Interim Results

Perpetual UK Smaller Co's IT PLC
12 September 2000


Chairman's Statement

During the six month interim period to 31st July 2000, your Company has
continued to outperform its Benchmark Index, in what has been a generally
difficult period for investors.  Your Company's net asset value decreased in
the period by 0.3%, which compares with a decline in the Index of 1.2%.  Over
the full year to 31st July 2000, the Company's net asset value has increased
by 32.7%,which compares favourably with an increase of 13.8% for the Index.

The apparently modest changes in the main UK stockmarket indices in the six
month period to 31st July 2000 mask a considerable amount of volatility in
underlying share prices.  The technology inspired boom which prevailed at the
end of the Company's year in January lasted until the spring, but then came to
an inevitable end as investors sought to realise profits and move to the
relative sanctuary of more value-based investments.

The Manager has been active in the period, realising profits in many holdings,
especially those in software and computer services, and reinvesting mainly in
cyclical investments such as holiday and leisure companies.  The portfolio has
also benefited from a significant level of corporate activity in companies in
which we are invested.

In common with previous years, it is not our intention to pay an interim
dividend; our primary aim remains long-term capital growth.

At the Annual General Meeting in April, shareholders gave us authority to
repurchase our own shares when considered appropriate.  To date, the Manager
has not exercised this power, but it is a potentially useful tool to reduce
the share price discount to net asset value, while at the same time enhancing
shareholder returns.

The next year will, as always, present challenges and opportunities to alert
investors.  I believe that shareholders are well placed to benefit.


Jamie Berry                                       12th September 2000

Manager's Review

Investment Review

The period under review was characterised by the volatile performance of UK
smaller companies.  The early part of 2000 saw a dramatic increase in the
value of technology, media and telecommunications ('TMT') stocks which
prompted a bout of speculation among fund managers and private investors
alike about the long-term prospects for the internet.  During this period the
so called 'old economy' stocks were ignored by investors although the period
did, however, see substantial merger and acquisition activity among such
investments which benefited the Company's performance.

UK smaller companies enjoyed strong relative performance against their larger
counterparts in the early part of the period under review.  Towards the end of
the period however, smaller companies suffered mainly as a result of
profit-taking in TMT stocks.  Higher interest rates and a stronger pound also
combined to depress share prices.

Investment Strategy

During the same period, we have taken profits and reduced weightings in
software and computer services holdings.  We increased weightings in the
cyclical service sector with additional purchases in holiday and leisure
stocks, such as De Vere Group, as well as in pub groups, such as Wolverhampton
& Dudley and Regent Inns.  Corporate activity picked up throughout the period.
The portfolio benefited from a number of take-overs which were mainly for
cash.  These included Thomson Travel, Slug & Lettuce and Ward Holdings.  We
have continued to keep investments in 'dot.com' stocks to a minimum, given
the over-optimistic ratings accorded to these companies.  Our profit-taking in
the period included a reduction in the holding of Alphameric and disposals of
other stocks such as Infobank International and SDL. 

Current Prospects

Domestic and international economic recovery has continued through the period.
At the same time, inflation has remained low and public sector finances have
been positive, underpinning future spending patterns on health, education and
roads.  Although the outlook for UK interest rates is uncertain, we believe
the domestic economy should continue to grow, albeit at more modest levels.
Improved productivity and reasonably modest price inflation should help to
support this scenario.

Given our views, we will continue to invest in shares that are trading at
discounts to their asset values, such as housebuilders and property groups.
In addition, we shall be looking at growth opportunities which are supported
by experienced management and proven business plans.

Where possible, we look for businesses which have unique products or services,
as well as a large market position that makes it difficult for potential
competitors to establish a similar business.  We also look for potentially
exciting growth situations, especially in the biotechnology area.  Examples of
such companies within our portfolio include SR Pharma and Oxford Biomedica. 
Barring any unforeseen shocks to global financial markets, we believe there
will continue to be interesting investment opportunities among UK smaller
companies over the course of the next twelve months.


