Half-yearly report

ABERFORTH GEARED CAPITAL & INCOME TRUST plc

HALF YEARLY REPORT

For the six months ended 30 June 2010


FEATURES

Total Returns

   Total Assets                        + 5.4%

   Net Asset Value of Capital          + 6.5%
    Shares (1)

   First Interim Dividend per            6.5p (2009: 5.9p)
   Income Share


(1)  Capital Shares asset performance assumes Income Shares have
     a capital entitlement of 100p each.

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

CHAIRMAN'S STATEMENT TO SHAREHOLDERS

Introduction
For the six months ended 30 June 2010, Aberforth Geared Capital & Income Trust
plc  (AGCiT) recorded a total return on total assets of 5.4%.  The  RBS  Hoare
Govett  Smaller Companies Index (Excluding Investment Companies) (HGSC (XIC)),
which  is representative of AGCiT's opportunity base, recorded a total  return
of  1.2%  for  the  same period.  The FTSE All-Share Index, representative  of
larger companies, showed a total return of -6.1%.

AGCiT  has  a highly geared structure and has a policy of maintaining  gearing
towards  the maximum level over the long term.  Borrowings during  the  period
were  consistently above £30m and on some occasions close to the maximum  debt
available  of  £34.3m.  At the period end £30.0m of debt  was  being  utilised
reflecting  the  balance of recent purchases and sales in the portfolio.   The
net  asset value of a Capital Share (assuming 100p prior charge for the Income
Shares)  rose from 301.52p on 31 December 2009 to 321.21p on 30 June 2010,  an
increase of 6.5%.

AGCiT  has  an  interest rate swap in place that has  an  expiry  date  of  30
September 2011. At that date the swap will have a zero value.  As at  30  June
2010  the  value  of the swap was negative £1,669,000 (30 June  2009  negative
£2,065,000).   The  negative  swap value is charged  against  capital  and  is
equivalent,  at  30 June 2010, to negative 15.9p per Capital  Share.   It  has
always  been the intention of your Board, ceteris paribus, to allow this  swap
arrangement  to  run until its maturity, at which point it will  have  a  zero
value.  In the intervening period the value of the swap will be a function  of
the prevailing relevant short term interest rates and the length of time until
expiry.
Dividends
I  am  pleased to announce a first interim dividend of 6.5p per Income  Share.
This represents an increase of 10.2% over the 5.9p paid in respect of the same
period  in 2009. Dividends paid by companies held in the portfolio have shown,
in  aggregate, a welcome increase on those paid in 2009.  A particular feature
of  the recovery from the recent recession is the speed with which the smaller
company  sector  has  been  able to restore or  increase  dividends.   AGCiT's
portfolio has participated fully in this trend.

The  revenue reserve, as at 30 June 2010, and after accounting for  the  first
interim dividend of 6.5p per Income Share is £1,465,000, equivalent to 6p  per
Income  Share.  These reserves were built up consistently  over  AGCiT's  life
prior  to  2009  with the intention of smoothing dividend payments  to  Income
Shareholders  in  the  event  of a reduction in income  for  the  Trust.   The
reserves  were  drawn upon in 2009 when total dividends of  12.6p  per  Income
Share  were  paid as against earnings per share in that year of  11.4p.   Your
Board  has resolved to distribute the revenue reserve with the second  interim
dividends  in 2010 and 2011.  Consequently, your Board expects to recommend  a
second interim dividend in respect of 2010 of at least 7.3p per Income Share.

The  first  interim dividend of 6.5p will be paid on 20 August 2010 to  Income
Shareholders on the register at 30 July 2010.  The "ex dividend" date will  be
28 July 2010.

Outlook
The  first  half of 2010 has been satisfactory for AGCiT.  In particular,  the
dividend performance of the portfolio has been most encouraging, indicating  a
degree  of confidence from company boards and management.  This is in contrast
to   the   more  macro  orientated  factors  that  are  currently   dominating
stockmarkets and causing uncertainty.  As I indicated last year, the  path  of
the  recovery is unlikely to be smooth and I have no reason now to alter  that
view.   However, I retain confidence in your Managers' ability to steward  the
Company's assets in these uncertain times.

