1st Quarter Results

BFS SMALL COMPANIES DIVIDEND TRUST PLC

PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS

The Directors announce the unaudited statement of consolidated results for the
period

1 May 2003 to 31 July 2003 as follows:

CONSOLIDATED STATEMENT OF TOTAL RETURN

(*incorporating the revenue account)

                                    1 May 2003 to               1 May 2002 to
                                                                             
                                     31 July 2003                31 July 2002
                                                                             
                        Revenue  Capital    Total   Revenue  Capital    Total
                                                                             
                         £'000    £'000    £'000     £'000    £'000    £'000 
                                                                             
Gains /(losses) on           -    5,947    5,947         -   (2,596)  (2,596)
investments                                                                  
                                                                             
Dividends and              557        -      557       577        -      577 
interest                                                                     
                                                                             
Other income                 2        -        2         -        -        - 
                                                                             
Investment management      (36)     (54)     (90)      (32)     (48)     (80)
fee                                                                          
                                                                             
Other expenses             (56)       -      (56)      (61)       -      (61)
                                                                             
Net return before                                                            
                                                                             
finance costs and          467    5,893    6,360       484   (2,644)  (2,160)
taxation                                                                     
                                                                             
Interest payable and       (34)     (51)     (85)      (35)     (53)     (88)
similar charges                                                              
                                                                             
Appropriations in                                                            
respect of:                                                                  
                                                                             
- Zero Dividend              -     (166)    (166)        -     (154)    (154)
Preference shares                                                            
                                                                             
- Preference shares          -       (1)      (1)        -       (1)      (1)
                                                                             
Issue costs of Zero                                                          
                                                                             
Dividend Preference          -       (8)      (8)        -       (8)      (8)
shares                                                                       
                                                                             
Return on ordinary                                                           
activities before                                                            
                                                                             
and after taxation         433    5,667    6,100       449   (2,860)  (2,411)
                                                                             
First interim             (354)       -     (354)     (346)       -     (346)
dividend proposed of                                                         
2.25p                                                                        
                                                                             
(2002: 2.20p)                                                                
                                                                             
Transfer to/ (from)         79    5,667    5,746       103   (2,860)  (2,757)
reserves                                                                     
                                                                             
Return per:               pence    pence    pence     pence    pence    pence
                                                                             
Ordinary share            2.75    35.98    38.73      2.85   (18.16)  (15.31)
                                                                             
Zero Dividend                -     2.66     2.66         -     2.46     2.46 
Preference share                                                             
                                                                             
Preference share             -     2.66     2.66         -     2.46     2.46 
                                                                             

* The revenue column of this statement is the revenue account of the Group.

BALANCE SHEET

                                               As at        As at       As at
                                                                             
                                             31 July     30 April     31 July
                                                                             
                                                2003         2003        2002
                                                                             
                                         (unaudited)    (audited) (unaudited)
                                                                             
                                              £'000        £'000       £'000 
                                                                             
Investments                                  35,859       30,060      32,147 
                                                                             
Current assets                                                               
                                                                             
Debtors                                         387          632         128 
                                                                             
Cash at bank                                    100          309           1 
                                                                             
                                                487          941         129 
                                                                             
Current liabilities                                                          
                                                                             
Creditors                                       538          899         562 
                                                                             
Bank overdraft                                7,277        7,491       6,974 
                                                                             
                                              7,815        8,390       7,536 
                                                                             
Net current liabilities                      (7,328)      (7,449)     (7,407)
                                                                             
Total assets less current liabilities        28,531       22,611      24,740 
                                                                             
Creditors - amounts falling due after                                        
                                                                             
more than one year                           (8,571)      (8,397)     (7,897)
                                                                             
                                             19,960       14,214      16,843 
                                                                             
Share capital and reserves                                                   
                                                                             
Share capital                                 3,938        3,938       3,938 
                                                                             
Share premium                                11,126       11,126      11,126 
                                                                             
Capital reserve                               4,206       (1,461)      1,200 
                                                                             
Revenue reserve                                 690          611         579 
                                                                             
Shareholders funds                           19,960       14,214      16,843 
                                                                             
Net asset value per:                                                         
                                                                             
