Half-yearly report to 30 June 2010

ABERFORTH SMALLER COMPANIES TRUST plc

HALF YEARLY REPORT

For the Six Months ended 30 June 2010


Aberforth Smaller Companies Trust plc (ASCoT) invests only in small UK quoted
companies and is managed by Aberforth Partners LLP.

The investment objective of ASCoT is to achieve a net asset value total return
(with dividends reinvested) greater than on the RBS Hoare Govett Smaller Companies
Index (Excluding Investment Companies) over the long term.

All data throughout this Half Yearly Report is to, or as at, 30 June 2010 as
applicable, unless otherwise stated.


CHAIRMAN'S STATEMENT

For the six months to 30 June 2010, Aberforth Smaller Companies Trust plc (ASCoT)
achieved a net asset value total return of -0.5%, which compares with a total
return of 1.2% from the RBS HGSC Index (Excluding Investment Companies), your
Company's investment benchmark.  Larger companies, as represented by the FTSE All-
Share Index, registered a total return of -6.1%.  ASCoT, therefore, outperformed
the FTSE All-Share, but underperformed its benchmark.

This is my first Statement to Shareholders since I became Chairman following the
Annual General Meeting in March 2010.  The period under review has been eventful.
The macro environment has once again been dominated by the inflation versus
deflation debate.  Against a backdrop of increasing concerns over sovereign debt
levels, and the appropriate timelines for austerity measures to be implemented, it
is perhaps not so surprising to see deflationary forces build over the period.  In
the UK, as predicted by the pollsters, the election resulted in the first hung
parliament since the early seventies.  Notwithstanding the risks associated with
austerity measures, initial policy actions have, in the short term, been well
received by financial markets and the business community alike.  This is helpful
in maintaining confidence in the current fragile economic climate.

During the period the UK stockmarket was influenced by three major events all
worthy of comment. Two of these arose in the large cap world where both the impact
of the Macondo well blow-out on BP and the misjudgement by Prudential over their
proposed AIG Asia acquisition will, I am sure, come to be judged as momentous
events. The consequent negative returns from these two companies, especially BP,
were responsible for lowering the returns on the FTSE All-Share by over 3
percentage points, helping explain to some extent why large caps underperformed
smaller companies over the period.

The third factor, which has received a fraction of the media coverage of either BP
or Prudential, is the nascent dividend recovery that is occurring within the UK
stockmarket (ex-BP).  Your Managers provide greater information and detail in
their report but it is genuinely encouraging to be able to report to Shareholders
on such a trend a mere fifteen months on from the depths of fourth quarter 2008,
and after the unprecedented level of dividend cuts by many UK companies in 2009.
A continuation of this recovery in dividends, if achieved, would likely be
supportive of asset prices whilst providing Shareholders with a growing income
stream.

Gearing remains substantially unchanged over the period and, as at 30 June 2010,
stood at 9.2%.

On 4 March 2010, your Board was pleased to announce a first interim dividend of
6.0p per Ordinary Share in respect of the current financial year.  The dividend
was paid on 2 April 2010 to Shareholders on the register on 12 March 2010.  Your
Board believed that it was in Shareholders' interests to accelerate the timing of
this year's first interim dividend, which would normally have been paid in August
2010.  It is anticipated that future dividend payments will revert to the normal
dividend schedule with the next anticipated payment date being February 2011. The
revenue reserves at 30 June 2010 have been temporarily depressed as a result of
this payment.

At the Annual General Meeting on 3 March 2010, all resolutions proposed were
passed, including that which renewed the authority to buy-in up to 14.99% of
ASCoT's Ordinary Shares.  During the six months to the end of June 2010, 120,000
shares (0.12% of the issued share capital) were purchased and cancelled under this
authority for a total consideration of £647,000 at an average discount of 15.7%.

Economic recoveries are by their very nature fragile, and history would point to
more than a few bumps along the road to recovery.  That fragility only increases
when an economic downturn coincides with a banking crisis.  Your Board fully
appreciates the Managers' portfolio positioning in seeking both a margin of safety
in valuation terms by being overweight in the "smaller" small companies in the RBS
HGSC universe but also reinforcing it with balance sheet flexibility at the
investee company level.

In the short term such positioning may be somewhat out of fashion, but this should
change either over time as the stockmarket re-rates future income streams or more
immediately as M&A activity continues to recover.  Your Board remains confident
that the Managers' experience and consistency of approach will benefit ASCoT over
the long term.


