AN unusual feature of the #71m Murray Ventures' performance over the

past year has been its success in unlisted disposals, which are

traditionally hard to move in a recession. Yesterday's results showed

that sales totalled #15.7m for a #7.5m net gain.

It is a measure of Murray Johnstone's management success that out of a

portfolio of 61 young companies there was only one receivership, though

clearly substantial provisions have been required to reflect difficult

trading conditions.

Five investments made substantial capital gains and three more fair

market values. Successes included Burn Stewart Distillers' listing, the

sale of Clairmont's core business, also Tallent Holdings, and Alexander

Drew. All were above valuation with a 25% uplift overall.

Lack of business confidence has restricted the flow of new proposals,

however, with #8.8m invested in the year against #13.7m previously. But

there is a strong flow of medium-sized regional management buy-outs,

with some at attractive prices.

The trust's net asset value of 286.2p was 6% lower on the year to

end-July, though it had been around 297p earlier this month ahead of the

recent rally. Earnings moved from 12.04p to 12.20p a share.

The final dividend is maintained at 6.90p and covered. But the board

warns that any advance in the current year is likely to be modest, with

the ability of unlisted investments to produce income restricted and a

cautious approach on dividend payments necessary.

That point made, the record is a good one, with 72% dividend growth

over the last five years, which is well above the yield on the All-Share

index. That the going is tough for these smaller companies is well

known, but trust managers highlight overdue customer payments, bad

debts, and the illiquidity of traditional providers of financial

facilities, as among problems affecting recovery strategies. Their own

after-care team has been fully committed with portfolio companies, which

has obviously helped these results.

The listed content has increased from 41% to 47% of assets over the

year. Traditionally holding half in UK smaller and medium companies,

this was cut to just 20% in 1990 anticipating they would be severely

hit. Now that valuations have fallen steadily the trust has restored its

listed exposure to 50%, with the balance in blue chips as a solid anchor

and source of liquidity to fund unlisted deals.

''This has been a record year for profitable disposals of unlisted

investments, despite the dismal economic conditions,'' commented fund

manager Geoff Burns. ''The recession will lead to lower prices of MBOs

and an increased equity demand, and the trust is well placed to benefit

from the recovery.''

Among the 20 largest investments are Crockfords, Stage-Coach, ScotCare

Group, and Burn Stewart Distillers.