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TR European Growth (TRG)

  Print      Mail a friend       Annual reports

Thursday 14 September, 2006

TR European Growth

Final Results

TR European Growth Trust PLC
14 September 2006

                                                                    Page 1 of 15

14 September 2006



                          TR EUROPEAN GROWTH TRUST PLC
      Unaudited Preliminary Group Results for the year ended 30 June 2006


KEY POINTS

• Net asset value per ordinary share rises by 34.0%

• Share price up 34.1%

• Outperformance of Benchmark by 1.4%


Chairman's Statement

Performance

I am pleased to report that the Company had a good year. The results reveal that
the net asset value per ordinary share increased by 34.0% compared to a rise of
32.6% in the Benchmark.

Our share price rose by 34.1% as the discount was little changed at the year
end. The average discount over the year remained below 10%.

Revenue and Dividend

Our gross revenue fell by 26.4%, primarily due to a shift in the mix of the
underlying portfolio away from high yielding stocks. We also had significantly
less bank interest income this year as average cash balances were much lower
than last year.

We are proposing an increased final dividend per ordinary share of 2.60p versus
2.50p last year. No special dividend is being proposed.

Share Capital

We were active in buying back shares throughout the year. A total of 7,147,790
shares were purchased and cancelled, which represents 7.5% of the issued
ordinary share capital at the beginning of the year. These shares were all
bought back at a discount thereby enhancing the NAV per ordinary share for the
remaining shareholders. Since the year end, we have bought back a further
125,000 shares.

The Board

There has been no change in Board composition during the year. At this year's
AGM, we are seeking approval for the re-election of both Bernard Clark and
myself as we are retiring by rotation. In addition, having reached the age of 70
during the year and special notice having been received, Jeremy Lancaster will
also retire and offer himself for re-election.




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                                                                    Page 2 of 15



                          TR EUROPEAN GROWTH TRUST PLC
      Unaudited Preliminary Group Results for the year ended 30 June 2006


Extracts from the Chairman's Statement, continued

New Accounting Standards (IFRS)

As was noted in the interim results, the Company has adopted International
Financial Reporting Standards (IFRS) and so this is our first annual results to
be prepared on that basis. The most noteworthy change is that the portfolio is
valued on a bid basis rather than using mid market prices previously. The other
significant difference from last year's annual results is that the proposed
dividend to be paid after the AGM is no longer accrued for as at the year end.

Performance Fee

The outperformance of the Benchmark over the last two years has triggered a
performance fee payment to our Manager for the year ended 30 June 2006 of £4.9m
(excluding VAT).  This is the result of an average annual outperformance of our
Benchmark of 9.1% since the start of the two year period beginning on 1 July
2004.  The performance figures in these results are stated after deduction of
this payment.

Outlook

European economic growth continues to recover. The question over the next year
will be whether this can be maintained in the light of a slowing US economy,
with the US consumer in particular under pressure. Balanced against this,
investor confidence is not excessive and European valuations do not seem
unreasonable. Overall, despite investor uncertainty, this should be a fairly
benign environment for many companies, with interest rates still relatively low.
We believe that it is a market in which, with careful stockpicking from our
Manager, there should be opportunities for further asset growth.



Audley Twiston-Davies
Chairman
14 September 2006


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                                                                    Page 3 of 15



                          TR EUROPEAN GROWTH TRUST PLC
      Unaudited Preliminary Group Results for the year ended 30 June 2006


Consolidated Income Statement
for the year ended 30 June 2006

                                                                               Year ended 30 June 2005
                                           Year ended 30 June 2006                Restated (note 5)
                                      Revenue         Capital                 Revenue    Capital
                                       return          return        Total     return     return      Total
                                        £'000           £'000        £'000      £'000      £'000      £'000
Investment income                       5,007               -        5,007      6,161          -      6,161
Other income                               95               -           95        771          -        771
Gains on investments held at fair
     value through profit or loss           -         101,951      101,951          -    105,369    105,369
                                    ---------      ----------  ----------- ---------- ---------- ----------
Total income                            5,102         101,951      107,053      6,932    105,369    112,301

Expenses
Management fees and performance
fees                                    (422)         (7,215)      (7,637)      (416)    (8,000)    (8,416)
Other operating expenses                (604)               -        (604)      (722)          -      (722)
                                    ---------      ----------   ----------  --------- ----------  ---------
Profit before finance costs and
taxation                                4,076          94,736       98,812      5,794     97,369    103,163