Alastair C. Dempster
Chairman
16 July 2010


MANAGERS' REPORT

Investment background
Small UK quoted companies extended the gains achieved in 2009.  The HGSC (XIC)
recorded  a total return of 1.2%, which exceeded the negative 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  HGSC (XIC), were up by 2.1%.  In contrast, `smaller small' companies,  as
measured by the FTSE SmallCap, experienced a total return of negative 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 recovery.   The
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  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 AGCiT secure a total asset total return  of
7.7%.   With the stockmarket driven on by a continuation of the recovery  that
took  hold  in  2009, the 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, AGCiT's relative performance improved: its  total
return was -2.2% against -6.7% for the HGSC (XIC).  Thus, over the first  half
as  a  whole AGCiT secured a positive absolute return at the same time as out-
performing  the  HGSC  (XIC) by 417 basis points.   The  following  paragraphs
explain this performance.

·     Both stock and sector selection were positive, contributing 173 and  244
  basis points respectively to relative performance.  AGCiT benefited from its
  heavy over-weight positions in the capital goods sectors such as Electronic &
  Electrical Equipment and Industrial Engineering, which out-performed the HGSC
  (XIC) despite growing concerns in May and June about growth in the US and China.
  At the stock selection level, there were good contributions from the General
  Retailers  and Media sectors, where strong results from individual  holdings
  succeeded in offsetting more general concerns about the domestic economy.

·     The portfolio's size positioning was unhelpful and influenced both stock
  and sector selection.  The HGSC (XIC) has a substantial overlap with the FTSE
  250,  to the extent that mid caps account for 76% of the HGSC (XIC)'s market
  capitalisation.  In contrast, the portfolio's weighting in mid caps is  46%.
  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  HGSC
  (XIC) 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 20% 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.

·     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 65 holdings at the end of June is encouraging
  and is summarised in the following table:

   Band      Nil   Down    Flat    +0-     +10-     +
                                   10%     20%     >20%
   No. of     2      3      20      16      11      13
   holdings


  The  `Nil' category includes those companies that did not pay a dividend  in
  the  first  half.  Both are businesses whose profits suffered  badly  during
  recession, forcing a passing of the dividend.  In both cases, however, it is
  anticipated  that  payments will resume over the next twelve  months.   This
  phenomenon  is relevant to the wider small company universe and can  have  a
  meaningful  impact on aggregate reported dividend growth.   Three  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: 40 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: i.e. a sustainable dividend yield could provide  some
  compensation for declines in capital.  In the event, last year turned  out  to
  be  the  worst  in  terms of dividends in the HGSC (XIC)'s  history.   AGCiT'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 AGCiT's income account.

·     When making their decisions about dividends, the boards of those companies
  in  which  AGCiT invests would have taken comfort from the strength  of  their
  balance sheets.  At the end of the half year, 37% of the portfolio was invested
  in companies with net cash on their balance sheets.  Your Managers' preference
  for well financed businesses was unhelpful 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 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, one of which was a portfolio
  holding, were completed.  On top of those, twelve HGSC (XIC) 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 AGCiT  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  `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 HGSC (XIC).


                         30 June 2010   31 December    30 June 2009
                                            2009
Characteristics          AGCiT   HGSC   AGCiT   HGSC   AGCiT    HGSC
                                (XIC)          (XIC)           (XIC)
Number of Companies         65    437      61    448      63    480
Weighted Average Market  £363m  £668m   £347m  £619m   £303m  £605m
Capitalisation
Price Earnings Ratio     10.3x  12.8x    8.4x  11.2x    7.3x   8.7x
(Historic)
Net Dividend Yield        4.0%   2.7%    4.2%   2.7%    5.2%   3.6%
(Historic)
Dividend Cover            2.6x   2.9x    2.9x   3.3x    2.7x   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
AGCiT's portfolio was 9.7x at the end of June.  In relation to the average PE of
the  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 AGCiT's nine years  of  12.1x.
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 dividend cover  of  2.6x,  the
4.0% historic dividend 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 over the remainder of AGCiT's life.

