Interim Results

F&C Smaller Companies PLC
18 December 2001


Embargoed for 7.00am 18 December 2001

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

                          F&C SMALLER COMPANIES PLC

                  Unaudited Preliminary Statement of Results

                   for the half year ended 31 October 2001

Key Points


  * The interim dividend has been increased by 2.3%, broadly in line with
    inflation.

  * Portfolio ahead of benchmark, down 18.7% compared with a fall of 20% in
    the Extended Hoare Govett Smaller companies index.

  * In the same period the share price fell by 16.7%





SUMMARY OF RESULTS
                                                 31 Oct     30 April          %
                                                   2001         2001     Change
Attributable to equity shareholders
Net assets                                      £223.4m      £274.9m      -18.7
Net asset value per share                        238.4p       291.9p      -18.3
Share price                                      202.0p       242.5p      -16.7

                                            6 months to     6 months
                                                                  to
                                                 31 Oct       31 Oct          %
                                                   2001         2000     Change

Earnings per share                                2.50p        2.53p       -1.2

Dividends per share                               1.34p        1.31p       +2.3




F&C SMALLER COMPANIES PLC

Unaudited Preliminary Statement of Results for the half year ended 31 October
2001

Extracts from the Chairman's Statement

In the first half of our financial year, stock markets around the world fell
significantly. It is modest consolation to be able to report that we were
ahead of our benchmark. The Extended Hoare Govett Smaller Companies Index
declined 20% during the first six months of our year, while your Company's net
asset value and share price both fell, by 18.7% and 16.7% respectively.

The relative outperformance was largely due to good performance in the USA and
the UK while Europe has shown a marked improvement. Unfortunately the return
in Japan has again proved disappointing. In part, this reflects differences in
our portfolios in these markets. In the USA and the UK, the portfolios have
been somewhat underweight in technology, while the Japanese smaller company
market is still dominated by technology-related companies and our portfolio
reflects this. However, while we have been reviewing the mix of our portfolio
across the Pacific region as a whole, we still believe that new technologies
will offer above-average returns in the longer term, and therefore consider it
right to maintain our exposure.

Markets & Investment Policy

Your Company began the year well, but share prices were already weak before
the tragic events of 11 September precipitated further falls. Markets have
bounced back somewhat since, in anticipation of a significant economic
recovery in 2002. However, the outcome is still highly uncertain, as all the
major regions of the world are displaying economic weakness. The task for your
Board and its manager is to position the portfolio so as to provide protection
from further downward shocks, without losing the ability to enjoy the benefits
of recovery wherever it comes.

In uncertain times, the broad geographic scope of your Company's portfolio,
combined with an increasingly international approach to allocation between
industrial sectors, provides us with a potential advantage: it enables us to
spread our exposure. When investing in smaller companies this spread is
particularly important as, although the markets for major stocks are becoming
increasingly globalised, there remains greater diversity in the performance of
smaller companies.

Although the ability to borrow remains an essential advantage of investment
trusts, you will have noted that by the year end, last April, we had reduced
the level of borrowing to historically low levels because of our nervousness
regarding the short-term outlook. Since then we have continued to keep the
level of borrowing low, while continuing to take advantage of market
opportunities to buy where we think share prices have fallen too far. We are
therefore cautiously placed in the event of a further market slide, while
having substantial scope to participate in the next, sustained, market upturn.
Our cautious attitude to the market has been reflected in the changes in the
list of the top 30 shares listed. The list contains 14 new names. The mix has
changed as we have realised profits from some of our larger investments, while
the value of some others has, meanwhile, been driven up by increased investor
interest in their defensive characteristics. One such holding is BSS Group, a
distributor of heating and plumbing equipment to both the industrial and
domestic markets. A new management team is having a positive impact on
developing the profitability of the business and during a period of falling
stock markets this company has enjoyed an increase of 25.5% in its share
price.

Dividend & Share Buy-backs

For some time I have been warning that a slowdown in Company earnings placed
some constraint on our ability to raise dividends. However, in the six months
under review, your Board has again been able to increase the dividend without
recourse to our substantial revenue reserve. We have decided on a rise of 2.3%
in the interim dividend, which is broadly in line with inflation. At the AGM
in July, authority was granted for 14.9% of the outstanding shares to be
bought in for cancellation, if that was deemed appropriate by your Board. The
number of individual shareholders, investing directly or through a number of
excellent saving schemes run by F&C Management has continued to rise year on
year. In the past six months the number of new shareholders invested through
these various schemes has risen to over 8,850, while the total number of
shareholders has increased by some 3.5% in the past 12 months.

