RNS Number:6561K
Royal London UK Eqty&Income Tst PLC
01 May 2003


ROYAL LONDON UK EQUITY & INCOME TRUST PLC

Preliminary Announcement of unaudited interim results for the half year ended 28
February 2003

Chairman's Statement


I regret to have to report that the last six months have again been particularly
difficult for investors. Equity markets world-wide have been both weak and
volatile and whilst your Company's equity portfolio has performed relatively
well against its benchmark, this is of little comfort to shareholders who have
seen absolute falls reducing total resources from #124.4 million to #86.3
million, although #20 million is accounted for by repayment of debt.

The background against which the Company has been operating during the six
months under review has been one of continuing deterioration in the economic
environment throughout the world.

In the United States the improvement in corporate profitability has been used to
repay debt, but there are few signs of a meaningful recovery in business
sentiment. Expectations of growth for Europe are still declining, with the
German economy in particular suffering from the effects of weak global trends
and the subdued nature of capital expenditure in the United States. In the
United Kingdom economic data has been relatively poor recently and the signs are
that trading conditions are likely to remain tough, particularly for the
manufacturing sectors.

It looks as though base rates will remain at, or around, current levels for some
time. In addition to these economic factors, world markets have had to cope with
the threat, and ultimate reality, of war with Iraq.

Against this background, the Company's equities have performed satisfactorily -
the portfolio being biased towards the more defensive higher yielding stocks,
which have performed best in an uncertain and volatile market. The best
performing sectors include mining, telecommunications, pharmaceuticals,
utilities and tobacco. Exposure to the more cyclical areas of the markets was
limited with, for example, a significant underweight position in media.

The bond portfolio had a rather mixed six months, but benefited from a
substantial weighting in high yielding secured debt. The overall yield on the
bond portfolio is approximately three percentage points above gilt yields.

The income portfolio continued to perform poorly. Many of these investments are
now trading at negligible value, reflecting the impact of the severe falls in
the equity market exacerbated by the high level of structural gearing within the
funds. The overall exposure to highly geared investment companies has now fallen
to under 5% and it is not envisaged that there will be a quick recovery in
values.

The structure of your Company has not changed greatly since I last wrote to you
in November, with bank debt remaining at #50 million. Your Board is still unable
to declare or pay dividends due to your Company's inability to meet the
requirements of Section 265 of the Companies Act 1985. The zero dividend
preference ('ZDP') share buy-back has continued, although on a reduced level
recently, due to weak markets and bank covenant restrictions. At the time of
writing, 6,575,900 ZDP shares have been purchased for cancellation, enhancing
the Group's net asset values by #3,426,000.

Against this background the Group's total assets, less current liabilities, fell
30.6% during the period under review.
                                                                                                       #'000
NAV attributable to ordinary shareholders                                                                nil
NAV attributable to annuity shareholders                                                              21,106
NAV attributable to ZDP shareholders                                                                  15,168

At 28 February 2003 the breakdown of the Group's assets was as follows:
                                                                    Market Value
                                                                           #'000                           %
UK Equity Portfolio                                                       53,982                        62.6
Income Portfolio                                                           3,834                         4.4
UK Bond Portfolio                                                         26,477                        30.7
Cash (Net Liquidity)                                                       1,981                         2.3
                                                                          86,274                       100.0

Whilst the outlook for the markets continues to be very uncertain, and
volatility remains very high, your Manager favours UK equities as an asset class
as they offer comparatively modest valuations and good earning potential. Your
Board agrees with this view, reflected in your Company's asset allocation, and
whilst we are disappointed with recent returns, your Board continues to be fully
supportive of your Manager's efforts, and hopes that your Company will be in a
position to benefit from an upturn in the markets in which it is invested.


