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City of London IT (CTY)

  Print      Mail a friend       Annual reports

Monday 11 September, 2000

City of London IT

Final Results

City of London Investment Trust PLC
11 September 2000


 Unaudited Preliminary Results for the year ended 30 June 2000

Extracts from the Chairman's Statement:

The  year under review can be divided into two distinct periods.
For  the first eight months, unprecedented rises occurred in the
Technology,  Media  and Telecommunications sectors.   Shares  in
other  sectors retreated against a background of interest  rates
rising  from  5%  to  6% and a strengthening exchange  rate  for
sterling   against  the  euro.   In  addition,  small  companies
outperformed.   This  was a difficult period  for  the  Company,
given  the  bias  in its portfolio towards large  capitalisation
companies  with  an  above average dividend yield,  and  capital
performance  was poor.  For the final four months  there  was  a
correction  in  Technology, Media and Telecommunications  shares
and  recovery in the rest of the market.  Overall, our gains  in
the  final period failed to make up for our underperformance  in
the  first  eight months.  Our net asset value total return  for
the  year was -1.3% which compares with +5.2% for the FTSE  All-
Share  Index, a disappointing year coming after three successive
years of outperformance.

During  this year of underperformance, the share price  discount
to  net  asset value per share increased from 1.4% to 10.2%  and
the  opportunity has been taken to buy back a total of 3,918,285
shares, including 1,213,285 since the year end, at discounts  of
over 10%, so enhancing the net asset value.



A  fourth interim dividend of 1.84p was paid on 31 August  2000,
making  a  total  net  dividend for the  year  of  7.18p.   This
increase  of 3.5% over the previous year continued the Company's
unbroken record of annual dividend increases since 1966.

For  the  year to 30 June 2001 the Board is forecasting  a  2.5%
increase  in the Company's total net dividend to 7.36p,  payable
at the new quarterly rate of 1.84p.

Expenses remained under tight control.  In the year to  30  June
2000,  excluding  interest  but including  the  portion  of  the
management  fee  which  is  charged to capital,  total  expenses
amounted to less than 0.45% of assets under management.

The  Board  decides upon a split of expenses and  finance  costs
between revenue and capital according to expected future returns
from  the  portfolio.  Since 1 July 1993,  City  of  London  has
charged  to  capital  50%  of  finance  costs  and  50%  of  the
proportion of the management fee that related to the maintenance
or  enhancement of the value of the investments.  The board  has
reviewed  this  arrangement, in the context of  the  returns  of
recent  years  and  the  change  in  corporate  dividend  policy
following the abolition of the ACT tax credit for pension  funds
in 1997, and has decided that charging 70% of the management fee
and  finance  costs to capital and 30% to revenue is appropriate
to  reflect  expected future returns from the  portfolio.   This
change is being made with effect from 1 July 2000.



The  economic outlook appears to be sound with the UK enjoying a combination
of low inflation and steady growth.  The strength of sterling and the action
taken  so far to increase interest rates have helped to restrain growth  and
lessen  the pressure from inflation, although the recent loosening of fiscal
policy  will  have the opposite effect and the current trend in  oil  prices
provides a further element of uncertainty.

The  valuation  of the UK equity market is high by historical standards  but
reasonable  when  compared with other international  equity  markets.   This
performance  of  the  market largely reflects the  high  value  still  being
accorded  to  TMT stocks and the portfolio is being managed to allow  us  to
participate in these and other growth areas as opportunities arise,  without
sacrificing  our  objective  of  providing  above  average  income  to   our

S J Titcomb
8 September 2000

       Unaudited Preliminary Results for the year ended 30 June 2000

Statement of Total Return (incorporating the revenue account)

                          Year ended 30 June 2000 Year ended 30 June 1999
                          RevenueCapital  Total  Revenue Capital  Total
                           £'000  £'000   £'000   £'000   £'000   £'000
Total capital                  - (20,709)(20,709)       -  43,426  43,426
(losses)/gains from                
Income from fixed asset   17,892       -  17,892  19,121       -  19,121
Other interest receivable    180       -     180     330       -     330
and similar income

