Interim Results

Ivory & Sime UK Smlr.Co's Trust PLC
2 November 2000


INTERIM RESULTS

Investment Objective

Ivory & Sime UK Smaller Companies Trust aims to achieve capital growth by
investing primarily in a portfolio of smaller companies quoted on the London
Stock Exchange.

Interim results for the six months ended 30 September 2000

* Reporting season provides encouragement for the second half prospects.

* Debt facilities fully utilised.

* Share buy-back powers now in place.

Results   Over the six months to 30 September 2000, the fully diluted net
asset value of the Company fell by 5.7%.  This compares with a rise of 1.8% in
the FTSE SmallCap (ex Investment Companies) Index over the same period.  Over
the twelve months to 30 September 2000 the equivalent figures were 48.2% and
26.8% respectively.

The headline figures for the six month period mask a number of positive
developments across the portfolio.  A broadly based recovery in semiconductor
markets meant that Eurodis Electron was the Company's best performing holding
over the period.  Hitachi Credit continued its trend of consistent profit
delivery.  Shanks Group' the waste management operator, added a number of
innovative technologies from its latest Dutch acquisition. 

The start of the period witnessed a sharp correction in the prices of
technology stocks.  Our stocks were caught in the general melee.  In the
calmer conditions prevailing over the summer the market showed far greater
selectivity and the prices of better quality stocks recovered much of the lost
ground.  Encouragingly, this has resulted in the Company's performance being
markedly stronger in the second three months.

There were individual disappointments - most notably Scotia Holdings whose
flagship drug, Foscan, failed to gain FDA approval and Headlam Group, which
experienced significant competitive pressure in its fabrics division.

Earnings and Dividends  Group earnings per share were 3.7 pence per ordinary
share in respect of the six months ended 30 September 2000 (1999 - 3.3 pence).
 The Board has declared an unchanged interim dividend of 1.0 pence per
ordinary share, payable on 4 January 2001 to shareholders on the register on 1
December 2000.

 Portfolio   The volatility in the share prices of high technology stocks is
indicative of the difficulties that investors face in trying to value such
young companies.  Historic reference points do not yet exist. Technology
stocks are not fundamentally different from any other business. Successful
companies will possess three critical attributes - they must confer a
demonstrable competitive advantage on their customer base, have a management
team capable of configuring the business to handle the challenges of their
operating environment and, crucially, the financial flexibility to allow their
business plan to bear fruit.

The Managers have deliberately held a small number of stocks that they believe
fulfil the above criteria.  Regular updates with company management indicate
that, in each case, business momentum remains strong.  The Company's largest
holding, Autonomy, was subject to market volatility yet managed to outperform
the benchmark because it was able to show tremendous growth in its core
activities. The Managers added one new technology holding, iSOFT, which
specialises in the design and installation of software for the healthcare
sector. The shares stood at a premium of over 70% to its flotation price at 30
September. Whilst volatility of this nature is unwelcome, the expected return
profile of these stocks encourages the managers to remain committed to an
overweight position in technology.

The gyrations within the technology sector have grabbed the headlines and, in
doing so, obscured many of the positive developments within other areas of the
economy. The Company has increased its exposure to stocks with strong
fundamental growth prospects but whose share prices were overlooked during the
market's fixation with technology companies. Notable examples include Britt
Allcroft, Esporta and Taylor and Francis.

Shareholder Value    At the AGM in June the Board took powers to buy back
shares.  The Board proposes to use these buy-back powers selectively at levels
of discount that permit a material contribution to be made to the net asset
value per share. The Managers continued their initiatives of marketing the
Company to potential new purchasers.  The Board welcomes new products such as
the Twenty20 wrapper for IFAs, which incorporates the Company's shares. The
Board believes that a combination of good investment performance, proactive
marketing and new product launches will help narrow the discount.

A further 25,000 warrants were bought in for cancellation, prior to the final
exercise of warrants.  During August the last warrant exercise was concluded
and the Company issued a further 802,445 new ordinary shares. 

Borrowings  The Managers have fully utilised the debt facilities available to
them.  The rise in the Company's asset base means that the gearing level has
fallen to 117%. When the borrowing facilities were initially negotiated they
represented a potential gearing level of 125%.  The Board believes that it is
appropriate to re-instate the original level of gearing. 
 Outlook  Notwithstanding any macro-economic concerns principally relating to
the clear slowing of the rate of growth in the US economy, the environment for
profit growth amongst small companies is robust.  There is a clear polarity in
share price performance between those companies that have a distinct product
or service offering and those that merely follow trends or are at the mercy of
factors outwith their control. The Board believes that a focused portfolio
based on well-defined stock picking methodologies will allow shareholders to
exploit fully the wide range of opportunities present in today's business
environment.