Jonathan Carr
Chairman

1 May 2003



Consolidated Statement of Total Return (unaudited)
(incorporating the revenue account)
for the half year ended 28 February 2003

                                                                                                                   
                                           (Unaudited)                      (Unaudited)                      (Audited)
                 Notes                Half year ended       Period from 31 August 2001     Period from 31 August 2001
                                      28 February 2003              To 28 February 2002              to 31 August 2002
                           Revenue   Capital     Total      Revenue   Capital     Total    Revenue   Capital     Total
                             #'000     #'000     #'000        #'000     #'000     #'000      #'000     #'000     #'000

  Losses from                    -  (13,223)  (13,223)            -  (15,870)  (15,870)          -  (60,816)  (60,816)
  investments                                                                                                         

  Income from                2,424         -     2,424        5,834         -     5,834     10,753         -    10,753
  fixed asset                                                                                                         
  investments                                                                                                         

  Other                         52         -        52          347         -       347        408         -       408
  interest                --------   -------  --------     --------   -------   -------   --------  --------  --------
  receivable                                                                                                          
  and similar                                                                                                         
  income                                                                                                              

  Gross revenue              2,476  (13,223)  (10,747)        6,181  (15,870)   (9,689)     11,161  (60,816)  (49,655)
  and capital                                                                                                         
  losses                                                                                                              

  Management fee             (208)     (312)     (520)        (405)     (608)   (1,013)      (738)   (1,108)   (1,846)

  Other                      (186)         -     (186)        (159)         -     (159)      (372)         -     (372)
  administrative           -------   -------   -------      -------   -------   -------   --------  --------  --------
  expenses                                                                                                            

  Net                        2,082  (13,535)  (11,453)        5,617  (16,478)  (10,861)     10,051  (61,924)  (51,873)
  return/(loss)                                                                                                       
  on ordinary                                                                                                         
  activities                                                                                                          
  before                                                                                                              
  interest                                                                                                            
  payable and                                                                                                         
  taxation                                                                                                            

  Interest                 (1,120)   (1,680)   (2,800)        (922)   (1,382)   (2,304)    (2,120)   (3,179)   (5,299)
  payable                  -------   -------   -------      -------   -------   -------    -------   -------   -------

  Net                          962  (15,215)  (14,253)        4,695  (17,860)  (13,165)      7,931  (65,103)  (57,172)
  return/(loss)                                                                                                       
  on ordinary                                                                                                         
  activities                                                                                                          
  before                                                                                                              
  taxation                                                                                                            

  Taxation on                    -         -         -        (716)       590     (126)      (919)       919         -
  net                      -------   -------   -------      -------   -------   -------    -------   -------   -------
  return/(loss)                                                                                                       
  on ordinary                                                                                                         
  activities                                                                                                          

  Net                          962  (15,215)  (14,253)        3,979  (17,270)  (13,291)      7,012  (64,184)  (57,172)
  return/(loss)                                                                                                       
  on ordinary                                                                                                         
  activities                                                                                                          
  after taxation                                                                                                      
  Dividends and                                                                                                       
  other                                                                                                               
  appropriations:                                                                                                       
  Minority                       -     (741)     (741)            -     (782)     (782)          -   (1,679)   (1,679)
  interest:                                                                                                           
  provision for                                                                                                       
  ZDP shares                                                                                                          
  (in                                                                                                                 
  subsidiary)                                                                                                         

  Gain on                        -     3,426     3,426            -         -         -          -         -         -
  redemption of                                                                                                       
  ZDP shares                                                                                                          
  Dividends on                                                                                                        
  annuity                                                                                                             
  shares:                                                                                                             

  First interim                  -         -         -        (537)         -     (537)      (537)         -     (537)
  2002: 1.79p                                                                                                         

  Second                         -         -         -        (638)         -     (638)      (638)         -     (638)
  interim 2002:                                                                                                       
  2.125p                                                                                                              

  Appropriation            (1,275)         -   (1,275)            -         -         -    (1,375)         -   (1,375)
  of dividend             --------  --------  --------     --------  --------  --------   --------  --------  --------
  attributable                                                                                                        
  to annuity                                                                                                          
  shareholders                                                                                                        
                           (1,275)     2,685     1,410      (1,175)     (782)   (1,957)    (2,550)   (1,679)   (4,229)
                          --------  --------   -------      -------  --------  --------   --------  --------  --------

