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Thursday 30 August, 2007

City of London IT

Final Results

City of London Investment Trust PLC
30 August 2007



30 August 2007



                    THE CITY OF LONDON INVESTMENT TRUST PLC



         Unaudited Preliminary Results for the year ended 30 June 2007


Total Returns %                                30 June 2007       30 June 2006
Net asset value per ordinary share ("NAV")            +21.0              +18.5
FTSE All-Share Index - 4% Capped (benchmark)          +20.3              +21.9
FTSE All-Share Index                                  +18.4              +19.7
Ordinary share price                                  +17.2              +17.0


Dividend                                       30 June 2007       30 June 2006
Pence per share                                       10.30               9.36
Increase %                                            10.0                 8.6


Minimum increase of 10.3% forecast for the current year to 30 June 2008


Extracts from the Chairman's Statement:-


I am pleased to report that our net asset value total return for the year to 30
June 2007 was 21.0%, an outperformance of our benchmark, which itself was
materially ahead of the FTSE All-Share Index.  We have increased our dividend by
10.0% and have forecast a further increase of 10.3% for the current year.  The
companies in which we are invested have delivered, on average, earnings and
dividends that have come in above market expectations.


Performance

Over the course of the twelve months, City of London outperformed its benchmark
by 0.7%, which in turn outperformed the FTSE All-Share Index by 1.9%.  Both
gearing and stock selection were positive contributors.  The overweight position
relative to the benchmark in real estate stocks, which was a significant
contributor to outperformance in the first half of the period under review, was
a negative in the second half.  Despite exposure being reduced to real estate
stocks with some large profits realised, the above average position relative to
the benchmark was the most important cause of the second half giving back some
of the gains relative to the benchmark.

City of London's share price discount to net asset value (with debt at market
value) increased from 6.9% to 10.9% over the year, which was similar to the
trend experienced by many other investment trusts.  At the time of writing, the
discount has narrowed to 6.6%.


Earnings and Dividends

Revenue return per share was 11.59p, an increase of 13.9% reflecting another
strong year for UK dividend growth.  A fourth interim dividend of 2.62p will be
paid on 31 August 2007, making a total for the year of 10.30p, an increase of
10.0% over the previous year.  This is the forty-first consecutive year that
City of London has increased its dividend, the longest record of any investment
trust.

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                    THE CITY OF LONDON INVESTMENT TRUST PLC



         Unaudited Preliminary Results for the year ended 30 June 2007



Extracts from the Chairman's Statement (continued)



The minimum quarterly dividend for the year ahead will be 2.84p, a further
minimum increase of 10.3% on an annual basis.  The quarterly rate will next be
considered when the third interim dividend is declared in March 2008, by which
time the Board will be able to assess better the trend in income performance of
the portfolio.



Expenses

The investment management fee and other non interest expenses were around 0.42%
of the Company's average assets for the year which is a slight decline from
0.44% last year.  No performance fee was paid to our Investment Manager,
Henderson Global Investors, because the period's outperformance did not exceed
the previous year's underperformance.



Savings

City of London sets out to be an attractive and straightforward long-term
savings vehicle for private investors.  As well as investing directly, shares
can be purchased through the Itshenderson products (the Share Plan and ISA) or
the Alliance Trust Savings (including for pensions).



Outlook

Since the year end, markets have become more volatile and have fallen back.
This change of sentiment stems from concerns about the mortgage market in the
United States, the level of risk adopted by the banks by lending on historically
tight terms and the opaque nature of hedge funds. Credit may be scarcer in the
future and a reduced appetite for risk could result. There is much talk of the
contagion effect of this global credit crunch and it will probably take time for
the wider ramifications and effect on the consumer to become clear. Having said
all of this, I am confident that City of London's relatively defensive portfolio
is well positioned and, with a low level of gearing, we are well placed to take
advantage of the opportunities that often arise from volatility in markets and
sectors. We are focused on companies that have good cash flow from high quality
businesses that can deliver the dividend growth that is so important to our
shareholders. Although there may be volatility, this brings with it
opportunities for our investment management team to perform. Now that the market
has pulled back, the downside risk has been reduced.



The Board

After serving ten years as a director, Mark Nicholls has decided not to stand
for re-election at the next Annual General Meeting.  I would like to thank Mark
for his wise counsel and most valuable contribution to the Company.