Prof. Paul Marsh
Chairman
20 July 2010




MANAGERS' REPORT

Investment background

Small UK quoted companies extended the gains achieved in 2009.  The RBS Hoare
Govett Smaller Companies Index(XIC) ( RBS HGSC (XIC) or the benchmark) recorded
a total return of 1.2%, which exceeded the -6.1% return of large
companies as measured by the FTSE All-Share.  In an echo of the pre-crisis bull
market, the sweet-spot within the UK was the FTSE 250.  The mid caps, which
account for over three quarters of the market capitalisation of the RBS HGSC
(XIC), were up by 2.1%.  In contrast, `smaller small' companies, as measured by
the FTSE SmallCap, experienced a total return of -3.6%.

While these generally positive returns reflected the ongoing recovery from
recession, the overall figures mask a period of considerable volatility.  May
and June witnessed substantial declines for equities worldwide as a combination
of top-down concerns conspired to bring the risk of deflation back to the fore
and to undermine risk appetites and confidence in the recovery.  The RBS HGSC (XIC)
shared in the pain, falling by 12% from its late April peak to the end of June.

Of these concerns, that which made most headlines was the Greek sovereign debt
crisis, which threatened to spread around the fringes of the euro zone and drove
the euro down by 13% against the dollar.  The financial markets were initially
unconvinced by the official response.  However, the European Central Bank and
IMF unveiled a €750bn package in early May, which may go on to encompass
measures such as quantitative easing.  This seems to have restored some
confidence, but risks of contagion and the implications for lenders to these
countries continued to buffet the markets as the first half drew to a close.

Doubts about the euro coincided with the impact of more restrictive policies
within China.  Here authorities appear concerned that the success of last year's
stimulus in sustaining GDP growth of above 8% risks over-heating, particularly
in the property sector.  The view of China as an autonomous source of growth
played an important part in the rebound in equities around the globe in 2009.
Any challenge to this was always going to test the equity markets' mettle, as
will be the case when the Western economies see fit to withdraw their own
monetary stimuli.  Late in June, China wrong-footed the markets again with an
indication that its currency peg to the dollar would be relaxed.  On balance
this was taken positively, since, at the margin, a stronger renminbi would
soften China's mercantilism and rebalance growth towards the Chinese consumer.

On top of these global issues, the UK market has had to contend with the general
election and an austerity budget.  With ten year yields dropping from 4.0% to
3.4%, the gilt market was reassured by the outcome of the election, with the
coalition government emphasising fiscal rectitude in the budget.  These actions
are not, however, without risk and have alarmed those of a Keynesian persuasion,
who see risks of a double dip recession, or worse, as fiscal policy is tightened
against the background of still uncertain domestic and international demand.
For the Chancellor's strategy to succeed, the onus is on the private sector and
companies in particular to take up the strain.

There is reason for optimism among small UK quoted companies.  Results through
the first half of the year were on the whole strong, benefiting from a modest
pick-up in sales and, more particularly, from the deep cost cutting exercises
undertaken last year.  Balance sheets in general are in good shape, helped in
some cases by the substantial equity issuance that took place in 2009.  With the
corporate sector looking relatively robust in many major developed economies,
these characteristics are not unique to constituents of the RBS HGSC (XIC).
However, as detailed below, many small UK quoted companies are reflecting their
more rapid than expected return to good levels of profitability in an
encouraging dividend performance.

Performance Analysis

The first quarter of the year saw ASCoT secure a net asset value total return of
5.7%.  With the stockmarket driven by a continuation of the recovery that took
hold in 2009, the RBS HGSC (XIC)'s return was greater at 8.5%.  This was driven
by a 10.3% total return from the FTSE 250.  Moving into the second quarter, the
influence of the macro economic concerns previously described grew.  In this
environment, ASCoT's relative performance improved: its total return was -5.9%
against -6.7% for the benchmark.  However, over the first half as a whole
ASCoT's NAV total return was -0.5%, which represents under-performance against
the RBS HGSC (XIC) of 169 basis points (or 1.7%).  The following table and
paragraphs explain this performance.

Performance Attribution Analysis
For the six months ended 30 June 2010

                                                         Basis
                                                        Points
Stock selection            }                               (96)
Sector selection           } Based on mid-prices           (26)
                                                          -----
Attributable to the portfolio of investments              (122)
(after transaction costs of 29 basis points)
Movement in the spread between mid and bid prics             2
Cash/gearing                                                (6)
Purchase of Ordinary Shares                                  2
Management fee                                             (41)
Other expenses                                              (4)
                                                          -----
Total attribution based on bid-prices                     (169)
                                                          -----
Note: 100 basis points = 1%. Total attribution is the
difference between the total return of the net asset value
and the Benchmark Index (i.e. net asset value = -0.50%;
Benchmark Index = 1.19%; difference is -1.69% being -169
basis points).


· At the portfolio level, attribution was negative.  The `fallen stars',
  which so affected returns in 2009 and which were described in last year's
  reports, were not a significant factor.  Many left the benchmark on its
  rebalancing at the start of this year and several of those that remained
  actually suffered badly in the difficult market in the second quarter.

