Interim Results

F&C Global Smaller Companies PLC
12 December 2006



Date:                11 December 2006



Contact:             Peter Ewins
                     F&C Management Limited
                     020 7628 8000






                        F&C GLOBAL SMALLER COMPANIES PLC
                     Unaudited Interim Statement of Results
                    for the half-year ended 31 October 2006




HIGHLIGHTS OF RESULTS




•         Net asset value outperformed the benchmark

•         Strong relative performance in the UK, Europe and Pacific ex Japan

•        Interim dividend up by 2.7% from 1.49p to 1.53p

•        More than 3,500 new shareholders







SUMMARY OF UNAUDITED RESULTS FOR THE HALF-YEAR ENDED 31 OCTOBER 2006






                                                            31 October 2006            30 April 2006       % Change

Share price                                                          410.75p                 435.00p           -5.6

Net asset value per share (debenture at nominal value)               454.43p                 470.83p           -3.5

Net asset value per share (debenture at market value)                446.70p                 463.47p           -3.6

Benchmark (capital return)                                                                                     -4.2

                                                             Half-year ended         Half-year ended
                                                             31 October 2006         31 October 2005       % Change

Revenue return per share                                               2.41p                   2.37p           +1.7

Interim dividend per share*                                            1.53p                   1.49p           +2.7



* Payable on 30 January 2007 to shareholders on the register at 29 December
  2006.



Chairman's Statement


The first half of the current financial year was a testing period for global
smaller company shares.  World equity markets enjoyed a good start to 2006, but
some came under pressure as the year progressed, particularly at the smaller
company end where gains over recent years have been strongest.  The blended
benchmark* against which the performance of your Company is measured, fell by
4.2% over the six months. The Company's net asset value ('NAV') declined by 3.5%
and we therefore performed better than the benchmark.  Both the NAV and the
share price have outperformed the benchmark by a clear margin over the last five
years.



The Company's share price fell by slightly more than the NAV, down by 5.6%.
When measured against the NAV including the debenture at market value, the
shares ended the period at an 8.0% discount.



While a fall in the share price at any time is disappointing, it should be
remembered that this came after a 62% rise in the last financial year.
Shareholders who held the shares for the five years to the end of October 2006
have seen a total return of 125%, well ahead of most other investments.



Continuing the theme of recent years, dividend income received from the
investment portfolio was encouraging.  This has led the Board to declare an
interim dividend of 1.53p, which is 2.7% higher than last year.  We are keen to
maintain a progressive approach to the dividend although, of course, this
depends in the final analysis on the performance of our portfolio companies.
There is no plan to declare another special dividend in the current financial
year, as last year's payout was prompted by the circumstances surrounding the
Tender Offer.



Investment performance

Our investment performance over the six months was strong in relation to the
relevant local benchmarks in the UK, Europe and Pacific ex Japan, whilst in the
US and Japan we underperformed.  The background to the different regional
performances is discussed below. Returns from the different regions varied quite
considerably, with the UK the best and Japan the worst by quite a distance.  The
Company has been overweight in the UK and also in Europe throughout the period
and this has proved to be advantageous.



Over the course of the six months, the Manager reduced the level of gearing on
the portfolio.  Gearing is only helpful when markets are rising, and being
geared over the first half of the year had a marginally detrimental effect on
performance.



Discount

At the time of the Tender Offer last year we said that, going forward, we
intended to use our share buyback powers actively so as to ensure that, as far
as possible, the discount to NAV at which our shares trade remains close to the
tender level discount of 5%.  We have followed this policy and the Company
bought in 475,000 shares for cancellation over the period.  Previously, there
had been considerable volatility in the discount partly depending on whether
smaller companies as an asset class were in or out of favour.  Over the last
year, the discount has been less volatile reflecting a more balanced shareholder
base.



Good investment performance and effective marketing of the Company to the
investment community also benefited the discount by increasing the demand for
the Company's shares.  I am pleased to say that the various F&C savings schemes
have continued to be an effective tool for gaining new shareholders.  Over the
course of the last six months, more than 3,500 new shareholders have joined the
register and we now have over 22,000.



In addition to our everyday marketing to institutional and private client
brokers, a direct mailing campaign was used in November to target new private
investors.  We estimate that over 71% of the Company's shares are now held
privately.