Aberforth Partners LLP
Managers
16 July 2010


INVESTMENT PORTFOLIO
Fifty Largest Investments as at 30 June 2010


                        Valuation  % of
No. Company                 £'000 Total  Business Activity

1  JD Sports Fashion        4,144   4.5  Retailing - sports goods & clothing
2  Spirax-Sarco Engineering 3,686   4.0  Engineering
3  Domino Printing Sciences 3,673   4.0  Industrial printers & inks
4  RPC Group                3,288   3.4  Plastic packaging
5  Beazley                  2,776   3.0  Lloyds insurer
6  Greggs                   2,685   2.9  Retailing - baked products &
                                         sandwiches
7  Huntsworth               2,367   2.6  Media - public relations
8  Spectris                 2,363   2.5  Diversified electronics businesses
9  Holidaybreak             2,282   2.5  Education & holiday services
10 Hampson Industries       2,180   2.4  Composite tools & components for
                                         aerospace
   Top Ten Investments     29,444  31.8
11 Phoenix IT Group         2,176   2.3  IT services & disaster recovery
12 UMECO                    2,092   2.3  Supply chain management &
                                         advanced composite materials
13 Bodycote                 2,058   2.2  Engineering - heat treatment
14 Tullett Prebon           1,822   2.0  Inter dealer broker
15 Wilmington Group         1,803   2.0  Information & training for
                                         professional business market
16 Dunelm Group             1,781   1.9  Homewares retailer
17 e2v technologies         1,764   1.9  Electronic components &
                                         subsystems
18 Dialight                 1,707   1.8  LED based lighting solutions
19 Morgan Crucible Co       1,696   1.8  Engineer - ceramic & carbon materials
20 Brown (N.) Group         1,684   1.8  Catalogue retailer
   Top Twenty
   Investments             48,027  51.8
21 RM                       1,658   1.8  IT services for schools
22 Smiths News              1,639   1.8  Newspaper distribution
23 Collins Stewart          1,619   1.7  Stockbroker & private client fund
                                         manager
24 Keller Group             1,543   1.7  Ground engineering services
25 Microgen                 1,541   1.7  Workflow & financial services software
26 BBA Aviation             1,447   1.6  Aviation - fuelling & maintenance
27 Galliford Try            1,423   1.5  Housebuilding & construction services
28 Evolution Group          1,381   1.5  Stockbroker & private client fund
                                         manager
29 Low & Bonar              1,331   1.4  Manufacture of industrial textiles
30 office2office            1,330   1.4  Distribution of office products
   Top Thirty
   Investments             62,939  67.9
31 RPS Group                1,288   1.4  Energy & environmental consulting
32 KCOM Group               1,260   1.4  Telecommunications services
33 Regus                    1,256   1.4  Serviced office accommodation
34 De La Rue                1,244   1.3  Bank note printer
35 Brewin Dolphin Holdings  1,231   1.3  Stockbroker & private client fund
                                         manager
36 Castings                 1,214   1.3  Engineering - automotive castings
37 Elementis                1,202   1.3  Speciality chemicals producer
38 Game Group               1,186   1.3  Video games retailer
39 Go-Ahead Group           1,104   1.2  Bus & rail operator
40 United Business Media    1,089   1.2  B2B media conglomerate
   Top Forty
   Investments             75,013  81.0
41 Hansard Global           1,075   1.2  Life assurance savings products
42 Chaucer Holdings         1,057   1.1  Lloyds insurer
43 Micro Focus Intl         1,007   1.1  Software - development & testing
44 Diploma                    892   1.0  Distribution conglomerate
45 Vitec Group (The)          862   0.9  Engineering
46 JKX Oil & Gas              857   0.9  Oil & gas exploration &
                                         production
47 Morgan Sindall Group       842   0.9  Office fit out, construction &
                                         civil engineering
48 SThree                     794   0.9  Recruitment
49 Robert Wiseman Dairies     792   0.8  Dairy operator
50 Anite                      778   0.8  Software - telecoms & travel
   Top Fifty
   Investments             83,969  90.6
   Other Investments (15)   8,692   9.4
   Total Investments       92,661 100.0
   Net Liabilities        (55,876)
   (incl. Income Shares)
   Total Net Assets        36,785



