Preliminary Annual Results

Edinburgh Small Companies Trust plc
26 August 2005



                      EDINBURGH SMALL COMPANIES TRUST PLC


Edinburgh Small Companies Trust plc, the investment trust with an investment
objective to achieve long term capital growth by investment in UK quoted smaller
companies, announces its preliminary results for the year ended 30 June 2005.


              PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2005



For further information, please contact:



Donald MacDonald
Edinburgh Small Companies Trust plc                           Tel. [phone]




Richard England
Press Manager, Standard Life Investments                      Tel. [phone]



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.




Edinburgh Small Companies Trust plc
Chairman's Statement





The period under review is the first full year with Standard Life Investments as
the Manager of the Company. The board is pleased with the substantial progress
the Company has made in the last twelve months in terms of share price and net
asset value performance. The improved performance, along with the benefit of
strong support of the Manager in marketing and distribution has been reflected
in a further significant narrowing of the discount over the past year.



Review of Year ended 30 June 2005

Returns from smaller companies were strong over the year as a whole, and in line
with broader market indices. The period from August 2004 through to March 2005
was one of significant strength for smaller company markets. Above-trend UK
economic growth enabled a wide range of UK smaller companies to report healthy
earnings progress. In addition, bid activity remained at high levels. Oil & gas
and minerals were the strongest market areas, while technology was the weakest.



By March 2005, however, it became clear that consumer spending in the UK was
slowing. At the same time the new issues market was overheating and the oil
price was approaching $55. Markets weakened significantly in March and April
before recovering in June as the outlook for interest rates moved towards the
greater likelihood of cuts, a move which would generally be good for stock
markets.



Performance

I am pleased to report that the Company delivered a 20.8% rise in net asset
value over the period. This was comfortably ahead of its benchmark, the Hoare
Govett Smaller Companies Index (excluding investment trusts) which rose 14.8%.
This strong performance reflects the success of the portfolio repositioning
which has been implemented by the Manager since its appointment in September
2003.



Performance improved steadily throughout the year as the Manager's style of
investing in a well-diversified portfolio of medium and smaller capitalisation
stocks with strong business franchises was rewarded by the market. A broad range
of stocks performed well during the year, most notably Morgan Sindall, the
social housing refurbishment company, Victrex, the specialist polymers
manufacturer and Paddy Power, the Irish off-track bookmaker.



Gearing

The amount of 7.75% 2023 debenture outstanding remains at £18.7m with no
repurchases during the year. However, the potential gearing was reduced from
38.9% to 32.5% of shareholders' funds over the period. After discussions with
the Manager, the board has broadened the range of permissible effective gearing
from 10% - 20% to 0% - 20%. This gives the Manager more flexibility to respond
appropriately to market conditions. During the period, actual gearing was
reduced from 11.5% at the start of the year to 3.2% at year end, reflecting the
Manager's more cautious outlook.



As the potential gearing has reduced, the impact of the dilutive effect of the
interest payable on the 7.75% 2023 debenture continues to fall. Repurchases of
the debenture may take place but only if it is advantageous to shareholders. The
board believes that the risks inherent in the potential gearing are
significantly reduced compared to last year.





Discount

The share price of the Company rose by 35.1% to 69.25p by the end of the period
under review representing a significant narrowing in the discount from 28.1% to
19.6%.



Revenue Account

Dividends from UK companies grew last year, although in general, investment
income from dividends received fell marginally. This reflected portfolio
realignment towards slightly lower yielding shares and a lower level of actual
gearing throughout the year. A substantially greater interest payment from funds
on deposit meant that overall investment income rose for the year. A strong rise
in dividend growth from shares held by the Company should lead to higher levels
of income in the coming financial year although returns from money held on
deposit may be lower.



The expense ratio of the Company was significantly lower than the previous year,
falling from 1.50% of average shareholders funds to 1.10%.



As a result of the improved capital and revenue performance, the board is
proposing to pay a dividend of 0.80p which represents an increase of 6.7% on
2004. If approved, the final dividend will be paid on 8 November 2005 to
shareholders on the register at the close of business on 14 October 2005.



Following the payment of the dividend the Company will have revenue reserves of
1.1p per share.



