Interim Results

ABERFORTH SMALLER COMPANIES TRUST plc

INTERIM RESULTS

For the Six Months to 30 June 2006


FEATURES

Net Asset Value Total Return                       +4.8%

Benchmark Index Total Return                       +6.8%

Increase in Interim Dividend per Ordinary Share    +6.3%


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 2006, Aberforth Smaller Companies
Trust plc (ASCoT) achieved a net asset value total return of 4.8%,
which compares with a total return of 6.8% 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 6.1%.  ASCoT, therefore, underperformed its benchmark during a
period when smaller companies slightly outperformed larger
companies.

These bald performance numbers mask a period comprising radically
different stockmarket conditions.  Indeed, for the first four months
of the year, the HGSC (XIC) produced a total return of 11.6% whereas
ASCoT's total return was 9.2%.  In contrast, the final two months'
respective figures were a negative return of 4.3% from the HGSC
(XIC) and a negative of return of 4.1% from ASCoT.  Evidently, in
early May, investor sentiment and attitudes changed from "ebullient"
to "concerned".  As has been the case before, your Managers' "value"
investment style fared less well during the "ebullient" stockmarket
conditions that prevailed for most of the six month period.
Consistent application of any investment style inevitably leads to
periods of underperformance.  This is not a concern to your Board as
your Managers' approach has generated excellent absolute and
relative performance for ASCoT over the medium and long term.

Your Board is pleased to announce an interim dividend of 4.25p per
share, which represents an increase of 6.3% compared with the
equivalent period last year.  This rate of increase broadly reflects
the underlying growth in dividends from ASCoT's portfolio which has
been encouraging.  Dividend growth is a key contributor to your
Company's performance over time.  The interim dividend will be paid
on 1 September 2006 to Shareholders on the register on 4 August
2006.  Shareholders will recall ASCoT adopted a number of new
accounting standards in the 2005 Annual Report and consistent with
one of those, FRS 21, the interim dividend has not been reflected in
these financial statements but rather will be accounted for on its
payment date.  ASCoT operates a Dividend Reinvestment Plan; the
relevant documentation is available from Aberforth on request, or
from their website www.aberforth.co.uk, for those Shareholders who
wish to participate in the plan and are not already doing so.

At the Annual General Meeting, Shareholders renewed the authority
for your Company to buy in up to 14.99% of its Ordinary Shares.
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
20 July 2006



MANAGERS' REPORT

INVESTMENT BACKGROUND
What a difference a few weeks can make!  The stockmarket exuberance
that characterised 2005 held sway for much of the first half of
2006.  Indeed, by close on 9 May 2006, the HGSC (XIC) had risen by
14% from its level at the start of the year, implying a remarkable
annualised return of 45%, somewhat higher than the 5-7% real rates
of return that your Managers have indicated as likely over the
longer term.  Subsequently, however, the benchmark fell back sharply
to produce a more modest 6.8% total return over the first half as a
whole.

This pattern was not confined to small UK quoted companies.
Displaying higher correlation than might usually be expected, the
world's major stockmarkets, emerging market equities and commodities
experienced pronounced declines at roughly the same time.  The
finger of blame was pointed at worse than anticipated inflation news
in the US, with the release in May showing headline CPI up by 4.2%
year on year.  However, the curious behaviour of gold, which is
traditionally considered an inflation hedge but which shared in the
pervading gloom, suggested that other concerns were at play.

Indeed, underlying inflationary pressures, not least from
commodities, have been evident for some time and have presumably
been an influence on US monetary policy, which saw interest rates
rise further, to 5.25%, in the first half.  The Fed was joined in
tightening by other central banks, most notably in Japan, where the
strategy of "quantitative easing" was brought to an end and the
possibility of interest rate rises was actually mooted. However,
interest rates in much of the world remain at low levels, especially
in real terms.  Accordingly, notwithstanding the imbalances that
still characterise the global economy, economic activity has thus
far continued buoyant and businesses have found trading conditions
generally favourable.

