Final Results

F&C Smaller Companies PLC
18 June 2002


Date: EMBARGOED UNTIL 7.00AM TUESDAY 18 JUNE 2002

Contact: Sandy Fleming, F&C Management Ltd, 020 7628 8000/Emma Chilvers, Lansons
Communications, 020 7294 3606


                           F&C SMALLER COMPANIES PLC

              (formerly Foreign & Colonial Smaller Companies PLC)

                   Unaudited Preliminary Statement of Results

                        for the year ended 30 April 2002



SUMMARY OF RESULTS
                                                                    30 April             30 April               % change
                                                                        2002                 2001

Share price                                                           219.0p               242.5p                   -9.7

Net assets                                                           £246.3m              £274.9m                  -10.4

Net asset value per share (prior charges at nominal                   265.5p               291.9p                   -9.0
value)

Earnings per share                                                     3.89p                4.22p                   -7.8

Dividends per share                                                    4.02p                3.95p                   +1.8



MAIN POINTS


- Outperformed benchmark in difficult markets;

- Dividend up 1.8% - 32nd consecutive annual increase;

- Continuing rise in the number of private investors;

- John Curry to become Chairman.



F&C SMALLER COMPANIES PLC

Unaudited Preliminary Statement of Results for the year ended 30 April 2002

Chairman's Statement

Commenting on these results Sarah Hogg, the Chairman said:


In the six months since I last reported to you on your Company, the results have
taken a turn for the better. The Net Asset Value of the Company rose 11.4% in
the second half of the year.

However, sharp falls in the first half mean that overall, the NAV at the end of
April was 9.0% lower than a year ago. We again outperformed our benchmark,
albeit marginally, as the Extended Hoare Govett Smaller Companies Index declined
9.2% through the year. Both the first-half fall and second-half recovery in our
share price were less dramatic than the movements in the index, reflecting the
relative stability of your Company in weak and uncertain markets. This may help
to explain the steady increase in the number of individual investors in the
Company. Nevertheless, we have not been immune from investors' increasing
wariness of equity markets after nearly three years' drift, and our discount
widened slightly from 16.9% to 17.5%, as the share price declined 9.7%.

Weak stock markets, and the underlying slowdown in the world economy, have also
affected the ability of the companies in which we are invested to increase their
dividends. We are now beginning to see the consequences, about which I have been
warning for some time, in terms of our own revenue. This is an issue that
receives more detailed analysis in our Manager's review. Nevertheless, the
decline has been less severe than we feared, and the existence of a substantial
reserve has encouraged your Board to recommend the 32nd consecutive increase in
our dividend. We are recommending to shareholders an increase in the final
dividend of 1.5% to 2.68 pence, resulting in a full year increase of 1.8% to
4.02 pence.


The Markets

Markets were already in decline before the terrible events of 11 September last
year, but the immediate reaction was to drive most indices much lower. Since
then there has been a marked difference in the performance of the various
sectors in which we are invested, and in the different economies, with the
United States showing strong signs of recovery early in 2002. As a result, this
was a year when the international range of our investments, which is rare
amongst smaller company trusts, worked to the advantage of your Company. Our US
portfolio produced positive returns for the year as a whole.

Stock selection is quite as important as asset allocation, so it is pleasing to
note our US portfolio also outperformed its domestic benchmark. Most
significantly, our biggest geographical portfolio, the UK, outperformed the
benchmark by a healthy 2.5%. There were, however, some weaker areas. While our
investments in continental Europe modestly outperformed the regional benchmark,
the softness in these markets meant that returns were still negative. In Japan
we underperformed our local benchmark by 4% although there was some improvement
in the second six months. We hope to see this improvement continue and to
deliver a positive boost to our returns.


Gearing, Dividends, Shareholders and Buy Backs

When markets are rising, an investment trust's ability to borrow enables it to
magnify the benefits of share price movements for its investors. The reverse is
true in falling markets. Your Board has therefore kept the level of gearing low
during the past year. We stand ready to increase it when the time is ripe, but
remain cautious in the near term.



