Half-yearly report

ABERFORTH SMALLER COMPANIES TRUST plc

INTERIM RESULTS

For the Six Months to 30 June 2007


FEATURES

Net Asset Value Total Return                     +5.4%

Benchmark Index Total Return                     +4.6%

Increase in Interim Dividend per Ordinary Share +10.6%


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



CHAIRMAN'S STATEMENT

For  the six months to 30 June 2007, Aberforth Smaller Companies Trust
plc  (ASCoT)  achieved a net asset value total return of  5.4%,  which
compares  with  a total return of 4.6% from the Hoare  Govett  Smaller
Companies  Index (Excluding Investment Companies) (HGSC  (XIC)),  your
Company's  investment benchmark.  Larger companies, as represented  by
the  FTSE All-Share Index, registered a total return of 7.6%.   ASCoT,
therefore,  out-performed its benchmark during a period  when  smaller
companies under-performed larger companies.

In  each of the four financial years to 31 December 2006, ASCoT's  net
asset  value  total return ranged from 24.9% to 37.1% resulting  in  a
compound  annual  return  for the four years  of  29.2%.   These  were
exceptional returns and I noted in my Chairman's Statement, issued  in
January  this  year, that sooner or later there would be more  testing
stockmarket   conditions.    That   comment   appears   prescient   as
stockmarkets had a material setback in late February when a number  of
events  (referred  to  more  fully in your  Managers'  Report)  caused
investors to review their appetite for risk.  But stockmarkets quickly
recovered  and  through to early June seemed to  be  back  to  a  form
similar  to the previous four years.  As then, this proved challenging
to  ASCoT's  relative  performance.  In early June,  however,  markets
suffered  a  further setback after a sharp rise in short, medium,  and
long  term  interest  rates. While this was less helpful  to  absolute
returns,  this  assisted ASCoT's relative returns.  Although  interest
rates  have been rising for well over a year, the abruptness of  these
recent moves unsettled most stockmarkets as investors became concerned
that  debt funded M&A may provide less impetus than has been the case.
It is very difficult to gauge whether this will transpire, and indeed,
the  broad  market  indexes have now recovered from  their  early-June
falls, albeit leaving UK smaller companies somewhat behind. Meanwhile,
ASCoT  seems  relatively  well positioned should  either  stockmarkets
prove  less ebullient or smaller companies experience weaker  relative
performance.

Your  Board  is pleased to announce an interim dividend of  4.70p  per
share,  which  represents  an  increase of  10.6%  compared  with  the
equivalent  period  last year.  While underlying growth  in  dividends
from   ASCoT's  portfolio  remains  good,  Shareholders   should   not
extrapolate  this increase for the year as a whole as  your  Board  is
seeking  to rebalance slightly the relative weight of the interim  and
final dividends.  The interim dividend will be paid on 23 August  2007
to  Shareholders  on the register on 27 July 2007.   For  Shareholders
participating in ASCoT's Dividend Reinvestment Plan (DRiP),  the  last
date  for submission of Forms of Election is 1 August 2007.  For those
Shareholders  who  wish to participate but are not already  doing  so,
details  of  the  DRiP are available from Aberforth  Partners  LLP  on
request, or from their website www.aberforth.co.uk.

In  2004, the Association of Investment Companies (AIC), together with
JPMorgan  Claverhouse  Investment Trust plc (Claverhouse),  brought  a
case  against HM Revenue and Customs (HMRC) to challenge  the  current
imposition  of  VAT  on  management  fees  paid  by  investment  trust
companies.  The case was referred to the European Court of Justice and
its  judgment was delivered on 28 June 2007 supporting the Claverhouse
and  AIC  position.  Whilst we await HMRC's response to this judgment,
your  Managers  have  submitted the necessary  protective  claims  and
beyond  this, your Board has agreed with your Managers that, dependent
on  the  final  outcome, ASCoT will receive a refund of all  VAT  paid
since  1  January  2001 including all VAT previously  offset  by  your
Managers.  Certain VAT paid in relation to earlier periods may also be
recoverable  pending the outcome of further legal  appeals.   We  will
keep  Shareholders  updated  with significant  developments  in  these
matters.