Simon de Zoete
30 August 2007

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                    THE CITY OF LONDON INVESTMENT TRUST PLC



         Unaudited Preliminary Results for the year ended 30 June 2007

Income Statement
for the year ended 30 June 2007
                                                   (Unaudited)                    (Audited)
                                             Year ended 30 June 2007       Year ended 30 June 2006
                                            Revenue   Capital             Revenue   Capital
                                             Return    Return     Total    Return    Return     Total
                                              £'000     £'000     £'000     £'000     £'000     £'000
Gains on investments held at fair value
through profit or loss                            -   107,437   107,437         -    81,104    81,104
Income from investments held at fair
value through profit or loss (note 2)        26,734         -    26,734    23,503         -    23,503
Other interest receivable and similar
income (note 3)                                 249         -       249       474         -       474
                                          --------- --------- --------- --------- --------- ---------
Gross revenue and capital gains              26,983   107,437   134,420    23,977    81,104   105,081

Management fee                                (684)   (1,596)   (2,280)     (609)   (1,422)   (2,031)
Performance fee                                   -         -         -         -         -         -
Other administrative expenses                 (497)         -     (497)     (520)         -     (520)
                                          --------- --------- --------- --------- --------- ---------
Net return on ordinary activities
before finance charges and taxation          25,802   105,841   131,643    22,848    79,682   102,530

Finance charges                             (1,465)   (3,002)   (4,467)   (1,459)   (2,988)   (4,447)
                                          --------- --------- --------- --------- --------- ---------
Net return on ordinary activities
before taxation                              24,337   102,839   127,176    21,389    76,694    98,083

Taxation on net return on
ordinary activities                           (190)         -     (190)     (181)       (5)     (186)
                                          --------- --------- --------- --------- --------- ---------
Net return on ordinary activities
after taxation                               24,147   102,839   126,986    21,208    76,689    97,897
                                          ========= ========= ========= ========= ========= =========

Return per ordinary share - basic (note 4)   11.59p    49.34p    60.93p    10.18p    36.79p    46.97p
                                          ========= ========= ========= ========= ========= =========



The total columns of this statement represent the income statement of the
Company. All revenue and capital items derive from continuing operations. No
operations were acquired or discontinued during the year. The Company has no
recognised gains or losses other than those recognised in the Income Statement.



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                    THE CITY OF LONDON INVESTMENT TRUST PLC


         Unaudited Preliminary Results for the year ended 30 June 2007



Reconciliation of Movements in Shareholders' Funds
for the years ended 30 June 2007 and 30 June 2006


                                                                     Share        Other
                                                      Called up    premium      capital    Revenue
                                                  share capital    account     reserves    reserve        Total
Year ended 30 June 2007                                   £'000      £'000        £'000      £'000        £'000

At 30 June 2006                                          52,103     35,309      508,695     18,032      614,139
Net return on ordinary activities
   after taxation                                             -          -      102,839     24,147      126,986
Buy-back of 483,722 ordinary shares                       (120)          -      (1,343)          -      (1,463)
Fourth interim dividend (2.40p) for the
   year ended 30 June 2006 paid
   31 August 2006                                             -          -            -    (5,002)      (5,002)
First interim dividend (2.53p) for the
   year ended 30 June 2007 paid
   30 November 2006                                           -          -            -    (5,273)      (5,273)
Second interim dividend (2.53p) for the
   year ended 30 June 2007 paid
   28 February 2007                                           -          -            -    (5,274)      (5,274)
Third interim dividend (2.62p) for the
   year ended 30 June 2007 paid
   31 May 2007                                                -          -            -    (5,459)      (5,459)
Write-back of dividends over 12 years old                     -          -            -          3            3
                                                      ---------  ---------    ---------  ---------    ---------
At 30 June 2007                                          51,983     35,309      610,191     21,174      718,657
                                                      =========  =========    =========  =========    =========


                                                                     Share        Other
                                                      Called up    premium      capital    Revenue
                                                  share capital    account     reserves    reserve        Total
Year ended 30 June 2006                                   £'000      £'000        £'000      £'000        £'000
At 30 June 2005                                          52,103     35,309      432,006     16,026      535,444
Net return on ordinary activities
   after taxation                                             -          -       76,689     21,208       97,897
Fourth interim dividend (2.26p) for the
   year ended 30 June 2005 paid
   31 August 2005                                             -          -            -    (4,710)      (4,710)
First interim dividend (2.28p) for the
   year ended 30 June 2006 paid
   30 November 2005                                           -          -            -    (4,752)      (4,752)
Second interim dividend (2.28p) for the
   year ended 30 June 2006 paid
   28 February 2006                                           -          -            -    (4,752)      (4,752)
Third interim dividend (2.40p) for the
   year ended 30 June 2006 paid
   31 May 2006                                                -          -            -    (5,002)      (5,002)
Write-back of dividends over 12 years old                     -          -            -         14           14
                                                       --------   --------   ----------   --------   ----------
At 30 June 2006                                          52,103     35,309      508,695     18,032      614,139
                                                       ========   ========   ==========   ========   ==========



