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Perpetual Inc&Growth (PLI)

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Monday 22 November, 2010

Perpetual Inc&Growth

Half-yearly Report


               Perpetual Income and Growth Investment Trust plc                

                   Half-Yearly Financial Report Announcement                   

                    for the Six Months to 30 September 2010                    

KEY FACTS

Perpetual Income and Growth Investment Trust plc (`the Company') is an
investment trust company listed on The London Stock Exchange. The Company is
managed by Invesco Asset Management Limited.

Investment Objective of the Company

The investment objective of the Company is to generate capital growth with a
higher than average income from investment mainly in the UK equity market. It
is intended that the Company will provide real dividend growth over the medium
term.

Full details of the Company's Investment Policy (incorporating the investment
objective and risk and investment limits) can be found on pages 15 and 16 of
the Company's 2010 annual financial report.

Performance Statistics

The Benchmark index of the Company is the FTSE All-Share Index.

                                                     At           At           
                                                                               
                                           30 September     31 March          %
                                                                               
                                                   2010         2010     Change
                                                                               
Total return (all income reinvested):                                          
                                                                               
Diluted net assets*                                                        +4.2
                                                                               
Benchmark*, the FTSE All-Share Index                                       +0.2
                                                                               
Diluted net asset value per share:                                             
                                                                               
- after charging proposed dividend               239.5p       231.2p       +3.6
                                                                               
- as balance sheet                               241.7p       231.2p       +4.5
                                                                               
Shareholders' funds (£'000)                     512,134      487,727       +5.0
                                                                               
Mid-market price:                                                              
                                                                               
- ordinary shares                                234.0p       217.9p       +7.4
                                                                               
- subscription shares                             28.5p        31.5p       -9.5
                                                                               
Discount per ordinary share                        3.2%         5.8%           
                                                                               
Capital return - Benchmark*, the                                               
                                                                               
  FTSE All-Share Index                                                     -1.5
                                                                               
Actual gearing                                      118          120           
                                                                               
Asset gearing                                       118          120           

* Source: Thomson Datastream and Fundamental Data.

                                              Six months ended                 
                                                                               
                                           30 September 30 September           
                                                                               
                                                   2010         2009           
                                                                               
Revenue                                                                        
                                                                               
Diluted revenue return per share                  5.46p        5.52p       -1.1
                                                                               
Dividends - first interim                          2.2p         3.4p           
                                                                               
- second interim                                   2.2p          n/a           
                                                                               
- total                                            4.4p         3.4p      +29.4

INTERIM MANAGEMENT REPORT INCORPORATING CHAIRMAN'S STATEMENT

Chairman's Statement

Performance

During the six months to 30 September 2010, the Company's total return was 4.2%
compared to the 0.2% return from the FTSE All-Share Index. The mid-market price
per share rose by 7.4% to 234p and the discount to NAV per ordinary share
narrowed from 5.8% to 3.2%.

Dividend

The Board has declared a second interim dividend of 2.2p per share in respect
of the three months to 30 September 2010. This dividend is payable on 30
December 2010 to shareholders registered at the close of business on 3 December
2010.

With effect from the financial year commencing 1 April 2010, the Board has
increased the frequency at which the Company pays dividends from twice yearly
to quarterly. As this is the first year in which quarterly dividends are being
paid, the 29.4% increase in total dividend should not be taken as an indication
of the level of future increases in total distribution.

Subscription Share Exercise and Issued Share Capital

During the period under review, subscription shareholders had their fifth
opportunity to exercise their right to subscribe for one ordinary share of the
Company at a price of 218.94p. The subscription period ended on 31 August 2010.
As a result, 203,607 ordinary shares were allotted on 13 September 2010.
Subscription shareholders will have further opportunities to convert their
holdings in each of the years 2011 to 2013. As a result of the above
transactions, the issued share capital of your Company at the period end was
210,254,624 ordinary shares of 10p each and 17,478,825 subscription shares.

William Alexander

Chairman

22 November 2010

Investment Management Report

Market Review

The UK equity market rose by 0.22% in the 6 months to 30 September 2010, as
measured by the FTSE All-Share Index (the `Index'). The best performing sectors
in the Index included leisure goods and personal goods, while oil & gas
producers and healthcare were among the worst performing.