Finance costs                            (46)           (184)        (230)       (17)       (67)       (84)
                                    ---------        --------    ---------  ---------  ---------  ---------
Profit before taxation                  4,030          94,552       98,582      5,777     97,302    103,079
Taxation                              (1,218)             646        (572)    (1,687)      1,099      (588)
                                    ---------       ---------   ----------   --------  ---------  ---------
Profit for the year                     2,812          95,198       98,010      4,090     98,401    102,491
                                        =====          ======       ======      =====      =====      =====

Earnings per ordinary share (note       3.10p         104.82p      107.92p      2.92p     70.17p     73.09p
2)
                                       ======          ======       ======      =====      =====      =====


The total column of this statement represents the Consolidated Income Statement,
prepared in accordance with IFRS.

The revenue return and capital return columns are supplementary to this and are
prepared under guidance published by the Association of Investment Trust
Companies.

All items in the above statement derive from continuing operations.

All income is attributable to the equity holders of TR European Growth Trust
PLC, the parent company.

There are no minority interests.



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                                                                    Page 4 of 15


                          TR EUROPEAN GROWTH TRUST PLC
      Unaudited Preliminary Group Results for the year ended 30 June 2006


Consolidated and Parent Company Statement of Changes in Equity
for the year ended 30 June 2006

                                                      Consolidated
                                                 Year ended 30 June 2006
                               Called up                   Capital        Other
                                   share        Share   redemption      capital       Revenue
                                 capital      premium      reserve     reserves       reserve         Total
                                   £'000        £'000        £'000        £'000         £'000         £'000
                                                                                                 
Balance at 30 June
2005 (as restated)                11,847      115,451        8,331      143,445        15,791       294,865
Buy-backs of ordinary
shares                             (894)            -          894     (23,731)             -      (23,731)
Profit for the year                    -            -            -       95,198         2,812        98,010
Tender offer costs                     -            -            -          (9)             -           (9)
Ordinary dividends
paid                                   -            -            -            -       (3,701)       (3,701)
                              ----------   ----------    ---------   ----------     ---------    ----------
Balance at 30 June
  2006                            10,953      115,451        9,225      214,903        14,902       365,434
                                  ======       ======        =====       ======         =====        ======


                                                      Consolidated
                                                 Year ended 30 June 2005
                               Called up                   Capital        Other
                                   share      Share     redemption      capital       Revenue
                                 capital    premium        reserve     reserves       reserve         Total
                                   £'000      £'000          £'000        £'000         £'000         £'000
Balance at 30 June
2004 (as restated)                18,979    115,451          1,199      191,902        16,011       343,542
Buy-backs of ordinary
shares                           (7,132)          -          7,132    (146,346)             -     (146,346)
Profit for the year                    -          -              -       98,401         4,090       102,491
Tender offer costs                     -          -              -        (512)             -         (512)
Ordinary dividends
paid                                   -          -              -            -       (4,310)       (4,310)
                               ---------  ---------     ----------   ----------    ----------    ----------
Balance at 30 June
2005                              11,847    115,451          8,331      143,445        15,791       294,865
                                   =====     ======         ======       ======         =====        ======




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                                                                    Page 5 of 15



                          TR EUROPEAN GROWTH TRUST PLC
      Unaudited Preliminary Group Results for the year ended 30 June 2006


Consolidated and Parent Company Statement of Changes in Equity
for the year ended 30 June 2006 (continued)

                                                              Company
                                                      Year ended 30 June 2006
                              Called up                     Capital         Other
                                  share Share premium    redemption       capital     Revenue
                                capital         £'000       reserve      reserves     reserve       Total
                                  £'000                       £'000         £'000       £'000       £'000
Balance at 30 June
2005  (as restated)              11,847       115,451         8,331       145,008      14,228     294,865
Buy-backs of ordinary
shares                            (894)             -           894      (23,731)           -    (23,731)
Profit for the year                   -             -             -        95,197       2,813      98,010
Tender offer costs                    -             -             -           (9)           -         (9)
Ordinary dividends
paid                                  -             -             -             -     (3,701)     (3,701)
                             ----------   -----------    ----------    ----------  ----------  ----------
Balance at 30 June
2006                             10,953       115,451         9,225       216,465      13,340     365,434
                                 ======        ======        ======        ======       =====      ======