Statement of Net Assets
As at 31st July 2000 (unaudited)

                                                           
                                                           
                                                           
  Assets                             31.7.00     31.7.99     31.1.00
                                       £'000       £'000       £'000
                                                                     
  Investments                         86,443      71,508      87,082
  Net current liabilities             (3,496)     (8,996)     (3,895)
                                                                    
  Total net assets                    82,947      62,512      83,187
                                                                    
                                                                    
  Number of ordinary               
  shares                            14,028,206  14,028,206  14,028,206     
  Net asset value per                 
  share                               591.3p      445.6p      593.0p
                                                           
This statement excludes revenue transferred to reserves for the interim
periods.
This statement has neither been reviewed, nor audited by the Company's
auditors.
                                                           
 Key Statistics                                   Year to    6 months
                                                                 to
                                                  31.7.00     31.7.00
  Increase/(decrease) in:                                            
                                                                     
  Total net assets                                  32.7%      (0.3%)
                                                                    
  Net asset value per                               32.7%      (0.3%)
  share - basic
                                                                     
  Share price                                       21.8%      (2.1%)
                                                                     
  Benchmark index*                                  13.8%      (1.2%)
                                                                     
  FTSE Actuaries All-                               4.7%        2.9%
  Share Index
                                                                
* Extended Hoare Govett Smaller Companies Index (capital gains excluding
investment trusts)

Statement of Total Return (incorporating the revenue account)
For the six months ended 31st July 2000 (unaudited)

                                                                         
                        6 months                   6 months           Year
                          ended                     ended             ended
                         31.7.00                    31.7.99          31.1.00
                                                    Restated
                 Revenue   Capital  Total  Revenue  Capital Total     Total
                                      
                 £'000    £'000    £'000   £'000    £'000   £'000      £'000
Gains/(losses)                                                                
on investments                                                                
  - realised              12,378   12,378           2,127   2,127     10,446
                                       
 - unrealised            (12,615) (12,615)         10,790  10,790     23,635
                                     
Income           1,355              1,355  1,597            1,597      3,066
Investment                                                                    
management fee    (437)              (437)  (334)            (334)    (1,455)
Other expenses     (63)       (3)     (66)   (53)      (2)    (55)      (145)

Net return                                                                    
before finance                                                                
costs and                                                                     
taxation           855      (240)     615  1,210   12,915  14,125     35,547

Interest                                                                      
payable and        
similar charges    (79)               (79)  (214)            (214)      (456)
                                                                              
Return on                                                                     
ordinary            
activities
before tax         776      (240)     536    996    12,915 13,911     35,091

Tax on ordinary                                                               
activities                                                                    
                                                                              
Return on                                                                     
ordinary                                                                      
activities                                                                    
after tax for                                                                 
the period          
attributable to
equity
shareholders       776     (240)      536    996   12,915   13,911     35,091

Dividends in                                                                  
respect of                                                             
equity shares                                                          (1,501)

Transfer                                                                      
to/(from)           
reserves           776     (240)      536    996   12,915   13,911     33,590

Return per                                                                    
ordinary share:
Basic             5.5p     (1.7p)     3.8p   7.1p   92.1p    99.2p      250.1p
                      
                                                                              

The revenue column of this statement is the Profit and Loss Account of the
Company.

This statement has neither been reviewed, nor audited by the Company's
auditors.

The Balance Sheet as at 31st January 2000 and the Statement of Total Return
for the year then ended have been abridged from the Company's 2000 statutory
accounts which have been filed with the Registrar of Companies; the auditors'
opinion on those accounts is unqualified.

The comparative figures on this statement have been restated to reflect the
adoption of FRS16 'Current Tax' in that UK dividends are disclosed net of tax
credits.

Copies of the interim report will be sent to shareholders of the Company, and
will be available from the Company's registered office at Perpetual Park,
Perpetual Park Drive, Henley-on-Thames, Oxon, RG9 1HH.