Final Results

F&C U.S. Smaller Companies PLC
05 September 2003

Date:          5 September 2003

Contact:       Robert Siddles, F&C, Tel: [phone]
               Emma Chilvers, Lansons Communications, Tel. [phone]


                          F&C US SMALLER COMPANIES PLC
                         Unaudited Preliminary Statement
                         for the year ended 30 June 2003


Highlights

•  For the year to 30 June 2003, the net asset value (NAV) per share fell
   by 8.4% compared with a fall of 10.5% for the sterling-adjusted Russell 2000
   Index.

•  Since inception of the Company in 1993, the NAV per share has risen by
   107.2% whereas the Russell 2000 Index gained 72.3% in sterling terms.

•  The discount to NAV of the shares stood at 4% at 30 June 2003 and the
   Board is committed to buying back shares at appropriate times.

•  The Manager continued with a cautious stance towards technology but
   reduced media and education stocks in favour of selected financials and
   cyclicals.

•  A Tender Offer was completed during the financial year and shareholders
   voted for continuation of the Company with future continuation votes to 
   be held every three years, starting at the AGM in 2005.


Summary of Results                                   30 June 2003            30 June 2002          % Change

Net assets attributable to equity                        £53.27m                  £74.59m           -28.59%
shareholders

Net asset value per share*                               200.06p                  227.10p           -11.91%

Net asset value per share (diluted)*                     200.06p                  218.38p            -8.39%

Share price                                              192.00p                  207.00p            -7.25%


•  There is no difference between the basic and diluted net asset values
in the year to 30 June 2003 due to the exercise of the warrants during the year.
There are no further potentially dilutive instruments in issue.


Extracts from Chairman's Statement

It was another difficult year for US equity markets. The net asset value (NAV)
per share of your Company fell 8.4% to 200.06p, compared to a decline of 10.5%
in the Company's benchmark, the sterling-adjusted Russell 2000 Index.

Your Company's NAV performance has exceeded its benchmark for the last three
years and in nine of the ten years since formation in March 1993. Since then,
the NAV per share has risen by 107.2%, compared with a rise in the
sterling-adjusted Russell 2000 Index of 72.3%.

No dividend is declared for the year to 30 June 2003. This is in line with
stated policy.

During the year under review the Russell 2000 declined by 3.1%, in dollar terms.
This modest fall, however, hides a substantial downturn in the first months of
the period: by 9 October 2002, the Russell 2000 had fallen by 27.0%. The reasons
for this seem to have been concerns about deflation and Middle East tension.
Since then, the stockmarket has gradually recovered, putting on a strong spurt
since March.

Within the market, the strongest performance was shown by sectors which had been
hardest hit in the previous two years, healthcare, technology and utilities.
Poorest performance was seen in the 'other' sector (diversified companies) and
in consumer staples, material and processing sectors. This reflected, on the one
hand, weakness in capital goods and commodity markets, and on the other,
profit-taking in staples after two years of out-performance.

The best performing major index during the year, the technology orientated
NASDAQ Composite Index, rose 2.5% in sterling terms. As pointed out in my
interim statement, the Company's superior relative performance was achieved
despite an underweight in technology. This index is, however, still 67.9% below
its all time high reached in early March 2000.

Discount and Buybacks

The price of the shares fell by 7.3% to 192p over the year. The discount to NAV
per share narrowed during the year from 5.2% to 4.0% and at 3 September 2003 was
12.76%. (The figure for 30 June 2002 is the discount to diluted NAV per share
because of the warrants that existed at that time).

The Company bought back its own shares during the year. Excluding the Tender
Offer there were purchases of 1,822,000 shares at an average discount of 9.6%.

Over the financial year, the average discount at which the Company's shares
traded was 9.3%. At the time of the war in Iraq, the discount widened to more
than 10%. In view of the unusual state of affairs, your Board carefully
considered its share buy-back policy, which aimed for a discount over a period
of no more than 10%. The volatility of the market meant that it was difficult to
establish the true discount when repurchasing shares. In the face of this kind
of volatility, the Board took the view that it was not in the long term
shareholders' best interests to be active in the market every day. The war ended
quickly and the discount narrowed promptly.

The Board will continue to apply its policy of, if necessary, buying back shares
at appropriate times with a view to maintaining a longer term discount of
approximately 10%.

Tender Offer

As set out in my interim report, the Board fulfilled its 1999 commitment to
shareholders, to provide an exit for those who wished to take it. The Board
proposed a Tender Offer, which was accepted by shareholders at an EGM in
December 2002. As a result of the Tender Offer, 6,935,500 shares (about 20% of
the outstanding) were repurchased.

Continuation Vote

Shareholders also voted for the continuation of the Company and for future
continuation votes to be held every three years, starting at the AGM in 2005.