F&C SMALLER COMPANIES PLC

Unaudited Preliminary Statement of Results for the year ended 30 April 2002

As I have already noted we feel able to extend our Company's record of
increasing the dividend, which has been possible every year since 1970. During
this period, funds have been built up in a revenue reserve that was established
in order to smooth payments through each economic cycle. This year we are making
modest use of the reserve to provide for an increase broadly in line with
inflation. Looking further ahead, however, I repeat my warning that the slowdown
in dividend growth amongst the companies in which we invest must be expected to
have some impact on our own trends.

The number of shareholders has continued to rise which we feel provides
encouraging evidence that the unusually wide spread of geography and sectors in
your Company's portfolio of smaller companies, managed by a respected house,
offers an attractive option to private investors.

At the same time, steady demand has reduced the need to buy in shares. In the
past year the authority to purchase shares for cancellation has been used
sparingly, with 1,425,000 shares being bought. We continue to use this authority
only where we can see a real opportunity to enhance value for all shareholders,
and these shares were bought in at a discount of 21%. Your Board will continue
to take these opportunities when it feels the timing is appropriate. To that
end, we intend to ask shareholders for fresh authority to buy in up to 14.9% of
the outstanding share capital at the forthcoming Annual General Meeting.


The Annual General Meeting

We are once again holding the AGM at the London Chamber of Commerce and Industry
at 12:00am on 29 July 2002, and I look forward to seeing a number of you there.
It will be my opportunity to bid you farewell, after seven years on the Board. I
am stepping down from the Chairmanship, as I have taken on substantial new
responsibilities this year as Chairman of 3i Group. I have been fortunate to
work with two excellent managers, first Andrew Barker and now Sandy Fleming, and
a strong and committed Board. I am delighted that John Curry, the senior
non-executive director of your Company, has agreed to take over from me, and I
am sure that with him as Chairman and Sandy as manager, the Company will go from
strength to strength.

Sir Richard Storey, who has been a member of the Board since August 1993, will
also be stepping down on this occasion. He has given tremendous service to your
Company, and I have been immensely grateful to him for his incisive questioning,
his independent view, and the breadth of knowledge he has brought to our
discussions.


Future Prospects

After a prolonged period of stock market weakness, there are signs of recovery
in the world economy that should, in due course, provide growth opportunities
for the companies in which we are invested. At this early stage it is, however,
far from clear how the benefits of economic recovery will be spread across the
world. In such uncertain times there are obvious advantages in the maintenance
of a broadly based international portfolio, although as ever performance will
depend on good stock selection as well as asset allocation. We believe the
Board's strategy of combining geographic diversity and wide industry exposure
with low gearing provides the appropriate conservative stance for current
uncertain markets and positions us well to benefit from economic recovery.

Sarah Hogg

17 June 2002



F&C SMALLER COMPANIES PLC

Unaudited Preliminary Statement of Results for the year ended 30 April 2002



Balance Sheet
                                                                                           30 April             30 April
                                                                                               2002                 2001
                                                                                             £'000s               £'000s
Fixed assets
Investments                                                                                 251,411              284,064

Current assets
Debtors                                                                                       1,067                1,902
Cash at bank and short-term deposits                                                         31,698               23,083
                                                                                             32,765               24,985
Current liabilities
Creditors: amounts falling due within one year:
Foreign currency and sterling loans                                                        (19,816)             (20,558)
Other                                                                                       (8,060)              (3,518)
                                                                                           (27,876)             (24,076)
Net current assets                                                                            4,889                  909

Total assets less current liabilities                                                       256,300              284,973

Creditors: amounts falling due after more than one
year:

Debenture                                                                                  (10,000)             (10,000)

Provision for liabilities and charges                                                             -                 (43)

Net assets                                                                                  246,300              274,930

Capital and reserves

Called up share capital                                                                      23,191               23,547

Capital redemption reserve                                                                    2,992                2,636

Share premium                                                                                23,132               23,132

Capital reserves                                                                            191,590              220,117

Revenue reserve                                                                               5,395                5,498

Total shareholders' funds - equity                                                          246,300              274,930

Net asset value per ordinary share - pence                                                   265.51               291.89



Geographical distribution of total assets less current liabilities (excluding
loans) at 30 April 2002 was United Kingdom 48%; North America 23%; Japan 10%;
Europe 13%; Far East and others 6%.



