Final Results

Perpetual UK Smaller Co's IT PLC
22 March 2001

PERPETUAL UK SMALLER COMPANIES INVESTMENT TRUST plc

CHAIRMAN'S STATEMENT

It has been an exceptionally volatile and generally difficult year for equity
investors. However, against this testing backdrop I am pleased to report that
your Company has made progress in the year, increasing net assets by 4.0% to £
86.47 million. This compares favourably with our benchmark, the Hoare Govett
Extended Smaller Companies Index (capital gains excluding investment trusts)
which rose by 2.3% over the same period, as well as the FTSE All Share Index
which increased by just 1.8%.

The Company's share price has risen by 5.9% in the period, whilst the discount
to net assets has narrowed from 18% at 31 January 2000 to 16.2% at 31 January
2001. This compares with an average for the sector of 15.2% at 31 January
2001. Since the end of the Company's financial year net assets have declined
slightly, by 1.9%, but this compares well with a decline over the same period
for the benchmark of 4.4%.

The proposed final dividend of 7.7 pence per share is a smaller dividend than
that paid last year, but represents a return to normal dividend levels.
Shareholders will recall that the Company enjoyed a significant one-off
increase in income last year due to the receipt of a number of special
dividends.

During the course of the year your Company entered into a new short term
borrowing facility, permitting it to borrow up to the lower of £25 million, or
30% of its assets. During the year the manager has geared the Company's
portfolio; at the year end gearing stood at 14% but has since been reduced to
10%. The board is of the opinion that the neutral level of gearing for the
Company is between 10% and 15%, although the actual level will of course vary
depending on market conditions.

There are a number of other matters I would like to draw to shareholders'
attention:

First, shareholders will be aware that AMVESCAP PLC acquired Perpetual plc
towards the end of last year. AMVESCAP itself is an important and active
manager of a wide variety of investment trusts.

Second, we are again seeking shareholders' authority for your Company to be
permitted to repurchase its own shares when deemed appropriate. We have used
this authority once during the course of the last year and we continue to
believe that it is a potentially valuable tool to enhance shareholder value.

Third, we are making some changes to the Company's Board. David
FitzWilliam-Lay has indicated to me that, on approaching 70, he would like to
retire as a director of the Company during 2001. I have agreed with him that
he will stand down as a director with effect from 30th September 2001. David
has been a Director of the Company since 1991 and I would like to thank him,
personally and on behalf of the Company, for his invaluable advice over the
years.

I am delighted to announce two new appointments to the Board. With effect from
today, Garth Milne and John Spooner have been appointed non-executive
directors of your Company. They each bring to the Company a wealth of
knowledge that I have no doubt will be of benefit in the coming years.

Finally, a full report from the investment manager follows this statement.
Your Board agrees with the manager's view that whilst both large and small
companies in the UK face a challenging few months ahead, the investment
environment is likely to improve later in the year. An improving outlook,
combined with careful stock selection, leads us to believe that your Company
is well placed to benefit from the recovery when it comes.

Jamie Berry      21 March 2001.

Chairman


MANAGER'S REVIEW

Investment Review

The year under review was a remarkable one for all equity markets. It can be
characterised by two key parts: the ending of the global boom in the
Technology, Media and Telecommunications ('TMT') sector during the first
quarter followed by an ongoing re-balancing across the market.

From late 1999, the TMT bubble pushed the market to an all-time high, whilst
the so called 'old economy' sectors slumped, in some cases to levels last seen
in the recession of the early 1990s. This process was justified by many as the
displacement of the old economy by the new, a view which we did not share.

After the first quarter, when world equity markets seemed to be focussed on
TMT stocks, the depressed valuations of old economy companies started to
improve and the excessive valuations of new economy stocks began to fall. The
modest slowdown in the UK economy and subsequently the more severe setback in
the USA emphasised the vulnerability of many sectors, especially TMT.