                                                              Company
                                                      Year ended 30 June 2005
                              Called up                     Capital         Other
                                  share Share premium    redemption       capital     Revenue
                                capital         £'000       reserve      reserves     reserve       Total
                                  £'000                       £'000         £'000       £'000       £'000
Balance at 30 June
2004 (as restated)               18,979       115,451         1,199       193,466      14,447     343,542
Buy-backs of ordinary
shares                          (7,132)             -         7,132     (146,346)           -   (146,346)
Profit for the year                   -             -             -        98,400       4,091     102,491
Tender offer costs                    -             -             -         (512)           -       (512)
Ordinary dividends
paid                                  -             -             -             -     (4,310)     (4,310)
                             ----------     ---------    ----------    ----------  ----------  ----------
Balance at 30 June
2005                             11,847       115,451         8,331       145,008      14,228     294,865
                                 ======        ======        ======        ======       =====      ======





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                                                                    Page 6 of 15



                          TR EUROPEAN GROWTH TRUST PLC
      Unaudited Preliminary Group Results for the year ended 30 June 2006


Consolidated and Parent Company Balance Sheets
at 30 June 2006
                                                                       Consolidated                     Company
                                                                           Restated                    Restated
                                                      Consolidated         (note 5)       Company      (note 5)    
                                                              2006             2005          2006          2005
                                                             £'000            £'000         £'000         £'000
Non current assets
Investments held at fair value through
   profit or loss                                          368,226          311,184       369,719       312,678
                                                       -----------      -----------   -----------   -----------

Current assets
Other receivables                                              978              566           978           566
Cash and cash equivalents                                    6,945            2,315         6,942         2,311
                                                        ----------       ----------    ----------    ----------
                                                             7,923            2,881         7,920         2,877
                                                        ----------       ----------     ---------    ----------
Total assets                                               376,149          314,065       377,639       315,555
                                                        ----------       ----------    ----------    ----------

Current liabilities
Other payables                                              10,667           13,171        12,157        14,661
Bank loans and overdrafts                                       48            6,029            48         6,029
                                                        ----------       ----------    ----------    ----------
                                                            10,715           19,200        12,205        20,690
                                                        ----------       ----------    ----------    ----------
Net assets                                                 365,434          294,865       365,434       294,865

                                                            ======           ======        ======        ======



Equity attributable to equity shareholders

Called up share capital                                     10,953           11,847        10,953        11,847
Share premium                                              115,451          115,451       115,451       115,451
Capital redemption reserve                                   9,225            8,331         9,225         8,331
Retained earnings:
   Other capital reserves                                  214,903          143,445       216,465       145,008
   Revenue reserve                                          14,902           15,791        13,340        14,228
                                                        ----------      -----------   -----------    ----------
Total equity                                               365,434          294,865       365,434       294,865
                                                            ======           ======        ======        ======

Net asset value per ordinary share
(note 4)                                                   417.04p          311.13p       417.04p       311.13p
                                                            ======           ======        ======        ======



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                                                                    Page 7 of 15



                          TR EUROPEAN GROWTH TRUST PLC
      Unaudited Preliminary Group Results for the year ended 30 June 2006


Consolidated and Parent Company Cash Flow Statements
for the year ended 30 June  2006
                                                                                              Year ended
                                                                   Year ended                30 June 2005
                                                                  30 June 2006            Restated (note 5)
                                                             Consolidated     Company  Consolidated      Company
                                                                    £'000       £'000         £'000        £'000
Operating activities
Profit before taxation                                             98,582      98,582       103,079      103,079
Add back interest paid                                                230         230            82           82
Less gains on investments held at fair value
    through profit or loss                                      (101,951)   (101,950)     (105,369)    (105,368)
Add net sales of investments held at fair value
    though profit or loss                                          45,121      45,121       135,141      135,141
Decrease/(increase) in other receivables                               62          62         (128)        (128)
(Increase)/decrease in amounts due from
brokers                                                             (410)       (410)           134          134
(Decrease)/increase in other payables                               (614)       (614)         6,737        6,737
(Decrease)/increase in amounts due to brokers                     (2,579)     (2,579)         5,616        5,616
                                                               ----------   ---------     ---------    ---------

Net cash inflow from operating activities
  before interest and taxation                                     38,441      38,442       145,292      145,293