Market performance during the review period can be divided into two halves. In
the first half, UK equities declined as risk aversion spread through the market
on concerns over the pace of global economic growth and on fears that the
sovereign debt crisis, which emanated from Greece, would spread to other
European countries such as Portugal and Ireland. This led to equity-market
volatility as the scale of the debt problem and the difficulty of finding a
solution came into the market's focus. The BP oil spill in the Gulf of Mexico
and the subsequent sharp fall in its share price also negatively impacted
investor sentiment during this time. The repercussions of the spill were
far-reaching, culminating in the company agreeing to US government demands to
place US$20 billion into a compensation fund, supported by asset sales and the
suspension of dividend payments until 2011.

In the second half of the review period, with the UK general election clarified
and in light of more positive economic data from the US and China, risk
appetite returned to the market. The UK equity market staged a strong rally,
recouping the losses accumulated in the first three months of the review
period.

For the first time in recent political history, the UK general election led to
a hung parliament, which culminated in a Conservative/Liberal Democrat
coalition government led by David Cameron. The new chancellor's emergency
budget on 22 June contained a number of measures designed to arrest the growth
of the UK's budget deficit.

The features of the budget included a new £2 billion levy on banks, downward
revisions to GDP forecasts by the newly formed Office for Budget
Responsibility, a rise in capital gains tax (to 28% for higher rate taxpayers),
an increase in VAT to 20% from 17.5%, and stepped reductions in corporation tax
to 24% by 2015. The autumn spending review was going to give more detail on the
long-term goals to reduce the UK government's debt. Although the Comprehensive
Spending Review has been announced after the period end it is worth noting that
the conclusions on the Government deficit were not materially different from
the emergency budget in June. The scale of the reduction in the civil service
and specific cuts to the welfare budget have grabbed the headlines. However,
the success of these cuts will only be determined over the next few years by
the strength of the private sector recovery. If the private sector fails to
achieve a rebalance of the composition of GDP growth in the UK, then the
Chancellor may have to come back for more.

Inflation, as measured by the consumer prices index, remained above the Bank of
England's 2% target throughout the review period, while the Monetary Policy
Committee (`MPC') kept interest rates on hold at 0.5% and the quantitative
easing programme at £200 billion.

Portfolio Strategy & Review

The Company's total return was 4.2% during the 6 months to the end of September
2010, compared to a marginal rise of 0.2% in the Index (both figures include
reinvested income).

The Company's holdings in some of the defensive areas of the market performed
particularly well over the review period and were the primary drivers to
outperforming the Index.

AstraZeneca's share price increased in line with the generally positive
environment for pharmaceuticals businesses. Specifically, AstraZeneca enjoyed
success in several of its drug trials and was also the beneficiary of a number
of positive regulatory decisions in relation to its leading products. In
financial terms, the company outperformed expectations for cash generation and
the growth of its emerging markets businesses.

International Power received a takeover offer from French utility GDF Suez to
combine their international power generation portfolio. The deal was well
received by the market. GDF Suez have paid a cash premium for International
Power to acquire a controlling interest in the new company which offers better
growth prospects and a much stronger balance sheet.

Vodafone and BT were also positive contributors to the Company's
outperformance. Following the sale of its holding in China Mobile, Vodafone`s
shares started to recover in the belief that value will be realised from the
disparate portfolio of its non-core assets. There was also positive news from
Vodafone's core businesses. The European business is starting to benefit from
strong growth in mobile data services, which is offsetting declining revenues
derived from voice calls. At BT, the company is benefiting from the ongoing
turnaround strategy in the Global Services division, as well as receding fears
concerning the pension fund deficit.

The most negative contributor to the Company's performance was Yell. The
company continued to suffer as a result of the underperformance of its
directory business, and on continued speculation concerning its long-term
future. The Manager remains cautiously optimistic as a result of the new
strategy to migrate more of Yell's business online. Elsewhere in the portfolio,
Imperial Tobacco's share price struggled as investors focused on the most
recent company announcement indicating worse than expected sales volumes and
weaker performance in mature markets.

Over the review period, a new holding in Ladbrokes was purchased. Ladbrokes has
embarked on a new strategy to improve the performance of its retail estate and
online businesses. The company has recently appointed a new chairman and CEO
who have initiated these changes. In the defence sector, Rolls-Royce was sold
following a period of strong performance. The Manager felt that valuations were
more attractive in other parts of the defence sector.

Outlook

The Manager's view on the economy remains unchanged from the full-year report.
The Manager continues to believe that the economic outlook remains challenging.
Credit growth is largely absent, banks continue to repair balance sheets and
consumers remain intent on rebuilding their finances following a decade of
debt-fuelled spending. This process of deleveraging of the domestic economy
will remain a dominant theme for many years and GDP growth will be subdued
during this period of time. The Government's recent spending announcements also
represent an increased risk to the domestic economy.

