Final Results

F&C U.S. Smaller Companies PLC
27 September 2007



Date:       27 September 2007

Contact:    Robert Siddles
            F&C Management Limited
            020 7628 8000



                          F&C US SMALLER COMPANIES PLC
                    Audited Preliminary Statement of Results
                        for the year ended 30 June 2007



HIGHLIGHTS OF RESULTS

  • The net asset value (NAV) per share of the Company rose 5.5% to 336.06p
    compared to an increase of 6.1% in our benchmark, the sterling-adjusted
    Russell 2000 Index and 8.9% in the Standard & Poor's Composite Index,
    adjusted for sterling;
  • The 8.5% fall in the dollar relative to sterling had a significant impact
    in the year;
  • Although slightly behind in the year, the NAV per share performance has
    exceeded its benchmark in eleven of the fourteen years since formation in
    March 1993. Since then, the NAV per share has risen by 247.9%, whereas the
    sterling-adjusted Russell 2000 Index gained 162.9%.



SUMMARY OF RESULTS
                                                                    30 June 2007      30 June 2006           Change

Net asset value                                                          £73.18m           £75.46m            -3.0%

Net asset value per share                                                336.06p           318.52p            +5.5%

Russell 2000 Index (sterling adjusted)                                    415.53            391.81            +6.1%

Share price                                                              300.50p           287.50p            +4.5%

Increase in net asset value per share since
inception on 8 March 1993                                                                                   +247.9%

Increase since 8 March 1993 in the Russell 2000 Index
(sterling adjusted)                                                                                         +162.9%






Extracts from the Chairman's Statement


Dear Shareholder

I am pleased to report a year of further progress for your Company.  The net
asset value (NAV) per share of the Company rose 5.5% to 336.06p. This compared
to an increase of 6.1% in our benchmark, the sterling-adjusted Russell 2000
Index and 8.9% in the sterling-adjusted Standard & Poor's Composite Index.

Although performance fell slightly short of the benchmark this year, over the
last three years performance was strong: NAV per share rose by 37.3%, exceeding
the benchmark by 9.9%. Your Company's NAV performance has exceeded its benchmark
in eleven of the fourteen years since formation in March 1993. Since then, the
NAV per share has risen by 247.9%, whereas the sterling-adjusted Russell 2000
Index gained 162.9%.


Market Review

During the year under review the Russell 2000 smaller company index rose by
15.1% in dollar terms, a significant gain but less than the other major indices
such as the Standard & Poor's Composite Index, which gained 18.4% and the
heavily technology-orientated NASDAQ Composite Index, which advanced by 19.9%.
After seven consecutive years of out-performance, the Russell 2000 lost ground
to the Standard & Poor's Composite Index.

The movement in the US dollar - sterling exchange rate had a significant impact
in the year. The Company's investments are denominated in dollars but are valued
in the portfolio in sterling. The 8.5% fall in the dollar against sterling this
year meant that shareholders' gains were less by a corresponding amount than if
there had been no exchange rate movement. The fall in the dollar relative to
sterling reflected perceptions that interest rates might fall next in the US
whereas they might have further to rise in the UK.

The US stock market advanced steadily during the year suffering only a minor
correction in February. Shares were helped initially by robust economic growth,
a drop in oil prices and a rally in bonds. An additional factor that pushed
equity indices to record levels was a boom in merger and acquisition activity,
especially from private equity buyers. Towards the end of the period, the seeds
were sown for less settled market conditions: firstly, oil prices rebounded and
bonds fell sharply on concerns that inflation would rise further; secondly
losses mounted in the sub-prime mortgage industry. At first, the market advanced
as though investors assumed that this meant interest rates would be cut soon.
These hopes were misplaced and with losses from mortgages mounting, fears of a
credit crunch rose. The implications were a weaker economy and greater
difficulty in financing mergers and acquisitions, a poor combination for an
already extended stock market.

The strongest sector was consumer staples, followed by materials and processing,
which was again one of the best performing sectors, and producer durables. The
worst performing sectors were financial services, other energy, and autos and
transportation.

It was another year when takeover speculation was rife and the market became
focused on a narrow group of commodity-related and infrastructure stocks.
Although these conditions did not suit the Company's longer term, conservative
investment approach, performance nearly matched the benchmark this year.


Discount and Buybacks

The price of the shares rose by 4.5% to 300.5p over the year.  The discount to
NAV per share widened slightly during the year from 9.7% to 10.6% and on 27
September 2007 was 9.9%. The average discount during the year was 11.1%. The
Company bought back some of its own shares during the year.  There were
purchases of 1,917,000 shares at an average discount of 11.7%.  The Board will
continue to apply its policy of buying back shares at appropriate times with a
view to limiting the discount in the longer term to around 10%.