Over  the  last few years the Alternative Investment Market (AIM)  has
attracted  a large number of companies and has enabled many  to  raise
funds.   In  previous  years, ASCoT has not  invested  in  AIM  quoted
companies although it has continued to own shares for a period of time
in investee companies that have chosen to move from the "Full List" to
AIM  so  as  to  avoid  being  a  forced  seller  of  otherwise  sound
investments.   The trend of companies moving in that  direction  shows
some signs of reversing with a number of companies now seeing merit in
moving  to the "Full List" from AIM.  Your Board believes ASCoT should
be  able to invest in such companies before they actually become fully
listed, but after they have committed to the move, and your Board  has
authorised your Managers accordingly.  It is unlikely such investments
will  form  a  material  part  of ASCoT's  portfolio,  but  they  may,
nevertheless, prove rewarding.

At  the Annual General Meeting, Shareholders renewed the authority for
your  Company to buy in up to 14.99% of its Ordinary Shares. No shares
have  been  purchased to date.  Your Board has established, and  keeps
under  careful  review, the circumstances under which  such  authority
will be utilised.  Should these circumstances arise, your Company will
seek  to  purchase Ordinary Shares.  Any Ordinary Shares  bought  back
would be cancelled rather than held in treasury.

David R Shaw
Chairman
18 July 2007


MANAGERS' REPORT

The  strong returns enjoyed by the HGSC (XIC) in the first  half  were
shared  by  many  stockmarkets  around  the  world.   Indeed,  several
indices,  including the FTSE All-Share, S&P500 and DAX,  recorded  new
all-time highs.  These were achieved despite a general environment  of
tightening  monetary  conditions  in  many  major  economies  and  two
specific bouts of nervousness reminiscent of the risk aversion in  the
middle of 2006.

The  first  wobble came in late February, when many  asset  classes  -
including commodities, low grade corporate debt and equities - endured
sharp falls.  While the Chinese stockmarket's 8% one day drop made the
headlines, the climate of greater risk aversion appeared to stem  from
fears of contagion from the US sub-prime mortgage fiasco and from a 5%
rise  in the yen against the dollar, which was perceived to jeopardise
the  viability  of  leveraged investment strategies  known  as  "carry
trades".   However, with the dollar actually rising by 3.5%  over  the
first  half as a whole, the yen's strength proved short-lived and  the
immediate  effects  of the sub-prime meltdown appeared  to  have  been
contained.

Duly  emboldened,  markets regained lost ground and  advanced  further
before encountering a second challenge in June, when large rises in US
government  bond  yields  prompted similar  reactions  in  other  bond
markets  including  that  of the UK.  In contrast  to  events  a  year
earlier, the cause did not appear to be nervousness about uncontrolled
inflation:  CPI data in the US proved unexciting and the  gap  between
conventional  and  index linked yields did not  expand  significantly.
Rather, the issue seemed to be a perception that real economic  growth
was  more  resilient  than previously thought and that  interest  rate
reductions  later  this year were therefore less  likely.   Apparently
confirming  the  lower probability of a recession,  the  increases  in
longer  bond  yields removed the inversion in the US yield  curve,  so
that long term bond yields now sit above short term yields.

In  the UK, monetary conditions also tightened over the first half  as
the Bank of England increased interest rates and gilt yields moved  up
sharply.  However, in contrast to the US, the yield curve has remained
inverted,  in response to the continued appetite of pension funds  for
longer  dated  gilts  and to the likelihood of further  interest  rate
rises  this  year.  Expectation of such rises reflects concerns  about
inflationary  pressures,  which in April necessitated  an  explanatory
letter  from Mervyn King to Gordon Brown.  These concerns are  fuelled
by  double  digit  broad money supply growth and a confident  consumer
sector that, unlike that of the US, continues to revel in annual house
price appreciation of more than 10%.