Ordinary share                              126.23p        90.25p    106.28p 
                                                                             
Zero Dividend Preference share              136.45p       133.67p    125.71p 
                                                                             
Preference share                            138.35p       135.69p    128.10p 
                                                                             
Total net assets attributable to:                                            
                                                                             
Ordinary shares                              19,881       14,214      16,740 
                                                                             
Zero Dividend Preference shares               8,528        8,355       7,857 
                                                                             
Preference shares                                43           42          40 

STATEMENT OF CASHFLOWS                                                       
                                                                             
                                               1 May 2003 to    1 May 2002 to
                                                                             
                                                31 July 2003     31 July 2002
                                                                             
                                                      £'000            £'000 
                                                                             
Net cash inflow from operating activities               757             (195)
                                                                             
Servicing of finance                                                         
                                                                             
Interest paid                                           (87)             (58)
                                                                             
Net cash outflow from servicing of                      (87)             (58)
finance                                                                      
                                                                             
Taxation recovered                                        -                5 
                                                                             
Capital expenditure and financial                                            
investment                                                                   
                                                                             
Purchase of investments                              (5,459)          (2,223)
                                                                             
Sale of investments                                   5,329            3,017 
                                                                             
Net cash (outflow) /inflow from capital                (130)             794 
                                                                             
expenditure and financial investment                                         
                                                                             
Equity dividends paid                                  (535)            (520)
                                                                             
Net cash inflow                                           5               26 
                                                                             
Increase in cash                                          5               26 
                                                                             
                                                          5               26 

NOTE

1. The above unaudited financial information which does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985 has been
prepared on the basis of the accounting policies set out in the statutory
accounts of the Group for the year ended 30 April 2003, save that the Group has
adopted the 2003 Statement of Recommended Practice regarding the Financial
Statements of Investment Trust Companies. The auditors have reported on those
accounts; their reports were unqualified and did not contain a statement under
section 237 (2) or (3) of the Companies Act 1985. Statutory financial
statements for the year ended 30 April 2003 have been delivered to the
Registrar.

2. The Directors have declared a first interim dividend of 2.25p (2002: 2.20p)
per Ordinary share, payable on 30 September 2003 to the holders of Ordinary
shares on the Register at 12 September 2003.

3. The revenue return per Ordinary share is based on earnings of £433,000
(2002: £449,000) and on 15,750,000 (2002: 15,750,000) Ordinary shares, being
the weighted average number of Ordinary shares in issue during the period.

4. The capital return per Ordinary share is based on net capital gains of £
5,667,000 (2002: losses of £2,860,000) and on 15,750,000 (2002: 15,750,000)
Ordinary shares, being the weighted average number of Ordinary shares in issue
during the period.

5. An amount of £105,000 (2002: £101,000) has been charged to capital in
respect of management fees, other expenses and interest in accordance with the
Company's accounting policy.

6. The Company has conducted its affairs so that it satisfies the conditions
for approval as an investment trust company as set out in section 842 of the
Income and Corporation Tax Act 1988. It is the intention of the Directors that
the Company continues to meet these conditions.

7. There are 31,260 Preference and 6,250,000 Zero Dividend Preference shares in
issue. They each have an initial capital entitlement of 100p per share, growing
to 184.63p on 30 April 2007. As at 31 July 2003 the final entitlements of the
Preference shares and the Zero Dividend Preference shares were fully covered.
The accrued entitlement as at 31 July 2003 calculated in accordance with the
provisions of FRS 4 was 136.45p per Zero Dividend Preference share (2002:
125.71p) and 138.35p per Preference share (2002: 128.10p) and a total amount of
£167,000 (2002: £155,000) has been charged to capital during the period.

8. The net assets attributable and the net asset values per share are
calculated under the provisions of FRS4. Shareholders funds shown in the
Balance Sheet are also in accordance with FRS 4.

9. The Group's funds are invested principally in companies with a market
capitalisation of less than £100 million. The Group's portfolio comprises
companies listed on the official list and companies admitted to trading on AIM.
The Group may also invest up to 5% of its portfolio in unquoted securities.
Whilst the majority of the Group's funds are invested in ordinary shares of
companies, up to 30% may be invested in convertible securities. The Group does
not invest in other investment trusts.