Given that the economic outlook is so uncertain, it is perhaps surprising that
the stockmarket is not awarding a higher rating to the companies with the most
reliable earnings and cashflows. In fact, the continued asset allocation shift
out of equities into bonds which is characterising investment flows from both
institutional and private clients has created some startling anomalies in the
way that the bond and the equity of the same corporate entity are being priced.
The discount that is being applied to large companies with dependable earnings
looks too wide, given the lack of top-line growth which is seen in the current
environment. It is not unreasonable to expect, these kinds of companies to be
trading at a premium to the rest of the market, particularly given their other
important characteristics of balance sheet strength, diversified revenues and
proven business models. Investors' present infatuation with bonds and emerging
market equities seems increasingly unsustainable given the cheap and attractive
alternative investment opportunities which exist in other parts of the UK
equity market and in which a large proportion of the portfolio is currently
invested.

Mark Barnett

Investment Manager

22 November 2010

Related Party

Invesco Asset Management Limited (`IAML'), a wholly owned subsidiary of Invesco
Limited, acts as Manager and Company Secretary to the Company. Details of
IAML's services and fee arrangements are given in the latest annual financial
report, which is available on the Manager's website.

Principal Risks and Uncertainties

The principal risks and uncertainties that could affect the Company's business
can be divided into various areas:

• Investment Policy and Process;

• Market Movements and Portfolio Performance;

• Ordinary Shares;

• Gearing;

• Regulatory; and

• Reliance on Third Party Service Providers

A detailed explanation of these principal risks and uncertainties can be found
on pages 20 and 21 of the 2010 annual financial report, which is available on
the Manager's website.

In the view of the Board, these principal risks and uncertainties are equally
applicable to the remaining six months of the financial year as they were to
the six months under review.

Going Concern

The financial statements have been prepared on a going concern basis. The
Directors consider this is the appropriate basis as they have a reasonable
expectation that the Company has adequate resources to continue in operational
existence for the foreseeable future. In reaching this conclusion, the
Directors took into account the Company's investment objective, its risk
management policies, the diversified portfolio of readily realisable securities
which can be used to meet funding commitments, the overdraft which can be used
for both long-term and short-term funding requirements, the liquidity of the
investments which could be used to repay the overdraft in the event that the
facility could not be renewed or replaced, and the ability of the Company to
meet all of its liabilities, including the £30 million debenture, and ongoing
expenses.

DIRECTORS' RESPONSIBILITY STATEMENT

in respect of the preparation of the half-yearly financial report

The Directors are responsible for preparing the half-yearly financial report
using accounting policies consistent with applicable law and UK Accounting
Standards.

The Directors confirm that to the best of their knowledge:

- the condensed set of financial statements contained within the half-yearly
financial report have been prepared in accordance with the Accounting Standards
Board's Statement "Half-Yearly Financial Report";

- the interim management report includes a fair review of the information
required by DTR 4.2.7R and DTR 4.2.8R of the FSA's Disclosure and Transparency
Rules; and

- the interim management report includes a fair review of the information
required on related party transactions.

The half-yearly financial report has not been audited or reviewed by the
Company's auditors.

Signed on behalf of the Board of Directors.

William Alexander

Chairman

22 November 2010

INVESTMENT PORTFOLIO STATEMENT AS AT 30 SEPTEMBER 2010

UK ordinary shares unless stated otherwise

                                                                Value      % of
                                                                               
Company                      Sector                             £'000 Portfolio
                                                                               
Equity investments                                                             
                                                                               
Reynolds American (US        Tobacco                           31,034       5.1
                                                                               
  Common Stock)                                                                
                                                                               
British American Tobacco     Tobacco                           30,670       5.1
                                                                               
AstraZeneca                  Pharmaceutical and                29,298       4.8
                             Biotechnology                                     
                                                                               
Vodafone                     Mobile Communications             28,737       4.7
                                                                               
Imperial Tobacco             Tobacco                           27,554       4.5
                                                                               
GlaxoSmithKline              Pharmaceutical and                27,521       4.5
                             Biotechnology                                     
                                                                               