· In explaining sector selection, no individual sector or top down theme
  stands out.  The portfolio is biased away from domestically oriented sectors and
  towards capital goods.  This proved helpful, but, as concerns about growth in
  China and the US intensified over the first half, the benefit diminished.  With
  China the marginal source of demand for industrial metals, these concerns also
  justified the lack of exposure to the commodities sectors through most of the
  period.  However, such was the de-rating of mining and metals companies in May
  and June that new positions in two commodities businesses were taken.

· Negative stock selection accounted for the majority of the under-
  performance.  Four stocks each detracted at least 50 basis points from relative
  performance.  All four represented at least 1.3% of the portfolio at the start
  of the year and, as with virtually all holdings, thus had a significant active
  weight.  Three of the four issued disappointing trading updates through the
  first half.  In a portfolio of 88 companies, this is not an uncommonly high
  incidence of profit warnings and, indeed, it was balanced by positive
  contributions from other holdings on the back of strong results.

· The portfolio's size positioning was unhelpful and influenced both stock
  and sector selection.  The RBS HGSC (XIC) has a substantial overlap with the
  FTSE 250, to the extent that mid caps accounted for 76% of the benchmark's
  market capitalisation at the end of June.  In contrast, the portfolio's
  weighting in mid caps is 47%.  Therefore, the large spread in performance
  between the FTSE 250, which was up by 2.1%, and the FTSE SmallCap, which was
  down by 3.6%, had an impact on relative returns.  This over-weight position in
  the smaller constituents of the benchmark has been built up over time.  It
  reflects the lower valuations available to your Managers down the scale of
  market capitalisations.  The forward PE ratio of the FTSE SmallCap was 22% below
  that of the FTSE 250 at the end of June.  Meanwhile, the FTSE SmallCap's yield
  was 34% higher than that of the mid caps.  Some difference to reflect the
  illiquidity of smaller companies is probably justified but these levels seem
  excessive, especially and crucially when there is little discernible gap in the
  fundamental prospects of the companies in each part of the benchmark.

· In the environment of very low or negative stockmarket returns, ASCoT's
  gearing proved unhelpful over the first half, modestly reducing relative returns
  to the tune of six basis points.

· An indication of the fundamental prospects of the portfolio companies is
  the dividend decisions made by boards through the first half.  The picture that
  emerges from an analysis of the 88 holdings at the end of June is encouraging
  and is summarised in the following table:

   Band                Nil  IPOs  Down   Flat  +0-10%  +10-20%   + >20%
   No. of holdings      20    3      5     15      18       11       16


  The `Nil' category includes those companies that did not pay a dividend in
  the first half.  Just over half of those can be termed structural nil payers,
  typically technology businesses at a relatively early stage of development.
  The others may be considered cyclical nil payers that will come back to the
  dividend register once their profits recover.  This latter phenomenon is
  relevant to the wider small company universe and can have a meaningful impact
  on aggregate reported dividend growth.  Of the three holdings in IPOs, two
  are expected to go on to pay dividends.  Five companies cut their dividends,
  which is not an abnormal incidence even in steadier economic conditions.  The
  positive aspect of the analysis is the number of companies in the three right
  hand columns: 45 companies chose to announce increased dividends, some by a
  significant amount.

  Going into recession, your Managers emphasised the notion of being `paid to
  wait' for a recovery: a sustainable dividend yield can provide some
  compensation in periods of difficult trading.  In the event, last year turned
  out to be the worst in terms of dividends in the RBS HGSC (XIC)'s history.
  ASCoT's portfolio fared less badly, but there were nevertheless some
  disappointing dividend decisions.  The turnaround encapsulated in the
  preceding analysis is therefore welcome and is indicative of the rapid cost
  reductions implemented by the management teams of investee companies last
  year.  It has come earlier than your Managers had expected, even at the start
  of the year, and is clearly supportive of ASCoT's income account.

· When making their decisions about dividends, the boards of those companies
  in which ASCoT invests would have taken comfort from the strength of their
  balance sheets.  At the end of the half year, just under one third of the
  portfolio was invested in companies with net cash on their balance sheets.  Your
  Managers' preference for well financed businesses was not helpful to relative
  returns last year, when the stockmarket's charge was led by companies with
  indebted balance sheets and greater potential for recovery.  However, the
  positioning proved assistive in the pessimism of the second quarter.  Beyond
  this defensive aspect, a strong balance sheet gives a business the flexibility
  to invest at a time when more highly geared competitors remain challenged by the
  banks' focus on the repair of their own balance sheets.  It is not your
  Managers' desire to see substantial balances of net cash reside on balance
  sheets indefinitely: if it cannot be invested profitably, a return of surplus
  cash to shareholders would seem appropriate.