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 high risk
profile in the context of the investment trust industry. This belief arises from
the Company employing a significant level of gearing to increase its yield and
to provide the potential for a growing level of dividend income and the
potential for geared capital appreciation (further information on the Company's
gearing levels can be found in the Capital Structure section of this report).
Some mitigating factors in the Company's risk profile include the facts that the
Company has a relatively simple capital structure; invests only in a diversified
portfolio of small UK quoted companies; and outsources all of its 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 risk,
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
Alastair C. Dempster
Chairman
16 July 2010


The Income Statement, Balance Sheet, Summary Reconciliation of Movements in
Shareholders' Funds,  and Summary 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          -        2,760       2,760
Movement in fair value               -          149         149
                             ---------   ----------  ----------
                                     -
Net gains on investments             -        2,909       2,909
Dividend income                  2,423            -       2,423
Other investment income              -            -           -
Other income                         8            -           8
Investment management fee        (118)        (276)       (394)
Transaction costs                    -        (196)       (196)
Other expenses                   (125)            -       (125)
                             ---------   ----------  ----------
                                     -
Net return before finance        2,188        2,437       4,625
costs and tax
Finance costs:
Interest                         (296)        (691)       (987)
Change in fair valuation of          -          322         322
interest rate swap
                             ---------   ----------  ----------
                                     -
                                 1,892        2,068       3,960
Finance costs:
Dividends on Income Shares     (1,642)            -     (1,642)
classified as financial
liabilities (Note 2)
                             ---------   ----------  ----------
                                     -
Return on ordinary                 250        2,068       2,318
activities before tax
Tax on ordinary activities           -            -           -
                             ---------   ----------  ----------
                                     -
Return attributable to             250        2,068       2,318
shareholders
                                ======       ======      ======

Returns per Share: (Note 3)
Income Share                     7.72p            -       7.72p
Capital Share                        -       19.70p      19.70p

DIVIDENDS
On 16 July 2010 the Board declared a first interim dividend for the year
ended 31 December 2010 of 6.5p per Income Share (2009 - 5.9p) payable on 20
August 2010.



INCOME STATEMENT
(unaudited)

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

Realised net losses on sales         -      (9,139)     (9,139)
Movement in fair value               -       17,769      17,769
                             ---------   ----------  ----------
                                     -
Net gains on investments             -        8,630       8,630
Dividend income                  2,034           74       2,108
Other investment income             27            -          27
Other income                        13            -          13
Investment management fee         (83)        (194)       (277)
Transaction costs                    -        (145)       (145)
Other expenses                   (122)            -       (122)
                             ---------   ----------  ----------
                                     -
Net return before finance        1,869        8,365      10,234
costs and tax
Finance costs:
Interest                         (303)        (706)     (1,009)
Change in fair valuation of          -           46          46
interest rate swap
                             ---------   ----------  ----------
                                     -
                                 1,566        7,705       9,271
Finance costs:
Dividends on Income Shares     (1,642)            -     (1,642)
classified as financial
liabilities (Note 2)
                             ---------   ----------  ----------
                                     -
Return on ordinary                (76)        7,705       7,629
activities before tax
Tax on ordinary activities           -            -           -
                             ---------   ----------  ----------
                                     -
Return attributable to            (76)        7,705       7,629
shareholders
                                ======       ======      ======

Returns per Share: (Note 3)
Income Share                     6.39p            -       6.39p
Capital Share                        -       73.38p      73.38p



INCOME STATEMENT
(unaudited)
                               For the year ended 31 December
                                            2009
                               Revenue      Capital       Total
                                 £ 000        £ 000       £ 000

Realised net losses on sales         -      (6,862)     (6,862)
Movement in fair value               -       30,700      30,700
                             ---------   ----------  ----------
                                     -
Net gains on investments             -       23,838      23,838
Dividend income                  3,761          150       3,911
Other investment income             30            -          30
Other income                        14            -          14
Investment management fee        (177)        (412)       (589)
Transaction costs                    -        (285)       (285)
Other expenses                   (233)            -       (233)
                             ---------   ----------  ----------
                                     -
Net return before finance        3,395       23,291      26,686
costs and tax
Finance costs:
Interest                         (602)      (1,406)     (2,008)
Change in fair valuation of          -          120         120
interest rate swap
                             ---------   ----------  ----------
                                     -
                                 2,793       22,005      24,798
Finance costs:
Dividends on Income Shares     (3,087)            -     (3,087)
classified as financial
liabilities (Note 2)
                             ---------   ----------  ----------
                                     -
Return on ordinary               (294)       22,005      21,711
activities before tax
Tax on ordinary activities           -            -           -
                             ---------   ----------  ----------
                                     -
Return attributable to           (294)       22,005      21,711
shareholders
                                ======       ======      ======

