Final Results

Schroder UK Growth Fund PLC
21 June 2007

21 June 2007


                       Schroder UK Growth Fund plc

          Preliminary Results For The Year Ended 30 April 2007



The Directors of Schroder UK Growth Fund plc announce the unaudited preliminary
results of the Company for the year ended 30 April 2007:



Income Statement
                                               Year ended                            Year ended
                                             30 April  2007                        30 April  2006
                                       Revenue     Capital      Total       Revenue      Capital         Total
                                        Return      Return                   Return       Return
                                         £'000       £'000      £'000         £'000        £'000         £'000
     Gains on investments held at            -      25,426     25,426             -       51,717        51,717
     fair value
     Income                              7,559           -      7,559         6,581            -         6,581
     Investment management fee           (352)       (821)    (1,173)         (303)        (708)       (1,011)
     Administrative expenses             (345)        (21)      (366)         (355)            -         (355)
     Net return on ordinary              6,862      24,584     31,446         5,923       51,009        56,932
     activities before finance
     costs and taxation
     Interest payable                    (479)     (1,115)    (1,594)         (384)        (896)       (1,280)
     Net return on ordinary              6,383      23,469     29,852         5,539       50,113        55,652
     activities before taxation
     Taxation on ordinary                    -           -          -             -            -             -
     activities
     Net return on ordinary              6,383      23,469     29,852         5,539       50,113        55,652
     activities after taxation
     attributable to equity
     shareholders
     Net return per ordinary share       3.94p      14.49p     18.43p         3.36p       30.44p        33.80p



The total column of this statement is the profit and loss account of the
Company. The revenue return and capital return columns are both provided in
accordance with guidance issued by the Association of Investment Companies. The
Company has no recognised gains or losses other than those disclosed in the
Income Statement and Reconciliation of Movements in Shareholders' Funds.
Accordingly no Statement of Total Recognised Gains or Losses is presented.



All revenue and capital items in the above statement derive from continuing
operations.






Reconciliation of Movements in Shareholders' Funds

                          Share      Capital       Share       Share     Warrant   Capital     Revenue     Total
                        capital   redemption     premium    purchase    exercise   reserve     reserve
                                     reserve     account     reserve     reserve
                          £'000        £'000       £'000       £'000       £'000     £'000       £'000     £'000
Balance at 30 April      41,161       16,108         944      95,727         417    21,006       1,407   176,770
2005 - previously
reported
Valuation adjustment          -            -           -           -           -     (192)           -     (192)
(a)
Dividends - second            -            -           -           -           -         -       2,717     2,717
interim dividend
accrued in respect
of  the year ended
30 April 2005
Balance at 30 April      41,161       16,108         944      95,727         417    20,814       4,124   179,295
2005 - restated

Balance at 30 April      41,161       16,108         944      95,727         417    20,814       4,124   179,295
2005 - restated
Net profit from               -            -           -           -           -    50,113       5,539    55,652
operating
activities
Shares bought back        (125)          125           -       (629)           -         -           -     (629)
and cancelled
Dividends - second            -            -           -           -           -         -     (2,717)   (2,717)
interim dividend
paid in respect of
year ended 30 April
2005
Dividends - first             -            -           -           -           -         -     (2,470)   (2,470)
interim dividend
paid in respect of
the  year ended 30
April 2006
Balance at 30 April      41,036       16,233         944      95,098         417    70,927       4,476   229,131
2006

Balance at 30 April      41,036       16,233         944      95,098         417    70,927       4,476   229,131
2006
Net profit from               -            -           -           -           -    23,469       6,383    29,852
operating activities
Shares bought back        (242)          242           -     (1,133)           -         -           -   (1,133)
and cancelled
Purchase of shares            -            -           -     (7,935)           -         -           -   (7,935)
into treasury
Dividends - second            -            -           -           -           -         -     (3,020)   (3,020)
interim dividend
paid  in respect of
the year ended 30
April 2006
Dividends - first             -            -           -           -           -         -     (2,399)   (2,399)
interim dividend
paid in respect of
year ended 30 April
2007
Balance at 30 April      40,794       16,475         944      86,030         417    94,396       5,440   244,496
2007


(a)   Mid to bid adjustment for portfolio valuation as at 30 April 2005 in
accordance with FRS26.