· Of course, management teams often use strong balance sheets to pursue M&A.
  While the dearth of mega deals continues, corporate activity in 2010 has,
  consistent with previous cycles, shown signs of life within the small company
  world.  Last year was depressed with only 14 RBS HGSC (XIC) companies acquired,
  against an average of 50 per annum in the preceding five years.  However,
  through the first half, deals for five companies, three of which were portfolio
  holdings, were completed.  On top of those, twelve benchmark constituents were
  at some stage of talks at the end of June.  Again, echoing previous cycles, the
  predators have frequently been large American companies, which typically trade
  on higher valuations than their smaller UK peers and, at the current time,
  benefit from the strength of the dollar.  Premiums to stockmarket valuations
  have often been large, especially in those businesses further down the scale of
  market capitalisations.  By way of illustration, at the quarter end one company
  had agreed a bid with an American trade buyer 262% above its £60m market
  capitalisation prior to the announcement of an approach.  Regrettably, this
  company was not held within the portfolio, but this episode perhaps demonstrates
  how a continued recovery in M&A might be one way in which ASCoT stands to
  benefit from its size positioning.

Conclusion & Investment Outlook

Confidence in continued recovery and appetite for risk waned in May and June.
Entering the second half, investors are confronted by doubts about China's
contribution to global growth, fears of a `double-dip' recession in the US and
ongoing sovereign debt concerns within Europe.  If all that is not enough, the
domestic economy has to cope with the implications of an austerity budget that a
significant number of economists consider inappropriate.

Weighed against these negative factors are the likelihood of very low interest
rates for a number of years that will aid balance sheet repair, the coalition
government's clear plans to control a public sector that has probably `crowded
out' private sector activity in recent years, and the underlying health of the
UK corporate sector.  That health is obvious in the world of small UK quoted
companies, which are, on the whole, well financed and, as previously
demonstrated, able to reflect their robustness in good levels of dividend
growth.

But perhaps the most important factor that encourages your Managers in the face
of the various macro economic challenges is the abundance of attractive
valuations on offer within the RBS HGSC (XIC).


                   30 June 2010      31 December 2009     30 June 2009
Characteristics    ASCoT Benchmark   ASCoT  Benchmark   ASCoT  Benchmark

Number of             88      437       87       448       92       480
Companies
Weighted Average   £370m    £668m    £368m     £619m    £327m     £605m
Market Capitalisation
Price Earnings      9.8x    12.8x     8.1x     11.2x     7.0x      8.7x
Ratio (Historic)
Net Dividend        3.0%     2.7%     3.2%      2.7%     4.3%      3.6%
Yield (Historic)
Dividend Cover      3.4x     2.9x     3.9x      3.3x     3.3x      3.2x
(Historic)


As the preceding table shows, valuations have moved upwards over the past twelve
months.  This reflects both falling profits as the recession took its toll and
rising share prices in anticipation of recovery.  The average PE ratio of
ASCoT's portfolio was 9.8x at the end of June.  In relation to the average PE of
the RBS HGSC (XIC), the portfolio stands at a 23% discount, which compares with a
long term average discount of 8%.  Against its own history, the portfolio also
represents good value, with the average PE over ASCoT's twenty years of 13.0x.
Given the falls in profits endured through the recession, a higher than average
valuation might be expected to reflect the scope for profits to grow strongly as
the economy recovers.  This is indeed what happened during the recovery from the
recession in the early 1990s.  The present valuation therefore reflects the
market's doubts about the sustainability of the present recovery: a lot of the
bad news, if indeed the infamous `double-dip' comes to pass, may already be in
the price.

Some additional comfort may be taken from the well diversified income profile of
the portfolio.  Consistent with the dividend experience so far in 2010, the
strong balance sheets within the portfolio and a still high dividend cover of
3.4x, the dividends generating the 3.0% historic yield might be expected to
grow.  Echoing the strategy of 2008, being `paid to wait' might provide some
compensation as the various macro economic dramas are played out.

In judging the appropriateness of ASCoT's tactical gearing, your Managers
continue to emphasise the attractive absolute valuations on offer within the
small company universe.  Over time, they should provide the basis for
improved performance, notwithstanding current macro economic challenges.  As the
valuation disparities narrow- whether between `smaller small' and midcap companies or
between well financed and highly geared companies - gearing should enhance the
returns that accrue to ASCoT's shareholders.