Interest paid                                                       (230)       (230)          (82)         (82)
Taxation on investment income                                       (635)       (635)         (331)        (331)
                                                                ---------  ----------    ----------   ----------
Net cash inflow from operating activities                          37,576      37,577       144,879      144,880
                                                                    =====       =====         =====        =====
Financing activities
Equity dividends paid                                             (3,701)     (3,701)       (4,310)      (4,310)
Purchase of ordinary shares                                      (23,042)    (23,042)     (146,134)    (146,134)
Tender offer costs paid                                               (9)         (9)         (489)        (489)
(Repayment)/drawdown of loans                                     (5,430)     (5,430)         5,327        5,327
                                                                ---------    --------    ----------  -----------
Net cash used in financing                                       (32,182)    (32,182)     (145,606)    (145,606)
                                                                    =====       =====        ======       ======

Increase/(decrease) in cash and cash

   equivalents                                                      5,394       5,395         (727)        (726)
Cash and cash equivalents at the start of the
   year                                                             1,689       1,685         3,027        3,022
Exchange movements                                                  (186)       (186)         (611)        (611)
                                                                ---------    --------     ---------  -----------
Cash and cash equivalents at the end of the
  year  (including bank overdrafts)                                 6,897       6,894         1,689        1,685
                                                                    =====       =====        ======       ======





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                                                                    Page 8 of 15



                          TR EUROPEAN GROWTH TRUST PLC
      Unaudited Preliminary Group Results for the year ended 30 June 2006


Notes to the Accounts

1.     Accounting Policies

      (a)   Basis of preparation

            The consolidated financial information for the year ended 30 June 2006 has been prepared in
            accordance with International Financial Reporting Standards ('IFRS'). These comprise standards and
            interpretations approved by the International Accounting Standards Board ('IASB'), together with
            interpretations of the International Accounting Standards and Standing Interpretations Committee
            approved by the International Accounting Standards Committee ('IASC') that remain in effect, to the
            extent that IFRS have been adopted by the European Union.

            The accounts have been prepared on the historical cost basis, except for the revaluation of certain
            financial instruments.  The principal accounting policies adopted are set out below.  Where
            presentational guidance set out in the Statement of Recommended Practice ('the SORP') for
            investment trusts issued by the Association of Investment Trust Companies ('the AITC') in December
            2005 is consistent with the requirements of IFRS, the directors have sought to prepare the
            financial statements on a basis consistent with the recommendations of the SORP.

       (b)  First time adoption of IFRS

            The date of transition to IFRS for the Group is 1 July 2004.  The IFRS accounting
            policies set out herein have been applied retrospectively to the opening balance sheet
            as at 1 July 2004 and all subsequent periods. The disclosures required by First-time
            Adoption of International Financial Reporting Standards ('IFRS 1') concerning the
            transition from UK GAAP to IFRS are given in notes 5 and 6.

       (c)  Basis of consolidation

            The Group accounts consolidate the accounts of the Company and of its wholly owned
            subsidiary undertaking, TREG Finance Limited.

       (d)  Investments held at fair value through profit or loss

            All investments are designated upon initial recognition as held at fair value through
            profit or loss. Assets are de-recognised at the trade date of the disposal. Proceeds
            will be measured at fair value, which will be regarded as the proceeds of sale less
            any transaction costs. The fair value of the financial instruments is based on their
            quoted bid price at the balance sheet date, without deduction of the estimated future
            selling costs. Unquoted investments are valued by the directors using primary
            valuation techniques such as earnings multiples, recent transactions and net assets.
            Where fair value cannot reliably be measured the investment will be carried at the
            previous reporting date value unless there is evidence that the investment has since
            been impaired, in which case the value will be reduced.

            Changes in the fair value of investments held at fair value through profit or loss and
            gains and losses on disposal are recognised in the Consolidated Income Statement as '
            Gains or losses on investments held at fair value through profit or loss'.  Also
            included within this caption are transaction costs in relation to the purchase or sale
            of investments, including the difference between the purchase price of an investment
            and its bid price at the date of purchase.