Further interest rate rises, or perhaps merely anticipation of them,
should eventually bring about a slowdown in the rate of growth.  In
the shorter term, however, the impact of tighter monetary conditions
may have been simply to calm the increasing ebullience displayed by
many financial markets over the last year.  The threat of less
freely available money would naturally complicate those investment
strategies that have relied upon cheap debt financing.  Thus, it is
possible to interpret the recent stockmarket declines as essentially
a financial market phenomenon, born of over-confidence and weaned on
leverage.

INVESTMENT PERFORMANCE

These gyrations set the scene for the swings in ASCoT's fortunes as
described by the Chairman.  As was the case in the second half of
2005, your Managers' value investment style fared less well in the
upbeat stockmarket conditions of the first four months of 2006. This
was again a period in which growth, and particularly momentum
oriented investment styles, ruled supreme.  Conversely, those
businesses with less demanding valuations tended to fare rather
better as the appetite for risk waned from the beginning of May.

While the impact of stock selection on ASCoT's relative performance
was positive, it was dwarfed by the negative contribution from
sector contribution.  Four sectors - Oil & Gas Producers, Mining,
Real Estate and General Financials - accounted for 45% of the
benchmark's rise in the first half;however, ASCoT's weighting in them was
10.6% percentage points less than the HGSC (XIC)'s 19.6% at the start of
the year. The performance of these sectors in 2005 had already taken
their constituent companies to valuations that your Managers found
difficult to rationalise.  Accordingly, their sustained momentum in
2006 precipitated further sales, to the extent that the portfolio
stood 12.9 percentage points underweight at the end of June.
Ironically, but driven by the availability of several attractively
valued businesses, the portfolio is now 7.1 percentage points above the
benchmark's 10.7% weighting in TMT.  These were the very sectors that
drove the last bull market in such a concentrated fashion at the turn of
the millennium, a period when ASCoT's relative performance was similarly
challenged.

Corporate activity continued.  Interest rates, though rising,
remained low in the longer term context and, with lower equity
valuations, continued to fuel the de-equitisation trend.  Of the
benchmark's 583 constituents, 22 were acquired in the six months,
with deals taking place even after the turmoil in financial markets
commenced.  On the other hand, IPOs did suffer: several were
abandoned towards the end of the period, though seven were
completed, to two of which ASCoT subscribed.  The 115 stock
portfolio saw five bids completed, with another three outstanding at
30 June, and thus enjoyed a hit-rate superior to the benchmark's.
It would not, however, be surprising if some of the fervour for
corporate activity was to diminish in response to still higher
interest rates and a general erosion in confidence.

To remedy some of the confusion frequently engendered by the
financial markets, it might be helpful to focus on the performance
of the underlying businesses in ASCoT's portfolio and, in
particular, on the dividend experience.  Of the 115 holdings, it was
the policy of 22 not to pay a dividend.  Another eight had been
listed for less than two years, preventing dividend growth
calculations.  Of the remaining 85, two cut their dividends, 14 left
them unchanged and 69 reported increases.  The median company of the
69 raised its dividend by 8.5%.  Although this median does not
necessarily reflect ASCoT's actual receipts, since the portfolio is
actively managed and a specific rate of dividend growth is not
targeted, it does suggest that underlying trading conditions
remained generally supportive.

INVESTMENT OUTLOOK
The threat of further interest rates rises would appear to have
affected equity markets in two ways.  First, it might be reasonable
to anticipate lower than previously expected demand for the goods
and services supplied by companies.  Second, with the logic of
leveraged investment in the shares of these companies appearing less
sound, certain speculative positions may have been unwound rather
quickly.  It feels plausible that this latter effect might explain
the particular severity of recent stockmarket declines.  This is
not, however, to underplay the potential impact on actual economic
activity.