Gross revenue and capital 18,072 (20,709)(2,637)  19,451  43,426  62,877
Management fee            (1,499)   (750) (2,249) (1,313)   (656) (1,969)
Other administrative       (385)       -   (385)   (325)       -   (325)
                          ------- ------- ------- ------- ------- -------
Net return/(loss) on                                                    
ordinary activities
   before interest        16,188 (21,459) (5,271)  17,813  42,770  60,583
payable and taxation                   
Interest payable          (2,161) (2,161) (4,322) (2,142) (2,142) (4,284)
                          ------- -------     --- ------- -------     ---
Net return/(loss) on                                                    
ordinary activities
   before taxation        14,027 (23,620) (9,593)  15,671  40,628  56,299
Taxation on net                                                         
return/(loss) on ordinary   (67)      67       -   (110)     110       -
                          ------- ------- ------- ------- ------- -------
Net return/(loss) on                                                    
ordinary activities
   after taxation         13,960 (23,553) (9,593)  15,561  40,738  56,299
Dividends :                                                              
Preference and preferred   (190)       -   (190)   (168)       -   (168)
ordinary stocks
                          ------- ------- ------- ------- ------- -------
Net return/(loss)                                                       
attributable to the       13,770 (23,553) (9,783)  15,393  40,738  56,131
ordinary shares
                          ------- ------- ------- ------- ------- -------

Ordinary shares                                                          
Three interim payments of (11,248)     - (11,248)(10,855)      - (10,855)
1.78p (1999: 1.72p)      
Fourth interim payment of (3,834)      -  (3,834) (3,748)      -  (3,748)
1.84p (1999: 1.78p)
                          ------- ------- ------- ------- ------- -------
                         (15,082)      - (15,082)(14,603)      - (14,603)
                          ------- ------- ------- ------- ------- -------
Transfer (from)/to        (1,312)(23,553)(24,865)    790  40,738  41,528
                          ======  ======  ======  ======  ======  ======
Return/(loss) per          6.54p (11.19p) (4.65p)   7.32p  19.36p  26.68p
ordinary share (note 1)               
                          ======  ======  ======  ======  ======  ======

The revenue columns of this statement represent the revenue accounts of
the Company.
* Restated for the change in accounting policy (see note 3).

       Unaudited Preliminary Results for the year ended 30 June 2000

Balance Sheet
                                         30 June     30 June
                                            2000        1999
                                           £'000       £'000
Fixed asset investments                           
Listed at market value in the United  607,910     610,051
Shares in subsidiary undertakings         347         347
                                      ----------  ----------
                                      608,257     610,398
                                      ----------  ----------
Current Assets                                    
Debtors                               2,050       27,080
Bank balances and short term            347        3,001
                                    ----------  ----------
                                      2,397       30,081
Creditors: amounts falling due        5,867       6,051
within one year
                                    ----------  ----------
Net current (liabilities)/assets     (3,470)     24,030
                                     ----------  ----------
Total assets less current             604,787     634,428
Creditors: amounts falling due after              
more than one                          46,000      46,000
                                      ----------  ----------
Total net assets                      558,787     588,428
                                      =======     =======
Capital and reserves                              
Issued share capital                   54,183      54,724
Share premium account                  28,249      26,895
Other capital reserves                465,974     495,116
Revenue reserves                       10,381      11,693
                                      ----------  ----------
Shareholders' funds (including non-               
equity interests                      558,787     588,428
   of £2,086,000)
                                      =======     =======

Net asset value per ordinary share    267.14p     278.48p
                                      =======    =======