Share and Warrant buybacks

No shares or warrants were purchased by the Company for cancellation over the
twelve month period. The board is seeking permission from shareholders to renew
the authority to purchase up to 14.99% of the shares in issues. Details of the
special resolution will be set out in the Notice of Annual General Meeting
within the Annual Report.



Prospects

While the next twelve months are unlikely to show as strong growth in smaller
company markets as the year just ended, there is likely to be measured progress.
With the recent peak in interest rates, UK economic growth may pick up around a
year from now providing a more positive environment to support further progress
in the UK stock market.



However, stock market sentiment may be subject to unpredictable geopolitical
events and indeed the rapid rise in the oil price to record levels is of some
concern. Stock market valuations for smaller companies are moving ahead of
recent historical norms but are not yet stretched.



The investment process of the current Manager is carefully risk controlled. It
is focused on Companies with proven business models and is therefore well placed
to capitalise on growth while remaining resilient in an uncertain world. The
board is confident that good progress will be made in the coming year.



Donald MacDonald



26 August 2005






STATEMENT OF TOTAL RETURN

for the year ended 30 June 2005 (Unaudited)
                                                                 Revenue           Capital             Total
                                                                    £000              £000              £000

Realised gains on investments                                         -              3,505            3,505
Unrealised gains on investments                                       -              7,417            7,417
                                                               _________         _________         _________

TOTAL CAPITAL GAINS ON INVESTMENTS                                    -            10,922            10,922

Investment Income                                                 1,281                 -             1,281
Interest receivable on AAA funds                                    381                 -               381
Interest receivable                                                 304                 -               304
Other income                                                          1                 -                 1
Investment management fee                                          (292)             (293)             (585)
Administrative expenses                                            (286)                -              (286)
                                                               _________         _________         _________

Net return before finance costs and taxation                      1,389            10,629            12,018
Interest payable and similar charges                               (709)             (709)           (1,418)
                                                               _________         _________         _________

Return on ordinary activities before taxation                       680             9,920            10,600
Taxation                                                              -                 -                 -
                                                               _________         _________         _________

Return on ordinary activities after taxation                        680             9,920            10,600
Dividends in respect of equity shares                              (539)                -              (539)
                                                               _________         _________         _________

Transfer to reserves                                                 141            9,920            10,061
                                                               _________         _________         _________
Return per ordinary share                                          1.01p            14.72p           15.73p
                                                               _________         _________         _________
Dividends per ordinary share                                       0.80p                -             0.80p
                                                               _________         _________         _________




STATEMENT OF TOTAL RETURN

for the year ended 30 June 2004 (Audited)
                                                                 Revenue           Capital             Total
                                                                    £000              £000              £000

Realised losses on investments                                        -           (12,361)          (12,361)
Unrealised gains on investments                                       -            22,184            22,184
                                                               _________         _________         _________

TOTAL CAPITAL GAINS ON INVESTMENTS                                    -             9,823             9,823

Investment Income                                                 1,337                 -             1,337
Interest receivable on AAA funds                                    292                 -               292
Interest receivable from UK T Bills                                  30                 -                30
Interest receivable                                                 179                 -               179
Other income                                                          6                 -                 6
Investment management fee                                          (267)             (267)             (534)
Administrative expenses                                            (377)                -              (377)
                                                               _________         _________         _________

Net return before finance costs and taxation                      1,200             9,556            10,756
Interest payable and similar charges                               (712)             (770)           (1,482)
                                                               _________         _________         _________

Return on ordinary activities before taxation                       488             8,786             9,274
Taxation                                                              -                 -                 -
                                                               _________         _________         _________

Return on ordinary activities after taxation                        488             8,786             9,274
Dividends in respect of equity shares                              (506)                -              (506)
                                                               _________         _________         _________

Transfer (from)/to reserves                                         (18)            8,786             8,768
                                                               _________         _________         _________
Return per ordinary share                                          0.72p            13.03p            13.75p
                                                               _________         _________         _________
Dividends per ordinary share                                       0.75p                -              0.75p
                                                               _________         _________         _________