  Net                        (313)  (12,530)  (12,843)        2,804  (18,052)  (15,248)      4,462  (65,863)  (61,401)
  (loss)/return                                                                                                       
  and capital                                                                                                         
  loss                                                                                                                
  attributable                                                                                                        
  to ordinary                                                                                                         
  shares                                                                                                              
  Dividends on                                                                                                        
  ordinary                                                                                                            
  shares:                                                                                                             

  First Interim                  -         -         -      (1,400)         -   (1,400)    (1,400)         -   (1,400)
  2002: 2.0p                                                                                                          

  Second                         -         -         -      (1,400)         -   (1,400)    (1,400)         -   (1,400)
  interim 2002:            -------   -------   -------      -------   -------   -------    -------   -------   -------
  2.0p                                                                                                                
                                 -         -         -      (2,800)         -   (2,800)    (2,800)         -   (2,800)
                           -------   -------   -------      -------   -------   -------    -------   -------   -------

  Transfer                   (313)  (12,530)  (12,843)            4  (18,052)  (18,048)      1,662  (65,863)  (64,201)
  (from)/to                 ======    ======    ======       ======    ======    ======     ======    ======    ======
  reserves                                                                                                            
  (Loss)/return                                                                                                       
  per share                                                                                                           
  (FRS 4 basis):                                                                                                      

  Ordinary           1     (0.45p)  (17.90p)  (18.35p)        4.01p  (25.79p)  (21.78p)      6.37p  (94.09p)  (87.72p)

  ZDP (in            1           -     4.59p     4.59p            -     3.91p     3.91p          -     8.40p     8.40p
  subsidiary)                                                                                                         

  Annuity            1       4.25p         -     4.25p        3.92p         -     3.92p      8.50p         -     8.50p


The revenue column of this statement represents the revenue account of the Group.
Consolidated Balance Sheet (unaudited)
at 28 February 2003

                                                                                                                      
                                                                       (Unaudited)        (Unaudited)        (Audited)
                                                                  28 February 2003   28 February 2002   31 August 2002
                                                          Notes              #'000              #'000            #'000
  Fixed asset investments                                                                                             
  Listed investments                                                        84,293            178,402          112,751
                                                                      ------------       ------------     ------------
  Current assets                                                                                                      
  Debtors                                                                      863              2,492            1,365
  Cash at bank and short term deposits                                       2,041              2,219           12,105
                                                                      ------------       ------------     ------------
                                                                             2,904              4,711           13,470
  Creditors: amounts falling due within one year                             (923)            (4,879)          (1,868)
                                                                      ------------       ------------     ------------
  Net current assets/(liabilities)                                           1,981              (168)           11,602
                                                                      ------------       ------------     ------------
  Total assets less current liabilities                                     86,274            178,234          124,353
  Creditors: amounts falling due after more than one                                                                  
  year                                                                                                                
  Bank loan                                                               (50,000)           (80,000)         (70,000)
                                                                      ------------       ------------     ------------
  Total net assets                                                          36,274             98,234           54,353
                                                                           =======            =======          =======
  Share capital and reserves                                                                                          
  Called up share capital                                                    1,000              1,000            1,000
  Share premium                                                             94,500             94,500           94,500
  Capital reserve - realised                                               (8,253)              (773)          (4,583)
  Capital reserve - unrealised                                            (70,140)           (17,279)         (61,280)
  Revenue reserve                                                            3,999                  4            3,037
                                                                      ------------       ------------     ------------
  Total shareholders' funds                                                 21,106             77,452           32,674
  Minority interest - ZDP shares                                            15,168             20,782           21,679
                                                                      ------------       ------------     ------------
  Shareholders' funds                                                       36,274             98,234           54,353
                                                                           =======            =======          =======
  Attributable on an Articles basis:                                                                                  
  Annuity shares - Non-equity                                               21,106             22,500           23,875
  Ordinary shares - Equity                                                       -             54,952            8,799
                                                                      ------------       ------------     ------------
  Total                                                                     21,106             77,452           32,674
                                                                           =======            =======          =======
  Net asset value per share on an Articles basis:                                                                     
  Annuity - Non-equity                                        2             70.35p             75.00p           79.58p
  Ordinary - Equity                                           2                  -             78.50p           12.57p
  ZDP (in subsidiary)                                         2            112.99p            103.91p          108.40p
  Attributable on an FRS 4 basis:                                                                                     
  Annuity shares - Non-equity                                               25,150             22,500           23,875
  Ordinary shares - Equity                                                 (4,044)             54,952            8,799
                                                                      ------------       ------------     ------------
  Total                                                                     21,106             77,452           32,764
                                                                           =======            =======          =======
  Net asset value per share on an FRS 4 basis:                                                                        
  Annuity - Non-equity                                        2             83.83p             75.00p           79.58p
  Ordinary - Equity                                           2            (5.78p)             78.50p           12.57p
  ZDP (in subsidiary)                                         2            112.99p            103.91p          108.40p