Balance Sheet


                                                                        At 30 April 2007     At 30 April 2006
Fixed assets                                                                       £'000                £'000
Investments held at fair value through profit or loss                            281,323              255,929

Current assets
Debtors                                                                            1,682                1,729
Cash at bank                                                                         854                  199
                                                                                   2,536                1,928
Creditors: amounts falling due within one year                                  (39,363)             (28,726)
Net current liabilities                                                         (36,827)             (26,798)
Net assets attributable to shareholders                                          244,496              229,131

Capital and reserves
Called-up share capital                                                           40,794               41,036
Capital redemption reserve                                                        16,475               16,233
Share premium account                                                                944                  944
Share purchase reserve                                                            86,030               95,098
Warrant exercise reserve                                                             417                  417
Capital reserve                                                                   94,396               70,927
Revenue reserve                                                                    5,440                4,476
Total equity shareholders' funds                                                 244,496              229,131
Net asset value per ordinary share                                               155.36p              139.59p


Cash Flow Statement


                                                              For the year ended          For the year ended
                                                                   30 April 2007               30 April 2006
                                                                           £'000                       £'000
Operating activities
Income from investments                                                    7,366                       6,975

Interest received                                                            239                         113
Administrative expenses                                                    (363)                       (360)
Investment management fee                                                (1,128)                       (953)
Net cash inflow from operating activities                                  6,114                       5,775
Returns on investments and servicing of finance
Bank loan and overdraft interest paid                                    (1,567)                     (1,288)
Net cash outflow from return on investments and                          (1,567)                     (1,288)
servicing of finance
Financial Investment

Purchase of investments                                                (127,393)                    (62,710)
Sales of investments                                                     130,940                      59,755

Net cash inflow/(outflow) from financial                                   3,547                     (2,955)
investment
Equity dividends paid                                                    (5,419)                     (5,187)
Net cash inflow/(outflow) before financing                                 2,675                     (3,655)

Financing
Purchase of shares for cancellation                                      (1,139)                       (626)
Purchase of shares into treasury                                         (7,881)                           -
Bank loan drawn down                                                       7,000                       3,000

Net cash (outflow)/inflow from financing                                 (2,020)                       2,374
Net cash inflow/(outflow)                                                    655                     (1,281)
Reconciliation of net cash outflow to movement in
net debt
Increase/(decrease) in cash during the year                                  655                     (1,281)
Movement in bank loan to finance investments                             (7,000)                     (3,000)
Change in net debt resulting from cash flows                             (6,345)                     (4,281)
Net debt brought forward at 1 May                                       (27,801)                    (23,520)
Net debt carried forward at 30 April                                    (34,146)                    (27,801)







Notes

a)                  Basis of  preparation

These accounts have been prepared under the historical cost convention, modified
to include the revaluation of investments and in accordance with the Companies
Act 1985, United Kingdom Generally Accepted Accounting Principles (UK GAAP) and
the Statement of Recommended Practice 'Financial Statement of Investment Trust
Companies ('SORP') issued in January 2003 and revised in December 2005.

b)                  Return per ordinary share

The basic revenue return per ordinary share is based on the net revenue return
on ordinary activities after interest payable and taxation of £6,383,000 (2006:
£5,539,000) and on 161,955,514 (2006: 164,640,421) ordinary shares, being the
weighted average number of ordinary shares in issue in the year.

The basic capital return per ordinary share is based on the net capital return
on ordinary activities after interest payable and taxation of £23,469,000 (2006:
£50,113,000) and on 161,955,514 (2006: 164,640,421) ordinary shares, being the
weighted average number of  ordinary shares in issue in the year.

The basic total return per ordinary share is based on the net total return on
ordinary activities after interest payable and taxation of £29,852,000 (2006:
£55,652,000) and on 161,955,514 (2006: 164,640,421) ordinary shares, being the
weighted average number of ordinary shares in issue in the year.

c)                  Net asset value per ordinary share

Net asset value per ordinary share is based on 157,376,900 (2006: 161,145,900)
ordinary shares in issue.

This announcement is prepared on the basis of the accounting policies as set out
in the most recent published set of annual financial statements.



The above financial information is unaudited and does not constitute statutory
accounts under Section 240 of the Companies Act 1985 (as amended). Statutory
accounts for the financial year ended 30 April 2006 have been reported on by the
Company's auditors and delivered to the Registrar of Companies.  The report of
the auditors was unqualified and did not contain a statement under Section 237
(2) or (3) of the Companies Act 1985.