Returns per Share: (Note 3)
Income Share                    11.40p            -      11.40p
Capital Share                        -      209.57p     209.57p



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
Equity
shareholders           105         50   9,674   21,830    2,808  34,467
funds as at 31
December 2009

Return
attributable to          -          -       -    2,068      250   2,318
shareholders
                     -----      -----   -----    -----    -----   -----
Equity
shareholders           105         50   9,674   23,898    3,058  36,785
funds as at 30
June 2010
                     =====      =====   =====    =====    =====   =====


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
Equity
shareholders           105         50   9,674     (175)   3,102  12,756
funds as at 31
December 2008

Return
attributable to          -          -       -   22,005     (294) 21,711
shareholders
                     -----      -----   -----    -----    -----   -----
Equity
shareholders           105         50   9,674   21,830    2,808  34,467
funds as at 31
December 2009
                     =====      =====   =====    =====    =====   =====


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
Equity
shareholders           105         50   9,674     (175)   3,102  12,756
funds as at 31
December 2008

Return
attributable to          -          -       -    7,705     (76)   7,629
shareholders
                     -----      -----   -----    -----   -----    -----
Equity
shareholders           105         50   9,674    7,530   3,026   20,385
funds as at 30
June 2009
                     =====      =====   =====    =====   =====   ======


BALANCE SHEET
(unaudited)
As at 30 June 2010
                                    30 June        31   30 June
                                       2010  December      2009
                                                 2009

                                      £'000     £'000     £'000
Fixed Assets: Investments
Investments at fair value through    92,661    93,514    78,720
profit or loss
                                    -------   -------   -------
Current assets
Amounts due from brokers                276       106       284
Other debtors                           423       315       557
Cash at bank                          1,294         1        11
                                    -------   -------   -------
                                      1,993       422       852
                                    -------   -------   -------
Creditors (amounts falling due
within one year)
Amounts due to brokers              (1,669)         -         -
Other creditors                        (45)      (46)      (45)
                                    -------   -------   -------
                                    (1,714)      (46)      (45)
                                    -------   -------   -------
Net current assets                      279       376       807
                                    -------   -------   -------
Total assets less current            92,940    93,890    79,527
liabilities

Creditors (amounts falling due     (56,155)  (59,423)  (59,142)
after more than one year) (Note
5)
                                    -------   -------   -------
Total net assets                     36,785    34,467    20,385
                                     ======    ======    ======

Capital and reserves: Equity
interests
Called up share capital:
Capital shares                          105       105       105

Reserves:
Capital redemption reserve               50        50        50
Special reserve                       9,674     9,674     9,674
Capital reserve                      23,898    21,830     7,530
Revenue reserve                       3,058     2,808     3,026
                                    -------   -------   -------
Total equity                         36,785    34,467    20,385
                                     ======    ======    ======

Net Asset Values:
  - per Capital Share               330.64p   317.17p   187.31p
  - per Income Share (Income        108.44p   104.75p   102.93p
Shares are classified as
financial liabilities)

NOTE
The Company had 24.5 million Income Shares and 10.5 million
Capital Shares in issue as at 30 June 2010, 31 December 2009
and 30 June 2009.