In both the UK and US, long bond yields are the same as or lower
than short term yields. This inversion of the yield curve is
conventionally interpreted as heralding economic slowdown or even
recession.  Moreover, the risk that monetary authorities may over-
react in their rediscovered enthusiasm to stifle inflation is
heightened by the high levels of debt that permeate the consumer
sectors on both sides of the Atlantic.  This has led some to talk
not just of a deceleration in economic growth but of possible
recession or stagflation.

From your Managers' point of view, these risks have been apparent
for some time but were increasingly overlooked by a bullish
stockmarket as it moved higher until the start of May.  The
subsequent retrenchment has not been too dispiriting: benchmark
returns of 6.8%, though less spectacular than looked likely in
April, are nevertheless excellent for a six month period in the
longer term context of the UK stockmarket.  Moreover, the increased
volatility has served to throw up additional investment
opportunities as fundamentally good businesses have found themselves
caught up in the atmosphere of worry.


                                          30 June 2006           30 June 2005
Characteristics
                                         ASCoT  Benchmark      ASCoT    Benchmark

Number of Companies                        115      560         114         627
Weighted Average Market Capitalisation   £381m    £539m       £364m       £409m
Price Earnings Ratio (Historic)          16.6x    16.9x       14.9x       16.4x
Net Dividend Yield (Historic)             2.5%     2.2%        2.6%        2.3%
Dividend Cover (Historic)                 2.4x     2.7x        2.5x        2.6x


As the table demonstrates, the tremendous returns afforded by small
UK quoted companies over the last 12 months have resulted in higher
valuations.  As was the case at the start of the year, the HGSC
(XIC) is more highly rated than larger companies: at the end of June
the FTSE All-Share Index had a PE of 13.6x and a yield of 3.2%.
Your Managers have offset some of the revaluation of the asset class
by progressively taking money out of those areas of the market that
they perceive to be over-valued.  Therefore, although the portfolio
is more highly rated than 12 months ago, it might be hoped that
ASCoT will fare relatively well should the recent pessimism persist.


Aberforth Partners LLP
Managers
20 July 2006



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 2006
(unaudited)
                                6 months to             6 months to
                               30 June 2006             30 June 2005
                                                         (Restated)
                          Revenue Capital    Total  Revenue Capital   Total
                            £ 000   £ 000    £ 000    £ 000   £ 000   £ 000

Realised net gains on           -  51,897   51,897        -  33,142  33,142
sales
Unrealised (losses)/gains       - (25,342) (25,342)       -  16,415  16,415
                           ------  ------   ------   ------  ------  ------
Net gains on investments        -  26,555   26,555        -  49,557  49,557
Dividend income             9,597   1,102   10,699    9,070   3,104  12,174
Interest income               360       -      360      260       -     260
Other income                   11       -       11       47       -      47
Investment management fee  (1,231) (2,052)  (3,283)    (996) (1,660) (2,656)
Transaction costs               -  (1,763)  (1,763)       -  (1,276) (1,276)
Other expenses               (203)      -     (203)    (187)      -    (187)
                           ------  ------   ------   ------  ------  ------
Return on ordinary          8,534  23,842   32,376    8,194  49,725  57,919
activities before finance
costs and tax
Finance costs                   -       -        -        -       -       -
                           ------  ------   ------   ------  ------  ------
Return on ordinary          8,534  23,842   32,376    8,194  49,725  57,919
activities
  before tax
Tax on ordinary activities      -       -        -        -       -       -
                           ------  ------   ------   ------  ------  ------
Return attributable to
  equity shareholders       8,534  23,842   32,376    8,194  49,725  57,919
                           ======  ======   ======   ======  ======  ======

Returns per Ordinary Share  8.64p  24.13p   32.77p    8.29p  59.33p  58.62p


DIVIDENDS
The Board declared on 20 July 2006 an interim dividend of 4.25p per Ordinary
Share (30 June 2005 - 4p) and the total amount payable will  be  £4,199,000
(30 June 2005 - £3,952,000).  The Board alsodeclared  on 19 January 2006 the
final dividend in respect of the year ended 31 December 2005 of 7.85p per
Ordinary Share  (30  June 2005 - 7.25p) and the total paid amounted to
£7,757,000 (30  June 2005 - £7,164,000).





RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
 (unaudited)

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 taxation                   -        -   49,184     (25,342)   8,534   32,376
                             -----  -------  -------     -------   ------  -------
Balance as at 30 June 2006     988  197,305  335,672     137,100   24,728  695,793
                             =====  =======  =======     =======   ======  =======

For the six months ended 30 June 2005
                                             Capital     Capital
                             Share  Special reserve-    reserve-  Revenue
                           capital  reserve realised  unrealised  reserve    TOTAL
                             £ 000    £ 000    £ 000       £ 000    £ 000    £ 000
Balance as at
31 December 2004               988  197,305  216,436     111,684   20,742  547,155
Return on ordinary acticities
after taxation                   -        -   33,310      16,415    8,194   57,919
                             -----   ------  -------     -------   ------  -------
Balance as at 30 June 2006     988  197,305  249,746     128,099   21,772  597,910
                             =====  =======  =======     =======   ======  =======

BALANCE SHEET
As at 30 June 2006
(unaudited)

                                             30 June  31 December   30 June
                                                2006         2005      2005
                                               £ 000        £ 000     £ 000
Fixed assets: investments
Investments at fair value                    680,690      659,560   580,913
through profit or loss
                                            --------     --------   -------

Current assets
Debtors                                        4,441        1,408     3,179
Cash at bank                                  13,702       10,267    14,301
                                            --------     --------   -------
                                              18,143       11,675    17,480
Creditors (amounts falling                    (3,040)         (61)     (483)
due within one year)
                                            --------     --------   -------
Net current assets                            15,103       11,614    16,997
                                            --------     --------   -------

Total assets less liabilities                695,793      671,174   597,910
                                            ========     ========   =======

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                 335,672      286,488   249,746
  Capital reserve - unrealised               137,100      162,442   128,099
  Revenue reserve                             24,728       23,951    21,772
                                            --------     --------   -------
                                             695,793      671,174   597,910
                                            ========     ========   =======

Net Asset Value per Ordinary Share           704.17p      679.26p   605.11p



CASH FLOW STATEMENT

For the six months ended 30 June 2006
(unaudited)
                                                6 months to     6 months to
                                               30 June 2006    30 June 2005
                                              £ 000   £ 000   £ 000   £ 000

Net cash inflow from operating activities             6,522           8,155

Returns on investment and                                 -               -
servicing of finance

Capital expenditure and
financial investment
Payments to acquire investments            (135,374)        (98,239)
Receipts from sales of investments          140,044          97,171
                                            -------         -------
Net cash inflow/(outflow) from capital
expenditure and financial investment                  4,670          (1,068)
                                                     ------          ------
                                                     11,192           7,087
Equity dividends paid                                (7,757)         (7,164)
                                                     ------          ------
                                                      3,435             (77)
Financing                                                 -               -
                                                     ------          ------
Increase/(decrease) in cash                           3,435             (77)
                                                     ======          ======

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

Net return before finance costs                      32,376          57,919
and taxation
Gains on investments                                (26,555)        (49,557)
Transaction costs                                     1,763           1,276
Increase in debtors                                  (1,040)         (1,465)
Decrease in creditors                                   (22)            (18)
                                                     ------          ------
Net cash inflow from operating activities             6,522           8,155
                                                     ======          ======


 NOTES TO THE FINANCIAL
 STATEMENTS

 1. ACCOUNTING STANDARDS
 The financial statements have been prepared under historical cost convention,
 as modified to include the revaluation of investments and in accordance with
 applicable accounting standards and the AITC's Statement of Recommended
 Practice "Financial Statements of Investment Trust Companies" issued in
 2005. As a consequence we now present an Income Statement and whilst it
 still shows supplementary information on the capital and revenue returns, it is
 the total column which 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 2005 have been
 applied. However, the financial statements for the six months ended 30 June
 2005 have been restated as a result of restating the Company's position as at
 31 December 2004. The financial statements for the six months ended 30 June 2005
 also reflect the revised treatment of transaction costs. The effect of the
 restatements has been summarised in Note 5.