The statutory accounts for the year ended 30 April 2007 will be finalised on the
basis of the financial information presented by the Directors in this
preliminary announcement and will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.

This statement was approved by the Board of Directors on 21 June 2007.

Chairman's Statement



Performance



I am pleased to report on another positive year for your Company. For the year
ended 30 April 2007, the Company's net asset value produced a total return of
13.7% while the share price posted a total return of 20.0%. These compare with a
return of 12.7% for the FTSE All-Share Index calculated on the same basis. The
Company's shares were re-rated in the market following the announcement of the
proposed change in investment policy and the introduction of a discount
protection mechanism in October 2006.



Since the introduction of the amended investment policy, performance has been
much improved. The Company's net asset value and share price produced total
returns between 20 November 2006 and 30 April 2007 of 9.7%, compared with a
return of 6.7% produced by the FTSE All-Share index. Whilst this is a positive
beginning, shareholders should continue to be aware of the more concentrated
nature of the portfolio and the impact that this could have on the volatility of
performance going forward, particularly over shorter-term time periods.

Earnings and Dividends



Earnings per share increased in the current year from 3.36p per share to 3.94p
per share. The Directors are pleased to declare a second interim dividend of
2.0p per share, making a total of 3.5p per share for the year as a whole - an
increase of 4.5% on the previous year.



As indicated in the Circular to shareholders dated 23 October 2006, the
Company's focus is on total return without constraining the Manager to deliver
any given level of investment income. Whilst we previously aimed to provide
shareholders with a stable stream of income rising over the long term, income
from investee companies may be somewhat more volatile in future following the
change in investment policy. Shareholders should note that this could impact on
the Company's ability to pay an increasing dividend stream. However, we are
particularly pleased that we are in a position to declare an increased dividend
for the year to 30 April 2007 because we recognise that shareholders view it as
being an important part of their total return.



Gearing Policy



During the year, the Company replaced its £30 million borrowing facility with a
£45 million facility, of which £35 million was drawn down at the end of the
year.



The effective net gearing level (which takes account not only of the borrowings
but any cash held by the investment manager) at the beginning of the year was
12.1% and had increased slightly to 14% by the end of the year. The Company's
gearing continues to operate within pre-agreed limits so that actual gearing
does not represent more than 20% of shareholders' funds.



Discount Management Policy



As outlined in my Interim Statement, the Board introduced a formal discount
management policy to take effect once the change in investment policy had been
approved in November 2006. Accordingly, the Company seeks to maintain the
discount to the net asset value at which shares are quoted on the London Stock
Exchange at no greater than 5 per. cent. over the long-term.



During the year ended 30 April 2007, the Company purchased 970,000 shares for
cancellation and a further 5,799,000 shares to be held in treasury. We are
seeking authority from shareholders for a renewal of the required authorities to
purchase shares for cancellation and to hold shares in treasury for re-issue at
a premium to net asset value, to assist with achieving the target longer-term
discount level established by the formal discount management policy. From time
to time, it will be necessary for the Board to review target levels should
general market conditions change.



Electronic Communications and Amendment to the Articles of Association



There have been a number of recent changes to company law and practice
permitting the use of electronic communications as an alternative to traditional
means of communication. We are therefore proposing to adopt revised Articles of
Association which will allow the Company, where a shareholder agrees, to send
certain information relating to the Company (e.g. notices, proxy forms and
accounts) by electronic means or by placing this information on a website, but
only if the shareholder has been sent notice that it is available in this way
and not objected to the change.





Outlook



The change in investment policy has been welcomed by investors and the market
and we have seen indications that the more flexible investment approach is
providing greater scope for the Company to benefit from truly active
stock-picking. This is translating into improved performance relative to the
FTSE All-Share Index benchmark.



Annual General Meeting



The Annual General Meeting will be held at 12.00 noon on Friday 3 August 2007,
and shareholders are encouraged to attend. I hope as many of you as possible
will be able to come along. The meeting, as in previous years, will include a
presentation by the Investment Manager on the prospects for the UK market and
the Company's investment strategy.