BG                           Oil and Gas Producers             26,097       4.3
                                                                               
Tesco                        Food and Drug Retailers           22,007       3.6
                                                                               
BT                           Fixed Line Communications         21,814       3.6
                                                                               
International Power          Electricity                       19,721       3.3
                                                                               
Top ten holdings                                              264,453      43.5
                                                                               
Capita                       Support Services                  18,447       3.0
                                                                               
Reckitt Benckiser            Household Goods                   17,971       3.0
                                                                               
BAE Systems                  Aerospace and Defence             17,091       2.8
                                                                               
Centrica                     Gas, Water and Multiutilities     16,517       2.7
                                                                               
Babcock International        Support Services                  15,981       2.6
                                                                               
Hiscox                       Insurance                         13,548       2.2
                                                                               
Scottish & Southern Energy   Electricity                       12,996       2.1
                                                                               
Balfour Beatty               Construction and Materials        12,936       2.1
                                                                               
Pennon                       Gas, Water and Multiutilities     11,884       2.0
                                                                               
Northumbrian Water           Gas, Water and Multiutilities     11,556       1.9
                                                                               
Top twenty holdings                                           413,380      67.9
                                                                               
Compass                      Travel and Leisure                10,890       1.8
                                                                               
BTG                          Pharmaceutical and                10,112       1.7
                             Biotechnology                                     
                                                                               
Napo Pharmaceuticals         Pharmaceutical and                10,074       1.7
                             Biotechnology                                     
                                                                               
  (US Common                                                                   
                                                                               
  Stock-Unquoted)                                                              
                                                                               
Drax                         Electricity                        9,421       1.6
                                                                               
Provident                    Financial Services                 9,305       1.5
                                                                               
Chemring                     Aerospace and Defence              9,302       1.5
                                                                               
Morrison (W) Supermarkets    Food and Drug Retailers            9,285       1.5
                                                                               
Rentokil Initial             Support Services                   8,543       1.4
                                                                               
Tate & Lyle                  Food Producers                     8,519       1.4
                                                                               
Homeserve                    Support Services                   8,291       1.4
                                                                               
Top thirty holdings                                           507,122      83.4
                                                                               
Bunzl                        Support Services                   8,179       1.4
                                                                               
Beazley                      Insurance                          7,818       1.3
                                                                               
KCOM                         Fixed Line Communications          7,580       1.3
                                                                               
Ladbrokes                    Travel and Leisure                 6,633       1.1
                                                                               
Sage                         Software and Computer              6,377       1.1
                             Services                                          
                                                                               
Impax Environment            Equity Investment Instruments      5,229       0.9
                                                                               
Biocompatibles               Healthcare Equipment &             5,061       0.8
                             Services                                          
                                                                               
Altria (US Common Stock)     Tobacco                            5,025       0.8
                                                                               
Altus Resources              Equity Investment Instruments      4,751       0.8
                                                                               
Serco                        Support Services                   4,176       0.7
                                                                               
Top forty holdings                                            567,951      93.6
                                                                               
Lombard Medical              Healthcare Equipment &             4,132       0.7
                             Services                                          
                                                                               
Damille Investment           Finance                            3,855       0.6
                                                                               
Impax Asian Environment      Equity Investment Instruments      3,210       0.5
                                                                               
  - ordinary & subscription                                                    
shares                                                                         
                                                                               
Trading Emissions            Equity Investment Instruments      2,814       0.5
                                                                               
Macau Property               Finance                            2,565       0.4
                                                                               
Ecofin Water & Power         Finance                            2,493       0.4
                                                                               
  - ordinary & subscription                                                    
shares                                                                         
                                                                               
Vectura                      Pharmaceutical and                 2,463       0.4
                             Biotechnology                                     
                                                                               
UK Coal                      Mining                             2,452       0.4
                                                                               
Landkom International        Food Producers                     2,202       0.4
                                                                               
Yell                         Media                              1,984       0.3
                                                                               
Top fifty holdings                                            596,121      98.2
                                                                               
Imperial Innovations         Pharmaceutical and                 1,908       0.3
                             Biotechnology                                     
                                                                               
Helphire                     Financial                          1,482       0.3
                                                                               
Renovo                       Pharmaceutical and                 1,091       0.2
                             Biotechnology                                     
                                                                               
Puricore                     Personal Goods                     1,065       0.2
                                                                               
Fusion IP                    Pharmaceutical and                   800       0.1
                             Biotechnology                                     
                                                                               
Xcounter AB                  Healthcare Equipment &               455       0.1
                             Services                                          
                                                                               
XTL Biopharmaceutical (US    Pharmaceutical and                   162       0.0
ADR)                         Biotechnology                                     
                                                                               