CASH FLOW STATEMENT
(unaudited)
For the six months ended 30 June 2010
                                  6 months  6 months Year ended
                                     ended     ended
                                   30 June   30 June 31 December
                                      2010      2009       2009
                                     £'000     £'000      £'000

Net cash inflow from operating       1,805     1,609      3,233
activities
                                   -------   -------    -------
Returns on investments and
servicing of finance
Interest and other finance costs     (984)   (1,015)    (2,006)
paid
Dividends paid                     (1,642)   (1,642)    (3,087)
                                   -------   -------    -------
Net cash outflow from returns
on investments and servicing of    (2,626)   (2,657)    (5,093)
finance
                                   -------   -------    -------
Capital expenditure and
financial investment
Payments to acquire investments   (12,768)  (12,256)   (24,392)
Receipts from sales of              17,832    12,651     25,239
investments
                                   -------   -------    -------
Net cash inflow from capital         5,064       395        847
expenditure and financial
investment
                                   -------   -------    -------
Net cash inflow/(outflow) before     4,243     (653)    (1,013)
financing activities
                                   -------   -------    -------
Financing activities
Loans (repaid)/drawn down          (2,950)       800      1,150
                                   -------   -------    -------
Net cash (outflow)/inflow from     (2,950)       800      1,150
financing activities
                                   -------   -------    -------
Change in cash during the period     1,293       147        137
                                    ======    ======     ======
Reconciliation of net return
before finance costs and
taxation to net cash inflow from
operating activities
Net return before finance costs      4,625    10,234     26,686
and tax
Net gains on investments           (2,909)   (8,630)   (23,838)
Transaction costs                      196       145        285
(Increase)/decrease in debtors       (108)     (109)        133
Increase/(decrease) in creditors         1      (31)       (33)
                                   -------   -------    -------
Net cash inflow from operating       1,805     1,609      3,233
activities
                                    ======    ======     ======


NOTES TO THE FINANCIAL STATEMENTS

1.   ACCOUNTING STANDARDS

The financial statements have been prepared in accordance with UK generally
accepted accounting practice (UK GAAP) and the AIC's Statement of Recommended
Practice ``Financial Statements of Investment Trust Companies and Venture
Capital Trusts'' issued in January 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.    FINANCE COSTS: DIVIDENDS ON INCOME SHARES CLASSIFIED  AS
FINANCIAL LIABILITIES

                                  Six months   Six months  Year ended
                                       ended        ended
                                 30 June 2010 30 June 2009 31 December
                                                                 2009
                                       £'000        £'000       £'000
Amounts recognised as
distributions to Income
Shareholders:
Second interim dividend for the            -        1,642       1,642
year ended 31 December 2008 of
6.7p paid on 27 February 2009
First interim dividend for the             -            -       1,445
year ended 31 December 2009 of
5.9p paid on 21 August 2009
Second interim dividend for the        1,642            -           -
year ended 31 December 2009 of
6.7p paid on 26 February 2010
                                      -------     -------     -------
                                        1,642       1,642       3,087
                                       ======      ======      ======

A  first interim dividend for the year ended 31 December  2010
of  6.5p will be paid on 20 August 2010 to Income Shareholders
on the register on 30 July 2010.


3.   RETURNS PER SHARE

                                  Six months   Six months  Year ended
                                       ended        ended
                                 30 June 2010 30 June 2009 31 December
                                                                 2009
                                       £'000        £'000       £'000
Return per Income Statement            1,892        1,566       2,793
Less: Tax on ordinary activities           -            -           -
                                    ---------   ---------   ---------
Return attributable to Income          1,892        1,566       2,793
Shareholders
                                     ========    ========    ========
Number of Income Shares in issue  24,500,000   24,500,000  24,500,000
during the period
Return per Income Share                7.72p        6.39p      11.40p

                                  Six months   Six months  Year ended
                                       ended        ended
                                 30 June 2010 30 June 2009 31 December
                                                                 2009
                                       £'000        £'000       £'000
Return attributable to Capital         2,068        7,705      22,005
Shareholders
                                     ========      ======    ========
Number of Capital Shares in       10,500,000   10,500,000  10,500,000
issue during the period
Return per Capital Share               19.70p      73.78p     209.57p


4.   NET ASSET VALUE

Total net assets have been calculated in accordance with the provisions of
Financial Reporting Standard 4. Income Shares are classified as financial
liabilities and are carried on the balance sheet at their fair value of 100p
each which results in a total fair valuation of the Income Shares of
£24,500,000. This valuation does not reflect the rights of the Income Shares
under the Articles of Association on a return of assets. Set out below is a
reconciliation of the Capital Share net asset value on the basis of Income
Shares at 100p each and a reconciliation of Capital and Income share net
asset values in accordance with the Articles.