* 40% Hoare Govett Smaller Companies Index, 60% MSCI World ex UK Small Cap Index




Markets and investment policy

Over the six months, the fundamental world economic background remained largely
supportive for corporate profitability.  The dynamic growth of the Chinese
economy continued and this helped to foster faster growth in other parts of the
world. UK growth was better than expected and Europe threw off its previous
sluggishness.  The main area which witnessed a slowdown was the US, where the
series of interest rate rises has had an impact on the housing sector and
elsewhere.



Early in the period, the rise in oil and other commodity prices served to dampen
enthusiasm in stockmarkets and stoked concern about rising inflation and a
growth slowdown. Volatility and risk aversion increased.  This can cause smaller
company shares to find themselves out of favour relative to large companies, and
this was particularly evident in the US and Japan.  However, circumstances
improved as the period progressed.



We break our portfolio down into five main segments; the UK, Europe, the US,
Japan and Pacific ex Japan.  In each we judge success against a local small cap
benchmark.  The UK was the best performing market.  Japan suffered from reduced
private investor confidence following a number of reported corporate scandals.



The solid UK market performance owed something to a spate of takeover activity.
With companies feeling more confident, finance readily available to fund deals
and private equity companies awash with liquidity, this was perhaps not a
surprise.  Our portfolio benefited from takeovers of MacLellan Group and Hardman
Resources.  More important to performance however were significant gains in our
long standing and large holdings in Aveva Group, Omega International and
Chemring Group.  All these companies reported better than expected results.



Our European portfolio continued its good form from last year, rising well ahead
of the benchmark.  A notable contributor here, continuing the takeover theme,
was Europistas, the Spanish motorway concessions company, which attracted
attention from two competing bidders.  Logitech, the communications device
company, also performed strongly in the period.



In the US, we had a more difficult time.  Two particular disappointments were
Lenox, the giftware/tableware business, where management appear to have failed
to deliver synergies from a merger, and TRX, an IT software company serving the
travel industry, where there have been order delays.  On the other hand Reynolds
and Reynolds, which provides software into the car dealership market, was taken
over giving the portfolio a boost, and technology stock Avocent also rose
strongly on completion of a number of acquisitions.



The Japanese portfolio underperformed with a poor October largely to blame.
Over the six months, Nippon Yushoki which supplies fork-lift equipment was weak
on concerns of a cyclical downturn. MTI, the telecoms retailer and mobile
content company also fell heavily as competition in its sector increased.
Partially offsetting these falls, Jin the opticians business, performed well, as
did Ahresty the automotive components group which benefited from the trend
towards the greater use of aluminium in the industry.  We believe that there are
some interesting opportunities in Japan following the recent weakness and we
have started to increase exposure to the market.



The Pacific ex Japan portfolio performed strongly in the period.  We said in the
Annual Report that we would be moving towards a portfolio of third party managed
collectives for this region as we felt that this was likely to result in better
and more consistent returns over the longer term.  While we have made progress
towards this, three of the remaining direct holdings have contributed good
results.  Leyshon Resources was up over 50% as it announced encouraging gold
drilling results in China. Labroy Marine is continuing to benefit from high
demand for its services, as is Olam, the supply chain manager in the commodities
market.



In overall asset allocation terms, the Company's exposure to the UK and the US
increased over the period, though we remain underweight in the US against the
benchmark.  The overweight position in Europe was a good call and produced a
positive return.  However, we have recently started to take profits in Europe as
we perceive value is becoming harder to find in the smaller company universe.




The Board

I am pleased to say that Mr Leslie Cullen joined your Board as a non-executive
director on 1 September 2006.  Les is an MBA and a Fellow of both the
Association of Certified Accountants and the Association of Corporate
Treasurers.  He is an independent trustee and audit chairman of the British
Telecom Pension Scheme and a non-executive director of Sustrans Ltd, Interserve
plc, Avis Europe plc and DTZ Holdings plc.  Les has worked in the UK and
overseas for a number of large public companies, including being group finance
director of Prudential plc and Inchcape plc.  He was chairman of a number of
private equity backed organisations.  He is already making a great contribution
to our deliberations and we are very pleased to have him.



Outlook

Market sentiment has improved since late summer as hopes have risen that the
monetary tightening phase in the US has come to an end.  Takeover activity
continues to be supportive and most companies are still enjoying positive
trading conditions.  Valuations in some sectors and parts of the world do look
high however.