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                                                                    Page 9 of 15



                          TR EUROPEAN GROWTH TRUST PLC
      Unaudited Preliminary Group Results for the year ended 30 June 2006

Notes to the Accounts, continued

        (e)   Presentation of Income Statement

              In order to better reflect the activities of an investment trust company, and in accordance
              with guidance issued by the Association of Investment Trust Companies ('AITC'), supplementary
              information which analyses the Income Statement between items of a revenue and capital nature
              has been presented alongside the Income Statement. In accordance with the Company's status as
              a UK investment company under section 266 of the Companies Act 1985, net capital returns may
              not be distributed by way of dividend.  Additionally, the net revenue is the measure the
              directors believe appropriate in assessing the Group's compliance with certain requirements
              set out in section 842 of the Income and Corporation Taxes Act 1988.

        (f)   Income

              Dividends receivable on equity shares are recognised as revenue for the year on an ex-dividend
              basis.  Special dividends are treated as revenue return or as capital return, depending on the
              facts of each individual case. Income from fixed interest debt securities is recognised using
              the effective interest rate method. The trading profits of the subsidiary undertaking, which
              represent realised gains and losses on the sale of current asset investments, are dealt with in
              the revenue column of the Income Statement as a revenue item. Bank deposit interest is accounted
              for on an accruals basis.

        (g)    Expenses

               All expenses and interest payable are accounted for on an accruals basis.  On the basis of
               the Board's long term split of total returns in the form of capital and revenue returns of
               80% and 20% respectively, the Company charges 80% of its finance costs and management fee to
               capital return. All administration expenses are charged to the revenue column of the Income
               Statement.  Expenses which are incidental to the purchase or sale of an investment are
               charged to the capital column of the Income Statement and allocated to other capital
               reserves.

               Purchase and sale transaction costs for the year ended 30 June 2006 were £211,000 and
               £541,000 respectively (2005: transaction costs of purchases £192,000; transaction costs of
               sales £640,000). These comprise mainly stamp duty and commission.

               Any performance fees payable are allocated wholly to capital, reflecting the fact that they
               are expected to be attributable largely, if not wholly, to capital performance.

        (h)    Taxation

               The tax expense represents the sum of the tax currently payable and deferred tax.

               The tax currently payable is based on the taxable profit for the year.  Taxable profit
               differs from net profit as reported in the Income Statement because it excludes items of
               income or expense that are taxable or deductible in other years and it further excludes items
               that are never taxable or deductible.  The Group's liability for current tax is calculated
               using tax rates that were applicable at the balance sheet date.

               In line with the recommendations of the SORP, the allocation method used to calculate tax
               relief on expenses presented against capital returns in the supplementary information in the
               Income Statement is the 'marginal basis'. Under this basis, if taxable income is capable of
               being offset entirely by expenses presented in the revenue return column of the Income
               Statement, then no tax relief is transferred to the capital return column.




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                                                                   Page 10 of 15



                          TR EUROPEAN GROWTH TRUST PLC
      Unaudited Preliminary Group Results for the year ended 30 June 2006


Notes to the Accounts, continued

       (h)   Taxation  continued

             Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
             amounts of assets and liabilities in the financial statements and the corresponding tax bases
             used in the computation of taxable profit, and is accounted for using the balance sheet liability
             method.  Deferred tax liabilities are recognised for all taxable temporary differences and
             deferred tax assets are recognised to the extent that it is probable that taxable profits will be
             available against which deductible temporary differences can be utilised.  Investment trusts
             which have approval as such under section 894 of the Income and Corporation Taxes Act 1988 are
             not liable for taxation on capital gains.

             The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to
             the extent that it is no longer probable that sufficient taxable profits will be available to
             allow all or part of the asset to be recovered.

             Deferred tax is calculated at the tax rates that are expected to apply in the period when the
             liability is settled or the asset is realised.  Deferred tax is charged or credited in the Income
             Statement, except when it relates to items charged or credited directly to equity, in which case
             the deferred tax is also dealt with in equity.

       (i)   Foreign currency

             For the purposes of the consolidated accounts, the results and financial position of each entity
             is expressed in pounds sterling, which is the functional currency of the Company and the
             presentational currency of the Group.  Sterling is the functional currency because it is the
             currency of the primary economic environment in which the Group operates.

             Transactions recorded in overseas currencies during the year are translated into sterling at the
             appropriate daily exchange rates. Assets and liabilities denominated in overseas currencies at
             the balance sheet date are translated into sterling at the exchange rates ruling at that date.