Aberforth Partners LLP
Managers
20 July 2010



INVESTMENT PORTFOLIO
Fifty Largest Investments as at 30 June 2010
                      Valuation  % of
No Company                £'000 Total  Business Activity
 1 JD Sports Fashion     21,319 3.8    Retailing - sports goods & clothing
 2 Huntsworth            17,653 3.1    Media - public relations
 3 Domino Printing       16,933 3.0    Industrial printers & inks
   Sciences
 4 Beazley               16,171 2.9    Lloyds insurer
 5 RPC Group             15,032 2.7    Plastic packaging
 6 Bodycote              13,461 2.4    Engineering - heat treatment
 7 Spectris              13,098 2.3    Diversified electronics businesses
 8 JKX Oil & Gas         12,537 2.2    Oil & gas exploration & production
 9 RPS Group             12,038 2.1    Energy & environmental consulting
10 Tullett Prebon        11,920 2.1    Inter dealer broker
   Top Ten Investments  150,162 26.6

11 CSR                   11,759 2.1    Location & connectivity chips for mobile devices
12 Greggs                11,578 2.1    Retailing - baked products & sandwiches
13 Phoenix IT Group      11,567 2.0    IT services & disaster recovery
14 Hampson Industries    11,453 2.0    Composite tools & components for aerospace
15 St. Modwen            10,917 1.9    Property development
   Properties
16 e2v technologies      10,858 1.9    Electronic components & subsystems
17 Collins Stewart       10,593 1.9    Stockbroker & private client fund manager
18 Holidaybreak          10,329 1.8    Education & holiday services
19 Millenium & Copt.      9,928 1.8    Hotels
   Hotels
20 Anite                  9,728 1.7    Software - telecoms & travel
   Top Twenty
   Investments          258,872 45.8

21 Galliford Try          9,311 1.6    Housebuilding & construction services
22 Micro Focus            9,077 1.6    Software - development & testing
   International
23 Wilmington Group       9,074 1.6    Information & training for professional business market
24 Punch Taverns          8,906 1.6    Leased & managed pub operator
25 UMECO                  8,593 1.5    Supply chain management & advanced composite materials
26 National Express       8,487 1.5    Train, bus & coach operator
   Group
27 Melrose Resources      8,450 1.5    Oil exploration & development
28 Regus                  8,434 1.5    Serviced office accommodation
29 Evolution Group        8,283 1.5    Stockbroker & private client fund manager
30 Biocompatibles Intl.   8,250 1.4    Drug-delivery technology
   Top Thirty
   Investments          345,737 61.1

31 Pace                   8,103 1.4    Design & sourcing of set top boxes
32 Dunelm Group           7,940 1.4    Homewares retailer
33 Keller Group           7,800 1.4    Ground engineering services
34 Low & Bonar            7,718 1.4    Manufacture of industrial textiles
35 Dialight               7,690 1.3    LED based lighting solutions
36 Kofax                  7,443 1.3    Document capture software
37 RM                     7,351 1.3    IT services for schools
38 Ferrexpo               7,325 1.3    Iron ore resource company
39 United Business        7,298 1.3    B2B media conglomerate
   Media
40 Microgen               7,092 1.3    Workflow & financial services software
   Top Forty
   Investments          421,497 74.5

41 Redrow                 6,876 1.2    Housebuilding
42 Bellway                6,848 1.2    Housebuilding
43 Intec Telecom          6,794 1.2    Billing software & related services
   Systems
44 Brewin Dolphin         6,777 1.2    Stockbroker & private client fund manager
   Holdings
45 Elementis              6,604 1.2    Specialty chemicals producer
46 Castings               6,367 1.2    Engineering - automotive castings
47 Ashtead Group          6,330 1.1    Plant hire
48 ProStrakan Group       6,302 1.1    Speciality pharmaceutical business
49 Hansard Global         6,265 1.1    Life assurance savings products
50 Debenhams              6,166 1.1    Department stores
   Top Fifty
   Investments          486,826 86.1
   Other Investments(38)130,487 23.1
                        ------- -----
   Total Investments    617,313 109.2
   Net Liabilities      (51,766)(9.2)
                        ------- -----
   Total Net Assets     565,547 100.0



INTERIM MANAGEMENT REPORT

Risks and Uncertainties

A review of the half year and the outlook for the Company can be found in the Chairman's Statement and the Managers'
Report. The Directors have established an ongoing process for identifying, evaluating and managing the key risks faced
by the Company. The Board believes that the Company has a relatively low risk profile in the context of the investment
trust industry. This belief arises from the fact that the Company has a simple capital structure; invests only in small
UK quoted companies; has never been exposed to derivatives and does not presently intend any such exposure; and
outsources all the main operational activities to recognised, well established firms.

As the Company's investments consist of small UK quoted companies, the principal risks facing the Company are market
related and include market price, interest rate, credit and liquidity risk. Additional risks faced by the Company
include investment objective, investment policy, share price discount, regulatory and operational/financial risk and
gearing risk. An explanation of these risks and how they are managed can be found in the Directors' Report contained
within the 2009 Annual Report.