INVESTMENT PERFORMANCE

As  described  by the Chairman, despite some weakness in  June,  small
companies  enjoyed another period of good absolute returns,  with  the
HGSC  (XIC) rising by 4.6% in total return terms.  ASCoT succeeded  in
out-performing  with  a  5.4% return.  In this,  it  was  aided  by  a
reversal of fortune with regard to sector selection.  Last year,  this
made a substantial negative contribution to relative performance since
ASCoT  was heavily under-weight in four sectors - Oil & Gas Producers,
Mining,  Real Estate and General Financials - that performed strongly.
In  contrast,  thus  far  in 2007, conviction  in  these  under-weight
positions has been vindicated, particularly in Real Estate, which  may
be feeling the effects of the tightening monetary conditions explained
above: having reduced ASCoT's relative performance by 114 basis points
over  the  whole of 2006, sector selection for Real Estate  added  116
basis points in the first half of 2007.

Eating  into the beneficial effects of sector selection was a negative
contribution from stock selection.  The incidence of profit  warnings,
which are inevitable in a 107 stock portfolio over a six month period,
was  not  uncommonly high.  This in part reflects the continuation  of
benign  trading  conditions.  More relevant  is  the  effect  of  your
Managers' consistent adherence to a value investment style, which  was
not in step with the bull market conditions that prevailed in much  of
the  first  half.  A reluctance to expose the portfolio  to  companies
whose  growth  prospects  are  more  than  discounted  in  exaggerated
valuations proved particularly painful in two sectors.

Within the benchmark, Media and Software & Computer Services performed
strongly,  rising  by  11.3% and 13.5% respectively.   In  each  case,
however,  these  returns were driven by a small number  of  companies,
typically also members of the FTSE 250, that over the first half  were
taken from what your Managers already considered to be high ratings to
even   higher  valuations.   They  therefore  eschewed  these  stocks,
preferring  to invest further down the size spectrum in businesses  on
more  modest  valuations but still with good, albeit less spectacular,
growth prospects.  These two-speed sectors together accounted for more
than all the drag from stock selection experienced by the portfolio in
the first half.

De-equitisation, a term that describes the tendency over recent  years
to  replace  equity financing with debt financing,  continued.   ASCoT
benefited,  with four holdings taken over and another three  in  talks
with potential acquirers at the end of June.  However, in contrast  to
previous years, when takeover activity was concentrated within  medium
sized  companies, much of the action has taken place  out  of  ASCoT's
reach within the large cap world.  Underlying this shift is the strong
performance of the FTSE 250 over recent years, which has taken many of
its constituents to valuation levels above those of their larger peers
and  that  are now often too high to be refinanced substantially  with
debt.   Private  equity firms have therefore been scrutinising  larger
businesses and completed several substantial deals in the first  half,
notably  TXU for $45bn in the US and Alliance Boots for £11bn  in  the
UK.   This  pick-up in takeover activity among larger companies  helps
explain the relative strength of the FTSE 100 against the FTSE 250  so
far  this year, only the second half-year of large cap out-performance
since the end of 2002.

While  larger companies may now be making the headlines  in  terms  of
takeovers,  de-equitisation  in  its  less  glamorous  forms   remains
relevant  to  small  companies.  Dividend growth continues  to  exceed
inflation  by  a substantial margin and indeed the long  term  average
achieved  by equities.  This is demonstrated by the following analysis
of  ASCoT's  portfolio of 107 companies at the end of June,  a  useful
cross-section of the small cap universe.  Of those companies,  it  was
the  policy  of 22 not to pay a dividend, while a further 3  had  been
listed  for  less than two years, preventing growth calculations.   Of
the remaining 82, 5 cut their dividends, 9 left them unchanged and  68
reported increases.  Of the 82, the median rate of dividend growth was
10%,  though  this median does not necessarily reflect ASCoT's  actual
receipts,  since it is diluted by the other 25 holdings and since  the
portfolio is actively managed, with a specific rate of dividend growth
not targeted.