Against this backdrop, the Manager is making some changes to asset allocation
based on the relative attractiveness of valuations in the different parts of the
world.  The effects of the recent fall in the US dollar are also being
appraised.  For the long-term, the Board remains confident that astute stock
selection from the wide smaller company stock universe, should deliver good
returns to shareholders.



Gerry Grimstone

Chairman



December 2006


UNAUDITED INCOME STATEMENT





                                                   Half-year ended 31 October 2006      Half-year ended 31 October 2005

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

(Losses)/gains on investments                                -   (6,565)   (6,565)             -      43,023     43,023
Exchange losses                                            (1)      (42)      (43)           (3)       (965)      (968)
Income                                                   1,977         -     1,977         2,865           -      2,865
Management fee                                           (129)     (303)     (432)         (175)       (408)      (583)
Performance fee                                              -     (138)     (138)             -           -          -
Other expenses                                           (324)      (32)     (356)         (284)        (29)      (313)
Net return before finance costs and

   taxation                                              1,523   (7,080)   (5,557)         2,403      41,621     44,024
Finance costs                                            (178)     (415)     (593)         (232)       (541)      (773)
Net return on ordinary activities before

   taxation                                              1,345   (7,495)   (6,150)         2,171      41,080     43,251
Taxation on ordinary activities                          (183)        53     (130)         (165)           -      (165)
Net return attributable to equity shareholders           1,162   (7,442)   (6,280)         2,006      41,080     43,086

Return per share - pence                                  2.41   (15.45)   (13.04)          2.37       48.62      50.99



*The total 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.

A statement of total recognised gains and losses is not required as all gains
and losses of the Company have been reflected in the above statement.



UNAUDITED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS


Half-year ended 31 October 2006              Called up      Share       Capital                           Total equity
                                                 share    premium    redemption     Capital    Revenue   shareholders'
                                               capital    account       reserve    reserves    reserve           funds
                                                £'000s     £'000s        £'000s      £'000s     £'000s          £'000s

Balance brought forward at 30 April 2006        12,088     23,132        14,095     170,960      7,377         227,652
Movements during the half-year ended
  31 October 2006
Dividends paid                                       -          -             -           -    (1,944)         (1,944)
Shares purchased by the Company                  (119)          -           119     (1,865)          -         (1,865)
Return attributable to equity                        -          -             -     (7,442)      1,162         (6,280)
shareholders
Balance carried forward at
    31 October 2006                             11,969     23,132        14,214     161,653      6,595         217,563




Half-year ended 31 October 2005              Called up      Share       Capital                                  Total
                                                 share    premium    redemption     Capital    Revenue   shareholders'
                                               capital    account       reserve    reserves    reserve           funds
                                                £'000s     £'000s        £'000s      £'000s     £'000s          £'000s

Balance brought forward at 30 April 2005        21,231     23,132         4,952     207,658      7,425         264,398
Movements during the half-year ended
  31 October 2005
Dividends paid                                       -          -             -           -    (2,499)         (2,499)
Shares purchased by the Company                  (125)          -           125     (1,384)          -         (1,384)
Return attributable to equity                        -          -             -      41,080      2,006          43,086
shareholders
Balance carried forward at
   31 October 2005                               21,106     23,132         5,077     247,354      6,932         303,601






Year ended 30 April 2006                     Called up      Share       Capital                                  Total
                                                 share    premium    redemption     Capital    Revenue   shareholders'
                                               capital    account       reserve    reserves    reserve           funds
                                                £'000s     £'000s        £'000s      £'000s     £'000s          £'000s

Balance brought forward at 30 April 2005        21,231     23,132         4,952     207,658      7,425         264,398
Movements during the year ended

    30 April 2006
Dividends paid                                       -          -             -           -    (3,258)         (3,258)
Shares purchased by the Company                (9,143)          -         9,143   (133,240)          -       (133,240)
Return attributable to equity                        -          -             -      96,542      3,210          99,752
shareholders
Balance carried forward at
  30 April 2006                                 12,088     23,132        14,095     170,960      7,377         227,652


