Final Results

Montanaro UK Smlr Cos Inv Tst PLC
25 May 2000

              MONTANARO UK SMALLER COMPANIES INVESTMENT TRUST PLC

                  PRELIMINARY ANNOUNCEMENT OF ANNUAL RESULTS                  
   
The Directors announce the audited statement of results for the year ended 31
March 2000 as follows:-
                                                                              
                    SUMMARISED STATEMENT OF TOTAL RETURN                      
             (incorporating the revenue account*) of the Company              

                                                         **Restated
                              1 April 1999               1 April 1998 
                            to 31 March 2000            to 31 March 1999

                        Revenue   Capital   Total   Revenue   Capital   Total
                          £'000     £'000   £'000     £'000     £'000   £'000

Capital gains / (losses)
   on investments             -   32,849   32,849        -    (6,401)  (6,401)
Income                    2,253        -    2,253    2,532         -    2,532
Administration expenses  (1,444)       -   (1,444)  (1,348)        -   (1,348)
                          -----   ------   ------    -----     -----    -----
Net return before finance
 costs and taxation         809   32,849   33,658    1,184    (6,401)  (5,217)
Interest payable 
 and similar charges       (808)       -     (808)    (897)        -     (897)
                          -----   ------   ------    -----     -----     -----
Return on ordinary 
 activities before and 
 after taxation               1   32,849   32,850      287    (6,401)  (6,114)
                          -----   ------   ------     -----     -----    -----
Dividends proposed         (120)       -     (120)    (283)        -     (283)
                           -----   ------   ------    -----     -----    -----
Transfer from/(to)
  reserves after 
  dividends proposed       (119)  32,849   32,730        4    (6,401)  (6,397)
                          =====   ======   ======    =====     =====    =====

                          pence    pence    pence    pence     pence    pence
Return per ordinary share
 - basic                   0.00p   73.89p   73.89p    0.61    (13.59)  (12.98)
 - diluted                    -        -        -     0.59    (13.26)  (12.67)

*  The revenue column of this statement is the revenue account of the Company.

** The accounts have been prepared using accounting standards and policies 
   adopted at the previous year end, with the exception of income, which has 
   been calculated in accordance with the recently issued Financial Reporting 
   Standard No.16:Current Taxation.  The comparative figures have been 
   restated to reflect this change. 

All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued in the year.


SUMMARISED BALANCE SHEET: 
                                          As at            As at   
                                    31 Mar 2000      31 Mar 1999  
                                          £'000            £'000  

Investments                             100,253           81,411        
                                         ------           ------
Net current assets/(liabilities)          1,254             (243)
                                         ------           ------
Total asset less current liabilities    101,507           81,168
                                        -------           ------
Creditors:amounts falling due after
 more than one year                      (7,500)          (7,500)
                                         ------           ------  
Net assets                               94,007           73,668 
                                         ======           ======  
Net asset value per 
 ordinary share   
 - basic                                234.43p         156.41p          
 - fully diluted                            n/a         153.39p  


STATEMENT OF CASH FLOWS

                                          As at            As at   
                                    31 Mar 2000      31 Mar 1999  
                                          £'000            £'000  
Operating activities
 - Investment income received             2,052            1,893
 - Deposit interest received                181              503
 - Underwriting commission received          22               23
 - Investment Management fee               (877)            (640)
 - Secretarial fees paid                    (44)             (56)
 - Other expenses                          (289)            (414)
                                          -----            -----
Net cash inflow from operating 
  activities                              1,045            1,309
                                          -----            -----
Servicing of finance      
 - Interest and similar charges paid       (743)            (944)
                                          -----            -----
Net cash outflow from servicing 
  of finance                               (743)            (944)
                                          -----            -----
Capital expenditure and financial 
  investment
 - Purchases of investments             (29,785)         (48,641)
 - Sales of investments                  41,824           48,923
                                          -----           ------
Net cash inflow from capital 
expenditure and financial investment     12,039              282
                                         ------           ------
Equity dividends paid                      (283)            (283)
                                         ------           ------
Financing 
 - Proceeds of credit facility           10,000                -
 - Repayment of credit facility          (2,500)          (7,500) 
 - Ordinary shares repurchased 
   and cancelled                        (10,901)               - 
 - Warrants repurchased and cancelled    (1,407)          (2,303)
                                         ------           ------
Net cash outflow from financing          (4,808)          (9,803)
                                         ------           ------
Increase/(decrease) in cash               7,250           (9,439)
                                         ======           ====== 


The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 March 1999 or 2000 but is derived
from those accounts. Statutory accounts for 1999 have been delivered to the
Registrar of Companies, whereas those for 2000 will be delivered following the
Company's Annual General Meeting. The auditors have reported on those
accounts; their reports were unqualified and did not contain a statement under
section 237(2) or (3) of the Companies Act 1985.

CHAIRMAN'S STATEMENT

1999/2000 Performance  

During the period from 1 April 1999 to 31 March 2000, UK small companies
performed well: the FTSE SmallCap (excluding investment companies) Index ('the
SmallCap') rose by 39% in comparison with a gain of less than 4% by the
FTSE-100 Index.  The performance of the Trust was particularly strong.  At 31
March 2000, the diluted net asset value ('NAV') of the Trust was 234.43p, an
annual increase of 53%, outperforming its benchmark (the SmallCap) by 14%. 

