Interim Results

F&C Smaller Companies PLC
16 December 2003

Date: 15 December 2003




Contact:        Sandy Fleming
                F&C Management Ltd                      0207 628 8000

                Lisa Stanley
                Lansons Communications               0207 294 3692


                           F&C SMALLER COMPANIES PLC
                     Unaudited Interim Statement of Results
                    for the half year ended 31 October 2003

Highlights

  • Net asset value of the Trust has increased by 34.5%, compared to 33.6% for
    the Hoare Govett Smaller Companies Index.
  • Relative outperformance has been achieved in the UK, the USA, Japan and
    Asia.
  • Share price has risen 30.6% during the first six months of this financial
    year, compared to a FT All Share Index return of 14.2%.
  • Dividend payment of 1.41p per share, a rise of 2.9% which is in line with
    inflation.


SUMMARY OF RESULTS
                                                                31 Oct               30 Apr                  %
                                                                  2003                 2003             Change
Attributable to equity shareholders

Net assets                                                     £213.0m              £168.0m              +26.8

Net asset value per share                                       246.3p               183.1p              +34.5

Share price                                                     192.0p               147.0p              +30.6

                                                              6 months             6 months
                                                                    to                   to
                                                                31 Oct               31 Oct                  %
                                                                  2003                 2002             Change

Earnings per share                                               2.17p                1.59p              +36.5

Dividends per share                                              1.41p                1.37p               +2.9


F&C SMALLER COMPANIES PLC
Unaudited Interim Statement of Results for the half year ended 31 October 2003


Chairman's Statement:

Dear Shareholder

The recovery in stock markets that began in March has continued throughout the
period.  Furthermore, as indications of a return to global economic growth
become clearer, markets have established a new trading range well above the
bottoms established in March 2003.  Since the recovery in the markets began
smaller companies have outperformed.  Our official benchmark, the extended Hoare
Govett Smaller Companies Index (HGSC Index) has risen 33.6% while the net asset
value per share has increased by 34.5%.  This is particularly pleasing as the
benchmark is a UK index and the UK market was, with the exception of Japan, the
strongest of all the major geographic areas.

Markets & Investment Policy

The swift conclusion to the war in Iraq, the easing of the SARs scare and a
general recognition that, in the absence of complete economic collapse, market
valuations were attractive, resulted in a shift in sentiment that led to a
significant recovery in valuations worldwide.

Historically markets anticipate shifts in the economic outlook and we are now in
the most testing period as we await the evidence that the economic fundamentals
have improved and that this is being translated into improved corporate
profitability.  The attraction of smaller companies is that because they tend to
be more domestically orientated and focused on a limited number of activities,
the benefits of an upturn in activity are seen much quicker.  For these reasons
smaller companies have historically outperformed the overall market in the early
stages of economic recovery and this recent period has been no exception.  In
the UK the HGSC Index return of 33.6% compares with an improvement of just 14.2%
in the FT All Share Index.  A similar picture has emerged in other markets where
relative outperformance of around 20% has been fairly standard.  Encouragingly
history suggests that when such a shift in sentiment occurs, smaller companies
continue to provide superior returns for far longer than a few months.  In the
US in the early 1990's the outperformance continued for several years.

At this stage it is impossible to be sure that the same will happen this time,
but the indications of a sustained economic upturn are strengthening and
therefore smaller companies should enjoy the benefits of increased spending and
improved business confidence.

In my last annual review I commented on how difficult it is for investors with a
longer term perspective to match the immediate impact of a profound change in
market sentiment, but added that such short term aberrations to performance were
usually recovered in the ensuing period.   I am pleased to be able to report
that by sticking to our strategy of focusing on financially strong and
attractively valued stocks we are showing relative outperformance in every
region other than Europe, where a rise of 24.4% hasn't matched our internal
benchmark which has risen 29.6%.

F&C SMALLER COMPANIES PLC
Unaudited Interim Statement of Results for the half year ended 31 October 2003

Gearing, Dividends & Share Buy Backs

For the past few years we have been comfortable with modest levels of gearing as
markets continued to fall.  However it was always the intention to increase the
levels of borrowing as confidence in the market improved and while we started
the current financial year with a gearing level of 2.3% this has risen to around
5% during the past six months.

A reflection of the improvement in sentiment amongst the companies in which we
are invested is the rise in dividends being received.  As a result your board is
pleased to be able to increase the interim distribution to 1.41p, a rise of
2.9%, which is broadly in line with inflation.

The surge in stock markets during the first six months of this financial year
has been reflected in our share price which has risen 30.6% during the period,
compared to a FT All Share Index return of 14.2%.  Since the last Annual General
Meeting we have exercised the authority granted to purchase 5.25m shares for
cancellation at discounts of around 23% which has added around 1.5% to the net
asset value.  It is your board's intention to continue to utilise the authority
for buy-backs when we believe it is in shareholders' best interests.

