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29 May 2007

Results for the six months to 30 April 2007

• NAV rises by 7.7%, ahead of global and UK comparator indices
• Since January 2004 NAV has risen by 59.0%, also ahead of the comparator indices
• Stock price ends period at all-time high
• Performance reflects continued good results from equity portfolio
• Interim dividend per ordinary stock unit increased by 3.6% to 4.30p

The Scottish Investment Trust PLC invests internationally and is independently managed. It is categorised as a global growth trust by the Association of Investment Companies.

Commenting on the results, Chairman, Douglas McDougall said:-

"In the six months to 30 April 2007, the net asset value per ordinary stock unit (NAV) rose by 7.7% (with borrowings at par), ahead of the company's principal comparator indices – the FTSE All-World Index^TM (+6.5%) and the UK FTSE All-Share Index^TM (+6.9%). Over the period, the company's stock price rose by 10.5% to an all-time closing high of 498.5p, reflecting the increase in NAV and a further narrowing of the discount to 8.4% (with borrowings at market value).

"Under accounting standards introduced in the year to October 2006, the final and special dividends for that year, totalling 6.57p per stock unit, are now deducted from the NAV when the dividends are paid, in our case in February 2007. This has had the impact of reducing the NAV performance at the 2007 interim stage by 1.2%. Nevertheless, in spite of this change, the NAV performance is ahead of both of the company's principal comparator indices.

"Since the introduction of the current investment approach in 2004, the NAV (with borrowings at par) has performed strongly and since 31 January 2004 has risen by 59.0% compared with the 41.3% capital return from the All-World Index and 53.4% from the UK All-Share Index.

"World equity markets made steady progress over the year against a backdrop of solid growth around the world, albeit with signs of a slowdown in the US. Most of the gains made in the period between November and late February were unwound in a subsequent brief period of volatility and heightened risk-aversion sparked first, by concerns over the buoyant domestic Chinese equity market and second, by the possibility of recession in the US economy. However, investors quickly put these concerns and others, such as the US housing market, aside and markets recovered to end the period in many cases at or near all-time highs.

"Regional sterling returns were mixed with the more mature regions – Japan, North America and the UK – lagging by a wide margin the higher growth, emerging market regions of the Middle East, Africa, Latin America and Asia Pacific. Europe (ex UK) was the one exception as it also performed strongly. Sector returns were in a narrow range with Basic Materials and Utilities leading by a slim margin.

"The NAV performance reflected a further period of good stock selection across the market with the global equity portfolio matching or beating the All-World Index in nine of its ten major industry groups. The largest contributions came from Consumer Services and Industrials while the underperformance was in Basic Materials where we were relatively underexposed. A small benefit from gearing and buybacks exceeded interest and expenses charged to capital.

"The global equity portfolio appreciated by £65.4m over the six months. Net disposals of £33.1m were made to finance stock buybacks of £15.2m and achieve a reduction in gearing to 101.5% from the year end level of 104.1%. Listed equities were reduced by £24.3m and unlisted by £8.8m.

"Over the period, we added £37.2m to listed North American holdings as we rebuilt our oil industry investments there, with a bias to oil service companies, as well as boosting telecoms and healthcare exposure. This was financed by reductions in listed investments in Europe (ex UK) of £20.5m and the UK of £40.2m – two regions which have performed much better than the US in recent years. On an industry sector basis, we increased exposure to Industrials, Telecommunications and Oil & Gas funded by a reduced emphasis on Financials and Utilities.

"The largest gains were made in Banks, Unlisteds and Automobiles & Parts. In the last sector, we benefited from strong performances by Italian vehicle manufacturer Fiat and German tyre and brake specialist Continental. The largest stock gain was generated by UK outsourcing group Serco. Other significant gains were made by Australian healthcare group CSL, Scottish Power ( UK ), Apax Europe V-B ( UK ) and Chinese property group Guangzhou R&F. Our oil services investments made good contributions.

"The portfolio received an unprecedented number of bids for holdings as merger and acquisition activity continued apace, to the considerable benefit of performance. The number of listed portfolio holdings has been reduced from 117 to 112.

"Earnings per stock unit increased in comparison to the 2006 interim period by 24.7% from 4.25p to 5.30p owing to strong dividend growth from holdings and the combined effects of the tender offer in 2006 and subsequent buybacks.

"At the AGM in January stockholders voted to renew the company's authority to repurchase its own stock for cancellation. These powers are used as part of the stock buyback scheme which is intended to maintain the company's stock price discount to NAV at 9% or lower (with borrowings taken at market value). Over the first half of the year, the company repurchased for cancellation 3.2m stock units (utilising 1.90 % of the current 14.99% authority) at an average discount of 9.5% and a cost of £15.2m inclusive of dealing expenses. The average daily discount over the first half of the year was 9.2%.

"The board has declared an interim dividend of 4.30p, an increase of 3.6% on 2006, which will be payable on 16 July 2007."

For further information, please contact:- John Kennedy, Manager 0131 225 7781

The Maitland Consultancy 020 7379 5151

* Includes actuarial gain of £269,000