Interim Results

Ivory & Sime UK Smlr.Co's Trust PLC
06 November 2002

IVORY + SIME UK SMALLER COMPANIES TRUST PLC

Press Release

Date:          6 November 2002

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 2002

•     Net asset value per share fell by 33.8%

•     Unchanged interim dividend of 1.0p per share



Results

Over the six months to 30 September 2002, the Company's net asset value fell by
33.8 per cent compared with a fall of 29.1 per cent in the benchmark index, the
FTSE SmallCap (ex Investment Companies) Index.


At the start of 2002 there was an expectation of a strong recovery in corporate
profitability as the year progressed. Instead, renewed concerns over the health
of the global economy unsettled stockmarkets. Such concerns proved justified as
individual company trading news across the economic spectrum proved
disappointing. A realistic assessment suggests an early sustained recovery is
unlikely.


Business investment has suffered from postponement or deferral as confidence
over future prospects has remained low. The principal impact on the portfolio
has been felt in the technology sector, exacerbating an already protracted
downturn in the Information Technology cycle. A slowing economy and tougher
overall trading conditions have shown up flaws in a number of business models
and sadly the Company has not been immune to such situations.


Earnings and Dividends

Group earnings per Ordinary Share were 2.12 pence in respect of the six months
ended 30 September 2002 (2001 - 2.75 pence). The Board has declared an unchanged
interim dividend of 1.00 pence per Ordinary Share payable on 3 January 2003 to
shareholders on the register on 6 December 2002.


Investment Policy and Portfolio

The Managers have maintained an investment proposition that focuses on the
medium term growth potential of smaller companies. This emphasis has made it
more difficult to be resilient in a period of falling equity values. It does not
mean, however, that the portfolio is structurally flawed.


In looking at where most pain has been felt, technology holdings continued to be
a major source of disappointment with Anite, IndigoVision, and London Bridge
failing to take advantage of business conditions which should have favoured
their products. The most significant single loss was in Health Clinic, a stock
whose Eye Clinic retail chain and city centre healthcare practices promised
much. Regrettably, Health Clinic's profits were materially overstated.
Management was unable to effect a re-financing of the business leading to the
suspension of the shares and the subsequent liquidation of the company. Biotrace
unwound most of its strong gains from last year as the momentum within the
business tailed off and the Ministry of Defence reined back orders for its
biological reagent.


It is important to retain a balanced perspective and not allow bad news to
overshadow positive developments in a number of stocks. Bovis Homes, Domino
Printing, RPC, Thorntons, Parkman Group, Keller and Topps Tiles have all met or
surpassed earnings forecasts and have business plans that appear to be on track.
This has yet to be reflected in their share prices. It is symptomatic of the
current market malaise that there is little reward for good news.


Shareholder Value

The discount at which the Company's shares trade widened during the period as
stockmarket conditions deteriorated. The Board monitors the level of the
discount and is continually evaluating means of enhancing shareholder value.

Marketing activities continue to create demand for the Company's shares
principally through the ZeroCharge TM Individual Savings Accounts (ISAs) and
Investment Plans and the Managers continue to communicate their strategy to
shareholders and stock market analysts.


Gearing

The Company maintained a high cash balance over most of the period, a reflection
of the Managers' concerns over market instability and the lack of confidence in
corporate earnings forecasts. At the end of the period, the capital element of
the £7 million fixed rate loan was covered by a gilt, and there were additional
cash and near cash instruments amounting to more than £3.5 million.


Outlook

The magnitude of the reduction in net asset value reported is clearly
disappointing. However, equity investment is for the long-term. The current
business environment is a difficult one but there are dangers in becoming so
pessimistic that genuinely attractive investment opportunities are missed.
Whilst the Managers believe it is unrealistic to attempt to pinpoint the timing
of any stockmarket recovery, the market's fall has left a wide range of equities
looking attractively priced. Hence, it is envisaged that the Managers will add a
small number of new holdings to the Company's portfolio over the coming months.






For further information contact:


Stephen Grant/Gordon Hay Smith

ISIS Asset Management plc : tel. [phone]




Group Balance Sheet (Unaudited)

                                                                As at 30          As at 30      As at 31
                                                          September 2002    September 2001    March 2002
                                                                   £'000             £'000         £'000

Fixed Assets
Investments                                                       32,230            42,420        49,958

Current Assets
Debtors                                                            1,266               598           212
Cash at bank and on deposit                                        3,043             4,201         1,838
                                                                 _______           _______       _______

                                                                   4,309             4,799         2,050

Creditors
Amounts falling due within one year                                (312)             (329)         (861)
                                                                 _______           _______       _______

Net Current Assets                                                 3,997             4,470         1,189
                                                                 _______           _______       _______

Total Assets less current liabilities                             36,227            46,890        51,147


Creditors amounts falling due after more than one year           (7,000)           (7,000)       (7,000)
                                                                 _______           _______       _______
Net Assets                                                        29,227            39,890        44,147
                                                                 _______           _______       _______

Equity Shareholders' funds                                        29,227            39,890        44,147
                                                                 _______           _______       _______

Net asset value per Ordinary Share                               133.64p           182.40p       201.86p








Group Statement Of Total Return (Unaudited)

(Incorporating the Revenue Account)

For the Six Months Ended 30 September 2002



                                                                      Six Months ended 30 September 2002

                                                                    Revenue           Capital         Total
                                                                      £'000             £'000         £'000

Losses on investments                                                     -          (14,892)      (14,892)
Income                                                                  806                 -           806
Investment management and secretarial fees                            (103)             (143)         (246)
Other expenses                                                        (118)                 -         (118)
                                                                     ______            ______        ______
Net return before finance costs and taxation                            585          (15,035)      (14,450)