Net  Asset Value of Capital Shares (based on Income Shares  at
  100p)
                                       As at        As at       As at
                                 30 June 2010  31 December 30 June 2009
                                                     2009
                                       £'000        £'000       £'000
Total net assets                      36,785       34,467      20,385
Revenue reserve                      (3,058)      (2,808)     (3,026)
                                      -------     -------     -------
Net Asset Value of Capital            33,727       31,659      17,359
Shares
                                       ======      ======      ======
Number of Capital Shares          10,500,000   10,500,000  10,500,000
NAV per Capital Share (Income        321.21p      301.52p     165.32p
Shares at 100p)

Net Asset Value of Capital and Income Shares (Articles basis)
                                     Capital       Income       Total
                                      Shares       Shares
                                       £'000        £'000       £'000
Total net assets as at 30 June        36,785            -      36,785
2010
Revenue reserve                      (3,058)        3,058           -
Capital entitlement of Income               -      24,500      24,500
Shares at 31 March 2011
(valuation of Income Shares
disclosed within Creditors)
Adjustment to reflect capital            990        (990)           -
entitlement not yet transferred
to Income Shareholders in
accordance with Articles
                                      -------     -------     -------
Net assets per Articles as at 30      34,717       26,568      61,285
June 2010
                                       ======      ======      ======
Number of shares                   10,500,000  24,500,000
NAV per share (per Articles)          330.64p     108.44p


5. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

                                       As at        As at       As at
                                 30 June 2010  31 December 30 June 2009
                                                     2009
                                       £'000        £'000       £'000
Loan facility (Base Rate)                  -        2,950       2,600
Loan facility (LIBOR)                 30,000       30,000      30,000
Less: unamortised issue costs           (14)         (18)        (23)
Income shares                         24,500       24,500      24,500
Interest rate swap                     1,669        1,991       2,065
                                      -------     -------     -------
                                      56,155       59,423      59,142
                                       ======      ======      ======

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 to 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 to 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.

It is anticipated the Half Yearly Report will 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.

Capital Structure
Summary
Aberforth Geared Capital & Income Trust plc has a split level capital
structure consisting of 24.5 million Income Shares and 10.5 million Capital
Shares. It has long-term bank debt facilities available amounting to £34.3
million, being equal to 100% of the net proceeds of the original issue of
shares. It is intended that the long-term facilities will be used close to
their full extent throughout the life of the Company. The effect of this
structure is to increase the yield and to provide the potential for a growing
level of dividend income for Income Shareholders, and the potential for geared
capital appreciation for the Capital Shareholders.

Income Shares
All net income earned by the Company is attributable to the Income Shares. It
is the intention to distribute substantially the whole of the net income each
year in accordance with the objective to provide a high dividend yield. The
Directors aim to increase dividends over the planned life of the Company.
Dividends will be paid half yearly.

The Income Shares were issued with an initial capital entitlement upon a
winding up of 50.00p per Income Share which increases daily, from the date of
issue, on a straight line basis until 31 March 2011 at such a rate as will
give a final entitlement of 100.00p. In the event that the Company is not
wound up on the planned winding up date of 31 December 2011, the capital
entitlement of the Income Shares will continue at a value of 100.00p. The
Income Shares will rank after repayment of the bank debt and any other
liabilities of the Company but before any payment on the Capital Shares. In
the event that the value of the investment portfolio falls significantly, then
it is possible that the Income Shares will have no underlying value at the
planned winding up date.

The Board has concluded that the amount of £24.5 million raised through the
issue of the Income Shares falls under the definition of a financial liability
within Financial Reporting Standard 25. Consequently, this amount has been
recorded as a long-term liability in the Company's Balance Sheet. As at 30
June 2010, the middle market price of an Income Share was 111p.

Capital Shares
The Capital Shares have a return that is entirely in the form of capital and
they have no entitlement to income. Capital Shareholders will be entitled to
all the Company's remaining net assets at the planned winding up date after
providing for payment in full of the final capital entitlement of 100.00p per
Income Share.