These principal risks and uncertainties have not changed from those disclosed in the 2009 Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors confirm that, to the best of their knowledge:

(i) the condensed set of financial statements has been prepared in accordance with the Statement `Half-yearly financial
reports' issued by the UK Accounting Standards Board; and

(ii) the half-yearly report includes a fair review of information required by:

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events during the first six
months of the year and their impact on the financial statements together with a description of the principal risks and
uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being disclosure of related party transactions and changes
therein.

On behalf of the Board
Prof. Paul Marsh
Chairman
20 July 2010


The Income Statement, Reconciliation of Movements in Shareholders' Funds, Balance Sheet and the Cash
Flow Statement are set out below:-

INCOME STATEMENT  (unaudited)

 For the six months ended 30 June 2010
                                 Revenue      Capital       Total
                                   £ 000        £ 000       £ 000

 Realised net gains on sales           -       18,096      18,096
 Movement in fair value                -      (26,536)    (26,536)
                                --------    ---------   ---------
 Net losses on investments             -       (8,440)     (8,440)
 Dividend income                  11,590            -      11,590
 Other income                         42            -          42
 Investment management fee          (891)      (1,486)     (2,377)
 (Note 2)
 Transaction costs                     -       (1,693)     (1,693)
 Other expenses                     (223)           -        (223)
                                --------    ---------   ---------
 Return on ordinary               10,518      (11,619)     (1,101)
 activities before finance
 costs and tax
 Finance costs                      (458)        (763)     (1,221)
                                --------    ---------   ---------
 Return on ordinary               10,060      (12,382)     (2,322)
 activities before tax
 Tax on ordinary activities            -            -           -
                                --------     --------    --------
 Return attributable to           10,060      (12,382)     (2,322)
 equity shareholders
                                ========     ========    ========

 Returns per Ordinary Share       10.39p      (12.79p)     (2.40p)
 (Note 4)

On 4 March 2010, the Board declared a first interim dividend for the year ending 31 December 2010 of 6.00p per Ordinary
Share (2009 - 6.00p) which was paid on 2 April 2010.



INCOME STATEMENT  (unaudited)

 For the six months ended 30 June 2009
                                 Revenue      Capital       Total
                                   £ 000        £ 000       £ 000

 Realised net losses on sales          -      (45,943)    (45,943)
 Movement in fair value                -      123,024     123,024
                               ---------   ----------  ----------
 Net gains on investments              -       77,081      77,081
 Dividend income                  10,750          846      11,596
 Other income                         97            -          97
 Investment management fee          (619)      (1,031)     (1,650)
 (Note 2)
 Transaction costs                     -       (1,068)     (1,068)
 Other expenses                     (218)           -        (218)
                                --------    ---------   ---------
 Return on ordinary               10,010       75,828      85,838
 activities before finance
 costs and tax
 Finance costs                      (182)        (303)       (485)
                                --------    ---------   ---------
 Return on ordinary                9,828       75,525      85,353
 activities before tax
 Tax on ordinary activities            -            -           -
                                --------    ---------   ---------
 Return attributable to            9,828       75,525      85,353
 equity shareholders
                                ========     ========    ========

 Returns per Ordinary Share       10.14p       77.94p      88.08p
 (Note 4)

INCOME STATEMENT(unaudited)

 For the year ended 31 December 2009
                                 Revenue      Capital       Total
                                   £ 000        £ 000       £ 000

 Realised net losses on sales          -      (40,331)    (40,331)
 Movement in fair value                -      209,726     209,726
                                --------    ---------   ---------
 Net gains on investments              -      169,395     169,395
 Dividend income                  19,110        1,183      20,293
 Other income                        169            -         169
 Investment management fee        (1,450)      (2,417)     (3,867)
 (Note 2)
 Transaction costs                     -       (2,624)     (2,624)
 Other expenses                     (437)           -        (437)
                                --------    ---------   ---------
 Return on ordinary               17,392      165,537     182,929
 activities before finance
 costs and tax
 Finance costs                      (579)        (965)     (1,544)
                                --------    ---------   ---------
 Return on ordinary               16,813      164,572     181,385
 activities before tax
 Tax on ordinary activities            -            -           -
                                --------     --------   ---------
 Return attributable to           16,813      164,572     181,385
 equity shareholders
                                ========      =======    ========

 Returns per Ordinary Share       17.35p      169.84p     187.19p
 (Note 4)



RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
 (unaudited)

For the six months ended 30 June 2010
                               Capital
                     Share  Redemption  Special  Capital  Revenue
                   capital     reserve  reserve  reserve  Reserve    Total
                     £ 000       £ 000    £ 000    £ 000    £ 000    £ 000
 Balance as at 31
 December 2009         969          19  186,025  362,796   37,113  586,922
 Return on
 ordinary activities     -           -        -  (12,382)  10,060   (2,322)
 after taxation
 Equity dividends        -           -        -        -  (18,404) (18,404)
 paid
 Purchase of            (2)          2     (649)       -        -     (649)
 Ordinary Shares
                     -----       -----   ------  -------   ------  -------
 Balance as at 30      967          21  185,376  350,414   28,769  565,547
 June 2010
                     =====       =====   ======  =======   ======  =======