INVESTMENT OUTLOOK

Two   years  ago,  Alan  Greenspan  described  as  a  "conundrum"  the
reluctance  of  long bond yields to respond to rising interest  rates.
It  would, however, seem that the recent rapid rise in bond yields has
gone  some way to resolving that conundrum.  An environment of  higher
government  bond yields and, by extension, tighter monetary conditions
may  have  profound  implications for the  valuation  of  other  asset
classes,  including  equities.  First, higher  borrowing  costs  ought
eventually  to  have  a  dampening effect  on  economic  activity  and
eventually  corporate profitability.  Second, costlier debt undermines
the  viability of highly leveraged investment activity that has driven
the  fantastic returns of recent years. Third, as the risk free  rate,
government  bond  yields are the basis for valuation  of  other  asset
classes - higher yields should, other things being equal, imply  lower
equity prices.

In  the face of these influences, the initially insouciant reaction of
stockmarkets to the sell-off in bonds was surprising.  It is,  though,
perhaps  a reaction to the brighter outlook for the real economy,  and
by  extension for corporate profitability, implied by a normalised  US
yield curve and to hints that the sovereign wealth funds of East Asian
and   oil-rich  economies  were  looking  to  reduce  bond  exposures.
However, as the half year drew to a close, there were signs of tighter
credit  conditions  permeating  the asset  markets  and  greater  risk
aversion  developing.  The failure of two hedge  funds  that  had  bet
heavily  on  bonds backed by sub-prime mortgages affected  confidence,
seeming  to  serve  as a reminder that the US housing  market  remains
troubled  and  will  be an important influence on both  real  economic
activity and the financial markets as the year goes on.  Moreover, the
market  for  leveraged loans is showing signs of strain, with  several
scheduled corporate bond issues either re-priced or delayed.

Your  Managers  therefore retain a cautious stance and  have  oriented
ASCoT's portfolio accordingly.  They remain reluctant to expose  ASCoT
to  parts  of the market that trade on high valuations and  that  they
perceive  to  have  benefited  from  inflow  of  speculative  capital.
Accordingly, the portfolio retains a relatively low exposure  to  more
highly  valued  mid cap stocks and maintains significant  under-weight
positions  in  Real  Estate  and Oil & Gas Producers.   Moreover,  the
portfolio has been biased towards companies with comparatively  robust
balance sheets, which ought to afford a degree of defensiveness should
trading  conditions  deteriorate and can also offer  scope  for  value
enhancement through de-equitisation.



                                   30 June 2007                30 June 2006
Characteristics
                                   ASCoT   Benchmark       ASCoT    Benchmark
Number of Companies                  107         487         115          560
Weighted Average Market Cap        £500m       £627m       £381m        £539m
Price Earnings Ratio (Historic)    16.9x       15.8x       16.6x        16.9x
Net Dividend Yield (Historic)       2.1%        2.0%        2.5%         2.2%
Dividend Cover (Historic)           2.8x        3.2x        2.4x         2.7x

With the return from cash, notwithstanding recent interest rate rises,
comparatively  low, a corollary of the portfolio's skew  to  companies
with net cash on their balance sheets is an exaggerated PE, which,  as
the table above demonstrates, was 7% higher than that of the benchmark
at  the  end of June.  It is possible to look through this  effect  by
examining  ratios of enterprise value to operating profits, which  are
unaffected  by  how  a  company is funded.   On  this  basis,  ASCoT's
portfolio  sat  on  a discount of almost 10% to the benchmark,  rather
than the premium implied by PEs.  Your Managers take comfort from this
valuation  advantage, which they believe forms a sound foundation  for
ASCoT's prospects.