Alan Clifton

Chairman



Investment Manager's Review

Market Background

The UK equity market has been in an uptrend since March 2003, with any setbacks
proving to be short term corrections rather than a wholesale change in investor
sentiment.  The current financial period began with a sharp correction taking
the FTSE All-Share index back to levels last seen at the end of 2005.  This was
short lived however, proving to be a timely pause following a long period of
virtually uninterrupted growth rather than signalling a major market reversal,
as leveraged investors sought to take profits after very strong gains.

Relatively benign economic conditions and strong corporate profitability have
helped keep the market buoyant, as have the high levels of merger and
acquisition activity. The sharp fall in the Chinese stock market seen in
February, combined with fears over the health of the US sub-prime mortgage
lending market, were quickly overcome by a relentless flow of takeover
speculation involving UK businesses. The main drivers of performance during the
year have been stocks either directly involved with or with speculation
surrounding take-over activity and those experiencing strong end markets for
their products. Large cap stocks have continued to lag their mid cap peers which
have been subject to the majority of merger and acquisition activity and
speculation, although some recent deals have seen a move up the size spectrum.

Investment Activity and Portfolio Strategy

Following the vote in favour of changing the investment strategy of the Company
a programme trade was placed to reduce the number of holdings, with proceeds
reinvested to increase weights in favoured holdings.  Whilst the Company's
objective remains to outperform the FTSE All-Share index over the longer term,
the new investment strategy is not constructed along index-relative lines, but
instead around a relatively concentrated portfolio of between 20-40 stocks,
chosen on the basis of investment conviction.  Particular emphasis is now placed
on a stock's potential to provide an attractive absolute return, with stocks
only purchased when we believe they have scope to rise in price by 10-20%,
usually over a 12-18 month period.  The underlying investment philosophy and
process adopted in the research and selection of securities has not changed, but
the new investment strategy places more emphasis on the generation of absolute
returns in a shorter time horizon than a more traditional index-relative
strategy.

The Company is currently heavily invested in FTSE 100 stocks, with only around
15% held in mid cap stocks.   We are still finding attractive opportunities
among the FTSE 250, but we also believe that investors' continued focus on this
area of the market has left many high quality, larger companies significantly
undervalued. On this basis, we hold sizeable positions in HSBC, Vodafone, Tesco
and GlaxoSmithKline and see significant potential from a number of smaller
stocks within the FTSE 100 including Resolution and Whitbread.

In our view, takeover activity is likely to continue driving returns among mid
and small caps, but some large caps now offer an attractive dividend and a
strong and reliable growth opportunity at attractive prices.

We have also seen little attention being paid to the longer-term potential of
oil and gas stocks in recent months. In our opinion, the increasing difficulty
involved in accessing oil and gas resources, combined with the apparent
inability of recent capital expenditure to meet demand growth, means that the
oil price is well-supported.  With this in mind, we remain invested in stocks
such as Wood Group, BP, BG, and Dana Petroleum, the latter of which, in our
opinion, is decidedly undervalued given its international exploration potential.

Outlook

We remain positive on the outlook for UK equities and are not overly concerned
by the weakness seen earlier in the year. Although issues in the US
(particularly the recent sub-prime lending 'crisis') could still generate
further worries about US and global growth, we believe we are now seeing the
gradual economic slowdown that we have been expecting for some time. We are also
confident, therefore, that this will provide a supportive backdrop for equity
markets in the year ahead, particularly in conjunction with the ongoing takeover
trend and the continued health of the corporate sector. On this basis, should
the market experience some further ups and downs over the course of the coming
months, we would be happy to take advantage of periods of weakness to invest for
the longer-term.

Schroder Investment Management Limited



Second Interim Dividend



The Directors of the Company have declared the payment of a second interim
dividend, in lieu of a final dividend, of 2.0p net per share, making a total
distribution of 3.5p for the year ended 30 April 2007.  The second interim
dividend will be payable on 31 July 2007 to shareholders on the register on 6
July 2007.



Ex-Dividend Date                           : 4 July 2007

Record Date                                : 5.00 p.m. on 6 July 2007

Dividend Warrants                          : Despatched on 30 July 2007

Payment Date                               : 31 July 2007

Dividend per share                         : 2.0p net







Annual Report Distribution



The Annual Report and Accounts will be mailed to shareholders at their
registered addresses in July 2007 and copies of the Annual Report and Accounts
will be available to the public at the Company's registered office: 31 Gresham
Street, London, EC2V 7QA.





Enquiries:

John Spedding
Schroder Investment Management Limited
(020 7658 3206)
21 June 2007


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