -------------
Net current liabilities                                                          (1,758)               (5,239)
                                                                           -------------         -------------

Total assets less current liabilities                                            449,264               509,032

Creditors: amounts falling due after more than one year                         (46,000)              (46,000)
                                                                           -------------         -------------
Total net assets                                                                 403,264               463,032
                                                                                 =======               =======

Capital and reserves
Called up share capital                                                           54,539                53,398
Share premium account                                                             35,309                28,249
Other capital reserves                                                           302,545               370,063
Revenue reserve                                                                   10,871                11,322
                                                                           -------------         -------------
Shareholders' funds (including non-equity interests                              403,264               463,032
of £2,086,000)
                                                                                 =======               =======

Net asset value per ordinary share                                               191.21p               224.58p
                                                                                 =======               =======





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                                     - 6 -

                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2003

Cash Flow Statement
for the year ended 30 June 2003
                                                                    Unaudited                    Audited
                                                                    2003          2003          2002          2002
                                                                   £'000         £'000         £'000         £'000

Net cash inflow from operating activities                                       15,386                      15,374

Servicing of finance
Debenture interest paid                                          (4,265)                     (4,265)
Bank and loan interest paid                                        (193)                        (96)
Dividends paid on preference and preferred ordinary stock          (190)                       (190)
                                                              ----------                  ----------
Net cash outflow from servicing of finance                                     (4,648)                     (4,551)

Taxation
Withholding and income tax recovered                                   7                          18
                                                              ----------                  ----------
Net tax recovered                                                                    7                          18

Financial investment
Purchases of investments                                        (40,065)                    (71,264)
Sales of investments                                              43,778                      76,411
                                                              ----------                  ----------
Net cash inflow from financial investment                                        3,713                       5,147

Equity dividends paid                                                         (16,478)                    (16,259)
                                                                            ----------                  ----------
Net cash outflow before financing                                              (2,020)                       (271)

Financing
Net cash outflow from loans                                        (214)                           -
Proceeds from issue of ordinary shares                             4,742                           -
Cost of repurchases of ordinary shares                                 -                       (345)
                                                              ----------                  ----------
Net cash inflow/(outflow) from financing                                         4,528                       (345)
                                                                            ----------                  ----------
Increase/(decrease) in cash                                                      2,508                       (616)
                                                                                ======                      ======







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                                     - 7 -

                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2003

Notes:

1.     Return/(loss) per Ordinary Share

       Revenue return per ordinary share is based on earnings attributable to the ordinary shares of £16,265,000 (2002:
       £15,352,000) and on the weighted average number of ordinary shares in issue during the year of 206,745,219 (2002:
       205,261,977).
       Capital loss per ordinary share is based on net capital losses for the year of £67,518,000 (2002: £78,362,000)
       and on the weighted average number of ordinary shares in issue during the year of 206,745,219 (2002:
       205,261,977).

2.     Issued Share Capital

       There were 209,813,762 ordinary shares of 25p in issue at 30 June 2003 (30 June 2002: 205,251,018) for the
       purpose of calculating the net asset value per ordinary share.

3.     Share Buy-Backs

       During the year the Company made no purchases in the market for cancellation of its own issued ordinary shares.

4.     Share Allotments

       During the year the Company issued 4,562,744 ordinary shares at prices ranging from 166.22p to 202.00p per share.

5.     2003 Accounts

       The preliminary figures for the year ended 30 June 2003 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.

6.     2002 Accounts

       The figures and financial information for the year ended 30 June 2002 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.

7.     Annual Report

       The full annual report and accounts will be posted to shareholders in September 2003 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 17 October 2003 at 3.00 pm.




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                                     - 8 -

                    THE CITY OF LONDON INVESTMENT TRUST PLC

         Unaudited Preliminary Results for the year ended 30 June 2003

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 2003                                                  30 June 2003
                                                  £'000                                                         £'000

BP                                               27,947       Scottish & Southern Energy                        4,680
HSBC                                             26,635       Anglo American                                    4,625
Shell Transport & Trading                        24,400       Legal & General                                   4,498
GlaxoSmithKline                                  23,849       Johnston Press                                    4,243
Vodafone                                         20,145       Wolseley                                          4,022
Royal Bank of Scotland                           19,331       Boots                                             3,988
Barclays                                         13,500       Prudential                                        3,670
HBOS                                             12,630       Reckitt Benckiser                                 3,668
AstraZeneca                                      11,786       Next                                              3,593
British American Tobacco                         11,000       Imperial Tobacco                                  3,520
Lloyds TSB                                       10,111       Slough Estates                                    3,418
Diageo                                            9,382       Bovis Homes                                       3,408
Tesco                                             7,893       Scottish Power                                    3,276
Land Securities                                   6,838       Rodamco Europe                                    3,171
National Grid Transco                             6,782       Smith & Nephew                                    3,134
Aviva                                             6,206       Reed Elsevier                                     3,026
Rio Tinto                                         5,700       BSkyB                                             3,022
Unilever                                          5,476       Allied Domecq                                     3,006
Kingfisher                                        5,041       Gallaher                                          2,975
BT                                                4,890       Tomkins                                           2,724


These investments represent 73.49% 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
Associate Director, Investment Trusts, Henderson Global Investors
Telephone: 020 7818 6417

or

Vicki Staveacre
Henderson Press Office
Telephone: 020 7818 4222


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