The final quarter of the year saw some significant falls among TMT stocks. In
the UK, the economy had slowed in response to previous tighter monetary
policy, and the market was hit by a series of corrections to the US Nasdaq
Index, combined with a series of profit warnings from highly-rated companies.
Uncertainty regarding the outcome of the US presidential election also weighed
heavily on market sentiment.

Investment strategy

The TMT sector performed strongly early in the year and we responded by
reducing our exposure as valuations rose sharply. As a result, by the end of
the period, we were underweight in hardware and software companies, compared
to the peer group. As the TMT sector declined sharply, our underweight
position proved well founded. The portfolio was also boosted by increased
merger and acquisition activity.

We maintained our core holdings in sectors such as aerospace and defence,
media, construction, housebuilding and leisure throughout the year, seeking
out stocks trading at significant discounts to their net asset values as well
as those with proven business plans and high barriers to entry. We also
capitalised upon the weakness of the biotechnology sector towards the end of
the year as an opportunity to purchase and add to stocks such as Oxford
Glycoscience and Oxford Biomedica.

Construction and housebuilding companies performed well during the period and
we increased our exposure with stocks such as Crest Nicholson Bryant Group,
and Laing (John). In addition other old economy stocks in sectors in which we
were positioned, such as consumer cyclicals, performed strongly and we also
had a significant exposure to the leisure-related areas with companies such as
Po Na Na, Esporta and Regent Inns. We gradually moved to reasonably
significant weightings within the media sector, with holdings in, amongst
others Sanctuary Group and Incisive Media.

Company Risk Profile

The Company's objective is to achieve long term capital growth by investing
predominately in the shares of quoted UK smaller companies. Smaller companies
shares tend to be moderately traded and, as such, the market in these shares
can at times prove illiquid. Shifts in investor sentiment, or the announcement
of new information, can result in significant movements in share prices, and
make dealing difficult. By investing in a broad range of companies, the
Company seeks to minimise so-called stock-specific risk.

Current Prospects

The current outlook for the UK appears relatively benign; however, we expect
interest rates to be cut further in the coming months, and believe that
despite signs of robust consumer spending around Christmas 2000, such
reductions should have occurred sooner.

Sentiment towards the US markets has deteriorated, despite the two 0.5%
interest rate cuts in January and the further 0.5% cut yesterday. There are
certainly some strong fiscal balances in the UK and US, where government money
is adequate to spend on public projects and services, but the benefits from
this will take some time to feed through into the real economy. With UK
economic growth forecast to be moderate, the smaller company sector should
feel the positive effects of interest rate cuts. However, in an illiquid
market movements and sentiments are often exaggerated, so further volatility
could be experienced over the next few months.

We expect further merger and acquisition activity, particularly in the form of
management buyouts among companies disillusioned with their stock market
valuations. This continues a trend which started in early 2000 when directors
in poorly performing sectors considered that their companies were unreasonably
marked down, and decided to take their firms private. With lower interest
rates, this should be easier to finance, as the companies gear higher.

We believe it will be a challenging few months for smaller companies. This
will present the Company with useful opportunities to acquire new investments
in line with our existing strategy. Additionally we will monitor our exposure
to the TMT sector. Given a steady and cautious approach, there is no reason
why UK smaller companies cannot show positive gains by the end of the
financial year.



SUMMARY OF RESULTS

As at 31st January 2001
                                                   2001       2000     % change
Total net assets (£'000)                         86,473     83,187         4.0%
Net asset value per share -basic                 617.5p     593.0p         4.1%
Share Price                                      517.5p     488.5p         5.9%
Benchmark Index*                                2,837.4    2,772.8         2.3%
FT-SE Actuaries All-Share Index                 3,030.1    2,975.9         1.8%
Dividends per share                                7.7p      10.7p      (28.0%)
Earnings per share                                 8.9p      12.5p      (28.8%)
Expense ratio (excluding performance fee)**       1.22%      1.30%            -
Expense ratio (including performance fee)**       1.43%      2.41%            -

*Extended Hoare Govett Smaller Companies Index (capital gains excluding
investment trusts).