Warrants

All the Company's warrants have now been cancelled. This follows from the issue
of 1,375,738 ordinary shares on the exercise of warrants on 6 December 2002 and
the exercise and tender by the Trustee of the remaining 1,162,191 warrants.

AGM

The Annual General Meeting will be held on 14 November 2003 in the offices of F&
C Management Limited at Exchange House, Primrose Street, London EC2A 2NYand I
hope that you will attend.

Outlook

Although over the financial year as a whole, the small company sector
under-performed large companies, since March the situation has changed. The
smaller company sector has performed strongly since then, continuing the
out-performance cycle that began four years ago. The sector still appears cheap
and to have better growth prospects than large companies.

Further concerns about the state of the economy may arise in the future but our
conservative approach to investment should provide reasonable relative
performance.


Gordon Grender
September 2003


Balance sheet
At 30 June
                                                                       2003                       2002
                                                                     £'000s                     £'000s
Fixed assets
Listed Investments                                                   52,135                     73,336
Current assets
Debtors                                                                  20                        262
Taxation recoverable                                                      -                          1
Cash at bank and short-term deposits                                  1,295                      1,384
                                                                      1,315                      1,647
Current liabilities
Creditors: amounts falling due within one year:                       (185)                      (393)
Net current assets                                                    1,130                      1,254
Net assets                                                           53,265                     74,590

Capital and reserves
Called up equity share capital                                        6,656                      8,211
Capital redemption reserve                                            6,696                      4,507
Share premium                                                         2,468                        565
Non-distributable reserve                                               841                          -
Warrant reserve                                                           -                        841
Special reserve                                                      11,009                     26,088
Capital reserves                                                     27,133                     35,773
Revenue reserve                                                     (1,538)                    (1,395)
Total equity shareholders' funds                                     53,265                     74,590

Net asset value per ordinary share : 
Basic (pence)                                                        200.06                     227.10
Diluted (pence)                                                      200.06                     218.38


Geographical distribution of the investments at 30 June 2003 was:
United States 100%

Statement of Total Return (incorporating the Revenue Account*)
for the year ended 30 June

                                                         2003                                  2002
                                          Revenue     Capital       Total       Revenue     Capital       Total
                                           £'000s      £'000s      £'000s        £'000s      £'000s      £'000s

Losses on investments                           -     (8,632)     (8,632)             -    (10,837)    (10,837)
Exchange losses on currency                     -         (2)         (2)             -        (83)        (83)
balances
Income                                        526           -         526           537           -         537
Management fee                              (430)           -       (430)         (630)           -       (630)
Loss on warrants purchased for                  -           -           -             -       (837)       (837)
cancellation
Other expenses                              (164)         (6)       (170)         (153)         (4)       (157)

Net return before finance                    (68)     (8,640)     (8,708)         (246)    (11,761)    (12,007)
Costs and taxation
Interest payable and similar                    -           -           -             -           -           -
charges

Return on ordinary activities                (68)     (8,640)     (8,708)         (246)    (11,761)    (12,007)
before taxation
Taxation on ordinary activities              (75)           -        (75)          (76)           -        (76)

Return attributable to equity               (143)     (8,640)     (8,783)         (322)    (11,761)    (12,083)
shareholders
Dividends on ordinary shares                    -           -           -             -           -           -
(equity)

Amount transferred from reserves            (143)     (8,640)     (8,783)         (322)    (11,761)    (12,083)

Return per ordinary share - pence          (0.49)     (29.62)     (30.11)        (0.99)     (35.98)     (36.97)

Return per ordinary share (diluted)             -           -           -             -           -           -
- pence

• *The revenue column of this statement is the profit and loss account
  of the Company.

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

• - There is no dilution.


Cash Flow Statement
for the year ended 30 June
                                                                                 2003                   2002
                                                                               £'000s                 £'000s

Net cash outflow from operating activities                                       (51)                  (278)
Total tax paid                                                                   (76)                   (73)

Net cash inflow from financial investment                                      12,581                    516
Net cash inflow before use of liquid resources and                             12,454                    165
financing
Net cash (outflow)/inflow from financing                                     (12,541)                    370
(Decrease)/increase in cash                                                      (87)                    535


Notes

No dividend is recommended for payment on the ordinary shares.

The above financial information comprises non-statutory accounts within the
meaning of section 240 of the Companies Act 1985. The financial information for
the year ended 30 June 2002 has been extracted from published accounts for the
year ended 30 June 2002 that have been delivered to the Registrar of Companies
and on which the report of the independent auditors was unqualified.

The Audited Report and Accounts will be posted to all shareholders in September
2003. Copies may be obtained during normal office hours from the Company's
Registered Office, Exchange House, Primrose Street, London EC2A 2NY.

The Annual General Meeting will be held at the Company's Registered Office,
Exchange House, Primrose Street, London EC2A 2NY on 14 November 2003.


By order of the Board
F&C Management Limited
Secretary


4 September 2003


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