UNAUDITED BALANCE SHEET


                                                                    31 October 2006     31 October 2005   30 April 2006
                                                                             £'000s              £'000s          £'000s
Fixed assets
Investments                                                                 223,716             256,243         238,228
Current assets
Debtors                                                                         744              13,831           1,609
Taxation recoverable                                                              9                  10              10
Cash at bank and short-term deposits                                          5,404              45,753           2,652
                                                                              6,157              59,594           4,271
Creditors: amounts falling due within one year
Loans                                                                             -                   -         (3,000)
Other                                                                       (2,310)             (2,236)         (1,847)
                                                                            (2,310)             (2,236)         (4,847)
Net current assets/(liabilities)                                              3,847              57,358           (576)
Total assets less current liabilities                                       227,563             313,601         237,652
Creditors: amounts falling due after more than one year
Debenture                                                                  (10,000)            (10,000)        (10,000)
Net Assets                                                                  217,563             303,601         227,652

Capital and reserves
Called up share capital                                                      11,969              21,106          12,088
Share premium account                                                        23,132              23,132          23,132
Capital redemption reserve                                                   14,214               5,077          14,095
Capital reserves                                                            161,653             247,354         170,960
Revenue reserve                                                               6,595               6,932           7,377
Total equity shareholders' funds                                            217,563             303,601         227,652

Net asset value per ordinary share - pence                                   454.43              359.61          470.83




UNAUDITED CASH FLOW STATEMENT


                                                                           Half-year ended         Half-year ended
                                                                           31 October 2006         31 October 2005
                                                                                    £'000s                  £'000s
Net cash inflow from operating activities                                            1,633                   2,160
Cash outflow from servicing of finance                                               (591)                   (792)
Total tax paid                                                                       (129)                   (165)
Net cash inflow from financial investment                                            8,900                  57,181
Equity dividends paid                                                              (1,944)                 (2,499)
Net cash inflow before use of liquid resources and financing                         7,869                  55,885
Increase in short-term deposits                                                    (1,000)                (30,862)
Net cash outflow from financing                                                    (4,865)                (15,601)
Increase in cash                                                                     2,004                   9,422

Reconciliation of net cash flow to movement in net (debt)/funds
Increase in cash                                                                     2,004                   9,422
Increase in short-term deposits                                                      1,000                  30,862
Decrease in short-term loans                                                         3,000                  14,217
Movement in net funds resulting from cash flows                                      6,004                  54,501
Exchange movement                                                                     (44)                   (969)
Movement in net funds                                                                5,960                  53,532
Net debt brought forward                                                          (10,556)                (17,779)
Net (debt)/funds carried forward                                                   (4,596)                  35,753

Represented by:
Cash at bank                                                                         3,404                  11,210
Short-term deposits                                                                  2,000                  34,543
                                                                                     5,404                  45,753
Debenture                                                                         (10,000)                (10,000)
                                                                                   (4,596)                  35,753




Notes



1    ACCOUNTING POLICIES

These results have been prepared on the basis of the accounting policies set out
in the Company's financial statements at 30 April 2006.  These accounting
policies are expected to be followed in the year ending 30 April 2007 as well.



2    RETURN PER ORDINARY SHARE

Revenue return

The revenue return per share for the half-year ended 31 October 2006 is based on
the revenue return attributable to equity shareholders of £1,162,000 profit
(half-year ended 31 October 2005: £2,006,000 profit).



Capital return restated

The capital return per share for the half-year ended 31 October 2006 is based on
the capital return attributable to equity shareholders of £7,442,000 loss
(half-year ended 31 October 2005: £41,080,000 profit).



Weighted average number of shares in issue

Both the revenue and capital returns per share for the half-year ended 31
October 2006 are based on a weighted average number of 48,176,100 shares in
issue (half-year ended 31 October 2005: 84,490,527).



3    DIVIDEND

The Directors have declared an interim dividend of 1.53p per ordinary share
payable on 30 January 2007 to shareholders on the register on 29 December 2006.
The amount of this dividend will be £732,000 based on 47,825,781 shares in issue
at 11 December 2006. This amount has not been accrued in the results for the
half-year ended 31 October 2006.



4    RESULTS

The results for the half-year ended 31 October 2006 and for the half-year ended
31 October 2005, which are unaudited, constitute non-statutory accounts within
the meaning of Section 240 of the Companies Act 1985. The latest published
accounts which have been delivered to the Registrar of Companies are for the
year ended 30 April 2006; the report of the auditors thereon was unqualified and
did not contain a statement under Section 237 of the Companies Act 1985. The
abridged financial statements shown above for the year ended 30 April 2006 are
an extract from those accounts (except as noted above).



5    REPORT AND ACCOUNTS

The Report and Accounts will be posted to shareholders in early January 2007.
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
Exchange House, Primrose Street, London EC2A 2NY



11 December 2006




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