Dividend

In line with the Company's primary focus on capital appreciation rather than
income, the Board proposes a final dividend of 0.30p per ordinary share to be
paid on 31 July 2000 to shareholders on the register at the close of business
on 9 June 2000.

Discount

From a low of 10% in May 1998, the discount of the share price to the NAV
widened to a peak of 27% in September 1998 and narrowed to 16% a year later.
In line with the small companies sector in general, it subsequently widened,
and closed the 2000 financial year at 26%.

We are committed to seeking ways on behalf of our shareholders to narrow the
discount of the Trust.  A number of positive steps have been taken already.   

Share Buybacks

The Board was among the first to arrange a facility to buy back shares in the
Trust. During 1999, the Board authorised the buyback for cancellation of 7
million shares from several shareholders, thereby enhancing the NAV.  The
authority for the Board to repurchase ordinary shares has been fully utilised.
Approval to renew this authority is included as a Resolution in the
forthcoming Annual General Meeting. 

Warrants

A tender offer for the outstanding warrants was made on 11 June 1999 at 48p
for each warrant outstanding following an earlier buyback of warrants.  The
tender offer was completed on 2 July 1999.  A further tender offer was made on
20 October 1999 at a price of 59.65p which was completed on 29 October 1999. 
There are no warrants outstanding.    

Structure

The Board has reviewed the structure of the Company and has concluded that the
present arrangements are appropriate for the long-term creation of shareholder
value.

The Board

At the Annual General Meeting Iain Cater will be resigning, and after five
years of service, Sir Geoffrey Littler will be retiring from the Board on
reaching the age of 70.  On behalf of the Board and the shareholders, I would
like to thank them for their considerable contribution to the success of the
Trust and for their much appreciated help since its launch.    

In his place, I am pleased to welcome Tony Hardy (aged 60), who has been
invited to join the Board at the Annual General Meeting.  He has considerable
experience of investment trusts and is currently Investment Manager of Church
Commissioners for England. He is also a director of Perpetual Income & Growth
Investment Trust plc.
        
Observations

Since my last statement, several new words have appeared in the vocabulary of
investors and analysts: 'new paradigm'; 'TMT' (technology, media and
telecommunications) stocks; 'dotcoms' (internet companies); 'old economy' and
'new economy' stocks.  This reflects a marked shift in focus towards
technology companies by both private client and institutional investors
following the launch of the techMARK-100 Index last November.  

There is little doubt that we are witnessing a technological revolution with
far reaching implications.  The internet has been compared to the industrial
revolution and the advent of the railways with some justification.  The way
that businesses interact is being transformed as e-commerce helps to reduce
supply chain inefficiencies by eliminating intermediaries, lowering the cost
of goods, and offering the potential for faster growth without inflation.  

The consumer now has easier access to a global market and is better able than
ever before to compare prices and get the best deal.  Communication has been
made easy and quick, whether it is via the internet, interactive digital
television or mobile telephone.  These developments have taken place in a
fraction of the time for earlier technological revolutions.  No wonder
investors have become excited.  

However, investor returns are a function of the level of risk that investors
are prepared to take.  It is more difficult to assess the intrinsic value of a
company that has no profits and does not generate cash - and is not likely to
do so for several years.  When companies are valued on the basis of multiples
of revenue, and valuations are justified by comparison with others assessed on
the same basis, investors are entering high-risk territory.  

It is often difficult to assess the technological risks involved in such
companies and the capability of their management teams, who may be relatively
unproven in terms of running a public company and managing rapid growth in
their businesses.  It comes as no surprise that more than 80% of US internet
companies newly listed during the first quarter of 2000 are now trading below
their first day closing prices (source: Nomura Technology Group 14 April
2000).     

It is now easier for technology companies to go public as the Financial
Services Authority has relaxed the listing requirements for the techMark-100
Index in the face of competition from EASDAQ, NASDAQ and other stockmarkets. 
The launch of a separate index for technology companies, and the flotation of
internet related companies, has captured the imagination of private investors
attracted to high returns.  We have also witnessed a new phenomenon - the
internet day-trader - which has contributed to increased market volatility. 
Although a valid part of any growth portfolio, it is easy to forget
(especially when they are going up) that technology companies carry a high
level of risk.  In such markets, fund management expertise comes into its own.
  

Last year was an exceptionally good one for UK small companies.  Concerns
about a recession and Y2K problems proved to be unfounded.   Looking ahead,
the inflation outlook remains positive (indeed technological advances are
deflationary) although the strength of the economy has led to higher interest
rates.  An expansionary budget, a strong oil price and currency concerns may
lead to even higher rates.  This would put pressure on valuations, which are
already demanding particularly among technology and growth companies, and
could perpetuate volatile market conditions.  However, the UK small company
market is the nursery for the blue chip companies of the future and is likely
to continue to attract investors.                   
   
The Trust has now reached its fifth anniversary.  It has outperformed its
benchmark every year and cumulatively by a total of 42%.  The NAV has more
than doubled over the past five years, increasing by 137%.  In contrast with
UK small companies as a whole, the Trust has also outperformed the FTSE-100
Index, showing that the Investment Manager has added value through successful
stock selection.  The Board, on behalf of the shareholders, congratulates the 
Investment  Manager on these considerable achievements.  

The annual report will be sent to shareholders in Mid June 2000 and will be
available to members of the public from the Company's registered office at 23
Cathedral Yard, Exeter, EX1 1HB.

Brandon Gough
Chairman
24 May 2000