Interim Results

F&C U.S. Smaller Companies PLC
15 March 2007

               
Date:          15 March 2007

Contact:       Robert Siddles
               F&C Management Limited
               020 7628 8000


                          F&C US SMALLER COMPANIES PLC
                     Unaudited Interim Statement of Results
                    for the half-year ended 31 December 2006


HIGHLIGHTS OF RESULTS

  • The NAV per share rose 0.1%, compared to a rise of 2.7% in the benchmark,
    the sterling adjusted Russell 2000 Index. The market was led by higher risk
    stocks and this did not suit the Company's conservative investment approach;
  • The Company bought back 1,184,684 of its own shares in the six month
    period at an average discount of 11.8%.


SUMMARY OF UNAUDITED RESULTS FOR THE HALF-YEAR TO 31 DECEMBER 2006


                                                                31 December 2006     30 June 2006           Change

Net assets                                                               £71.73m          £75.46m            -4.9%

Net asset value per share                                                318.70p          318.52p            +0.1%

Russell 2000 Index (sterling adjusted)                                    402.45           391.81            +2.7%

Share price                                                              284.00p          287.50p            -1.2%

Increase in net asset value per share since
inception on 8 March 1993                                                                                  +218.9%

Increase in the Russell 2000 Index
(sterling adjusted) since 8 March 1993                                                                     +155.2%



Chairman's Statement


Dear Shareholder

I am writing to report an increase of 0.1% in the net assets per share of your
Company in the six-month period to 31 December 2006. The Company's benchmark,
the sterling-adjusted Russell 2000 Index rose 2.7%.

The under-performance with respect to the benchmark was disappointing; however,
it should be borne in mind that this followed very strong out-performance in the
2005 calendar year. In the current period, the market was led by higher risk
stocks and this did not suit the Company's conservative investment approach.


Market Review

During the period of six months under review, the Russell 2000 Index rose 8.7%
in dollar terms, less than the Standard & Poors Composite Index, which gained
13.2% and the more technology-orientated NASDAQ Composite Index, which advanced
13.4%.

Sterling investors suffered from a fall of 5.5% in the US dollar over the six
months. The dollar was undermined by concerns that US economic growth might not
be sustainable and, as a result, it declined to levels close to twenty-five year
lows.

After initial weakness in July, smaller companies made progress steadily during
the period under review, helped by a strong rally in the bond market and a
retreat in oil prices.

The best performing sectors were utilities, consumer staples and integrated
oils. The laggards were other energy, autos and transportation, and producer
durables.


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-weighted because of the potential
impact of rising rates. Commercial finance and insurance are emphasised instead.

In the last six months, the manager focused on areas of the market where growth
will be more insulated from economic volatility, such as staples and niche
growth areas, for example, distributors.

CNA Surety was an example of a stock that was sold after a share price rise.
This underwriter of surety bonds staged a strong recovery as economic conditions
improved. The manager took profits in LKQ, a distributor of recycled car parts,
as the shares began to look expensive.

Bids were received for two portfolio holdings: Reynolds & Reynolds (software for
car dealership) and Mercantile Bancshares (a Baltimore-based bank). Both were
sold. Price Communications was sold following a board proposal to liquidate the
company: its principal asset was the right to receive a distribution in Verizon
stock.

The biggest contributions to performance came from Reynolds & Reynolds and
Cousins Properties, the Atlanta-based real estate developer. This real estate
investment trust was lifted by the rally in the bond market. Poor performers
included America's Car-Mart, a used car retailer, that was hurt by higher credit
losses, as well as Universal Truckload Services and Transaction Systems
Architects, both of which fell back on profit-taking. The former is a
transportation service company and the latter provides electronic funds transfer
software for large banks and retailers.


Buy-backs and discount

The Company bought back 1,184,684 of its own shares in the six-month period at
an average discount of 11.8%. The Board will continue to apply its policy of
buying back shares at appropriate times with a view to limiting the discount in
the longer term to around 10%.

The discount widened slightly from 9.7% at 30 June 2006 to 10.9% at 31 December
2006. As at 14 March 2007, the discount was 11.4%.


Outlook

Despite the sell-off in May 2006, smaller companies have rallied to new record
highs. Although large companies led smaller ones in the last six-month period,
there is no sign yet that the secular bull market in small companies, which
began seven years ago, is over. The Board believes that the Company's
risk-averse approach will continue to benefit shareholders over the longer term.


Gordon Grender
March 2007


UNAUDITED INCOME STATEMENT

                                                      6 months to 31 December 2006         6 months to 31 December 2005
                                                       Revenue   Capital     Total       Revenue     Capital      Total
                                                        £'000s    £'000s    £'000s        £'000s      £'000s     £'000s

(Losses)/gains on investments                                -     (504)     (504)             -       6,936      6,936
Exchange gains/(losses) on currency balances                 -     (111)     (111)             -          30         30
Income                                                     616         -       616           667           -        667
Management fee                                           (293)         -     (293)         (302)           -      (302)
Other expenses                                           (107)       (2)     (109)          (96)         (4)      (100)

Net return before finance costs and taxation               216     (617)     (401)           269       6,962      7,231
Interest payable and similar charges                         -         -         -             -           -          -

Return on ordinary activities before taxation              216     (617)     (401)           269       6,962      7,231
Taxation on ordinary activities                           (88)         -      (88)          (98)           -       (98)

Return attributable to equity shareholders                 128     (617)     (489)           171       6,962      7,133

Return per ordinary share - pence                         0.55    (2.67)    (2.12)          0.72       29.11      29.83



The total column is the profit and loss account of the Company.

