Interim Results

F&C U.S. Smaller Companies PLC
24 March 2005


Date:              24 March 2005

Contact:           Robert Siddles                    Lisa Stanley
                   F&C Management Limited            Lansons Communications
                   020 7628 8000                     020 7294 3692



                          F&C US SMALLER COMPANIES PLC
                     Unaudited Interim Statement of Results
                    for the half-year ended 31 December 2004

HIGHLIGHTS

  • The NAV per share is up by 5.0%, compared to a rise of 4.1% for the
    benchmark, the sterling adjusted Russell 2000 Index.
  • Smaller companies performed better than large ones in the six months
    period. The Russell 2000 Index rose 10.2% in dollar terms, compared to 6.2%
    for the S&P500.
  • In the last six months, the manager used the weakness in the technology
    sector to add exposure.  Some of the larger positions were reduced as the
    shares rose.
  • The Manager believes the bull run experience in US smaller companies over
    the last 5 years has not yet run its course.

SUMMARY OF RESULTS
                                         31 December 2004            30 June 2004               % change

Net assets                                        £65.63m                 £64.76m                   +1.3

Net asset value per share                         256.67p                 244.53p                   +5.0

Share price                                       223.00p                 216.50p                   +3.0




Chairman's Statement



Dear Shareholder

I am pleased to report an advance in the US small company market in the six
months period to 31 December 2004 and that your Company outperformed its
benchmark, the Russell 2000 Index.

Net assets per share rose 5.0% in the six months period. This compared to a gain
of 4.1% in the sterling-adjusted Russell 2000 Index.

Market Review

Following a lacklustre performance earlier in 2004, the US securities market
began to rise in August and continued to rise for the remainder of the year. The
Russell 2000 Index rallied strongly, gaining 25% from its lows. The market was
initially helped by a rebound in the technology sector but gained strength as
investors were relieved that the US Presidential Elections resulted in a
convincing win for President Bush. The economy provided a favourable backdrop as
growth remained firm and inflation showed little sign of underlying
acceleration.

US smaller companies performed better than large ones in the six months period.
The Russell 2000 Index rose 10.2% in dollar terms, compared to 6.2% for the S&P
500. This superior performance followed the strong performance of smaller
companies in calendar 2003, when the Russell 2000 rose by 45.4% in dollar terms,
compared to 26.4% for the S&P 500. For calendar 2004 as a whole, the Russell
2000 rose a further 17.0% beating the S&P 500 by a margin of 8%. In the six
months period to 31 December 2004, the US dollar fell, reducing gains for the
sterling investor by approximately 6%.

The best performing sectors were commodity-related, namely materials and
processing, other (mainly diversified manufacturers) and other energy, as the
market continued to focus on strong global growth. The laggards were technology,
consumer staples and health.

Portfolio Review

The portfolio continues to be substantially overweight in the consumer
discretionary sector (which includes both business and consumer services) but
underweight in technology, reflecting the Company's risk averse style. In the
financials sector, banks and REITs are under-weight, because of the potential
impact of rising interest rates (instead commercial finance is emphasised).

In the last six months, the Manager used the weakness in the technology sector
to add exposure although the portfolio continues to be underweight. Some of the
larger positions in other sectors were reduced as the shares rose and examples
of this were Kirby and SCP Pool. Following bids, three positions have been sold:
Dupont Photomask, Evergreen Resources and NeighborCare.  Some of the biggest
contributions to performance came in the materials and processing sector, such
as the St Joe Company (the owner of a unique asset - valuable development land
in Florida) and Shaw Group (an engineering and construction services company).
On the other hand, performance was hurt by a sell-off in Fred's, a retailer
whose customers suffered as a result of higher gasoline prices and healthcare
costs.

Buy-backs and discount

The Company bought back 915,000 of its own shares for cancellation in the six
month period at an average discount of 13.7%. Since the period end the Company
has bought back a further 1,336,500 shares at an average discount of 10.6%. The
Board will continue to apply its policy of buying back shares at appropriate
times with a view to maintaining a longer term discount of approximately 10%.

The discount widened slightly from 11.5% at 30 June 2004 to 13.1% at 31 December
2004. At 22 March 2005, the discount was 11.5%.

