Interim Results

Edinburgh Small Companies Trust PLC
14 February 2002


14 February 2002


                         EDINBURGH SMALL COMPANIES PLC
                      INTERIM RESULTS FOR THE SIX MONTHS TO
                                31 DECEMBER 2001



For further information, please contact:

Alistair Currie, Director
Edinburgh Fund Managers plc                                    0131 313 1000


EDINBURGH SMALL COMPANIES TRUST


CHAIRMAN'S STATEMENT

Background

World financial markets have experienced considerable volatility throughout the
period under review.  The UK Smaller Companies sector was not immune and at one
stage the Hoare Govett Smaller Companies Index fell 25.3% below its level at the
end of June 2001.  However, a partial recovery in share prices reversed some of
the sharp falls experienced in the aftermath of the terrorist attack on 11th
September and the index finished the period with a fall of 8.8%.


Performance

The sharp fall in share prices was most acute for a number of technology and
growth companies and this was reflected in the performance of Edinburgh Small
Companies Trust.   Over the period, gross assets have fallen by 22.6% from £159m
to £123m.  The underperformance, in relation to the benchmark, is due to a sharp
fall in companies operating in cyclical services, particularly leisure, media
and support services, information technology and software and computer services.

The impact of being geared during a period of falling prices led to a 27.8% fall
in the net asset value from 170.6p to 123.2p.


Gearing

At 30th June, gearing (long-term debt less cash and cash equivalents)
represented 29.4% of shareholders' funds but rose to 53.5% following the
collapse in the market following the terrorist attack on 11th September.  The
board was concerned with such a high level of gearing but took the decision that
it was the wrong time to reduce gearing.  Following the recovery of the market,
the board's policy has been to reduce gearing which fell to 31.9% at 31 December
and at 12 February stands at 30.6%.   The directors intend, markets permitting,
to reduce gearing below 25%.


Revenue Account

The loss on the earnings per share has fallen from 0.38p to 0.36p.  The board is
not recommending an interim dividend.


Outlook

The slowdown in the US may be greater and last longer than initially
anticipated.  While lower US activity affects the rest of the world, so far the
UK economy is proving to be more resilient than many of its international
competitors. It remains likely that the UK economy will avoid a recession and
economic growth will pick up in the coming months.  While economic uncertainty
persists, the UK stock market will remain vulnerable to any further unexpected
events or disappointing corporate profits.

In the light of recent events and the very disappointing performance, all the
companies in the portfolio have been thoroughly re-appraised by the managers.
They believe that valuations are attractive and that the long term potential for
these stocks remains strong.



Donald MacDonald
Chairman



STATEMENT OF TOTAL RETURN
for the six months to 31 December 2001 (unaudited)
                                                         Revenue         Capital           Total
                                                         £000            £000              £000

Realised net losses on investments                       -               (3,770)           (3,770)
Unrealised net losses on investments                     -               (27,986)          (27,986)

Total capital losses on investments                      -               (31,756)          (31,756)
Income from investments                                  857             -                 857
Interest receivable on short term deposits               122             -                 122
Other income                                             14              -                 14
Investment management fee                                (336)           (336)             (672)
Administrative expenses                                  (147)           -                 (147)

Net return before finance costs and taxation             510             (32,092)          (31,582)
Interest payable and similar charges                     (758)           (758)             (1,516)

Return on ordinary activities before taxation            (248)           (32,850)          (33,098)
Taxation                                                 -               -                 -

Return on ordinary activities after taxation             (248)           (32,850)          (33,098)


Dividend in respect of equity shares                     17              -                 17

                                                         (231)           (32,850)          (33,081)

Return per ordinary share                                (0.36p)         (48.74p)          (49.10p)

Diluted return per ordinary share                        (0.35p)         (48.21p)          (48.57p)


___________________________________________________________________________________

for the six months to 31 December 2000 (unaudited)
                                                         Revenue         Capital           Total
                                                         £000            £000              £000

Realised gains on investments                            -               13,195            13,195
Unrealised losses on investments                         -               (30,063)          (30,063)

Total capital losses on investments                      -               (16,868)          (16,868)
Income from investments                                  1,077           -                 1,077
Interest receivable on short term deposits               86              -                 86
Other income                                             10              -                 10
Investment management fee                                (618)           (618)             (1,236)
Administrative expenses                                  (131)           -                 (131)

Net return before finance costs and taxation             424             (17,486)          (17,062)
Interest payable and similar charges                     (691)           (663)             (1,354)

Return on ordinary activities before taxation            (267)           (18,149)          (18,416)
Taxation                                                 -               -                 -

Return on ordinary activities after taxation             (267)           (18,149)          (18,416)
Dividend in respect of equity shares                     -               -                 -