       (j)   Cash and cash equivalents

             Cash comprises cash in hand and demand deposits.  Cash equivalents are short-term, highly liquid
             investments that are readily convertible to known amounts of cash and that are subject to an
             insignificant risk of changes in value.

       (k)   Bank borrowings

             Interest-bearing bank loans and overdrafts are recorded as the proceeds received, net of direct
             issues costs. Finance charges, including premiums payable on settlement or redemption and direct
             issue costs, are accounted for on an accruals basis in the Income Statement using the effective
             interest rate method and are added to the carrying amount of the instrument to the extent that they
             are not settled in the period in which they arise.




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                                                                   Page 11 of 15



                          TR EUROPEAN GROWTH TRUST PLC
      Unaudited Preliminary Group Results for the year ended 30 June 2006


Notes to the Accounts, continued

2.     Earnings per ordinary share

       The earnings per ordinary share figure is based on the profit for the year of £98,010,000 (2005:
       £102,491,000 as restated) and on the weighted average number of ordinary shares in issue during the year
       of 90,818,115 (2005: 140,219,591).

       The earnings per ordinary share figure detailed above can be further analysed between revenue and
       capital, as below.


                                                                                                  30 June 2005
                                                                               30 June                Restated
                                                                                  2006                (note 5)
                                                                                 £'000                   £'000
       Net revenue gain                                                          2,812                   4,090
       Net capital gain                                                         95,198                  98,401
                                                                              --------                --------
       Net total gain                                                           98,010                 102,491
                                                                                 =====                   =====
       Weighted average number of ordinary
          shares in issue during the year                                   90,818,115             140,219,591

                                                                                 pence                   pence
       Revenue earnings per ordinary share                                        3.10                    2.92
       Capital earnings per ordinary share                                      104.82                   70.17
                                                                             ---------                --------
       Total earnings per ordinary share                                        107.92                   73.09
                                                                                 =====                   =====
3.      Ordinary share capital

        At 30 June 2006 there were 87,625,355 ordinary shares in issue (2005: 94,773,145). During the year
        ended 30 June 2006 the Company bought 7,147,790 of its own issued ordinary shares in the market
        for cancellation (2005: 57,057,812).

4.      Net asset value per share

        The net asset value per ordinary share is based on the net assets attributed to the ordinary
        shares of £365,434,000 (2005: £294,865,000 as restated) and on the 87,625,355 ordinary shares in
        issue at 30 June 2006 (2005: 94,773,145).

       The movements during the year in assets attributable to the ordinary shares were as follows:
                                                                                                     £'000
       Net assets attributable to ordinary shares at 1 July 2005 (as restated)                     294,865
       Purchase of own shares                                                                     (23,731)
       Tender offer costs                                                                              (9)
       Total net gain on ordinary activities after taxation                                         98,010
       Dividends appropriated in the year                                                          (3,701)
                                                                                                ----------
       Total net assets at 30 June 2006                                                            365,434
                                                                                                    ======



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                                                                   Page 12 of 15



                          TR EUROPEAN GROWTH TRUST PLC
      Unaudited Preliminary Group Results for the year ended 30 June 2006

Notes to the Accounts, continued

5.     (a)   Restatement of balances as at and for the year ended 30 June 2005

             As at 1 July 2005 the Company adopted International Financial Reporting Standards with a date
             transition of 1 July 2004.  In accordance with IFRS 1 (First-time Adoption of International
             Financial Reporting Standards) the following is a reconciliation of the results as at and for the
             year ended 30 June 2005, previously reported under the applicable UK Accounting Standards and the
             SORP, to the restated IFRS results.


                                                Consolidated                              Company
                                   Previously                              Previously   
                                  reported 30                   Restated     reported                Restated 
                                         June                    30 June      30 June                 30 June   
                                         2005    Adjustments        2005         2005 Adjustments        2005
                                        £'000          £'000       £'000        £'000       £'000       £'000
Fixed assets
Investments (note 1)                  311,686          (502)     311,184      313,180       (502)     312,678
Current assets                          2,881              -       2,881        2,877           -       2,877
Current liabilities (note 2)         (22,991)          3,791    (19,200)     (24,481)       3,791    (20,690)
                                   ----------     ----------  ----------   ----------  ----------  ----------
Total assets less current
liabilities                           291,576          3,289     294,865      291,576       3,289     294,865
                                      =======         ======       =====      =======      ======      ======