BALANCE SHEET


                                                                           At 30 June                   At 30 June
                                                                                 2005                         2004
                                                                          (Unaudited)                    (Audited)
                                                                £000             £000            £000         £000 
Fixed assets
Investments                                                                   60,862                       53,551

Current assets
Debtors                                                          372                              916
AAA money market funds                                         8,110                            8,110
Cash and short term deposits                                   8,713                            5,386
                                                              ______                           ______
                                                              17,195                           14,412

Creditors: amounts falling due within one year                 1,316                            1,252
                                                              ______                           ______
Net current assets                                                            15,879                       13,160
                                                                               ______                       ______

Total assets less current liabilities                                         76,741                       66,711

Creditors: amounts falling due after more than one
year                                                                          19,264                       19,295
                                                                               ______                       ______

                                                                              57,477                       47,416
                                                                               ______                       ______

Capital and reserves
Called up share capital                                                       16,851                       16,851
Share premium                                                                     56                           56
Capital redemption reserve                                                    17,219                       17,219
Warrant reserve                                                                  777                          777
Special reserve                                                               28,618                       28,618
Capital reserve - unrealised                                                   9,873                        2,456
Capital reserve - realised                                                   (16,664)                     (19,167)
Revenue reserve                                                                  747                          606
                                                                               ______                       ______

Total equity shareholders' funds                                              57,477                       47,416
                                                                               ______                       ______

Adjusted net asset value per share                                             86.11p                       71.23p
                                                                               ______                       ______




CASHFLOW STATEMENT


                                                                     2005                       2004
                                                                  (Unaudited)                 (Audited)
                                                                  £000          £000         £000         £000

Net cash inflow from operating activities                                      1,081                       849

Servicing of Finance
Interest paid                                                   (1,449)                    (1,466)
Debenture redemption services                                        -                        (75)
                                                                 ______                     ______
Net cash outflow from servicing of Finance                                    (1,449)                   (1,541)

Capital expenditure and financial investment
Purchase of investments                                        (24,942)                   (41,733)
Sales of investments                                            29,143                     43,366
                                                                 ______                     ______
Net cash inflow from capital expenditure and financial                         4,201                     1,633
investment

Equity dividends paid                                                           (506)                     (506)

Management of liquid resources
Purchase of Treasury Bills                                           -                          -
Sale of Treasury Bills                                               -                      4,970
Purchase of AAA money market funds                              (8,110)                    (6,075)
Sale of AAA money market funds                                   8,110                      4,765
                                                                 ______                     ______
Net cash inflow from management of liquid resources                                -                      3,660

Financing
Redemption of debenture                                              -                       (500)
Exercise of warrants                                                 -                          1
                                                                 ______                     ______
Net cash outflow from financing                                                     -                     (499)
                                                                               ______                    ______
                                                                               3,327                     3,596
Increase in cash                                                               ______                    ______

Reconciliation of net cashflow to movement in net debt
Increase in cash                                                  3,327                      3,596
Net change in liquid resources                                       -                     (3,660)
Redemption of debenture                                              -                        500
                                                                 ______                     ______
Change in net debt resulting from cashflows                                    3,227                       436
Other non-cash movements                                                          31                        48
                                                                               ______                    ______
Movement in net debt in year                                                   3,358                       484
Opening net debt                                                              (5,799)                   (6,283)
                                                                               ______                    ______
Closing net debt                                                              (2,441)                   (5,799)
                                                                               ______                    ______



NOTES:

1.       The accounts are prepared under the same accounting policies used for
the year ended 30 June 2004.

2.       The financial information for the year ended 30 June 2004 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. The statutory accounts for 2005 will be delivered to the Registrar of
Companies following the company's Annual General Meeting which will be held at
the offices of Standard Life, 1 George Street, Edinburgh on Thursday 3 November
2005 at 12.30pm.

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

4.       The investment management fee in each case includes irrecoverable VAT
calculated at 17.5%.

5.       The final dividend, subject to shareholder approval, will be paid on 8
November 2005 to shareholders on the register at the close of business on 14
October 2005. The ex-dividend date is 12 October 2005.

6.       The Annual Report will be posted to shareholders mid September 2005 and
copies will be available from the registered office of the company.



For Edinburgh Small Companies Trust plc
Edinburgh Fund Managers plc, Secretary

END






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