Interim Results

Foreign & Colonial Smaller Co's PLC
19 December 2000

                   FOREIGN & COLONIAL SMALLER COMPANIES PLC

                  Unaudited Preliminary Statement of Results

                   for the half year ended 31 October 2000

Highlights

  * Share price up 2.2% despite NAV per share down 4.2%.
  * Interim dividend increased by 4.8%, continuing the long term record of
    increases ahead of inflation.
  * Share buy-backs continue to enhance shareholder value.

 SUMMARY OF RESULTS
                                                 31 Oct     30 April          %
                                                   2000         2000     Change
Attributable to equity shareholders
Net assets                                      £297.3m      £313.1m       -5.0
Net asset value per share                       311.70p      325.42p       -4.2
Share price                                     260.75p      255.25p       +2.2

                                            6 months to     6 months
                                                                  to
                                                 31 Oct       31 Oct          %
                                                   2000         1999     Change

Earnings per share                                2.53p        2.42p       +4.5

Dividends per share                               1.31p        1.25p       +4.8


FOREIGN & COLONIAL SMALLER COMPANIES PLC

Unaudited Preliminary Statement of Results for the half year ended 31 October
2000

CHAIRMAN'S STATEMENT

After last year's excellent returns, the extreme volatility of the past six
months in stock markets worldwide has proved more challenging for your
company. However, the share price has risen over the period; we ended the six
months 2.2% ahead, as our discount narrowed. Over the full year to the end of
October, the share price has risen 19.6%.

Our performance in both the US and the UK has been positive, but returns in
Japan and Europe have been disappointing. As a result, our net asset value
(NAV) per share has fallen by 4.2%, while our UK based benchmark, the Extended
Hoare Govett Smaller Companies Index, rose 5.7%. Japan and Europe are,
however, areas where our investments have lifted our performance in past
periods, demonstrating the advantage of our international approach to
investment in smaller companies. We believe your company is well-placed to
benefit from recovery in these markets.

Markets and Investment Policy

The technology-related boom had already peaked as we entered the new financial
year, but the scale and length of the subsequent correction has had a
substantial effect on all major stock markets.

Despite stock prices in the telecommunications, media and technology sectors
('TMT') having fallen worldwide, the US and UK markets rose, overall, during
the period under review. In Japan and Continental Europe, by contrast, the
weakness in TMT valuations has been severe enough to result in an overall
decline. Your Manager has focused on companies offering the potential for
substantial growth.

In the US market, a similar strategy has resulted in a good performance in a
volatile period. The value of our investments rose 11.3% over the six months
to October, compared with a rise in the Russell 2000 Index of Smaller
Companies over that period of only 6.6%.

Overall, we have taken a cautious approach to investment during this period.
We have used the proceeds of sales and takeovers, notably Robert Fleming, to
reduce our gearing.

Dividend & Share Buy-backs

In my last report to shareholders, I mentioned that the overall level of
income received by our Company has been declining, as an increasing number of
companies are retaining profits to fund future growth rather than paying
dividends. Nonetheless, our earnings per share have continued to rise over the
period under review. Your Board has therefore decided that it can increase the
interim dividend by 4.8%. Once again, this is well ahead of inflation,
continuing your Company's outstanding record of real increases.

During the six months to October 2000 we have bought in a further 841,782
shares for cancellation, at an average discount of over 17%. At our AGM, we
sought and gained authority for a further programme of share buy-backs, but we
have no set target: we continue to make such purchases only where we believe
they offer good value for our shareholders.

Outlook

Although the uncertainty about the prospects for the world economy leads us to
take a cautious view, volatile markets offer opportunities to establish
holdings in smaller companies which offer the potential, over the medium term,
for good returns. Your Company's spread of investments across the major
markets provides some insurance against the impact of a major correction in
any one of them, while we are well placed to benefit from opportunities to
invest in growth companies.

Sarah Hogg

December 2000

FOREIGN & COLONIAL SMALLER COMPANIES PLC

Unaudited Preliminary Statement of Results for the half year ended 31 October
2000

Balance Sheet


                                                      at 31    at 31      at 30
                                                        Oct      Oct      April
                                                       2000     1999       2000
                                                     £'000s   £'000s     £'000s
Fixed assets
Investments                                         314,943  294,579    341,892
Current assets
Debtors                                               3,100    1,944      2,533
Cash at bank and short term deposits                 16,739    8,111      4,555
                                                     19,839   10,055      7,088
Current liabilities
Creditors: amounts falling due within one year:
Foreign currency and sterling loans                (22,345) (16,000)   (16,262)
Other                                               (5,140)  (3,040)    (4,590)
                                                   (27,485) (19,040)   (20,852)
Net current liabilities                             (7,646)  (8,985)   (13,764)
Total assets less current liabilities               307,297  285,594    328,128
Creditors: amounts falling due after more than one
year:
Sterling loan                                             -  (5,000)    (5,000)
Debenture                                          (10,000) (10,000)   (10,000)
Net assets                                          297,297  270,594    313,128
Capital and reserves
Called up share capital                              23,845   24,633     24,055
Capital redemption reserve                            2,338    1,550      2,128
Share premium                                        23,132   23,132     23,132
Capital reserves                                    241,598  215,468    258,603
Revenue reserve                                       6,384    5,811      5,210
Total shareholders' funds                           297,297  270,594    313,128
Net asset value per share - pence                    311.70   274.63     325.42

Geographical distribution of total assets less current liabilities (excluding
loans) at 31 October 2000 was United Kingdom 51%; USA 19%; Japan 11%; Europe
16%; Far East and others 3%.