Approved by the Board of Directors on 1 May 2003
Jonathan Carr
Chairman


Consolidated Cash Flow Statement (unaudited)
for the half year ended 28 February 2003

                                                                                                                      
                                             (Unaudited)                   (Unaudited)                       (Audited)
                                         Half year ended    Period from 31 August 2001   Period from 31 August 2001 to
                                        28 February 2003           to 28 February 2002                  31 August 2002
                      Notes         #'000          #'000          #'000          #'000           #'000           #'000
                                                                                                                     
  Net cash inflow                                  2,110                         3,307                           7,915
  from operating                                                                                                      
  activities                                                                                                          
  Servicing of                                                                                                        
  finance                                                                                                             

  Interest paid                   (3,140)                       (1,104)                        (4,211)                

  Dividend on                           -  -------------          (537)  -------------         (1,175)  --------------
  non-equity shares         -------------                 -------------              -  --------------                
                                                 (3,140)                       (1,641)                         (5,386)
                                           -------------                 -------------                  --------------
  Financial                                                                                                           
  Investment                                                                                                          
  Acquisition of                 (10,007)                     (306,013)                      (326,140)                
  investments                                                                                                         

  Sale of                          25,242  -------------        111,580  -------------         152,573  --------------
  investments               -------------                 -------------              -  --------------                

  Net cash                                        15,235                     (194,433)                       (173,567)
  inflow/(outflow)                         -------------                 -------------                  --------------
  from financial                                             
  investment                                                                                                          

  Equity dividends                                     -                       (1,400)                         (2,800)
  paid                                      ------------                  ------------                    ------------
  Net cash                                        14,205                     (194,167)                       (173,838)
  inflow/(outflow)                                                                                                    
  before financing                                                                                                    

  Financing                                                                                                           
  Gross proceeds                        -                       100,000                        100,000                
  from issue of                                                                                                       
  ordinary and                                                                                                        
  annuity shares                                                                                                      

  Purchase of ZDP                 (3,826)                             -                                               
  shares in                                                                                                           
  subsidiary                                                                                                          

  Gross proceeds                        -                        20,000                         20,000                
  from issue of ZDP                                                                                                   
  shares by                                                                                                           
  subsidiary                                                                                                          

  Issue expenses                    (443)                       (3,614)                        (4,057)                
  paid in respect                                                                                                     
  of share issues                                                                                                     

  Loan draw down                        -                        80,000                         80,000                
  Loan repayment                 (20,000)  -------------              -  -------------        (10,000)  --------------
                            -------------                 -------------                 --------------                
                                                                                
  Net cash                                      (24,269)                       196,386                         185,943
  (outflow)/inflow                         -------------                 -------------                  --------------
  from financing                                                          

  (Decrease)/increase                           (10,064)                         2,219                          12,105
  in cash                                       ========                      ========                        ========
  Reconciliation of                                                                                                   
  net cash                                                                                                            
  inflow/(outflow)                                                                                                    
  to movement in                                                                                                      
  net debt                                                                                                            