Walton & Company             Banks                                 53       0.0
                                                                               
Mirada                       Equity Investment Instruments         22       0.0
                                                                               
Total equity investments                                      603,159      99.4
(59)                                                                           
                                                                               
Other investments                                                              
                                                                               
Barclays Bank - Nuclear      Electricity                        1,510       0.3
                                                                               
  Power Notes 28 February                                                      
2019                                                                           
                                                                               
Puricore Convertible Notes   Personal Goods                     1,500       0.2
                                                                               
Ecofin Water & Power         Equity Investment Instruments        493       0.1
                                                                               
  6% May 31 2016                                                               
                                                                               
Total other interest                                            3,503       0.6
                                                                               
investments (3)                                                                
                                                                               
Total investments (62)                                        606,662     100.0

CONDENSED INCOME STATEMENT

                             Six months to           Six months to      Year to
                                                                          31   
                           30 September 2010       30 September 2009     March 
                                                                         2010  
                                                                               
                        Revenue Capital   Total Revenue Capital   Total   Total
                                                                               
                          £'000   £'000   £'000   £'000   £'000   £'000   £'000
                                                                               
Gains on investments at                                                        
fair value                                                                     
                                                                               
  through profit or           -  20,711  20,711       -  83,284  83,284 121,236
loss                                                                           
                                                                               
Foreign exchange losses       - (1,128) (1,128)       -    (25)    (25)    (25)
                                                                               
Income                                                                         
                                                                               
UK dividends             11,891       -  11,891  11,592       -  11,592  20,007
                                                                               
Overseas dividends        1,124       -   1,124     972       -     972   2,099
                                                                               
Unfranked investment         14       -      14     197       -     197     211
income                                                                         
                                                                               
Scrip dividends              83       -      83       -       -       -     323
                                                                               
Other income                  -       -       -      66       -      66      91
                                                                               
Gross return             13,112  19,583  32,695  12,827  83,259  96,086 143,942
                                                                               
Investment management     (653) (1,524) (2,177)   (581) (1,354) (1,935) (4,111)
fee - note 2                                                                   
                                                                               
Performance fee - note        -       -       -       -       -       -       -
2                                                                              
                                                                               
VAT recovered on              -       -       -     101     190     291     291
management fees - note                                                         
3                                                                              
                                                                               
Other expenses            (389)       -   (389)   (258)     (2)   (260)   (627)
                                                                               
Net return before        12,070  18,059  30,129  12,089  82,093  94,182 139,495
finance costs and                                                              
taxation                                                                       
                                                                               
Finance costs - note 2    (414)   (965) (1,379)   (384)   (897) (1,281) (2,681)
                                                                               
Return on ordinary       11,656  17,094  28,750  11,705  81,196  92,901 136,814
activities before                                                              
taxation                                                                       
                                                                               
Tax on ordinary           (167)       -   (167)   (146)       -   (146)   (332)
activities                                                                     
                                                                               
Return on ordinary       11,489  17,094  28,583  11,559  81,196  92,755 136,482
activities after                                                               
taxation for the                                                               
financial period                                                               
                                                                               
Return per ordinary                                                            
share - note 4                                                                 
                                                                               
Basic                     5.50p   8.10p  13.60p   5.52p  38.82p  44.34p  65.12p
                                                                               
Diluted                   5.46p   8.13p  13.59p   5.52p  38.82p  44.34p  65.12p

The total column of this statement represents the Company's income statement.
The supplementary revenue and capital columns are presented for information
purposes in accordance with the Statement of Recommended Practise issued by the
Association of Investment Companies. All items in the above statement derive
from continuing operations and the Company has no other gains or losses. No
operations were acquired or discontinued in the period.

CONDENSED BALANCE SHEET

Registered number 3156676

                                          at             at          at
                                                                       
                                30 September   30 September    31 March
                                                                       
                                        2010           2009        2010
                                                                       
                                       £'000          £'000       £'000
                                                                       
Fixed assets                                                           
                                                                       
Investments held at fair value                                         
through                                                                
                                                                       
  profit or loss                     606,662        543,054     586,710
                                                                       
Current assets                                                         
                                                                       
Amounts due from brokers                   -          2,292           -
                                                                       
Prepayments and accrued income         2,767          1,867       2,338
                                                                       
                                       2,767          4,159       2,338
                                                                       
Creditors: amounts falling due                                         
                                                                       
  within one year                                                      
                                                                       
Bank overdraft                      (64,834)       (49,367)    (69,907)
                                                                       
Amounts due to brokers                 (941)        (4,065)         (6)
                                                                       