Outlook

Share price volatility shows no sign of abating, increasing the attraction of
collective investment vehicles. Smaller company markets continue to offer
exciting potential, currently at better value than in the recent past. We
shall continue to seek out opportunities across all sectors and major
geographic regions, and should be well placed to benefit from a recovery in
economic growth.



Sarah Hogg

17 December 2001



F&C SMALLER COMPANIES PLC

Unaudited Preliminary Statement of Results for the half year ended 31 October
2001



Balance Sheet
                                                      at 31    at 31      at 30
                                                        Oct      Oct      April
                                                       2001     2000       2001
                                                     £'000s   £'000s     £'000s
Fixed assets
Investments                                         227,714  314,943    284,064
Current assets
Debtors                                               1,560    3,100      1,902
Cash at bank and short term deposits                 27,203   16,739     23,083
                                                     28,763   19,839     24,985
Current liabilities
Creditors: amounts falling due within one year:
Foreign currency and sterling loans                (20,476) (22,345)   (20,558)
Other                                               (2,576)  (5,140)    (3,518)
                                                   (23,052) (27,485)   (24,076)
Net current asset/(liabilities)                       5,711  (7,646)        909
Total assets less current liabilities               233,425  307,297    284,973
Creditors: amounts falling due after more than one
year:
Sterling loan                                             -  (5,000)    (5,000)
Debenture                                          (10,000) (10,000)   (10,000)
Net assets                                          223,425  297,297    274,930
Capital and reserves
Called up share capital                              23,429   23,845     23,547
Capital redemption reserve                            2,754    2,338      2,636
Share premium                                        23,132   23,132     23,132
Capital reserves                                    167,524  241,598    220,117
Revenue reserve                                       6,586    6,384      5,498
Total shareholders' funds                           223,425  297,297    274,930
Net asset value per share - pence                    238.41   311.70     291.89

Geographical distribution of total assets less current liabilities (excluding
loans) at 31 October 2001 was United Kingdom 49%; USA 22%; Japan 11%; Europe
13%; Far East and others 5%.

                          F&C SMALLER COMPANIES PLC

Unaudited Preliminary Statement of Results for the half year ended 31 October
                                     2001

Statement of Total Return (incorporating the revenue account*)


                            -6 months to 31 October-  -6 months to 31 October-
                                      

                                    - 2001 -                  - 2000 -
                            Revenue  Capital    Total Revenue  Capital    Total
                             £'000s   £'000s   £'000s  £'000s   £'000s   £'000s
Gains and losses on               - (50,782) (50,782)       - (12,851) (12,851)
investments
Exchange gains and losses         7       68       75     (6)    (986)    (992)
Income                        3,486        -    3,486   3,393        -    3,393
Management fee                (225)    (526)    (751)   (209)    (487)    (696)
Other expenses                (312)     (17)    (329)   (265)     (10)    (275)
Net return before finance
costs and taxation            2,956 (51,257) (48,301)   2,913 (14,334) (11,421)
Interest payable and          (231)    (539)    (770)   (246)    (573)    (819)
similar charges
Return on ordinary
Activities before taxation    2,725 (51,796) (49,071)   2,667 (14,907) (12,240)
Taxation on ordinary          (381)      303     (78)   (246)      171     (75)
activities
Return attributable to
equity shareholders           2,344 (51,493) (49,149)   2,421 (14,736) (12,315)
Dividends on ordinary
shares (equity)             (1,256)        -  (1,256) (1,247)        -  (1,247)
Amount transferred to/        1,088 (51,493) (50,405)   1,174 (14,736) (13,562)
(from) reserves
Return per ordinary share -    2.50  (54.84)  (52.34)    2.53  (15.40)  (12.87)
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 half year ended 31 October 2001


Cash Flow Statement
                                                     6 months to   6 months to
                                                     31 Oct 2001   31 Oct 2000
                                                          £'000s        £'000s
Net cash inflow from operating activities                  2,289         2,114
Cash outflow from the servicing of finance                 (808)         (805)
Total tax paid                                             (125)          (80)
Net cash inflow from financial investment                  6,365        15,969
Equity dividends paid                                    (2,487)       (2,397)
Net cash inflow before use of liquid resources             5,234        14,801
and financing

Increase in short term deposits                          (2,865)      (13,901)
Net cash outflow from financing                          (1,096)       (2,714)
Increase/(decrease) in cash during the period              1,273       (1,814)





During the half year to 31 October 2001 the Company purchased for cancellation
475,000 ordinary shares of 25p at a total cost of £1,100,000.

The Directors have declared an interim dividend of 1.34p per share payable on
1 February 2002 to shareholders registered on 31 December 2001.

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

18 December 2001