Interim Results

F&C U.S. Smaller Companies PLC
11 March 2004


Date:     11 March 2004

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 2003

HIGHLIGHTS

•    Net assets per share rose 16.1% in the six month period. This
     compared to a gain of 14.5% in the sterling-adjusted Russell 2000 Index.

•    The superior performance of your Company was achieved despite
     under-weighting the fashionable but risky technology sector. I believe this
     strong performance reflects good stock selection resulting from the 
     Company's risk averse approach that focuses on the shares of companies 
     which appear cheap, with strong franchises, free cash flow and significant 
     insider ownership.

•    The US smaller company sector has been a good one to be invested in
     over the last four years and we expect it to remain so in the future.


SUMMARY OF RESULTS
     
                                         31 December 2003            30 June 2003               % change

Net assets                                        £61.82m                 £53.27m                 +16.06

Net asset value per share                         232.18p                 200.06p                 +16.06

Share price                                       217.50p                 192.00p                 +13.28




Chairman's Statement

Dear Shareholder

I am pleased to report that the US stockmarket recovered strongly in the six
month period to 31 December 2003 and that your Company, outperformed its
benchmark, the Russell 2000 Index.

Net assets per share rose 16.1% in the six month period. This compared to a gain
of 14.5% in the sterling-adjusted Russell 2000 Index.

Market Review

The US stockmarket rally began in Spring as the SARS outbreak faded and concerns
that conflict in Iraq would spill over to the rest of the Middle East proved
unfounded. In the period under review, equities were led by small companies and
technology stocks. In dollar terms, the Russell 2000 Index of smaller companies
rose 24.2%, the NASDAQ Composite Index added 23.5% but larger company indices
gained less, the S&P 500 increasing by only 14.1%.

There are three features worth noting. Small companies have reasserted the
leadership they lost in 2000 continuing the cycle of superior performance that
began in 1999. Technology stocks did well, but their rally began to fade towards
the end of the six month period. The dollar fell significantly during the period
(8.5%), curtailing gains for sterling-based investors.

The Russell 2000 technology sector rose 29.7% in the period, compared with a
gain of 24.2% for the Russell 2000 Index but several other sectors did better
still during the period under review. The best performing sectors were the
industrially-orientated ones: other (diversified companies), producer durables,
and materials and processing.

The superior performance of your Company was achieved despite under-weighting
the fashionable but risky technology sector. I believe this strong performance
reflects good stock selection resulting from the Company's risk averse approach
that focuses on the shares of companies which appear cheap, with strong
franchises, free cash flow and significant insider ownership.

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 (instead commercial finance is emphasised).

In the last six months, the Manager has increased exposure to healthcare, which
is now over-weighted. In particular, service companies that will benefit from an
ageing population were added to, including hospitals and eldercare homes.
Profits have been taken in autos and transportation, and in some of the larger
positions in the consumer discretionary sector that have done well.

Some of the best contributions to performance came in the healthcare sector,
especially, biotechnology-related stocks, positions that were built up after the
sector fell in 2001, and in nursing homes. Beneficiaries of a low dollar and
Chinese growth, such as Freeport McMoran Copper and Gold also contributed
strongly. As mentioned above, the technology underweight was a drag on
performance in the six months.

Buy-backs and Discount

The Company made no purchases of its own shares in the six month period. The
Board will however 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 4.0% at 30 June 2003 to 6.3% at 31 December
2003. As at 9 March 2004, the discount was 9.6%.

Foreign Currency Hedging Policy

Although the Board has the authority to hedge out the £/$ risk for a sterling
based investor, it is not currently the Board's policy to do so.

Gearing Policy

The Company has chosen to remain ungeared since inception. In view of the
volatility of smaller company share prices and the regular continuation vote,
the Board feel the risks which would result from gearing to be unjustified.

Outlook

The US smaller company sector has been a good one to be invested in over the
last four years and we expect it to remain so in the future. The Board believes
that the Company's risk averse approach will continue to benefit shareholders
over the longer term.


Gordon Grender
March 2004



Unaudited Balance Sheet
                                                          31 December 2003       31 December          30 June
                                                                    £'000s              2002             2003
                                                                                      £'000s           £'000s
Fixed assets
Investments                                                         60,730            46,708           52,135

Current assets
Debtors                                                                 86                29               20
Taxation recoverable                                                     -                 1                -
Cash at bank                                                         1,148             1,794            1,295
                                                                     1,234             1,824            1,315

Current liabilities
Creditors: amounts falling due within one year                       (147)             (427)            (185)

Net current assets                                                   1,087             1,397            1,130

Net assets                                                          61,817            48,105           53,265

Capital and Reserves
Called up equity share capital                                       6,656             6,712            6,656
Capital redemption reserve                                           6,696             6,640            6,696
Share premium                                                        2,468             2,468            2,468
Non-distributable reserve                                              841               841              841
Special reserve                                                     11,009            11,618           11,009
Capital reserves                                                    35,647            21,296           27,133
Revenue reserve                                                    (1,500)           (1,470)          (1,538)
Total equity shareholders' funds                                    61,817            48,105           53,265

Net asset value per ordinary share - pence                          232.18            179.16           200.06



The geographical distribution of investments at 31 December 2003 was:
United States 100%.




Unaudited Statement of Total Return (incorporating the Revenue Account*)
for the 6 months to 31 December
                                                                   2003                                   2002
                                      Revenue      Capital        Total      Revenue      Capital        Total
                                       £'000s       £'000s       £'000s       £'000s       £'000s       £'000s          
Gains/(losses) on
Investments                                 -        8,641        8,641            -     (14,224)     (14,224)

Exchange (losses)/gains on
currency balances                           -        (126)        (126)            -            2            2

Income                                    428            -          428          273            -          273

Management fees                         (238)            -        (238)        (230)            -        (230)

Other expenses                           (89)          (1)         (90)         (80)        (255)        (335)


Net return before finance costs
and taxation                              101        8,514        8,615         (37)     (14,477)     (14,514)

Interest payable and similar
charges                                     -            -            -            -            -            -


Return on ordinary activities
before taxation                           101        8,514        8,615         (37)     (14,477)     (14,514)

Taxation on ordinary activities          (63)            -         (63)         (38)            -         (38)


Return attributable to equity
shareholders                               38        8,514        8,552         (75)     (14,477)     (14,552)

Dividend on ordinary shares                 -            -            -            -            -            -


Amount transferred
to/(from) reserves                         38        8,514        8,552         (75)     (14,477)     (14,552)


Return per ordinary share -
pence                                    0.14        31.98        32.12       (0.24)      (45.82)      (46.06)



*   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 6 months to 31 December


                                                                                   2003                  2002
                                                                                 £'000s                £'000s


Net cash inflow/(outflow) from operating activities                                  59                  (28)
Total tax paid                                                                     (63)                  (41)
Net cash (outflow)/inflow from financial investment                                (17)                12,404
Net cash (outflow)/inflow before use of liquid
resources and financing
                                                                                   (21)                12,335
Net cash outflow from financing                                                       -              (11,860)
(Decrease)/increase in cash during the period                                      (21)                   475



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 
2003.

The Board recommends that no interim dividend payment be made.

The Interim Report and Accounts will be posted to shareholders in late March
2004. 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

10 March 2004


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