There are two methods that can be used to calculate a Net Asset Value (NAV) of
a Capital Share. The detailed calculation is shown in note 4. The difference
between the two relates to the NAV assumed for the Income Shares. As described
above the Income Shares have an initial capital entitlement of 50.00p which
increases daily, on a straight line basis, to 100.00p on 31 March 2011. The
NAV of the Income Shares on 30 June 2010 was 108.44p (includes all revenue
reserves). The NAV of a Capital Share on 30 June 2010 is therefore 330.64p, or
alternatively 321.21p if one assumes a capital entitlement of 100.00p for an
Income Share. In the event that the value of the investment portfolio falls
sufficiently, then it is possible that the Capital Shares will have no
underlying value at the planned winding up date of 31 December 2011. As at 30
June 2010, the middle market price of a Capital Share was 273.5p.

Bank Facilities
The Company seeks to enhance the returns to its shareholders by utilising
gearing in the form of bank borrowing. Accordingly, it has bank debt
facilities with Bank of Scotland under which it is entitled to draw down an
aggregate principal amount of up to £34.3 million. Of the facilities, £30
million is linked to LIBOR and has been matched with a swap transaction, which
has the effect of fixing the total interest cost at 6.47% (31 December 2009:
6.47%) for the period to 30 September 2011. The swap transaction is not
included in the Company's investment portfolio. However, changes in its fair
value are recognised on the Income Statement and Balance Sheet. The fair value
of the interest rate swap based on market values at 30 June 2010 was negative
£1,669,000 (31 December 2009: negative £1,991,000). The balance of the debt
facilities, which amount to £4.3 million, has a variable rate of interest
linked to bank base rate and is utilised as required.

The long-term bank debt amounting to £34.3 million is repayable on 31 December
2011, although it may be repayable earlier if an event of default occurs. The
long-term debt facilities agreement contains, amongst others, a financial
covenant (tested annually at 31 December) that the ratio of the amount
outstanding under the long-term debt facilities and all other creditors
(excluding Income Shares and any liabilities arising from the interest rate
swap) to the aggregate value of all Permitted Investments shall not be greater
than 0.7:1. As at 30 June 2010 the ratio of long-term debt facilities and
other creditors (excluding Income Shares and any liabilities arising from the
interest rate swap) to the value of Permitted Investments was 0.34:1.

Interest on the bank debt is charged 70% to the capital reserves of the
Company and 30% to the revenue account of the Company. Changes to the fair
value of the interest rate swap are allocated 100% to Capital Shareholders.

Duration
The Directors are obliged by the Company's Articles of Association to convene
an Extraordinary General Meeting of the Company between 1 October 2011 and 31
December 2011 (both dates inclusive) at which an Ordinary Resolution will be
proposed to wind up the Company voluntarily on the planned winding up date -
being 31 December 2011. In the event that such resolution or any other
resolution to wind up, reconstruct or reorganise the Company is not passed at
such a meeting or any subsequent meeting, the Directors are obliged to convene
an Extraordinary General Meeting for the same date (or the immediately
preceding business day) in each succeeding year at which a resolution to wind
up the Company on the next anniversary of the planned winding up date will be
proposed. Income Shareholders shall have no vote on such resolutions. A
winding up will enable Capital Shareholders to realise the residual capital
value of their investment after the payment of the creditors, liquidation
costs and the capital and dividend entitlements of the Income Shareholders.

The Directors shall not be required to convene such an Extraordinary General
Meeting if a resolution shall previously have been passed to reconstruct or
reorganise the Company. In the event that such a resolution for reconstruction
is put to the Company at any time in the period after 1 April 2011, then
Income Shareholders shall have no vote on such resolution if the proposals
contained in it would result in the Income Shareholders receiving not less
than 100p in cash (in addition to any entitlement to undistributed revenue
reserve) for each Income Share held (whether or not an option may be given to
elect to receive such entitlement otherwise than in cash).

Please note that the above is a summary only. Full details of the rights
attached to the Capital Shares and Income Shares are set out in the Company's
Articles of Association.

Contact:     John Evans or David Ross - Aberforth Partners LLP - 0131 220
0733
Aberforth Partners LLP, Secretaries - 16 July 2010

ANNOUNCEMENT ENDS