Foreign Currency Hedging Policy and Gearing Policy

It is worth reiterating the Board's policy in relation to hedging and gearing.
Although the Board has the authority to hedge out the £/$ risk for a sterling
based investor, it has not done so to date.

The Company is not currently geared. The Board has the authority to gear the
Company. The Board takes the view that the asset class in which it invests is
sufficiently risky that it does not wish to compound this by adding risk by
borrowing. The Board believes that most of the Company's shareholders are
conservative long-term investors and that this policy suits their needs.


VAT Review

The European Court of Justice ruled in June that Investment Trusts should be
regarded as Special Investment Funds. This decision has been referred to the UK
Authorities and could result in your Company becoming exempt from paying VAT on
its Management and Performance fees in the near future. The Board is liaising
closely with its Manager and the AIC on the issue of recovering VAT paid on such
fees in the past, should they be deemed recoverable.


Directors

David Hunter decided to retire from the Board effective 31 March 2007, having
reached the age of 70. David had been on the Board since 1994, shortly after the
Company's formation, and was the Senior Independent Director for many years.
David's commitment to the Company and enormous experience as a practising
investment manager were of great value to the Board and me.

I am pleased that Clive Parritt agreed to join the Board in January. He brings a
wealth of financial and commercial experience. He is a former chairman of
accounting firm Baker Tilly, a member of the Council of the Institute of
Chartered Accountants in England & Wales and a member of its Board. He is also a
non-executive director of several publicly quoted companies including Baronsmead
AIM VCT.


Electronic Communications

We are proposing resolutions at the Annual General Meeting, which include the
future use of communications with shareholders both in electronic form and via
the F&C website. We expect these new communication arrangements to begin during
2008. We will write to all shareholders in due course to allow you to elect to
continue to receive hard copy documents in future.


AGM

The Annual General Meeting will be held at 12.30pm, Friday 23 November 2007.
The meeting will be held in the offices of F&C Management Limited at Exchange
House, Primrose Street, London EC2A 2NY.


Prospects

Conditions in the equity market have deteriorated since the end of June as
concerns have mounted not only about economic growth but also the stresses
caused in the financial system resulting from losses in sub-prime loans. The
duration of the impact of financial crises such as this is difficult to
forecast: it may be relatively short, as happened in 1998 or may persist for
some time, as was the case in 1995. Looking beyond this year there are good
prospects of recovery in the growth rate of the US economy in 2008 or 2009 and
this should provide a better backdrop for the equity market. The Board believes
that the Company's risk averse approach will continue to benefit shareholders
over the longer term.





Gordon Grender
September 2007



BALANCE SHEET

at 30 June                                                              2007                                       2006
                                                 £'000s               £'000s               £'000s                £'000s
Fixed assets
Listed investments                                                    71,472                                     73,081
Current assets
Debtors                                              52                                        57
Cash at bank and short-term
    deposits
                                                  2,128                                     2,664
                                                  2,180                                     2,721
Creditors: amounts falling due
   within one year                                (475)                                     (338)
Net current assets                                                     1,705                                      2,383
Net assets                                                            73,177                                     75,464
Capital and reserves
Called up share capital                                                5,444                                      5,923
Share premium account                             2,468                                     2,468
Non-distributable reserve                           841                                       841
Capital redemption reserve                        7,908                                     7,429
Special reserve                                       -                                     4,235
Capital reserves                                 57,635                                    55,781
Revenue reserve                                 (1,119)                                   (1,213)


                                                                      67,733                                     69,541
Total equity shareholders'
   funds                                                              73,177                                     75,464
Net asset value per ordinary
   Share - pence                                                      336.06                                     318.52





INCOME STATEMENT

for the year ended 30 June                                                     2007                                2006
                                                       Revenue    Capital    Total+       Revenue     Capital    Total+
                                                        £'000s     £'000s    £'000s        £'000s      £'000s    £'000s

Gains on investments                                         -      3,214     3,214             -       5,106     5,106
Exchange losses                                              -      (179)     (179)             -        (37)      (37)
Income                                                   1,032          -     1,032         1,128           -     1,128
Management fee                                           (585)          -     (585)         (621)           -     (621)
Other expenses                                           (209)        (6)     (215)         (193)         (8)     (201)
Net return before finance costs and taxation               238      3,029     3,267           314       5,061     5,375
Interest payable and similar charges                         -          -         -             -           -         -
Return on ordinary activities before taxation              238      3,029     3,267           314       5,061     5,375
Taxation on ordinary activities                          (144)          -     (144)         (150)           -     (150)
Return attributable to equity shareholders                  94      3,029     3,123           164       5,061     5,225

Return per ordinary share - pence                         0.41      13.37     13.78          0.69       21.26     21.95

+The total column of this statement is the profit and loss account of the
Company.