Outlook

Following yet another period of out-performance by the US small company sector
it is not surprising that some profit taking has set in during the early part of
2005. However, there seem to be no signs yet that the secular bull market in
small companies that began five years ago is over. The Board believes that the
Company's risk averse approach will continue to benefit shareholders.

Gordon Grender
March 2005


Unaudited Balance Sheet
                                                        31 December 2004 31 December 2003    30 June  2004
                                                                  £'000s           £'000s           £'000s  
                                                                                                    
Fixed assets
Investments                                                       64,602           60,730           63,843

Current assets
Debtors                                                              110               86              171
Cash at bank and short-term deposits                               1,355            1,148            1,381
                                                                   1,465            1,234            1,552

Creditors: amounts falling due within one year                     (437)            (147)            (632)

Net current assets                                                 1,028            1,087              920

Net assets                                                        65,630           61,817           64,763

Capital and Reserves
Called up equity share capital                                     6,392            6,656            6,621
Share premium account                                              2,468            2,468            2,468
Capital redemption reserve                                         6,960            6,696            6,731
Non-distributable reserve                                            841              841              841
Special reserve                                                    8,844           11,009           10,713
Capital reserves                                                  41,483           35,647           38,988
Revenue reserve                                                  (1,358)          (1,500)          (1,599)
Total equity shareholders' funds                                  65,630           61,817           64,763

Net asset value per ordinary share - pence                        256.67           232.18           244.53


The geographical distribution of investments at 31 December 2004 was:

United States 100%.


Unaudited Statement of Total Return (incorporating the Revenue Account*)
for the six months to 31 December
                                                                   2004                                   2003

                                      Revenue      Capital        Total      Revenue      Capital        Total
                                       £'000s       £'000s       £'000s       £'000s       £'000s       £'000s
                                                                                      
Gains on
investments                                 -        2,614        2,614            -        8,641        8,641

Exchange losses on currency
balances                                    -        (116)        (116)            -        (126)        (126)
                                            
Income                                    706            -          706          428            -          428

Management fees                         (259)            -        (259)        (238)            -        (238)

Other expenses                          (100)          (3)        (103)         (89)          (1)         (90)

Net return before finance costs
and taxation                              347        2,495        2,842          101        8,514        8,615
                                          
Interest payable and similar
charges                                     -            -            -            -            -            -
                                           
Return on ordinary activities
before taxation                           347        2,495        2,842          101        8,514        8,615

Taxation on ordinary activities         (106)            -        (106)         (63)            -         (63)

Return attributable to equity
shareholders                              241        2,495        2,736           38        8,514        8,552

Dividend on ordinary shares                 -            -            -            -            -            -

Amount transferred
to reserves                               241        2,495        2,736           38        8,514        8,552

Return per ordinary share -
pence                                    0.93         9.58        10.51         0.14        31.98        32.12
                                        

*   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.

Unaudited Summarised Cash Flow Statement for the six months to 31 December

                                                                                    2004                    2003
                                                                                  £'000s                  £'000s

Net cash inflow from operating activities                                            308                      59
Total tax paid                                                                      (97)                    (63)
Net cash inflow/(outflow) from purchases and sales of
investments                                                                        1,833                    (17)
                                                                                   
Net cash inflow / (outflow)  before use of liquid
resources and financing                                                            2,044                    (21)
                                                                                   
Net cash outflow from financing                                                  (1,954)                       -
Increase/(decrease) in cash during the period                                         90                    (21)

Notes

The Interim financial statements have been prepared on the basis of the
accounting policies set out in the Company's financial statements at 30 June 
2004.

The Board recommends that no interim dividend payment be made.

The results for the half year ended 31 December 2004, which are unaudited and
set out in this announcement, constitute non-statutory accounts within the
meaning of Section 240 of the Companies Act 1985.  They have been prepared on
the basis of the accounting policies set out in the Company's financial
statements at 30 June 2004.

The latest published accounts which have been delivered to the Registrar of
Companies are for the year ended 30 June 2004. The report of the auditors
thereon was unqualified and did not contain a statement under Section 237 of the
Companies Act 1985. The abridged financial statements shown above for the year
ended 30 June 2004 are an extract from those accounts.

The Interim Report and Accounts will be posted to shareholders in early April
2005. Copies may be obtained during normal business hours from the Company's
Registered Office, Exchange House, Primrose Street, London EC2A 2NY.

By order of the Board

F&C Management Limited, Secretary

23 March 2005


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