Interest payable                                                       (88)             (163)         (251)
                                                                     ______            ______        ______
Return on ordinary activities before taxation                           497          (15,198)      (14,701)

Tax on ordinary activities                                             (33)                33             -
                                                                     ______            ______        ______
Return attributable to equity shareholders                              464          (15,165)      (14,701)

Dividends in respect of equity shares                                 (219)                 -         (219)
                                                                     ______            ______        ______
Transfer to/(from) reserves                                             245          (15,165)      (14,920)
                                                                     ______            ______        ______
Return per Ordinary Share                                             2.12p          (69.34)p      (67.22)p







Group Statement Of Total Return (Unaudited)

(Incorporating the Revenue Account)

For the Six Months Ended 30 September 2002



                                                                               Six Months ended
                                                                               30 September 2001

                                                                    Revenue           Capital          Total
                                                                      £'000             £'000          £'000

Losses on investments                                                     -          (10,486)       (10,486)
Income                                                                  958                 -            958
Investment management and secretarial fees                            (124)             (177)          (301)
Other expenses                                                         (86)                 -           (86)
                                                                     ______            ______         ______
Net return before finance costs and taxation                            748          (10,663)        (9,915)

Interest payable                                                      (100)             (187)          (287)
                                                                     ______            ______         ______
Return on ordinary activities before taxation                           648          (10,850)       (10,202)

Tax on ordinary activities                                             (47)                47              -
                                                                     ______            ______         ______
Return attributable to equity shareholders                              601          (10,803)       (10,202)

Dividends in respect of equity shares                                 (219)                 -          (219)
                                                                     ______            ______         ______
Transfer to/(from) reserves                                             382          (10,803)       (10,421)
                                                                     ______            ______         ______
Return per Ordinary Share                                             2.75p          (49.40)p       (46.65)p





Group Statement of Total Return

(Incorporating the Revenue Account)

For the Six Months Ended 30 September 2002



                                                                                   Year Ended
                                                                                 31 March 2002

                                                                    Revenue          Capital            Total
                                                                      £'000            £'000            £'000

Losses on investments                                                     -          (5,632)          (5,632)
Income                                                                1,639                -            1,639
Investment management and secretarial fees                            (230)            (327)            (557)
Other expenses                                                        (199)                -            (199)
                                                                   ________          _______         ________
Net return before finance costs and taxation                          1,210          (5,959)          (4,749)

Interest payable                                                      (189)            (351)            (540)
                                                                   ________          _______          _______
Return on ordinary activities before taxation                         1,021          (6,310)          (5,289)

Tax on ordinary activities                                            (109)              109                -
                                                                   ________          _______          _______
Return attributable to equity shareholders                              912          (6,201)          (5,289)

Dividends in respect of equity shares                                 (875)                -            (875)
                                                                   ________          _______          _______

Transfer to /(from) reserves                                             37          (6,201)          (6,164)
                                                                   ________          _______          _______
Return per Ordinary Share                                             4.17p         (28.35)p         (24.18)p







Summarised Unaudited Group Statement of Cash Flows



                                                               Six months to          Six months to              Year to
                                                                30 September           30 September             31 March
                                                                        2002                   2001                 2002
                                                                       £'000                  £'000                £'000

Net cash inflow from operating activities                                385                    434                  824
Servicing of finance                                                   (251)                  (344)                (596)
Taxation                                                                   -                      7                    7
Financial investments                                                  1,727                (1,575)              (3,857)
Equity dividends paid                                                  (656)                  (656)                (875)

Net cash inflow / (outflow) before financing                           1,205                (2,134)              (4,497)
Financing                                                                  -                (5,000)              (5,000)

Increase / (decrease) in cash                                          1,205                (7,134)              (9,497)


Reconciliation of net cash flow to movement in net debt

Increase / (decrease) in cash                                          1,205                (7,134)              (9,497)
Loans repaid                                                               -                  5,000                5,000
Movement in net debt                                                   1,205                (2,134)              (4,497)
Net debt at 1 April                                                  (5,162)                  (665)                (665)

Net debt at 30 September/31 March                                    (3,957)                (2,799)              (5,162)

Reconciliation of net return before finance costs and taxation to net
cash inflow from operating activities

Net return before finance costs and taxation                             585                    748                1,210
Investment management fee charged to capital                           (143)                  (177)                (327)
Changes in working capital and other non-cash items                     (57)                  (137)                 (59)

Net cash inflow from operating activities                                385                    434                  824








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 2002.


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


            3.     Basic return per ordinary share is based on a weighted
            average of 21,870,260 Ordinary Shares in issue during the period
            (2001 - 21,870,260).


            4.     The interim dividend of 1.00 pence per Ordinary Share will be
            paid on 3 January 2003 to shareholders on the Register on 6 December
            2002.


            5.     There were 21,870,260 Ordinary Shares in issue at 30
            September 2002 (31 March 2002 and 30 September 2001 - 21,870,260).


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



 7. These are not statutory accounts in terms of Section 240 of the Companies Act
    1985 and are unaudited. Statutory accounts for the year to 31 March 2002,
    which received an unqualified audit report, have been lodged with the
    Registrar of Companies. No statutory accounts in respect of any period after
    31 March 2002 have been reported on by the Company's auditors or delivered
    to the Registrar of Companies.


 8. Copies of the Interim Report, which has been reviewed by the Company's
    auditors, will be mailed to shareholders and will be available for
    inspection at the Registered Office of the Company, One Charlotte Square,
    Edinburgh, EH2 4DZ





        Managed by ISIS Asset Management plc



                      This information is provided by RNS
            The company news service from the London Stock Exchange      IR QELFBLFBXFBL