For the six months ended 30 June 2009
                               Capital
                     Share  Redemption  Special  Capital  Revenue
                   capital     reserve  reserve  reserve  Reserve    Total
                     £ 000       £ 000    £ 000    £ 000    £ 000    £ 000
 Balance as at 31
 December 2008         969          19  186,192  198,224   38,711  424,115
 Return on
 ordinary  activities    -           -        -   75,525    9,828   85,353
 after taxation
 Equity dividends        -           -        -        -  (12,597) (12,597)
 paid
 Purchase of             -           -        -        -        -        -
 Ordinary Shares
                     -----      ------  -------  -------  -------  -------
 Balance as at 30      969          19  186,192  273,749   35,942  496,871
 June 2009
                     =====      ======  =======  =======   ======  =======


 For the year ended 31 December 2009

                               Capital
                     Share  Redemption  Special  Capital  Revenue
                   capital     reserve  reserve  reserve  Reserve    Total
                     £ 000       £ 000    £ 000    £ 000    £ 000    £ 000
 Balance as at 31
 December 2008         969          19  186,192  198,224   38,711  424,115
 Return on
 ordinary activities     -           -        -  164,572   16,813  181,385
 after taxation
 Equity dividends        -           -        -        -  (18,411) (18,411)
 paid
 Purchase of             -           -     (167)       -        -     (167)
 Ordinary Shares
                     -----      ------   ------  -------   ------  -------
 Balance as at 31
 December 2009         969          19  186,025  362,796   37,113  586,922
                     =====      ======  =======  =======   ======  =======





BALANCE SHEET
(unaudited)
As at 30 June 2010

                                 30 June    30 June 31 December
                                    2010       2009        2009
                                   £ 000      £ 000       £ 000
 Fixed assets:
 Investments at fair value       617,313     542,060    632,386
 through profit or loss
                              ----------  ----------  ---------
 Current assets
 Amounts due from brokers          3,250       3,745        422
 Other debtors                     1,898       3,003      1,588
 Cash at bank                        236           -        362
                              ----------  ----------  ---------
                                   5,384       6,748      2,372
                              ----------  ----------  ---------
 Creditors (amounts falling
 due within one year)
 Bank debt facility                    -     (50,582)         -
 Amounts due to brokers           (5,398)     (1,279)         -
 Other creditors                    (104)        (76)      (148)
                              ----------  ----------  ---------
                                  (5,502)    (51,937)      (148)
                              ----------  ----------  ---------
 Net current                        (118)    (45,189)     2,224
 (liabilities)/assets
                              ----------  ----------  ---------
 Total assets less current       617,195     496,871    634,610
 liabilities
 Creditors (amounts falling
 due after more than one year)
 Bank debt facility              (51,648)          -    (47,688)
                               ---------   ---------  ---------
 Total net assets                565,547     496,871    586,922
                               =========   =========  =========

 Capital and reserves:
 equity interests
   Called up share capital           967         969        969
 (Ordinary Shares)
 Reserves:
   Capital redemption                 21          19         19
 reserve
   Special reserve               185,376     186,192    186,025
   Capital reserve               350,414     273,749    362,796
   Revenue reserve                28,769      35,942     37,113
                               ---------   ---------   --------
                                 565,547     496,871    586,922
                               =========   =========   ========

 Net Asset Value per Share       584.56p     512.77p    605.90p

 Share Price                     512.50p     467.00p    534.00p




 CASH FLOW STATEMENT
 (unaudited)
 For the six months ended 30 June 2010
                                    Six        Six
                             Six months Six months
                                  ended      ended   Year ended
                                30 June    30 June  31 December
                                   2010       2009         2009
                                  £ 000      £ 000        £ 000

 Net cash inflow from             8,707      9,076       16,833
 operating activities

 Taxation
 Taxation paid                       (5)         -            -

 Returns on investments and      (1,035)      (504)      (2,062)
 servicing of finance

 Capital expenditure and
 financial investment
 Payments to acquire           (127,329)   (89,971)    (238,152)
 investments
 Receipts from sales of         134,834     84,588      235,245
 investments
                               --------   --------    ---------
 Net cash inflow/(outflow)
 from capital expenditure and
 financial investment             7,505     (5,383)      (2,907)
                               --------   --------   ----------
                                 15,172      3,189       11,864
 Equity dividends paid          (18,404)   (12,597)     (18,411)
                               --------   --------   ----------
                                 (3,232)    (9,408)      (6,547)
 Financing
 Purchase of Ordinary Shares       (649)         -         (167)
 Net drawdown of bank debt        3,755      9,408        7,076
 facilities (before costs)
                                -------   --------    ---------
 Change in cash during the period  (126)         -          362
 period
                                =======   ========    =========