For further information contact:


Stephen Grant/Keith Hannay
Friends Ivory & Sime plc : tel. [phone]



 Group Balance Sheet (Unaudited)

                                            As at         As at        As at 
                                          30.9.00       30.9.99       31.3.00
                                          PDS'000       PDS'000       PDS'000
                     
Fixed Assets                     
Investments                                83,509        52,630        81,474
Net current (liabilities)/assets          (4,646)         2,336         1,078
                                        ---------     ---------     ---------
                                           78,863        54,966        82,552
                     
Long term borrowings                      (7,000)       (7,000)       (7,000)
                                        ---------     ---------     ---------
                                           71,863        47,966        75,552
                                        ---------     ---------     ---------
                     
Equity Shareholders' funds                 71,863        47,966        75,552
                     
Net asset value per ordinary share                     
       - Undiluted                        328.59p       227.67p       358.61p
       - Fully-diluted                        n/a       221.67p       348.58p
       - Diluted (FRS 14)                     n/a       222.74p       349.68p


 
Group Statement Of Total Return (Unaudited)
(Incorporating the Revenue Account)
For the Six Months Ended 30 September 2000

                                                    Six Months ended
                                                   30 September 2000
                     
                                          PDS'000       PDS'000       PDS'000
                                          Revenue       Capital         Total
                     
Realised gains/(losses) on sales                -         (320)         (320)
Unrealised gains/(losses)                       -       (4,142)       (4,142)
                                           ______        ______        ______
Total capital gains/(losses) on
investments                                     -       (4,462)       (4,462)
Warrants purchased for cancellation             -          (36)          (36)
Income                                      1,194             -         1,194
Investment management and secretarial
fees                                        (153)         (237)         (390)
Other expenses                              (109)             -         (109)
Realised exchange differences                   -             -             -
                                           ______        ______        ______
Return before finance costs and taxation      932       (4,735)       (3,803)
                                           ______        ______        ______
Interest payable                            (145)         (269)         (414)
                                           ______        ______        ______
Return on ordinary activities before tax      787       (5,004)       (4,217)
                                           ______        ______        ______
Tax on ordinary activities                    (7)             7             -
                                           ______        ______        ______
Return attributable to equity shareholders    780       (4,997)       (4,217)
Dividends in respect of equity shares       (219)             -         (219)
                                           ______        ______        ______
Transfer to/(from) reserves                   561       (4,997)       (4,436)
                                           ______        ______        ______
Return per ordinary 50p share:                      
Basic                                        3.66       (23.42)       (19.76)
Diluted (FRS 14)                              n/a           n/a           n/a

 
Group Statement Of Total Return (Unaudited)
(Incorporating the Revenue Account)
For the Six Months Ended 30 September 1999


                                                   Six Months ended
                                                  30 September 1999
                     
                                          PDS'000       PDS'000       PDS'000
                                          Revenue       Capital         Total
                     
Realised gains/(losses) on sales                -         2,325         2,325
Unrealised gains/(losses)                       -         2,216         2,216
                                           ______        ______        ______
Total capital gains/(losses) on investments     -         4,541         4,541
Warrants purchased for cancellation             -          (63)          (63)
Income                                      1,019             -         1,019
Investment management and secretarial fees   (92)         (131)         (223)
Other expenses                              (109)             -         (109)
Realised exchange differences                   -             3             3
                                           ______        ______        ______
Return before finance costs and taxation      818         4,350         5,168
                                           ______        ______        ______
Interest payable                             (98)         (183)         (281)
                                           ______        ______        ______
Return on ordinary activities before tax      720         4,167         4,887
                                           ______        ______        ______
Tax on ordinary activities                   (25)            25             -
                                           ______        ______        ______
Return attributable to equity shareholders    695         4,192         4,887
Dividends in respect of equity shares       (211)             -         (211)
                                           ______        ______        ______
Transfer to/(from) reserves                   484         4,192         4,676
                                           ______        ______        ______
Return per ordinary 50p share:                      
Basic                                        3.30         19.91         23.21
Diluted (FRS 14)                             3.23         19.47         22.70

 Group Statement of Total Return 
(Incorporating the Revenue Account)
For the Year Ended 31 March 2000

                                                      Year Ended
                                                     31 March 2000
                     
                                          PDS'000       PDS'000       PDS'000
                                          Revenue       Capital         Total
                     
Realised gains/(losses) on sales                -        11,453        11,453
Unrealised gains/(losses)                       -        21,693        21,693
                                        ---------     ---------     ---------
Total capital gains/(losses) on
investments                                     -        33,146        33,146
Warrants purchased for cancellation             -         (324)         (324)
Income                                      1,588             -         1,588
Investment management and secretarial
fees                                        (233)         (342)         (575)
Other expenses                              (207)             -         (207)
Realised exchange differences                   -           (2)           (2)
                                        ---------     ---------     ---------
Return before finance costs and taxation    1,148        32,478        33,626
                     