Accruals and deferred income         (1,743)        (1,575)     (1,656)
                                                                       
                                    (67,518)       (55,007)    (71,569)
                                                                       
Net current liabilities             (64,751)       (50,848)    (69,231)
                                                                       
Total assets less current            541,911        492,206     517,479
liabilities                                                            
                                                                       
Creditors: amounts falling due                                         
                                                                       
  after one year                                                       
                                                                       
Debenture 2014                      (29,777)       (29,721)    (29,752)
                                                                       
Net assets                           512,134        462,485     487,727
                                                                       
Capital and reserves                                                   
                                                                       
Share capital - note 6                21,025         21,005      21,005
                                                                       
Share premium                        186,116        185,691     185,691
                                                                       
Capital reserve                      286,347        233,803     269,253
                                                                       
Revenue reserve                       18,646         21,986      11,778
                                                                       
Shareholders' funds                  512,134        462,485     487,727
                                                                       
Net asset value per                                                    
                                                                       
ordinary share - note 5                                                
                                                                       
Basic                                 243.6p         220.2p      232.2p
                                                                       
Diluted                               241.7p         220.1p      231.2p

CONDENSED CASH FLOW STATEMENT

                                   six months to  six months to      Year to
                                                                            
                                    30 September   30 September     31 March
                                                                            
                                            2010           2009         2010
                                                                            
                                           £'000          £'000        £'000
                                                                            
Net return before finance costs                                             
                                                                            
  and taxation                            30,129         94,182      139,495
                                                                            
Gains on investments                    (20,711)       (83,284)    (121,236)
                                                                            
Foreign exchange losses                    1,128             25           25
                                                                            
Scrip dividends                             (83)          (279)        (323)
                                                                            
Decrease in debtors                           16          6,165        5,694
                                                                            
Increase/(decrease) in creditors              13          (601)        (561)
                                                                            
Tax on overseas income                     (167)          (146)        (332)
                                                                            
Net cash flow from operating                                                
                                                                            
  activities                              10,325         16,062       22,762
                                                                            
Servicing of finance                     (1,282)        (1,317)      (2,688)
                                                                            
Capital expenditure and                                                     
financial                                                                   
                                                                            
  investment                                                                
                                                                            
Purchase of investments                 (53,273)       (84,187)    (151,937)
                                                                            
Sale of investments                       55,051         65,895      126,261
                                                                            
Equity dividends paid                    (4,621)       (12,588)     (31,073)
                                                                            
Net cash inflow/(outflow) before                                            
                                                                            
  management of liquid resources                                            
                                                                            
  and financing                            6,200       (16,135)     (36,675)
                                                                            
Financing                                      -          3,062        3,062
                                                                            
Increase/(decrease) in cash in                                              
                                                                            
  the period                               6,200       (13,073)     (33,613)
                                                                            
Exchange movements                       (1,128)           (25)         (25)
                                                                            
Debenture stock non-cash                    (24)           (17)         (48)
movement                                                                    
                                                                            
Movement in net debt in the                5,048       (13,115)     (33,686)
period                                                                      
                                                                            
Net debt at beginning of period         (99,659)       (65,973)     (65,973)
                                                                            
Net debt at end of period               (94,611)       (79,088)     (99,659)
                                                                            
Analysis of changes in net debt:                                            
                                                                            
Brought forward:                                                            
                                                                            
  Bank overdraft                        (69,907)       (36,269)     (36,269)
                                                                            
  Debenture 2014                        (29,752)       (29,704)     (29,704)
                                                                            
Net debt brought forward                (99,659)       (65,973)     (65,973)
                                                                            
Movements in the period:                                                    
                                                                            
  Cash inflow/(outflow) from               6,200       (13,073)     (33,613)
bank                                                                        
                                                                            
  Exchange movements                     (1,128)           (25)         (25)
                                                                            
  Debenture non-cash movement               (24)           (17)         (48)
                                                                            
Net debt at end of period               (94,611)       (79,088)     (99,659)

CONDENSED RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS

                                  Share      Share  Capital    Revenue         
                                                                               
                                Capital    Premium  Reserve    reserve    Total
                                                                               
                                  £'000      £'000    £'000      £'000    £'000
                                                                               
For the six months ended 30                                                    
September 2009                                                                 
                                                                               
Shareholder's funds at 1 April   20,840    182,794  152,607     23,015  379,256
2009                                                                           
                                                                               
Return for the period from the        -          -   81,196     11,559   92,755
income statement                                                               
                                                                               