       Unaudited Preliminary Results for the year ended 30 June 2000

Cash Flow Statement
                                    2000    2000    1999    1999
                                   £'000   £'000   £'000   £'000
Net cash inflow from operating            16,489          18,194
Servicing of finance                                            
Debenture interest paid          (3,412)         (3,412)        
Bank interest paid                  (57)            (19)        
Dividends paid on preference and                                
preferred                          (191)           (145)
   ordinary stocks
                                  ------         ------         
Net cash outflow from servicing           (3,660)          (3,576)
of finance                         
UK tax paid (including ACT)           -            (72)        
UK income tax paid                 (793)           (743)        
                                  ------          ------        
Net tax paid                                (793)           (815)
Capital expenditure and                                         
financial investment
Purchase of investments          (83,599)        (57,990)        
Sale of investments               87,772          55,925        
Net cash received/(paid) on          909            (664)        
futures contracts
                                  ------          ------        
Net cash inflow/(outflow) from             5,082          (2,729)
capital expenditure and financial
Equity dividends paid                    (14,996)        (14,466)
Management of liquid resources                                  
Cash withdrawn from short term         -           3,000        
                                  ------          ------        
                                               -           3,000
                                          ------          ------
Net cash inflow/(outflow) before           2,122           (392)
Proceeds from issues of ordinary   1,489           2,098        
Costs of repurchases of ordinary  (6,265)               -        
                                  ------          ------        
Net cash (outflow)/inflow from            (4,776)           2,098
                                          ------          ------
(Decrease)/increase in cash               (2,654)           1,706
                                          ------          ------


       Unaudited Preliminary Results for the year ended 30 June 2000
Notes :

1. Return per Ordinary Share
   Revenue return per ordinary share is based on earnings attributable  to
   the  ordinary  shares  of £13,770,000 (1999: £15,393,000)  and  on  the
   weighted average number of ordinary shares in issue during the year  of
   210,454,674 (1999: 210,350,386).

   Capital  return per ordinary share is based on net capital  losses  for
   the  year  of  £23,553,000  (1999: gains of  £40,738,000)  and  on  the
   weighted average number of ordinary shares in issue during the year  of
   210,454,674 (1999: 210,350,386).

2.   Issued Share Capital
   There were 208,389,303 ordinary shares of 25p in issue at 30 June  2000
   (30  June  1999:  210,553,142) for the purpose of calculating  the  net
   asset value per ordinary share.

3.   Change in Accounting Policy
   The  Company has adopted Financial Reporting Standard (FRS) 16  Current
   Tax  under which UK franked dividend income should be accounted for net
   of  the attributable tax credits.  The comparative figures for the year
   ended 30 June 1999 have been restated accordingly.  The effect of  this
   change  is  that  both  income and taxation are reduced  by  £1,928,000
   (1999:  £2,363,000).  However, there is no effect  on  the  revenue  or
   capital returns per share, nor on the net asset value per share.

4.   Investment Company Status
   The  Company has been advised that its Articles of Association  do  not
   meet  the  requirements of an investment company within the meaning  of
   section  266 of the Companies Act 1985.  However, it has conducted  its
   affairs as an investment trust for taxation purposes under section  842
   of  the  Income  and  Corporation Taxes  Act  1988  and  the  Company's
   Articles  prohibit  capital profits from being distributed  by  way  of
   dividend.  As such, the directors consider it necessary to continue  to
   present  the accounts in accordance with the SORP.  Under the SORP  the
   financial  performance of the Company is presented in  a  statement  of
   total  return  in  which  the revenue column is  the  profit  and  loss
   account  of  the Company.  The revenue column excludes net  profits  on
   disposals  of  investments, calculated by reference to  their  previous
   carrying  amount  of  £3,920,000  (1999:  £4,486,000),  and  management
   expenses  and  finance  costs  charged  to  capital,  of  £750,000  and
   £2,161,000  respectively  (1999:  £656,000  and  £2,142,000)  less  tax
   relief thereon of £67,000 (1999: £110,000).