Aberforth Partners LLP
Managers
18 July 2007




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

INCOME STATEMENT
For the six months ended 30 June 2007
(unaudited)
                                6 months to           6 months to
                               30 June 2007           30 June 2006
                        Revenue Capital    Total  Revenue Capital    Total
                          £ 000   £ 000    £ 000    £ 000   £ 000    £ 000

Realised net gains on sales   -  72,930   72,930        -  51,897   51,897
Movement in unrealised        - (33,181) (33,181)       - (25,342) (25,342)
appreciation
                         ------ -------- --------  ------ -------  -------
Net gains on investments      -  39,749   39,749        -  26,555   26,555
Dividend income          10,516     877   11,393    9,597   1,102   10,699
Interest income             191       -      191      360       -      360
Other income                  -       -        -       11       -       11
Investment management fee(1,487) (2,478)  (3,965)  (1,231) (2,052)  (3,283)
Transaction costs             -  (2,624)  (2,624)       -  (1,763)  (1,763)
Other expenses             (220)      -     (220)    (203)      -     (203)
                          ------ ------  -------   ------  ------   ------
Return on ordinary        9,000  35,524   44,524    8,534  23,842 3  2,376
 activities before finance
 costs and tax
Finance costs               (35)    (59)     (94)       -       -        -
                         ------  -------  ------   ------  ------   ------
Return on ordinary        8,965  35,465   44,430    8,534  23,842   32,376
activities before tax
Tax on ordinary activities    -       -        -        -       -        -
                         ------  -------  ------   ------  ------   ------
Return attributable to
  equity shareholders     8,965  35,465   44,430    8,534  23,842   32,376
                         ======  ======   ======   ======  ======   ======

Returns per Ordinary Share 9.07p  35.89p   44.96p    8.64p  24.13p   32.77p

The  Board  declared on 18 July 2007 an interim dividend of 4.70p  per
Ordinary  Share  (30 June 2006 - 4.25p) and the total  amount  payable
will  be  £4,644,000  (30  June  2006 - £4,199,000).  The  Board  also
declared on 22 January 2007 the final dividend in respect of the  year
ended  31  December 2006 of 9.15p per Ordinary Share (30 June  2006  -
7.85p)  and  the  total  paid amounted to £9,041,000(30  June  2006  -
£7,757,000).



RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
 (unaudited)

For the six months ended 30 June 2007
                                    Capital    Capital
                   Share  Special  reserve-   reserve-   Revenue
                 capital  reserve  realised unrealised   reserve   TOTAL
                   £ 000    £ 000     £ 000      £ 000     £ 000   £ 000
Balance as at
31 December 2006     988  197,305   367,212    239,622   28,204  833,331
Return on ordinary
activities after tax   -        -    68,646    (33,181)   8,965   44,430
Equity dividends paid  -        -         -          -   (9,041)  (9,041)
                   -----  -------   -------    -------   ------  -------
Balance as at        988  197,305   435,858    206,441   28,128  868,720
30 June 2007
                   =====  =======   =======    =======   ======  =======


For the six months ended 30 June 2006
                                    Capital    Capital
                   Share  Special  reserve-   reserve-   Revenue
                 capital  reserve  realised unrealised   reserve   TOTAL
                   £ 000    £ 000     £ 000      £ 000     £ 000   £ 000
Balance as at
31 December 2005     988  197,305   286,488    162,442   23,951  671,174
Return on ordinary
activities after tax   -        -    49,184    (25,342)   8,534   32,376
Equity dividends paid  -        -         -          -   (7,757)  (7,757)
                   -----  -------   -------    -------   ------  -------
Balance as at        988  197,305   335,672    137,100   24,728  695,793
30 June 2006
                   =====  =======   =======    =======   ======  =======


BALANCE SHEET
As at 30 June 2007
(unaudited)

                                               31
                               30 June   December     30 June
                                  2007       2006        2006
                                 £ 000      £ 000       £ 000
Fixed assets: investments
Investments at fair value      871,973    801,470     680,690
through profit or loss
                            ----------  ---------   ---------
Current assets
Amounts due from brokers           428          -       2,147
Other debtors                    2,608      1,369       2,294
Cash at bank                         -     30,554      13,702
                            ----------  ---------   ---------
                                 3,036     31,923      18,143
                            ----------  ---------   ---------
Creditors (amounts falling
due within one year)
Bank overdraft                 (1,185)          -           -
Amounts due to brokers         (5,051)          -     (3,001)
Other creditors                   (53)       (62)        (39)
                            ----------  ---------   ---------
                               (6,289)       (62)     (3,040)
                            ----------  ---------   ---------
Net current                    (3,253)     31,861      15,103
(liabilities)/assets
                            ----------  ---------   ---------
Total assets less liabilities 868,720     833,331     695,793
                            =========   =========   =========