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                    THE CITY OF LONDON INVESTMENT TRUST PLC



         Unaudited Preliminary Results for the year ended 30 June 2007



Balance Sheet
at 30 June 2007                    
                                                                           (Unaudited)           (Audited)
                                                                                  2007                2006
                                                                                 £'000               £'000
Investments held at fair value through profit or loss
Listed at market value in the United Kingdom                                   734,390             620,848
AIM quoted investment at market value                                                -               1,035
Listed at market value overseas                                                 23,899              30,243
Investment in subsidiary undertakings                                              378                 377
                                                                            ----------          ----------
                                                                               758,667             652,503
                                                                            ----------          ----------
Current assets
Debtors                                                                          3,542               8,443
Cash at bank and on short term deposit                                           8,268               6,415
                                                                            ----------          ----------
                                                                                11,810              14,858
                                                                            ----------          ----------
Creditors: amounts falling due within one year                                 (3,932)             (5,334)
                                                                            ----------          ----------
Net current assets                                                               7,878               9,524
                                                                            ----------          ----------

Total assets less current liabilities                                          766,545             662,027

Creditors: amounts falling due after more than one year                       (47,888)            (47,888)
                                                                            ----------          ----------
Total net assets                                                               718,657             614,139
                                                                            ==========          ==========

Capital and reserves
Called up share capital                                                         51,983              52,103
Share premium account                                                           35,309              35,309
Other capital reserves                                                         610,191             508,695
Revenue reserve                                                                 21,174              18,032
                                                                            ----------          ----------
Shareholders' funds                                                            718,657             614,139
                                                                            ==========          ==========

Net asset value per ordinary share (note 5)                                    345.62p             294.67p
                                                                            ==========          ==========




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                    THE CITY OF LONDON INVESTMENT TRUST PLC



         Unaudited Preliminary Results for the year ended 30 June 2007



Cash Flow Statement
for the year ended 30 June 2007


                                                                   (Unaudited)              (Audited)
                                                                   Year ended              Year ended
                                                                  30 June 2007             30 June 2006
                                                               £'000       £'000       £'000       £'000

Net cash inflow from operating activities                                 23,421                  19,622

Servicing of finance
Debenture interest paid                                      (4,265)                 (4,265)
Bank and loan interest paid                                     (24)                     (4)
Dividends paid on preference and preferred
ordinary stocks                                                (178)                   (178)
                                                          ----------              ----------

Net cash outflow from servicing of finance                               (4,467)                 (4,447)

Taxation
Withholding tax recovered                                         39                      59
                                                          ----------              ----------

Net tax recovered                                                             39                      59

Financial investment
Purchases of investments                                   (103,157)               (112,530)
Sales of investments                                         108,472                 109,464
                                                          ----------               ---------
Net cash inflow/(outflow) from
financial investment                                                       5,315                 (3,066)

Equity dividends paid                                                   (21,005)                (19,202)

Management of liquid resources
Cash (placed on)/withdrawn from deposit                      (1,900)                   5,824
                                                          ----------              ----------

Net cash (outflow)/inflow from liquid resources                          (1,900)                   5,824
                                                                      ----------              ----------
Net cash inflow/(outflow) before financing                                 1,403                 (1,210)

Financing
Purchases of ordinary shares                                 (1,460)                       -
                                                           ---------              ----------
Net cash outflow from financing                                          (1,460)                       -
                                                                       ---------              ----------

Decrease in cash                                                            (57)                 (1,210)
                                                                       =========              ==========







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                    THE CITY OF LONDON INVESTMENT TRUST PLC



         Unaudited Preliminary Results for the year ended 30 June 2007

Notes :
1.    Accounting Policies
a)    Basis of accounting
      The accounts have been prepared on the basis of the accounting policies used for the
      Company's accounts for the year ended 30 June 2006.



      The accounts are prepared in accordance with United Kingdom Generally Accepted Accounting
      Principles and with the Revised Statement of Recommended Practice - "Financial Statements of
      Investment Trust Companies" dated December 2005 (the "Revised SORP"). All of the Company's
      operations are of a continuing nature.