 Unaudited Preliminary Results for the year ended 30 June 2000
   Since  the  Company has been advised that its  Articles  of
   Association  do not meet the requirements of an  investment
   company  within the meaning of section 266 of the Companies
   Act  1985,  the Companies Act and/or FRS 3 would ordinarily
   require these items to be including in the profit and  loss
   account.   However,  in the opinion of  the  directors  the
   inclusion  of these amounts in the profit and loss  account
   would  be  misleading because it would obscure and  distort
   both the revenue and capital performance of the Company and
   would  not show clearly the revenue profits emerging to  be
   distributable by way of dividend.  The directors  therefore
   consider that these departures from the specific provisions
   of  Schedule 4 of the Companies Act, relating to  the  form
   and content of accounts for companies other than investment
   companies,  and these departures from accounting  standards
   are necessary to give a true and fair view.  The departures
   have no effect on total return or on the balance sheet.

5.    Reconciliation of operating revenue to net  cash  inflow
   from operating activities

                                                 2000     1999
                                                £'000    £'000
    Net  revenue  before  interest  payable    16,188   17,813
    and taxation
    Increase  in  prepayments  and  accrued     1,143    1,117
    Decrease in other debtors                       -      170
    Decrease   in   other   creditors   and      (38)    (157)
    Management  expenses charged  to  other     (750)    (656)
    capital reserves
    UK income tax deducted at source             (54)     (93)
                                             -------- --------
    Net    cash   inflow   from   operating    16,489   18,194
                                             -------- --------

6.   Analysis of net debt

                                     1 July     Cash    30 June
                                       1999     Flow       2000
                                      £'000    £'000      £'000
    Net  cash: cash at bank and       3,001  (2,654)        347
    in hand
    Debt:  debts  falling   due                                
    after more than                 (46,000)       -    (46,000)
    one year
                                 ----------  -------  ---------
    Net debt                        (42,999)  (2,654)   (45,653)
                                 ----------  -------  ---------

7.  2000 Accounts
   The preliminary figures for the year ended 30 June 2000 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.

 Unaudited Preliminary Results for the year ended 30 June 2000
8.  1999 Accounts
   The figures and financial information for the year ended 30
   June  1999  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  late September 2000 and  copies  will  be
   available  thereafter from the Secretary at  the  Company's
   Registered Office, 3 Finsbury Avenue, London EC2M 2PA.  The
   Annual  General Meeting will be held on Thursday 2 November
   2000 at 3.00pm.

 Unaudited Preliminary Results for the year ended 30 June 2000

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

                     Valuation                        Valuation
                            at                               at
                       30 June                          30 June
                          2000                             2000
                         £'000                            £'000
BP Amoco                34,236    Pearson                 7,350
Shell Transport &       32,538    Rio Tinto               6,480
HSBC                    26,065    Granada                 6,380
Vodafone Airtouch       25,365    Abbey National          6,320
Glaxo Wellcome          25,051    British American        5,953
British                 23,485    BG                      5,693
CGNU                    21,367    Bank of Scotland        5,657
Lloyds TSB              16,224    Reuters                 5,635
SmithKline Beecham      12,975    Scottish Power          5,600
Royal Bank of           12,081    BAE Systems             5,546
Marconi                 12,040    Bass                    5,325
Cable & Wireless        11,190    Cadbury Schweppes       5,208
AstraZeneca             10,798    EMI                     5,100
Barclays                10,269    Carlton                 5,037
Prudential               9,680    Royal & Sun             4,290
Diageo                   8,895    Thames Water            4,275
GKN                      8,430    Railtrack               4,106
Land Securities          7,900    Smith & Nephew          4,026
Legal & General          7,725    National Grid           3,908
Tesco                    7,398    WPP                     3,860

These investments represent 70.7% of the portfolio.

For further information please contact :

Job Curtis
Portfolio Manager
The City of London Investment Trust plc
Telephone: 020 7410 4367

Alex Crooke                    or              Vicki Staveacre
Deputy Portfolio Manager                   Henderson Investors
The City of London Investment Trust plc       The Press Office
Telephone: 020 7410 4370              Telephone: 020 7410 4222

       Issued by The City of London Investment Trust plc

a d v e r t i s e m e n t