                   FOREIGN & COLONIAL SMALLER COMPANIES PLC

    Unaudited Preliminary Statement of Results for the half year ended 31       
                            October 2000

Statement of Total Return (incorporating the revenue account*)

                                                                              
                                                - 6 months to 31 October -      
                                                        - 2000 -                
  
                                                 Revenue    Capital      Total
                                                  £'000s     £'000s     £'000s
  Gains and losses on                                  -   (12,851)   (12,851)
  investments                                                                 
  Exchange gains and losses                          (6)      (986)      (992)
  Income                                           3,393          -      3,393
  Management fee                                   (209)      (487)      (696)
  Other expenses                                   (265)       (10)      (275)
  Net return before finance                        2,913   (14,334)   (11,421)
  costs and taxation                                                          
  Interest payable and similar                     (246)      (573)      (819)
  charges                                                                     
  Return on ordinary                               2,667   (14,907)   (12,240)
  activities before taxation                                                  
  Taxation on ordinary                             (246)        171       (75)
  activities                                                                  
  Return attributable to                           2,421   (14,736)   (12,315)
  equity shareholders                                                         
  Dividends on ordinary shares                   (1,247)          -    (1,247)
  (equity)                                                                    
  Amount transferred to/(from)                     1,174   (14,736)   (13,562)
  reserves                                                                    
  Return per ordinary share -                       2.53    (15.40)    (12.87)
  pence                                                                       
 
                                                                              
                                                - 6 months to 31 October -      
                                                   - 1999 (restated **) -     
       
                                          Revenue           Capital    Total  
                                          £'000s             £'000s    £'000s 
  Gains and losses on                        -               18,521    18,521 
  investments                                                                 
  Exchange gains and losses                  -              (1,652)   (1,652) 
  Income                                   3,620               -       3,620  
  Management fee                           (184)             (429)     (613)  
  Other expenses                           (301)              (8)      (309)  
  Net return before finance                                                   
  costs and taxation                       3,135             16,432    19,567 
  Interest payable and similar             (238)             (554)     (792)  
  charges                                                                     
  Return on ordinary                                                          
  activities before taxation               2,897             15,878    18,775 
  Taxation on ordinary                     (423)              295      (128)  
  activities                                                                  
  Return attributable to                   2,474             16,173    18,647 
  equity shareholders                                                         
  Dividends on ordinary shares            (1,225)              -      (1,225) 
  (equity)                                                                    
  Amount transferred to/(from)             1,249             16,173    17,422 
  reserves                                                                    
  Return per ordinary share -              2.42              15.84     18.26  
  pence                                                                       
 

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

** Dividends have been restated to comply with Financial Reporting Standard 16
(FRS16) 'Current Taxation' on the basis of income actually receivable, without
adjustment for the tax credit attaching to the dividends, as set out in the
accounting policies of the Company's financial statement at 30 April 2000.
There is no effect on the revenue return on ordinary activities after tax or
on equity shareholders' funds.

                   FOREIGN & COLONIAL SMALLER COMPANIES PLC

Unaudited Preliminary Statement of Results the half year ended 31 October 2000

Cash Flow Statement
                                                        6 months to 6 months to
                                                        31 Oct 2000 31 Oct 1999
                                                             £'000s      £'000s
Net cash inflow from operating activities                     2,114       2,794
Cash outflow from the servicing of finance                    (805)       (782)
Total tax paid                                                 (80)       (150)
Net cash inflow/(outflow) from financial investment          15,969     (3,072)
Equity dividends paid                                       (2,397)     (2,322)
Net cash inflow/(outflow) before use of liquid               14,801     (3,532)
resources and financing

(Increase)/decrease in short term deposits                 (13,901)       8,767
Net cash outflow from financing                             (2,714)    (12,033)
Decrease in cash during the period                          (1,814)     (6,798)


During the half year to 31 October 2000 the Company purchased for cancellation
841,782 ordinary shares of 25p at a total cost of £2,269,000.

The Directors have declared an interim dividend of 1.31p per share payable on
1 February 2001 to shareholders registered on 3 January 2001.

The interim Report and Accounts will be posted to shareholders on or around 3
January 2001.

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

Foreign & Colonial Management Limited - Secretary

18 December 2000