** This is the total expenses, excluding interest, incurred by the Company,
including those charged to capital, as a percentage of average net assets
(shareholders' funds).



STATEMENT OF TOTAL RETURN (incorporating the revenue account)

Year ended 31st January 2001

                                               2001                  2000
                                   Revenue Capital Total Revenue Capital Total
                                     £'000   £'000 £'000   £'000   £'000 £'000
Gains/(losses) on investments
Realised                                 -   15,323  15,323    -  10,446  10,446
Unrealised                               - (11,895)(11,895)    -  23,635  23,635
Income                              2,511         -   2,511 3,066      -   3,066
Investment management fee           (878)     (179) (1,057)  (715) (740) (1,455)
Other expenses                      (144)       (9)   (153)  (137)   (8)   (145)
Net return before finance costs     1,489     3,240   4,729 2,214 33,333  35,547
Interest payable and similar        (236)         -   (236) (456)      -   (456)
charges
Return on ordinary activities for   1,253     3,240   4,493 1,758 33,333  35,091
the financial year before and after
tax
Dividends in respect of equity    (1,078)         - (1,078)(1,501)     - (1,501)
shares
Transfer to reserves                   175    3,240  3,415    257 33,333 33,590



Return per ordinary share:
Basic                                 8.9p    23.1p  32.0p   12.5p 237.6p 250.1p

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.

A dividend of 7.7p per share is proposed.

BALANCE SHEET

As at 31st January 2001
                                                                2001       2000
                                                               £'000      £'000
Fixed assets
Investments                                                   99,059     87,082
Current assets
Debtors                                                          571      2,367
Cash at bank and in hand                                         253        551
                                                                 824      2,918

Creditors: amounts falling due within one year               (2,088)    (3,094)
Bank overdrafts                                             (11,322)    (3,719)
                                                            (13,410)    (6,813)

Net current liabilities                                     (12,586)    (3,895)
Net assets                                                    86,473     83,187
Capital and reserves
Called-up share capital                                       14,003     14,028
Share premium account                                         21,244     21,244
Capital redemption reserve                                        25          -
Capital reserves
realised                                                      38,007     23,001
unrealised                                                    12,024     23,919
Revenue reserve                                                1,170        995
Total equity shareholders' funds                              86,473     83,187
Net asset value per ordinary share:
Basic                                                         617.5p     593.0p


CASH FLOW STATEMENT

Year ended 31st January 2001
                                                                2001       2000
                                                               £'000      £'000
Net cash inflow from operating activities                        673      2,118
Servicing of finance
Bank interest paid                                             (208)      (453)
Net cash outflow from servicing of finance                     (208)      (453)
Financial investment
Purchase of investments                                     (47,391)   (33,413)
Sale of investments                                           40,526    33,046
Net cash outflow from financial investment                   (6,865)      (367)
Equity dividends paid                                        (1,501)      (982)
(Decrease)/ increase in cash                                 (7,901)       316
Reconciliation of net cash flow to movement in net debt
(Decrease) / increase in cash in the period                  (7,901)       316
Net debt at 1st February 2000                                (3,168)    (3,484)
Net debt at 31st January 2001                               (11,069)    (3,168)


The above results, which have been agreed with the auditors, are an abridged
version of the Company's full accounts that have not yet been filed with the
Registrar of Companies.

The preliminary announcement has been prepared on the basis of the accounting
policies as stated in the 2000 accounts.

The Board approved this preliminary statement, which has been agreed with the
auditors, on 21st March 2001. The financial information set out above does not
constitute the Company's statutory accounts for the years ended 31st January
2001 or 2000, but is derived from those accounts. Statutory accounts for 2000
have been delivered to the Registrar of Companies and those for 2001 will be
delivered following the Company's annual general meeting. The auditors have
reported on the 2000 accounts; their report was unqualified and did not
contain statements under s237(2) or (3) Companies Act 1985. The audit report
on the 2001 accounts has yet to be signed.

Copies of this statement will be available from the Company's registered
office at Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxon, RG9 1HH