All revenue and capital items in the above statement derive from continuing
operations.

A statement of total recognised gains and losses is not required as all gains
and losses of the Company have been reflected in the above statement.





RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

for the year ended           
30 June 2007                 Called    
                                 up    Share           Non-     Capital                                        Total
                              share  premium  distributable  redemption  Special   Capital    Revenue  shareholders'
                            capital  account        reserve     reserve  reserve  reserves    reserve          Funds
                             £'000s   £'000s         £'000s      £'000s   £'000s    £'000s     £'000s         £'000s
Balance at 30 June
    2006                      5,923    2,468            841       7,429    4,235    55,781    (1,213)         75,464
Movements during the
    year ended 30 June
    2007:
Shares purchased by
    the Company               (479)        -              -         479  (4,235)   (1,175)          -        (5,410)
Return attributable to
    equity shareholders           -        -              -           -        -     3,029         94          3,123

Balance at 30 June
  2007                        5,444    2,468            841       7,908        -    57,635    (1,119)         73,177



for the year ended           Called 
30 June 2006                     up    Share           Non-     Capital                                        Total
                              share  premium  distributable  redemption  Special   Capital    Revenue  shareholders'
                            capital  account        reserve     reserve  reserve  reserves    reserve          Funds
                             £'000s   £'000s         £'000s      £'000s   £'000s    £'000s     £'000s         £'000s
Balance at 30 June
   2005                       6,026    2,468            841       7,326    5,346    50,720    (1,377)         71,350
Movements during the
    year ended 30 June
    2006:
Shares purchased by
    the Company               (103)        -              -         103  (1,111)         -          -        (1,111)
Return attributable to
    equity shareholders           -        -              -           -        -     5,061        164          5,225
Balance at 30 June
    2006                      5,923    2,468            841       7,429    4,235    55,781    (1,213)         75,464





CASH FLOW STATEMENT

for the year ended 30 June                                                     2007                               2006
                                                            £'000s           £'000s            £'000s           £'000s
Operating activities
Investment income received                                     969                                993
Interest received                                               50                                 36
Fee paid to management company                               (589)                              (743)
Fees paid to Directors                                        (71)                              (103)
Other cash payments                                          (144)                              (120)
Net cash inflow from operating activities                                       215                                 63
Taxation
Overseas tax paid                                            (145)                              (149)
Total tax paid                                                                (145)                              (149)
Financial investment
Purchases of investments                                  (17,973)                           (26,995)
Sales of investments                                        22,886                             29,517
Other capital expenses                                         (5)                                (8)
Net cash inflow from financial investment                                     4,908                              2,514
Net cash inflow before use of liquid
   resources and financing                                                    4,978                              2,428
Management of liquid resources
Decrease in short-term deposits                                                   -                                 21
Financing
Purchase of ordinary shares                                (5,335)                            (1,204)
Net cash outflow from financing                                             (5,335)                            (1,204)
(Decrease)/increase in cash                                                   (357)                              1,245





Notes

1    Dividend
The directors do not propose to pay a final dividend.


2    Return per share
                                                        Year ended                       Year ended
                                                      30 June 2007                     30 June 2006

                                                            £'000s                           £'000s
Total return                                                 3,123                            5,225
Revenue return                                                  94                              164
Capital return                                               3,029                            5,061
Weighted average
ordinary shares in
issue                                                   22,666,157                       23,803,464




3    Share capital

During the year 1,917,000 ordinary shares were purchased for cancellation at a
total cost of £5,410,000.  Since the year end no ordinary shares have been
purchased.


4    Results

The above financial information comprises non-statutory accounts within the
meaning of section 240 of the Companies Act 1985. The financial information for
the year ended 30 June 2006 has been extracted from published accounts for the
year ended 30 June 2006 that have been delivered to the Registrar of Companies
and on which the reports of the auditors have been unqualified.

The audited Report and Accounts will be posted to shareholders in early October
2007. Copies may be obtained, during normal business hours from the registered
office of the Company, Exchange House, Primrose Street, London EC2A  2NY.

The Annual General Meeting will be held at the registered office of the Company,
Exchange House, Primrose Street, London EC2A 2NY on Friday 23 November 2007 at
12.30 pm.



By order of the Board
F&C Management Limited, Secretary
Exchange House, Primrose Street, London EC2A 2NY
27 September 2007





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