Outlook

Following the strength of stock markets in the first six months of our financial
year it is hardly surprising that they have been marking time in the past few
weeks.  However the signs are that the improvement in the global economy is set
to continue.

It is particularly encouraging that the outperformance of smaller companies
shows little sign of abating.  Thus the ongoing focus on well structured,
financially strong businesses should provide the solid base from which our
company can exploit this positive outlook.

John Curry
15 December 2003


F&C SMALLER COMPANIES PLC
Unaudited Interim Statement of Results for the half year ended 31 October 2003

Unaudited Balance Sheet


                                                              at 31 Oct            at 31 Oct         at 30 Apr
                                                                   2003                 2002              2003
                                                                 £'000s               £'000s            £'000s
Fixed assets
Investments                                                     223,768              178,308           173,935

Current assets
Debtors                                                           1,989                1,047             1,830
Cash at bank and short-term deposits                             16,303               18,623            23,140
                                                                 18,292               19,670            24,970

Current liabilities
Creditors: amounts falling due within one year:
Loans                                                          (15,814)             (15,718)          (15,720)
Other                                                           (3,261)              (1,788)           (5,240)
                                                               (19,075)             (17,506)          (20,960)

Net current (liabilities)/assets                                  (783)                2,164             4,010

Total assets less current liabilities                           222,985              180,472           177,945

Creditors: amounts falling due after more than
one year:
Debenture                                                      (10,000)             (10,000)          (10,000)

Net assets                                                      212,985              170,472           167,945

Capital and reserves
Called up share capital                                          21,619               23,191            22,931
Capital redemption reserve                                        4,564                2,992             3,252
Share premium                                                    23,132               23,132            23,132
Capital reserves                                                158,075              115,555           113,771
Revenue reserve                                                   5,595                5,602             4,859
Total shareholders' funds                                       212,985              170,472           167,945

Net asset value per ordinary share - pence                       246.30               183.77            183.10

Geographical distribution of total assets less current liabilities (excluding
loans) at 31 October 2003 was United Kingdom 46.2%; USA 25.1%; Japan 9.7%;
Europe 11.1%;  Far East and others 7.9%.


F&C SMALLER COMPANIES PLC
Unaudited Interim Statement of Results for the half year ended 31 October 2003

Unaudited Statement of Total Return (incorporating the revenue account*)

                               - 6 months to 31 October -                   - 6 months to 31 October -
                                        - 2003 -                                     - 2002 -
                             Revenue        Capital          Total        Revenue        Capital          Total
                              £'000s         £'000s         £'000s         £'000s         £'000s         £'000s
Gains/(losses) on
investments                        -         55,172         55,172              -       (75,541)       (75,541)
Exchange gains/                    5          (321)          (316)              1            373            374
(losses)
Income                         2,746              -          2,746          2,431              -          2,431
Management fee                 (181)          (422)          (603)          (218)          (508)          (726)
Other expenses                 (289)           (19)          (308)          (310)           (22)          (332)

Net return before
finance costs and
taxation                       2,281         54,410         56,691          1,904       (75,698)       (73,794)
Interest payable and
similar charges                (188)          (440)          (628)          (201)          (469)          (670)
                               
Return on ordinary
activities before
taxation                       2,093         53,970         56,063          1,703       (76,167)       (74,464)
Taxation on ordinary
activities                     (138)              -          (138)          (226)            132           (94)
                               
Return attributable
to equity
shareholders                   1,955         53,970         55,925          1,477       (76,035)       (74,558)
Dividends on ordinary
shares                       (1,219)              -        (1,219)        (1,270)              -        (1,270)
                             
Amount transferred to
/(from) reserves                 736         53,970         54,706            207       (76,035)       (75,828)

Return per ordinary
share - pence                   2.17          59.88          62.05           1.59        (81.96)        (80.37)


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

All revenue and capital items in the above statement derive from continuing
operations.



F&C SMALLER COMPANIES PLC
Unaudited Interim Statement of Results for the half year ended 31 October 2003

Unaudited Cash Flow Statement
                                                                                  6 months to        6 months to
                                                                                  31 Oct 2003        31 Oct 2002
                                                                                       £'000s             £'000s

Net cash inflow from operating activities                                               2,423              1,747
Interest paid                                                                           (626)              (913)
Total tax paid                                                                          (160)              (110)
Net cash inflow/(outflow) from purchases and sales of investments                       4,078            (6,123)
                                                                                        
Equity dividends paid                                                                 (2,550)            (2,485)
Net cash inflow/(outflow) before use of liquid resources
   and financing                                                                        3,165            (7,884)

Decrease in short term deposits                                                         5,439             10,678
Net cash outflow from financing                                                       (9,785)            (3,649)

Decrease in cash during the period                                                    (1,181)              (855)


The Directors have declared an interim dividend of 1.41p per share payable on 27
January 2004 to shareholders registered on 30 December 2003.  The ex-dividend
date will be 24 December 2003.

The interim Report and Accounts will be posted to shareholders in early January
2004.

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
15 December 2003


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