 Reconciliation of net return before finance costs
 and taxation to net cash inflow from operating activities

Net return before finance         (1,101)   85,838      182,929
 costs and taxation
 Losses/(gains) on                 8,440   (77,081)    (169,395)
 investments
 Transaction costs                 1,693     1,068        2,624
 (Increase)/decrease in debtors     (305)     (725)         690
 Decrease in creditors               (20)      (24)         (15)
                                 -------   -------     --------
 Net cash inflow from              8,707     9,076       16,833
 operating activities
                                 =======   =======      =======

NOTES TO THE FINANCIAL STATEMENTS

1. ACCOUNTING STANDARDS
The financial statements have been prepared under the historical cost convention, as modified to  include  the
revaluation of investments and in accordance with applicable accounting standards and the AIC's Statement of Recommended
Practice "Financial  Statements of Investment Trust Companies and Venture Capital Trusts" issued in 2009. The total
column of the Income Statement is the profit and loss account of the Company. All revenue and capital items in the
Income Statement are derived from continuing operations. No operations were acquired or discontinued in the period.

The same accounting policies used for the year ended 31 December 2009 have been applied.



2. INVESTMENT MANAGEMENT FEE

                                     Revenue   Capital    Total
                                       £ 000     £ 000    £ 000
 Total for the six months ended          891     1,486    2,377
 30 June 2010
                                      ======    ======   ======

 Total for the six months ended          619     1,031    1,650
 30 June 2009
                                      ======    ======   ======

 Total for the year ended              1,450     2,417    3,867
 31 December 2009
                                      ======    ======   ======



3. DIVIDENDS

                                  Six months ended    Six months ended       Year ended
                                      30 June 2010        30 June 2009 31 December 2009
                                              £000                £000             £000
 Amounts recognised as distributions to
 equity holders in the period:
 Second interim dividend of 13.0p for
 the year ended 31 December 2008                 -              12,597           12,597
 First interim dividend of 6.0p for the
 year ended 31 December 2009                     -                   -            5,814
 Second interim dividend of 13.0p for
 the year ended 31 December 2009            12,592                   -                -
 First interim dividend of 6.0p for the
 year ending 31 December 2010                5,812                   -                -

                                           -------             -------         --------
                                            18,404              12,597           18,411
                                           =======             =======         ========
The first interim dividend for the year ending 31 December 2010 of 6.0p (2009 - 6.0p) was paid on
2 April 2010 to shareholders on the register on 12 March 2010.


4. RETURNS PER ORDINARY SHARE
The returns per Ordinary Share are based on:

                                  Six months ended    Six months ended       Year ended
                                      30 June 2010        30 June 2009 31 December 2009
                                              £000                £000             £000
 Returns attributable to Ordinary
 Shareholders                               (2,322)             85,353          181,385

 Weighted average number of shares in
 issue during the period                96,831,972          96,900,000       96,897,197


5. NET ASSET VALUES
The net assets and the net asset value per share attributable to the Ordinary Shares at each period end are calculated
in accordance with their entitlements in the Articles of Association and were as follows:

                                      30 June 2010        30 June 2009 31 December 2009
                                              £000                £000             £000
 Net assets attributable                   565,547             496,871          586,922

                                             Pence               Pence            Pence
 Net asset value attributable per
 Ordinary Share                             584.56              512.77           605.90

As at 30 June 2010, the Company had 96,747,000 Ordinary Shares in issue (30 June 2009 - 96,900,000
and 31 December 2009 - 96,867,000).


6. FURTHER INFORMATION

The foregoing do not constitute statutory accounts (as defined in section 434(3) of the Companies Act 2006) of the
Company. The statutory accounts for the year ended  31 December 2009, which contained an unqualified Report of the
Auditors, have been lodged with the Registrar of Companies and did not
contain a statement required under section 498(2) or (3) of the Companies Act 2006. All information
shown for the six months ended 30 June 2010 is unaudited.


Certain statements in this announcement are forward looking statements.  By their nature, forward
looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to
differ materially from those expressed or implied by those statements.  Forward looking statements regarding past trends
or activities should not be taken as representation that
such trends or activities will continue in the future.  Accordingly, undue reliance should not be
placed on forward looking statements.


The Half Yearly Report is expected to be posted to shareholders during the week commencing 26 July
2010.  Members of the public may obtain copies from Aberforth Partners LLP, 14 Melville Street,
Edinburgh EH3 7NS or from its website at www.aberforth.co.uk.

CONTACT:   David Ross/Alistair Whyte    ·    Aberforth Partners LLP    ·    0131 220 0733
Aberforth Partners LLP, Secretaries - 20 July 2010

ANNOUNCEMENT ENDS