Dividends Paid - note 7               -          -        -   (12,588) (12,588)
                                                                               
Ordinary shares issued              161      2,817        -          -    2,978
                                                                               
Exercised subscription shares         4         80        -          -       84
                                                                               
At 30 September 2009             21,005    185,691  233,803     21,986  462,485
                                                                               
For the year ended 31 March                                                    
2010                                                                           
                                                                               
Shareholder's funds at 1 April   20,840    182,794  152,607     23,015  379,256
2009                                                                           
                                                                               
Return for the year from the          -          -  116,646     19,836  136,482
income statement                                                               
                                                                               
Dividends Paid - note 7               -          -        -   (31,073) (31,073)
                                                                               
Ordinary shares issued              161      2,816        -          -    2,977
                                                                               
Exercised subscription shares         4         81        -          -       85
                                                                               
At 31 March 2010                 21,005    185,691  269,253     11,778  487,727
                                                                               
For the six months ended 30                                                    
September 2010                                                                 
                                                                               
Shareholder's funds at 1 April   21,005    185,691  269,253     11,778  487,727
2010                                                                           
                                                                               
Return for the period from the        -          -   17,094     11,489   28,583
income statement                                                               
                                                                               
Dividends Paid - note 7               -          -        -    (4,621)  (4,621)
                                                                               
Exercised subscription shares        20        425        -          -      445
                                                                               
At 30 September 2010             21,025    186,116  286,347     18,646  512,134

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

1. Basis of Preparation

The condensed financial statements of the Company have been prepared using the
same accounting policies as those adopted in the 2010 annual financial report,
which are consistent with applicable United Kingdom Accounting Standards and
with the Statement of Recommended Practice: `Financial Statements of Investment
Trust Companies and Venture Capital Trusts'.

2. Investment Management Fees and Finance Costs

Investment management fees and finance costs are allocated 70% to capital and
30% to revenue. A provision for a performance-related fee is recognised if the
Company's performance exceeds the FTSE All-Share Index and is wholly allocated
to capital. No fee has been provided for the six months under review.

3. VAT Recovered on Management Fees

As reported in the 2010 annual financial report, the Company recognised £
291,000 of VAT due from HM Revenue and Customs for the period 2001-2007.

4. Basis of Return per Ordinary Share

                                 Six months to   Six months to     Year to
                                                                          
                                  30 September    30 september    31 March
                                                                          
                                          2010            2009        2010
                                                                          
                                   (Unaudited)     (Unaudited)   (Audited)
                                                                          
                                         £'000           £'000       £'000
                                                                          
Returns after tax:                                                        
                                                                          
Revenue                                 11,489          11,559      19,836
                                                                          
Capital                                 17,094          81,196     116,646
                                                                          
Total                                   28,583          92,755     136,482
                                                                          
Weighted average number of                                                
                                                                          
   ordinary shares in issue                                               
                                                                          
during the period:                                                        
                                                                          
  - basic                          210,069,931     209,138,685 209,593,601
                                                                          
  - diluted                        210,279,581             n/a         n/a

The subscription shares are dilutive for the purposes of return per share when
they would result in the issue of ordinary shares. This occurs when the average
market price of the ordinary shares during the period is greater than the
exercise price of 218.94p. The average market price for the six months ended 30
September 2010 was 221.57p and thus was dilutive. The average market price for
30 September 2009 and 31 March 2010 was 190.62p and 200.38p respectively, and
was not dilutive.

5. Basis of Net Asset Value (`NAV') per Ordinary Share

                                         at             at          at
                                                                      
                               30 September   30 September    31 March
                                                                      
                                       2010           2009            
                                                                      
                                (Unaudited)    (Unaudited)   (Audited)
                                                                      
                                      £'000          £'000       £'000
                                                                      
Shareholders' funds :                                                 
                                                                      
- basic                             512,134        462,485     487,727
                                                                      
- diluted                           550,402        501,199     526,441
                                                                      
Ordinary shares in issue at                                           
                                                                      
  period end:                                                         
                                                                      
  - basic                       210,254,624    210,051,017 210,051,017
                                                                      
  - diluted                     227,733,449    227,733,449 227,733,449

When the basic NAV is greater than the exercise price of 218.94p, the
subscription shares are dilutive as shown above. However, subscription
shareholders are not likely to exercise their option unless the market price is
greater than the exercise price, as otherwise this would dilute their holdings.

