Final Results

MONTANARO UK SMALLER COMPANIES INVESTMENT TRUST PLC              

              PRELIMINARY ANNOUNCEMENT OF AUDITED ANNUAL RESULTS               

The Directors announce the audited statement of results for the year ended 31
March 2004 as follows:-

STATEMENT OF TOTAL RETURN

(incorporating the revenue account*) of the Company

                           1 April 2003 to 31 March   1 April 2002 to 31 March
                                               2004                       2003
                                                                              
                          Revenue  Capital    Total  Revenue  Capital    Total
                                                                              
                           £'000    £'000    £'000    £'000    £'000    £'000 
                                                                              
Capital gains/(losses)                                                        
on                                                                            
                                                                              
investments                 -       21,002   21,002       -  (29,413) (29,413)
                                                                              
Dividends and interest      2,158        -    2,158   2,179        -    2,179 
receivable                                                                    
                                                                              
Investment management       (394)    (395)    (789)    (386)    (387)    (773)
fee                                                                           
                                                                              
Other expenses              (214)        -    (214)    (238)       -     (238)
                                                                              
Net return before                                                             
financing costs                                                               
                                                                              
and taxation                1,550   20,607   22,157   1,555  (29,800) (28,245)
                                                                              
Interest payable and                                                          
similar                                                                       
                                                                              
charges                     (231)    (355)    (586)    (299)    (299)    (598)
                                                                              
Return on ordinary                                                            
activities                                                                    
                                                                              
before taxation             1,319   20,252   21,571   1,256  (30,099) (28,843)
                                                                              
Taxation on ordinary            -        -        -       -        -        - 
activities                                                                    
                                                                              
Return on ordinary          1,319   20,252   21,571   1,256  (30,099) (28,843)
activities after                                                              
taxation                                                                      
                                                                              
Dividend proposed         (1,050)        -  (1,050)   (928)        -     (928)
                                                                              
Transfer to/(from)                                                            
reserves                                                                      
                                                                              
after dividends proposed      269   20,252   20,521     328  (30,099) (29,771)
                                                                              
                            Pence    Pence    Pence   Pence    Pence    Pence 
                                                                              
Return per ordinary          3.56    54.75    58.31    3.37   (80.72)  (77.35)
share                                                                         
                                                                              

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

All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the year.

SUMMARISED BALANCE SHEET

                                                              As at      As at 
                                                                               
                                                           31 March   31 March 
                                                                               
                                                                2004      2003 
                                                                               
                                                               £'000     £'000 
                                                                               
Investments                                                   63,430    44,728 
                                                                               
Net current assets                                             8,032     9,270 
                                                                               
Total assets less current liabilities                         71,462    53,998 
                                                                               
Creditors - amounts falling due after                                          
                                                                               
more than one year                                           (7,500)   (10,000)
                                                                               
Net assets                                                    63,962    43,998 
                                                                               
Net asset value per ordinary share                           173.63p    118.00p

SUMMARISED STATEMENT OF CASHFLOWS                                              
                                                                               
                                                          Year to 31 Year to 31
                                                               March      March
                                                                               
                                                                2004       2003
                                                                               
                                                               £'000      £'000
                                                                               
Net cash inflow from operating activities                      1,159     1,179 
                                                                               
Servicing of finance                                                           
                                                                               
- Interest and similar charges paid                            (481)      (615)
                                                                               
- Loan breakage costs                                          (124)          -
                                                                               
Net cash outflow from servicing of finance                     (605)      (615)
                                                                               
Taxation                                                                       
                                                                               
- Taxation recovered                                               -         2 
                                                                               
Net inflow from taxation                                           -         2 
                                                                               
Capital expenditure and financial investment                                   
                                                                               
- Purchases of investments                                  (28,684)   (16,560)
                                                                               
- Sales of investments                                        31,150    20,589 
                                                                               
Net cash inflow from capital expenditure                                       
                                                                               
and financial investment                                       2,466     4,029 
                                                                               
Equity dividends paid                                          (929)      (690)
                                                                               
Net cash inflow before financing                              2,091      3,905 
                                                                               
Financing                                                                      
                                                                               
- (Repayment)/proceeds of credit facility                    (2,500)     2,500 
                                                                               
- Ordinary shares purchased for cancellation                   (557)         - 
                                                                               
Net cash (outflow)/inflow from financing                     (3,057)     2,500 
                                                                               
(Decrease)/increase in cash                                    (966)     6,405 

The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 March 2003 or 2004. Statutory
accounts for 2003 have been delivered to the Registrar of Companies, whereas
those for 2004 will be delivered following the Company's Annual General
Meeting. 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.