Capital and reserves
Called up share capital                11,847              -      11,847       11,847             -        11,847
Share premium                         115,451              -     115,451      115,451             -       115,451
Capital redemption reserve              8,331              -       8,331        8,331             -         8,331
Capital reserve - realised
(note 1)                               57,159       (57,159)           -       57,228      (57,228)             -
Capital reserve-unrealised/
revaluation reserve (note 1)           86,788       (86,788)           -       88,282      (88,282)             -
Other capital reserves
(note 1)                                    -        143,445     143,445            -       145,008       145,008
Revenue reserve (note 2)               12,000          3,791      15,791       10,437         3,791        14,228
                                   ----------     ----------  ----------   ----------    ----------    ----------
                                      291,576          3,289     294,865      291,576         3,289       294,865
                                       ======         ======      ======       ======        ======        ======

Net asset value per
ordinary share                        307.66p          3.47p     311.13p      307.66p         3.47p       311.13p
                                  -----------     ----------  ----------   ----------    ----------     ---------


Notes to the reconciliation
     
1.   Investments are classified as held at fair value through profit or loss under IFRS and are carried at bid
     prices. Previously, under UK GAAP, they were carried at mid prices.  The aggregate difference, being a revaluation
     downwards of £502,000, also decreases other capital reserves. Capital reserve - realised and capital reserve -
     unrealised are now reclassified within other capital reserves.

2.   No provision has been made for the dividends on the ordinary shares for the year ended 30 June 2005 of
     £3,791,000. Under IFRS, dividends are not recognised until approved by the shareholders.


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                                                                   Page 13 of 15



                          TR EUROPEAN GROWTH TRUST PLC
      Unaudited Preliminary Group Results for the year ended 30 June 2006


Notes to the Accounts, continued

5.   (b)   Reconciliation of the Statement of Total Return to the Income Statement for the year ended 30 June
           2005

           Under IFRS the Income Statement is the equivalent of the Statement of Total Return as reported
           previously.
                                                                                                          EPS
                                                                                           2005        impact
                                                                          Note            £'000         pence
           Net return on ordinary activities after taxation
             per Statement of Total Return                                              102,142
           Change from mid to bid basis at 30 June 2004                  1                  851          0.60
           Change from mid to bid basis at 30 June 2005                  1                (502)        (0.36)
                                                                                      ---------
           Net profit per Income Statement                                              102,491
                                                                                          =====

           Note to the reconciliation

           1.  The portfolio valuations at 30 June 2004 and 30 June 2005 are required to be valued at
           fair value under IFRS.  These values differ from the previous valuations by £851,000 and £502,000
           respectively.




5.    (c)   Reconciliation of the Cash Flow Statement for the year ended 30 June 2005

                                                                           Previously       Effect    Adjusted
                                                                             reported           of  cash flows
                                                                                        transition
                                                                           cash flows      to IFRS        2005
                                                                                 2005        £'000       £'000
                                                                Notes           £'000

            Net cash inflow from operating  activities                1         3,378      141,501     144,879
            Returns on investments and servicing of finance           1          (82)           82           -
            Taxation                                                  1           692        (692)           -
            Net cash inflow from financial investment                 1       140,891    (140,891)           -
            Equity dividends paid                                     2       (4,310)        4,310           -
                                                                            ---------    ---------    --------
            Net cash inflow before financing                                  140,569        4,310     144,879
            Financing                                                 2     (141,296)      (4,310)   (145,606)
                                                                            ---------     --------   ---------
            Decrease in cash and cash equivalents                               (727)            -       (727)
                                                                                =====        =====      ======

            Notes to the reconciliation

            1. Servicing of finance, taxation and net cash inflow from financial investment have now
            been analysed within operating activities.

            2. Equity dividends paid are now analysed within financing.




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                                                                   Page 14 of 15



                          TR EUROPEAN GROWTH TRUST PLC
      Unaudited Preliminary Group Results for the year ended 30 June 2006


Notes to the Accounts, continued

6.    Restatement of opening balances as at 30 June 2004

      As at 1 July 2005 the Company adopted International Financial Reporting Standards.  In accordance with IFRS
      1 (First Time Adoption of Financial Reporting Standards) the following is a reconciliation of the balance
      sheet as at 30 June 2004, previously reported under the applicable UK Accounting Standards and the SORP, to
      the restated IFRS results.