2.    Income from investments held at fair value through profit or loss
                                                                                 2007              2006
                                                                                £'000             £'000
      Franked:
        Listed                                                                 24,983            21,769
        Listed - special dividends                                                350               305
                                                                            ---------         ---------
                                                                               25,333            22,074
                                                                            ---------         ---------
      Unfranked - listed investments:
        Interest from UK convertibles                                              37               103
        Dividend income                                                         1,278             1,194
        Special dividends                                                          86               132
                                                                            ---------         ---------
                                                                                1,401             1,429
                                                                            ---------         ---------
                                                                               26,734            23,503
                                                                               ======            ======

3.    Other interest receivable and similar income
                                                                                 2007              2006
                                                                                £'000             £'000
      Bank interest                                                               148               378
      Underwriting commission                                                      65                66
      Stock lending                                                                36                30
                                                                            ---------         ---------
                                                                                  249               474
                                                                            =========         =========

4.    Return per ordinary share - basic
      The return per ordinary share is based on the net return attributable to the ordinary shares of
      £126,986,000 (year ended 30 June 2006: £97,897,000) and on 208,399,576 ordinary shares (year
      ended 30 June 2006: 208,413,762) being the weighted average number of ordinary shares in issue
      during the year.






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                    THE CITY OF LONDON INVESTMENT TRUST PLC



         Unaudited Preliminary Results for the year ended 30 June 2007


       The return per ordinary share can be further analysed between revenue and capital, as below.

                                                                       Year ended                Year ended
                                                                     30 June 2007              30 June 2006
                                                                            £'000                     £'000
       Net revenue return                                                  24,147                    21,208
       Net capital return                                                 102,839                    76,689
                                                                        ---------                 ---------
       Net total return                                                   126,986                    97,897
                                                                        =========                 =========
       Weighted average number of ordinary
       shares in issue during the year                                208,399,576               208,413,762

       Revenue return per ordinary share                                   11.59p                    10.18p
       Capital return per ordinary share                                   49.34p                    36.79p
                                                                        ---------                 ---------
       Total return per ordinary share                                     60.93p                    46.97p
                                                                        =========                 =========
       The Company does not have any dilutive securities.

5.     Net asset value per ordinary share
       The net asset value per ordinary share is based on the net assets attributable to the ordinary
       shares of £718,657,000 (2006: £614,139,000) and on 207,930,040 (2006: 208,413,762) shares in issue
       on 30 June 2007.

6.     Issued share capital
       There were 207,930,040 ordinary shares of 25p in issue at 30 June 2007 (30 June 2006: 208,413,762)
       for the purpose of calculating the net asset value per ordinary share. During the year the Company
       repurchased for cancellation 483,722 ordinary shares at a total cost of £1,463,000.


7.     2007 accounts
       The preliminary figures for the year ended 30 June 2007 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.


8.     2006 accounts
       The figures and financial information for the year ended 30 June 2006 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.

9.     Annual Report
       The full Annual Report and Accounts will be posted to shareholders in September 2007 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 Wednesday 10 October 2007 at 3.00 pm.









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                    THE CITY OF LONDON INVESTMENT TRUST PLC



         Unaudited Preliminary Results for the year ended 30 June 2007



Top 40 Investments
as at 30 June 2007



The 40 largest investments, representing 79.81% of the portfolio (convertibles
and all classes of equity in any one company being treated as one investment),
are listed below. In accordance with the UKLA Listing Rules, the comparative
value as at 30 June 2006 is provided for the top ten holdings. The stock marked
* was not in the top ten last year. For additional clarity, the stock which was
in the top ten last year but not this year is marked #. Market values reflect
changes in the value of underlying shares and portfolio changes.


                                      Market      Market                                            Market
                                       Value       Value                                             Value
                                        2007        2006                                              2007
                                       £'000       £'000                                             £'000

BP                                    35,577      30,895           ENI                              13,576
Vodafone *                            33,560      11,525           BHP Billiton                     11,815
British American Tobacco              32,262      25,878           Unilever                         11,305
HSBC                                  32,025      33,303           Scottish & Newcastle              9,928
Royal Dutch Shell                     29,162      18,910           Reed Elsevier                     9,698
BT                                    27,597      19,858           Bovis Homes                       8,930
Diageo                                27,481      24,102           Legal & General                   8,256
Barclays                              24,360      21,507           Britvic                           8,132
Lloyds TSB                            23,630      22,589           BAE Systems                       8,100
GlaxoSmithKline                       22,838      22,665           Rexam                             7,980
Royal Bank of Scotland                21,459                       Wolseley                          7,212
National Grid Transco                 19,188                       Pearson                           6,323
Tesco                                 16,740                       United Utilities                  6,031
Land Securities #                     16,558                       Reckitt Benckiser                 5,470
Rio Tinto                             16,265                       Imperial Tobacco                  5,306
Scottish & Southern Energy            15,939                       IMI                               5,062
Aviva                                 14,870                       Premier Foods                     5,014
HBOS                                  14,783                       Greene King                       4,867
Anglo American                        14,725                       Croda                             4,777
Cadbury Schweppes                     13,600                       Kingfisher                        4,756




                                    - ENDS -

For further information please contact:

Job Curtis
Portfolio Manager, The City of London Investment Trust plc
Telephone: 020 7818 4367

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