CHAIRMAN'S STATEMENT

Background

I am pleased to present the ninth annual report of the Montanaro UK Smaller
Companies Investment Trust PLC ('the Company').

The Company was launched on 16 March 1995. In 1996, the initial £25 million
Company was increased in size through a £30 million 'C' share issue. Net assets
now stand at £64 million.

An investment trust is an attractive vehicle for shareholders to invest in
quoted UK 'smaller' companies, which are less well researched and more illiquid
than larger, blue chip companies. The investment policy remains to focus on the
'smaller' end of the quoted UK small companies market.

Performance

In the year to 31 March 2004, the NAV of the Company increased by 47 % to
173.6p in comparison with a 62 % gain by the FTSE SmallCap (excluding
investment companies) Index (' SmallCap'). Since launch, the NAV of the Company
has outperformed the SmallCap, its benchmark, increasing by 76 % in comparison
with a 57 % gain by the SmallCap.

Last year was a turbulent period for investors as global stock markets suffered
ahead of the Iraq War only to stage a dramatic recovery once it had started and
been won. The three-year bear market saw its low point during this time in
March 2003. Although most assets - whether bonds, property, commodities or
equities - all saw strong gains, UK quoted small companies fared particularly
well, significantly outperforming large companies.

Although underperforming the SmallCap last year, the Company nonetheless
produced very strong absolute returns.

Discount

The discount of the Company's share price to NAV was 23% on 31 March 2004
(2003: 21%). This compares with the sector average of 21% (Source: Bloomberg).

Share Buy Backs

The Board is responsible for the implementation of the share buy back
programme, which is undertaken at arm's length from the Manager.

The Board continues to consider share buy backs as and when appropriate. Since
launch, a total of 10,583,470 shares of the Company have been purchased for
cancellation, including 320,000 that have been purchased since 31 March 2004.
Approval to renew this authority will be sought at the forthcoming Annual
General Meeting.

Holding Shares in Treasury

As an alternative to cancellation, new regulations came into force on 1
December 2003 that allow companies, including investment trusts, to buy back
shares and hold them in treasury for re-issue at a later date. This has the
benefit of improving liquidity as well as retaining the opportunity to enhance
net asset value through buybacks. The new regulations allow up to 10% of the
issued share capital to be held in treasury at any one time. Approval to issue
shares from treasury will be sought at the forthcoming Annual General Meeting.

Gearing

The Board reviews the level of gearing considered appropriate for the Company
in discussion with the Manager. One of the benefits of investment trusts is the
ability to hold prudent levels of gearing, which can enhance investment
returns.

ING Bank provides a borrowing facility of up to £10 million at a fixed rate of
5.73%, which expires on 1 August 2007. £2.5 million was repaid during the
period and as at 31 March 2004 £7.5 million was drawn down under the facility.

Dividend

Although t he Company's primary focus is on capital growth rather than income,
the Board is aware that certain shareholders have a requirement for income as
well. Accordingly, t he Board proposes a final dividend of 2.85p (2003: 2.49p)
per ordinary share, representing an increase of over 14%.

The final dividend will be payable on 30 July 2004 to shareholders on the
register at the close of business on 28 May 2004.

Corporate Governance

The Board has reviewed the revised disclosure requirements for annual reports
following release of the revised Combined Code on Corporate Governance. The
Company already complies with most requirements and will report fully on its
compliance with this code in its annual report and financial statements for the
year ended 31 March 2005.

Outlook

At the time of writing last year, the SmallCap had halved in value from its
peak and 'investors had suffered one of the most extreme and longest bear
markets in living memory'. Since then, UK quoted small companies have produced
the third highest returns in almost fifty years.

The economic outlook for the UK remains encouraging, supported by historically
low interest rates, a buoyant housing market and benign inflation outlook.
However, the prospects for equities appear less certain than a year ago when
valuations appeared more compelling. Certainly sentiment has changed
considerably. Record selling of equities in 2003 has been followed recently by
record buying on a scale last seen in March 2000, just before the previous
peak. At the very least, shareholders should not expect to see a repeat of the
returns of last year.

UK quoted small companies perform well when the domestic economy is in good
shape, as it appears to be today. Historically, at such times they have
produced positive absolute returns for investors. Although stock markets may
pause to digest the gains of last year, UK quoted small companies appear
broadly attractive relative to their larger counterparts.

However, whereas last year saw exceptional gains from most forms of investment,
future returns are likely to depend more on careful stock selection. As a
Board, we are confident that the Company is well placed in this regard due to
the experience and high level of in-house resources of the Manager.

Sir Brandon Gough

Chairman

18 May 2004