  (Decrease)/increase                           (10,064)                         2,219                          12,105
  in cash as above                                                                                                  
  Net cash                                        20,000                      (80,000)                        (70,000)
  outflow/(inflow)                                                                                                    
  from loans                                                                                                          

  Net debt at                                   (57,895)                             -                               -
  beginning of the                              ========                      ========                        ========
  period                                                                                                              

  Net debt at end                               (47,959)                      (77,781)                        (57,895)
  of the period                                 ========                      ========                        ========


NOTES TO THE ACCOUNTS



1. (Loss)/return per share

The revenue loss per ordinary share is based on the net revenue loss for the
half year ended 28 February 2003 of #313,000 (period ended 28 February 2002:
gains #2,804,000; period ended 31 August 2002: #4,462,000) and on 70,000,000
ordinary shares (period ended 28 February 2002 and period ended 31 August 2002:
70,000,000), being the weighted average number of ordinary shares in issue
during the half year ended 28 February 2003.

The capital loss per ordinary share is based on the net capital losses, after
deduction of appropriations attributable to Zero Dividend Preference ('ZDP')
shares, of #12,530,000 (period ended 28 February 2002: #18,052,000; period ended
31 August 2002: #65,863,000) and on 70,000,000 ordinary shares (period ended 28
February 2002 and period ended 31 August 2002: 70,000,000), being the weighted
average number of ordinary shares in issue during the half year ended 28
February 2003.

The capital return per ZDP share in the subsidiary is based on appropriations of
#741,000 (period ended 28 February 2002: #782,000; period ended 31 August 2002:
#1,679,000), and on 16,146,622 ZDP shares (period ended 28 February 2002; period
ended 31 August 2002: 20,000,000), being the weighted average number of ZDP
shares in issue during the half year ended 28 February 2003.

The revenue return per annuity share is based on appropriations of #1,275,000
(period ended 28 February 2002: #1,175,000; period ended 31 August 2002:
#2,550,000) and on 30,000,000 (period ended 28 February 2002 and period ended 31
August 2002: 30,000,000) annuity shares, being the weighted average number of
annuity shares in issue during the half year ended 28 February 2003.



2. Net asset value per share on an Articles basis

The net asset value per annuity share is based on net annuity shareholders'
funds of #21,106,000 (28 February 2002: #22,500,000; 31 August 2002:
#23,875,000) and on 30,000,000 annuity shares being the number of annuity shares
in issue at the end of each period.

The net asset value per ordinary share is based on net ordinary shareholders'
funds of #nil (28 February 2002: #54,952,000; 31 August 2002: #8,799,000) and on
70,000,000 ordinary shares, being the number of ordinary shares in issue at the
end of each period.

The net asset value per ZDP share is based on net ZDP shareholders' funds of
#15,168,000 (28 February 2002: #20,782,000; 31 August 2002: #21,679,000) and on
13,424,100 (2002: 20,000,000) ZDP shares, being the number of ZDP shares in
issue at 28 February 2003.

Net asset value per share on an FRS 4 basis

The net asset value per annuity share is based on net annuity shareholders'
funds of #25,150,000 (28 February 2002: #22,500,000; 31 August 2002:
#23,875,000) and on 30,000,000 annuity shares, being the number of annuity
shares in issue at the end of each period.

The net asset value per ordinary share is based on negative net ordinary
shareholders' funds of #4,044,000 (28 February 2002: positive net assets of
#54,952,000; 31 August 2002: positive net assets of #8,799,000) and on
70,000,000 ordinary shares, being the number of ordinary shares in issue at the
end of each period.

The net asset value per ZDP share is based on net ZDP shareholders' funds of
#15,168,000 (28 February 2002: #20,782,000; 31 August 2002: #21,679,000) and on
13,424,100 (2002: 20,000,000) ZDP shares, being the number of ZDP shares in
issue at 28 February 2003.



3. 2003 interim accounts

The figures and financial information for the period ended 28 February 2003 do
not constitute statutory accounts under Section 240 of the Companies Act 1985.


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