 2.DIVIDENDS

                                                    Six months        Six months
                                                 ended 30 June     ended 30 June
                                                          2006              2005
                                                         £'000             £'000
 Amounts recognised as distributions to equity
 equity holders in the period:
 Final Dividend of 7.85p paid on 7 March 2006
 (2005 - 7.25p paid on 4 March 2005)                     7,757             7,164
                                                        ------            ------

 An interim dividend of 4.25p (2005 - 4.00p) will be paid on 1 September 2006 to
 shareholders on the register on 4 August 2006.

 3. RETURNS PER ORDINARY SHARE
 The calculations of the revenue return per Ordinary Share are based on net
 revenue of £8,534,000 (30 June 2005 - £8,194,000) and on Ordinary Shares of
 98,809,788. The calculations of the capital return per Ordinary Share are based on
 net gains of £23,842,000 (30 June 2005 - £49,725,000) 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
                                                    2006        2005        2005
                                                   Pence       Pence       Pence
 Net asset value attributable per Ordinary Share  704.17      679.26      605.11

                                                    £000        £000        £000
 Net assets attributable                         695,793     671,174     597,910

 As at 30 June 2006, the Company had 98,809,788 Ordinary Shares in issue
 (31 December 2005 and 30 June 2005 - same).

 5. EXPLANATION OF PRIOR YEAR ADJUSTMENTS
 Reconciliation of the Income Statement for the six months ended 30 June 2005

                                           As previously   Effect of         As
                                                reported   change in   restated
 INCOME STATEMENT                                  Total      policy      Total
                                                    £000        £000       £000
 Net gains on investments                         43,673       5,884     49,557
 Dividend income                                  12,174           -     12,174
 Interest income                                     260           -        260
 Other income                                         47           -         47
 Imvestment management fee                        (2,656)          -     (2,656)
 Transaction costs                                     -      (1,276)    (1,276)
 Other expenses                                     (187)          -       (187)
                                                 -------     -------    -------
 Net return before finance costs and tax          53,311       4,608     57,919
 Finance costs                                         -           -          -
                                                 -------     -------    -------
 Net return on ordinary activities before tax     53,311       4,608     57,919
 Tax on ordinary activities                            -           -          -
                                                 -------     -------    -------
 Return attributable to equity shareholders       53,311       4,608     57,919
                                                 -------     -------    -------
 Returns per Ordinary Share                       53.95p       4.67p     58.62p


 Gains on Investments
 The adption of FRS 26 resulted in a change to the basis if valuation of
 investments. Under FRS 26, the Company's investments have been categorised as
 "financial assets at fair value through profit or loss". Therefore quoted
 investments are now valued at bid prices. Previously quoted investments were
 quoted at middle market prices. The change in accounting policy has
 increased the return attributable to Shareholders for the six months ended 30
 June 2005 by £4,608,000 and is included within the £5,884,000 increase in net
 gains on investments. The difference between the two figures reflects the impact
 of transaction costs on gains on investments.

 Expenses incurred in acquiring or disposing of Investments
 As a further consequence of investments being categorised as "financial
 assets at fair value through profit or loss", transaction costs incidental to the
 acquisition or disposal of investments amounting to £1,276,000 for the six
 months ended 30 June 2005 are now treated as a capital expense and included within
 expenses under the capital column of the Income Statement. This change in
 accounting policy has no overall effect on the return attributable to Shareholders
 and appears on the Income Statement as offsetting increases of £1,276,000 in
 transaction costs and within gains on investments. Previously such transaction
 costs were included within book cost of investments and proceeds from sales.

 6. 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 2005, 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 24 July
 2006. 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 - 20 July 2006


 ANNOUNCEMENT ENDS