                                                Consolidated                              Company
                                   Previously                              Previously   
                                  reported 30                   Restated     reported                Restated 
                                         June                    30 June      30 June                 30 June   
                                         2005    Adjustments        2005         2005 Adjustments        2005
                                        £'000          £'000       £'000        £'000       £'000       £'000
    Fixed Assets
    Investments (note 1)               341,118          (851)     340,267       342,613        (851)     341,762
    Current assets                       3,928              -       3,928         3,925            -       3,925
    Current liabilities (note 2)       (5,056)          4,403       (653)       (6,548)        4,403     (2,145)
                                    ----------     ----------  ----------    ----------   ----------  ----------
    Total assets less current
    liabilities                        339,990          3,552     343,542       339,990        3,552     343,542
                                       =======         ======       =====       =======       ======      ======

    Capital and reserves
    Called up share capital             18,979              -      18,979        18,979            -      18,979
    Share premium                      115,451              -     115,451       115,451            -     115,451
    Capital redemption
    reserve                              1,199              -       1,199         1,199            -       1,199
    Capital reserve - realised
     (note 1)                          160,624      (160,624)           -       160,624    (160,624)           -
    Capital reserve-
    unrealised/ revaluation
    reserve (note 1)                    32,129       (32,129)           -        33,693     (33,693)           -
    Other capital reserves
     (note 1)                                -        191,902     191,902             -      193,466     193,466
    Revenue reserve (note 2)            11,608          4,403      16,011        10,044        4,403      14,447
                                    ----------     ----------  ----------    ----------   ----------  ----------
                                       339,990          3,552     343,542       339,990        3,552     343,542
                                        ======         ======      ======        ======       ======      ======
    Net asset value per
    ordinary share                     223.93p          2.34p     226.27p       223.93p        2.34p     226.27p
                                        ======         ======      ======        ======       ======      ======


        Notes to the reconciliation

        1. Investments are classified as held at fair value under IFRS and are carried at bid prices.
        Previously, under UK GAAP, they were carried at mid prices.  The aggregate difference, being a
        revaluation downwards of £851,000, also decreases other capital reserves. Capital reserve - realised and
        capital reserve - unrealised are now reclassified within other capital reserves.

        2. No provision has been made for the dividends on the ordinary shares for the year ended 30
        June 2004 of £4,403,000. Under IFRS, dividend are not recognised until approved by the shareholders.



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                                                                   Page 15 of 15



                          TR EUROPEAN GROWTH TRUST PLC

      Unaudited Preliminary Group Results for the year ended 30 June 2006


7.     Dividend

       Subject to approval at the annual general meeting, the recommended final dividend of 2.60p per
       ordinary share will be paid on 3 November 2006 to shareholders on the register of members at the close
       of business on 22 September 2006.  The shares will be quoted ex-dividend on 20 September 2006.
                                                                                                   Year ended
                                                                                                      30 June
                                                                                                         2006
                                                                                                        £'000
       Revenue available for distribution by way of dividends for the year                              2,812
       Proposed final dividend for the year ended 30 June 2006 - 2.60p
       (based on 87,500,355 shares in issue at 14 September 2006)                                     (2,275)
                                                                                                        -----
       Undistributed revenue for section 842 purposes*                                                    537
                                                                                                          ===
       *Undistributed revenue comprises 10.7% of the income from investments of £5,007,000.

8.     2006 accounts

       The preliminary figures for the year ended 30 June 2006, which do not constitute statutory accounts,
       are an extract from the Group's draft accounts for the year.  These accounts have not yet been
       delivered to the Registrar of Companies, nor have the auditors yet reported on them.


9.     2005 accounts

       The figures and financial information for the year ended 30 June 2005 are an extract of the latest
       published accounts, restated to comply with IFRS (see note 5) 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.


10.    Annual report and AGM

       The full annual report and accounts will be posted to shareholders in September 2006 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 Monday 30 October 2006 at 12.30 pm.



For further information please contact:

Stephen Peak
Fund Manager
TR European Growth Trust PLC
Telephone: 020 7818 4334

James de Sausmarez
Head of Investment Trusts
Henderson Global Investors
Telephone: 020 7818 3349

Sarah Gibbons-Cook
Investor Relations and PR Manager
Henderson Global Investors
Telephone: 020 7818 3198


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