F&C SMALLER COMPANIES PLC

Unaudited Preliminary Statement of Results for the year ended 30 April 2002

Statement of Total Return (incorporating the revenue account*)

for the year ended 30 April


                                                 - 2002-                                     - 2001-

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

        Losses on investments                -      (24,536)      (24,536)              -       (32,376)       (32,376)
                              
        Exchange gains                       -           728           728              5          1,044          1,049
                                         
        Income                           5,687             -         5,687          6,006              -          6,006
                                        
        Management fee                   (442)       (1,031)       (1,473)          (422)          (985)        (1,407)
                                        
        Other expenses                   (550)          (35)         (585)          (574)           (24)          (598)

        Net return before
        finance costs and                4,695      (24,874)      (20,179)          5,015       (32,341)       (27,326)
        taxation
                                        
        Interest payable and
        similar charges                  (461)       (1,076)       (1,537)          (497)        (1,159)        (1,656)


        Return on ordinary                                     
        Activities before                4,234      (25,950)      (21,716)          4,518       (33,500)       (28,982)
        taxation
                                        
        Taxation on ordinary
        activities                       (595)           436         (159)          (497)            325          (172)

        Return on ordinary
        activities after                 3,639      (25,514)      (21,875)          4,021       (33,175)       (29,154)
        taxation

        Dividends on ordinary
        shares (equity)

                                       
        Interim of 1.34p (2001         (1,256)             -       (1,256)        (1,247)              -        (1,247)
        - 1.31p)
                                      
        Proposed final of              (2,486)             -       (2,486)        (2,486)              -        (2,486)
        2.68p (2001 - 2.64p)
                                         
        Amount transferred               (103)      (25,514)      (25,617)            288       (33,175)       (32,887)
        (from)/to reserves
                                          
        Return per ordinary               3.89       (27.26)       (23.37)           4.22        (34.82)        (30.60)
        share - pence


* The revenue column of this statement is the profit and loss account of the
Company.


F&C SMALLER COMPANIES PLC

Unaudited Preliminary Statement of Results the year ended 30 April 2002


Cash Flow Statement for the year ended 30 April

                                                                                               2002                 2001
                                                                                             £'000s               £'000s

Net cash inflow from operating activities                                                     3,680                3,685

Cash outflow from the servicing of finance                                                  (1,429)              (1,640)

Total tax paid                                                                                (172)                (140)

Net cash inflow from financial investment                                                    11,840               25,684

Equity dividends paid                                                                       (3,743)              (3,645)

Net cash inflow before use of liquid resources                                               10,176               23,944
and financing

Increase in short-term deposits                                                             (5,988)             (20,414)

Net cash outflow from financing                                                             (2,866)              (5,132)

Increase/(decrease) in cash                                                                   1,322              (1,602)


The financial information set out in the announcement does not constitute the
Company's statutory accounts for the years ended 30 April 2002 or 30 April 2001.
The financial information for the year ended 30 April 2001 has been extracted
from the statutory accounts for that year which have been delivered to the
Registrar of Companies. The auditors reported on those accounts: their report
was unqualified and did not contain a statement under either Section 237(2) or
Section 237(3) of the Companies Act 1985. The statutory accounts for the year
ended 30 April 2002 will be finalised on the basis of the financial information
presented by the directors in this preliminary announcement and will be
delivered to the Registrar of Companies following the Company's Annual General
Meeting.

During the year to 30 April 2002 the Company purchased for cancellation
1,425,000 ordinary shares of 25p at a total cost of £3,013,000.

The Directors have declared a final dividend of 2.68p per share payable on 30
July 2002 to shareholders registered on 28 June 2002.

The Report and Accounts will be posted to shareholders on or around 27 June
2002.

Copies may be obtained during normal business hours from the Company's
Registered Office, Exchange House, Primrose Street, London EC2A 2NY.


By order of the Board

F & C Management Limited - Secretary

17 June 2002


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