6. Share Capital

(a) Ordinary shares of 10p each

                               Six months to Six months to      Year to
                                                                       
                                30 September  30 September     31 March
                                                                       
                                        2010          2009         2010
                                                                       
                                 (Unaudited)   (Unaudited)    (Audited)
                                                                       
Number of ordinary shares:                                             
                                                                       
Brought forward                  210,051,017   208,404,620  208,404,620
                                                                       
Ordinary shares issued for                 -     1,607,905    1,607,905
cash                                                                   
                                                                       
Subscription shares exercised        203,607        38,492       38,492
                                                                       
Carried forward                  210,254,624   210,051,017  210,051,017

(b) Subscription Shares

The subscription shares carry the right to subscribe for one ordinary share at
a price of 218.94p on 31 August in each of the years 2010 to 2013. During the
period 203,607 subscription shares were exercised leaving 17,478,825
subscription shares remaining at the period end.

7. Dividends per Ordinary Share

The Company commenced the payment of quarterly (previously bi-annual) dividends
from 1 April 2010. The first interim dividend of 2.2p was paid on 27 September
2010 to shareholders registered on 3 September 2010. The Directors have
declared a second interim dividend of 2.2p payable on 30 December 2010 to
shareholders registered on 3 December 2010.

                                    Six months to  Six months to     Year to
                                                                            
                                     30 September   30 September    31 March
                                                                            
                                             2010           2009        2010
                                                                            
                                      (Unaudited)     (Unaudited   (Audited)
                                                                            
Dividends paid (pence):                                                     
                                                                            
Second interim                                  -           5.20        5.20
                                                                            
Special 2009                                    -           0.84        0.84
                                                                            
First interim 2010                              -              -        3.40
                                                                            
Second interim 2010                             -              -        5.40
                                                                            
First interim 2011                           2.20              -           -
                                                                            
Total                                        2.20           6.04       14.84
                                                                            
£'000 equivalent                            4,621         12,588      31,073

8. Investment Trust Status

It is the intention of the Directors to conduct the affairs of the Company so
that it satisfies the conditions for approval as an investment trust company
set out in section 1158 of the Corporation Tax Act 2010.

9. Status of Half-Yearly Financial Report

The financial information contained in this half-yearly report, which has not
been audited or reviewed by the independent auditors, does not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. The
financial information for the half years ended 30 September 2010 and 30
September 2009 has not been audited. The figures and financial information for
the year ended 31 March 2010 are extracted and abridged from 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 Independent Auditors, which was unqualified and did not
include a statement under section 498 of the Companies Act 2006.

By order of the Board

Invesco Asset Management Limited

Company Secretary

22 November 2010

DIRECTORS, ADVISERS AND PRINCIPAL SERVICE PROVIDERS

Directors

William Alexander, Chairman

Sir Martyn Arbib

Vivian Bazalgette

Antony Hardy, Audit Committee Chairman

Robert Yerbury

Manager, Company Secretary and Registered Office

Invesco Asset Management Limited

30 Finsbury Square

London EC2A 1AG

020 7065 4000

Company Secretarial contact: Karina Bryant

Company Number

Registered in England and Wales: No. 3156676

Registrars

Capita Registrars

Northern House

Woodsome Park

Fenay Bridge

Huddersfield

West Yorkshire HD8 0LA

If you hold your shares directly rather than through an ISA or Savings Scheme,
and have any queries relating to your shareholding you should contact the
Registrars on: 0871 664 0300. Calls cost 10p per minute plus network extras.
Lines are open from 8.30 a.m. to 5.30 p.m. every working day.

Shareholders holding shares directly, can also access their holding details via
Capita's website www.capitaregistrars.com or www.capitashareportal.com

Capita provide an on-line and telephone share dealing service to existing
shareholders who are not seeking advice on buying or selling. This service is
available at www.capitadeal.com or 0871 664 0364. Calls cost 10p per minute
plus network extras. Lines are open from 8.00 a.m. to 4.30 p.m. every working
day.

Invesco Perpetual Investor Services

Invesco Perpetual has an Investor Services Team available to assist you from
8.30 a.m. to 6.30 p.m. every working day on: 0800 085 8677.

The Invesco Perpetual investment trust website is:

www.invescoperpetual.co.uk/investmenttrusts

The contents of websites referred to in this document, or accessible from links
within those websites, are not incorporated into, nor do they form part of,
this document.

Contacts:

Andrew Watkins

Tel - 020 7065 4023

Karina Bryant

Tel - 020 7065 3644


                                                                                                                                                                                                                          

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