Interest payable                            (201)         (372)         (573)
                                        ---------     ---------     ---------
Return on ordinary activities before tax      947        32,106        33,053
                     
Tax on ordinary activities                   (46)            46             -
                                        ---------     ---------      --------
Return attributable to equity shareholders    901        32,152        33,053
  
Dividends in respect of equity shares        (790)            -         (790)
                                         ---------     ---------       -------
                   
Transfer to reserves                           111       32,152        32,263
                                         ---------    ---------     ---------
Return per ordinary 50p share (p):                     
Basic                                         4.28       152.67        156.95
Diluted (FRS 14)                              4.17       148.89        153.06

 
Summarised Unaudited Group Statement of Cash Flows

       
                              Six months to       Six months to       Year to
                               30 September        30 September      31 March
                                       2000                1999          2000
                                      £'000               £'000         £'000
                     
Net cash flow from operating
activities                              636                 594           730
Servicing of finance                  (356)               (191)         (491)
Taxation                                  -                (36)            72
Net cash outflow from financial
investment                          (8,726)             (4,019)       (3,071)
Equity dividends paid                 (580)               (526)         (736)
                     
Net cash flow before financing      (9,026)             (1,178)       (3,496)
Financing                             5,710               2,459           698
                     
Decrease in cash                    (3,316)             (1,719)       (2,798)
                     
                     
Reconciliation of net cash flow to movement in net debt              
                     
Decrease in cash                    (3,316)             (1,719)       (2,798)
Loans drawn down                    (5,000)             (8,500)       (7,000)
Loans repaid                              -               6,000         6,000
Changes in net debt resulting
from cash                           (8,316)             (4,219)       (3,798)
Flows                     
Currency gains/(losses)                   -                   3           (2)
                     
Movement in net debt                (8,316)             (4,216)       (3,800)
Net debt at 1 April                 (4,206)               (406)         (406)
                     
Net debt at 30 September/31 March  (12,522)             (4,622)       (4,206)
                     
Reconciliation of operating profit to net cash flow from operating activities 
                     
Net return before finance costs
and taxation                            932                 915         1,148
Management fee charged to capital     (237)               (131)         (342)
Changes in working capital and other
non-cash items                         (59)               (190)          (76)
                     
Net cash flow from operating
activities                              636                594            730



 Notes

1.   The unaudited interim results have been prepared on the basis of the
accounting policies set out in the statutory accounts of the Group for the
year ended 31 March 2000.

2.   Earnings for the first six months should not be taken as a guide to the
results for the full year.

3.   Basic earnings per ordinary share are based on a weighted average of
21,335,297 ordinary shares in issue during the period (1999 - 21,052,251). 
The diluted earnings per ordinary share which are calculated in accordance
with Financial Reporting Standard 14 (Earnings per share) is not applicable
following the final exercise of warrants on 31 July 2000.  Diluted earnings
per share in 1999 were 3.23p based on return attributable to equity
shareholders and on 21,535,440  ordinary shares, being the weighted average
number of ordinary shares in issue during the period plus the number of
ordinary shares that would have been issued for no consideration using a
weighted average share price for the period of 172.0p.

4.   The interim dividend of 1.00 pence per ordinary share will be paid on 4
January 2001 to shareholders on the Register on 1 December 2000.

5.   There were 21,870,260 ordinary shares in issue at 30 September 2000 (31
March 2000 and 30 September 1999 - 21,067,815).  The final exercise of
warrants took place on 31 July 2000, when 802,445 ordinary shares were issued
in respect of warrants for a total consideration of £746,000.  The Company
bought in for cancellation 25,000 warrants for a consideration of £36,000
during the period. 

6.   In accordance with FRS16, franked investment income is now shown
excluding any associated tax credit with a subsequent reduction in the amount
of the tax charge.  The figure for the six months to 30 September 1999 has
accordingly been restated.  The effect of this change in accounting policy for
the period is to decrease franked investment income and the tax charge by
£97,000. There is no change to the return attributable to equity shareholders.

7.   The group results consolidate those of I&S UK Securities Limited, a
wholly owned subsidiary which deals in securities.

8.   These are not full statutory accounts in terms of Section 240 of the
Companies Act 1985 and are unaudited.  Statutory accounts for the year to 31
March 2000, which were unqualified, have been lodged with the Registrar of
Companies.  No statutory accounts in respect of any period after 31 March 2000
have been reported on by the Company's auditors or delivered to the Registrar
of Companies.  A full interim report will be sent to shareholders in November
2000 and will be available for inspection at One Charlotte Square, Edinburgh,
the registered office of the Company.

Managed by Friends Ivory & Sime plc