All revenue and capital items in the above statement derive from continuing
operations. A statement of Total Recognised Gains and Losses is not

required as all gains and losses of the Company have been reflected in the above
statement.


UNAUDITED RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS

                                        Called-
                                             up   Share          Non-    Capital                                  Total
                                          share premium distributable redemption Special  Capital Revenue shareholders'
                                        capital account       reserve    reserve reserve reserves reserve         funds
                                         £'000s  £'000s        £'000s     £'000s  £'000s   £'000s  £'000s        £'000s

Balance brought forward    at 1 July
2005                                      6,026   2,468           841      7,326   5,346   50,720 (1,377)        71,350
Shares purchased by the Company           (103)       -             -        103 (1,111)        -       -       (1,111)
Return attributable to equity
shareholders                                  -       -             -          -       -    6,962     171         7,133

Balance carried forward  31 December
2005                                      5,923   2,468           841      7,429   4,235   57,682 (1,206)        77,372

Balance brought forward at
1 July 2005                               6,026   2,468           841      7,326   5,346   50,720 (1,377)        71,350
Shares purchased by the Company           (103)       -             -        103 (1,111)        -       -       (1,111)
Return attributable to equity
shareholders                                  -       -             -          -       -    5,061     164         5,225

Balance carried forward at
30 June 2006                              5,923   2,468           841      7,429   4,235   55,781 (1,213)        75,464

Balance brought forward at  1 July
2006                                      5,923   2,468           841      7,429   4,235   55,781 (1,213)        75,464
Shares purchased by the Company           (296)       -             -        296 (3,244)        -       -       (3,244)
Return attributable to equity
shareholders                                  -       -             -          -       -    (617)     128         (489)

Balance carried forward at
31 December 2006                          5,627   2,468           841      7,725     991   55,164 (1,085)        71,731



UNAUDITED BALANCE SHEET

                                                    At 31 Dec 2006           At 31 Dec 2005            At 30 June 2006
                                                            £'000s                   £'000s                     £'000s
Fixed assets
Listed investments                                          69,810                   75,979                     73,081

Current assets
Debtors                                                         81                      238                         57
Cash at bank and short-term deposits                         2,039                    1,343                      2,664

                                                             2,120                    1,581                      2,721
Current liabilities                                          (199)                    (188)                      (338)

Net current assets                                           1,921                    1,393                      2,383

Net assets                                                  71,731                   77,372                     75,464

Shareholders equity
Called-up share capital                                      5,627                    5,923                      5,923
Share premium account                                        2,468                    2,468                      2,468
Non-distributable reserve                                      841                      841                        841
Capital redemption reserve                                   7,725                    7,429                      7,429
Special reserve                                                991                    4,235                      4,235
Capital reserves                                            55,164                   57,682                     55,781
Revenue reserve                                            (1,085)                  (1,206)                    (1,213)

Total equity shareholders' funds                            71,731                   77,372                     75,464

Net asset value per ordinary share
- pence                                                     318.70                   326.57                     318.52



UNAUDITED CASH FLOW STATEMENT

                                                                                  6 months to               6 months to
                                                                             31 December 2006          31 December 2005
                                                                                       £'000s                    £'000s

Net cash inflow/(outflow) from operating activities                                       198                     (116)
Total tax paid                                                                           (89)                      (63)
Net cash inflow from purchases and sales of investments                                 2,621                     1,219

Net cash inflow before use of liquid resources and financing                            2,730                     1,040
Decrease in short-term deposits                                                             -                        21
Net cash outflow from financing                                                       (3,244)                   (1,204)

Decrease in cash during the period                                                      (514)                     (143)

Reconciliation of net cash flow to movement in net funds
Decrease in cash during the period                                                      (514)                     (143)
Decrease in short-term deposits                                                             -                      (21)
Exchange movement                                                                       (111)                        30

Movement in net funds in the period                                                     (625)                     (134)
Net funds at the beginning of the period                                                2,664                     1,477

Net funds at the end of the period                                                      2,039                     1,343


Notes


1    ACCOUNTING POLICIES

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
2006.


2    DIVIDEND

The directors do not propose to pay an interim dividend.


3    RETURN PER ORDINARY SHARE

Returns per ordinary share attributable to ordinary shareholders reflects the
overall performance of the Company in the period.  Net revenue recognised in the
first six months is not indicative of the total likely to be received in the
full accounting year.

                                                         6 months to               6 months to                  Year to
                                                         31 Dec 2006                 31 Dec 05               30 June 06
                                                              £'000s                    £'000s                   £'000s

Total return                                                   (489)                     7,133                    5,225
Revenue return                                                   128                       171                      164
Capital return                                                 (617)                     6,962                    5,061
Weighted average ordinary shares in issue                 23,079,953                23,912,845               23,803,464


4    RESULTS

The results for the six months to 31 December 2006 and 31 December 2005, which
are unaudited, constitute non-statutory accounts within the meaning of Section
240 of the Companies Act 1985. The latest published accounts which have been
delivered to the Registrar of Companies are for the year ended 30 June 2006; 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 2006 are an extract from those accounts.


By order of the Board
F&C Management Limited, Secretary
Exchange House, Primrose Street, London EC2A 2NY
15 March 2007



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