Capital and reserves:
equity interests
  Called up share capital         988         988         988
  (Ordinary Shares)
Reserves:
  Special reserve             197,305     197,305     197,305
  Capital reserve -realised   435,858     367,212     335,672
  Capital reserve -unrealised 206,441     239,622     137,100
  Revenue reserve              28,128      28,204      24,728
                            ---------   ---------   ---------
                              868,720     833,331     695,793
                            =========   =========   =========

Net Asset Value per Share      879.18p     843.37p     704.17p

Share Price                    745.00p     723.00p     619.00p


CASH FLOW STATEMENT

For the six months ended 30 June 2007
 (unaudited)
                                         6 months         6 months
                                       to 30 June       to 30 June
                                             2007             2006
                                    £ 000   £ 000     £ 000  £ 000

 Net cash inflow from                       6,146            6,522
 operating activities
 Returns on investment and                    (89)               -
 servicing of finance
 Capital expenditure and
 financial investment
 Payments to acquire investments (200,238)         (135,374)
 Receipts from sales of           171,483           140,044
 investments
                                  -------           -------
 Net cash (outflow)/inflow from capital
 expenditure and financial investment     (28,755)           4,670
                                           ------           ------
                                          (22,698)          11,192

 Equity dividends paid                     (9,041)          (7,757)
                                           ------           ------
                                          (31,739)           3,435
 Financing                                      -                -
                                           ------           ------
 Change in cash during the period         (31,739)           3,435
                                           ======           ======

 Reconciliation of net return
 before finance costs and
 taxation to net cash inflow
 from operating activities
 Net return before finance                 44,524          32,376
 costs and taxation
 Gains on investments                     (39,749)        (26,555)
 Transaction costs                          2,624           1,763
 Increase in debtors                       (1,239)         (1,040)
 Decrease in creditors                        (14)            (22)
                                           ------          ------
 Net cash inflow from                       6,146           6,522
 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" issued in 2005. 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 2006 have been applied.


2.DIVIDENDS
                                                                      Six          Six
                                                             months ended months ended
                                                                  30 June      30 June
                                                                     2007         2006
                                                                    £'000       £'000
Amounts recognised as distributions to equity holders in the period:
Final Dividend of 9.15p paid on 7 March 2007 (2006 - 7.85p paid on
7 March 2006)                                                       9,041        7,757      7,757
                                       -----       ------

An interim dividend of 4.70p (2006 - 4.25p) will be paid on 23 August 2007 to shareholders
on the register on 27 July 2007.

3. RETURNS PER ORDINARY SHARE
The calculations of the revenue return per Ordinary Share are based on net revenue of £8,965,000
(30 June 2006 - £8,534,000) and on Ordinary Shares of 98,809,788. The calculations of the capital
return per Ordinary Share are based on net gains of £35,465,000 (30 June 2006 - £23,842,000) and
on Ordinary Shares of 98,809,788.

4. NET ASSET VALUES
The net asset value per share and the net assets 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   31 December       30 June
                                                    2007          2006          2006
                                                   Pence         Pence         Pence
Net asset value attributable per Ordinary Share   879.18        843.37        704.17

                                                    £000     £000             £000
Net assets attributable                          868,720       833,331       695,793

As at 30 June 2007, the Company had 98,809,788 Ordinary Shares in issue (31 December 2006 and
30 June 2006 - same).


5. FURTHER INFORMATION
The foregoing do not comprise statutory accounts (as defined in section 240(5) of the Companies
Act 1985) of the Company. The statutory accounts for the year ended  31 December 2006, 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 237(2) or (3) of the Companies Act 1985.

The Interim Report is expected to be posted to shareholders on 23 July 2007.  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 Warnock    ·    Aberforth Partners LLP    ·    0131 220 0733
Aberforth Partners LLP, Secretaries - 18 July 2007


ANNOUNCEMENT ENDS