                                                         (267)           (18,149)          (18,416)

Return per ordinary share                                (0.38p)         (26.09p)          (26.47p)

Diluted return per ordinary share                        (0.38p)         (25.51p)          (25.89p)



for the year to 30 June 2001 (audited)
                                                         Revenue         Capital           Total
                                                         £000            £000              £000

Realised gains on investments                            -               14,282            14,282
Unrealised losses on investments                         -               (68,440)          (68,440)

Total capital losses on investments                      -               (54,158)          (54,158)
Income from investments                                  2,343           -                 2,343
Interest receivable on short term deposits               220             -                 220
Other income                                             10              -                 10
Investment management fee                                (1,083)         (1,083)           (2,166)
Administrative expenses                                  (276)           (2)               (278)

Net return before finance costs and taxation             1,214           (55,243)          (54,029)
Interest payable and similar charges                     (1,449)         (1,421)           (2,870)

Return on ordinary activities before taxation            (235)           (56,664)          (56,899)
Taxation                                                 (2)             -                 (2)

Return on ordinary activities after taxation             (237)           (56,664)          (56,901)
Dividend in respect of equity shares                     (522)           -                 (522)

                                                         (759)           (56,664)          (57,423)

Return per ordinary share                                (0.34p)         (81.43p)          (81.77p)

Diluted return per ordinary share                        (0.33p)         (79.88p)          (80.21p)




___________________________________________________________________________________


BALANCE SHEET
(unaudited)
                                           At 31 December        At 30 June           At 31 December
                                           2001                  2001                 2000
                                           £000                  £000                 £000
Fixed assets
Investments                                109,533               153,601              196,469

Current assets
Debtors                                    657                   416                  265
Treasury Bills                             6,959                 -                    -
Cash and short term deposits               7,104                 8,489                2,472

                                           14,720                8,905                2,737
Creditors: amounts falling due within one
year                                        1,193                 3,763                1,420

Net current assets                         13,527                5,142                1,317

Total assets less current liabilities      123,060               158,743              197,786


Creditors: amounts falling due after more
than one year                              41,439                41,474               41,510

                                           81,621                117,269              156,276


Capital and reserves
Called up share capital - equity           16,851                17,400               17,400
Other reserves                             64,770                99,869               138,876



Total equity shareholders' funds           81,621                117,269              156,276


Adjusted net asset value per ordinary      123.19p               170.60p              226.70p
share

Fully diluted adjusted net asset value per
share                                      122.19p               167.66p              221.41p




CASHFLOW STATEMENT
(unaudited)

                                                         At 31 December       At 31 December   At 30 June 2001
                                                                   2001                 2000
                                                                   £000                 £000              £000

Revenue before finance costs and taxation                          510                  424              1,214
(Increase)/Decrease in accrued income                              204                  355                209
(Increase)/Decrease in debtors                                       1                    2                (3)
Increase/(Decrease) in creditors                                 (114)                 (33)               (78)
Tax on unfranked investment income                                 (2)                    -                (1)
Expenses charged to capital                                      (335)                (618)            (1,151)

Net cash inflow from operating activities                          264                  130                190
Net cash outflow from servicing of finance                     (1,550)              (1,187)            (2,737)
Net cash inflow from financial investment                        9,933              (9,382)            (1,871)
Equity dividends paid                                            (505)                (522)              (522)

Net cash inflow before financing                                 8,142             (10,961)            (4,940)


Net cash outflow from financing                                (2,568)               10,649             10,645

Management of liquid resources                                 (6,959)                    -                  -

INCREASE/(DECREASE) IN CASH                                    (1,385)                (312)              5,705




NOTES :

1.              The accounts are prepared under the same accounting policies
used for the year to 30 June 2001.

2.              The financial information for the year ended 30 June 2001 has
been extracted from the Annual Report and Accounts of the Company which have
been filed with the Registrar of Companies and contained an unqualified
auditors' report.

3.     The statement of total return (incorporating the revenue account),
balance sheet and cashflow statement set out above do not represent full
accounts in accordance with Section 240 of the Companies Act 1985.

4.              No interim dividend has been declared in respect of the year
ending 30 June 2002.

5.     The Interim Report will be posted to shareholders on 27 February 2002 and
copies will be available from the registered office of the Company .



Please note that past performance is not necessarily a guide to the future and
that the value of investments and the income from them may fall as well as rise.
Investors may not get back the amount they originally invested.



For Edinburgh Small Companies Trust plc

Edinburgh Fund Managers plc, Secretary

Amanda Fraser

Company Secretary

END





                      This information is provided by RNS
            The company news service from the London Stock Exchange