Final Results

ADVANCE FOCUS FUND LIMITED Preliminary announcement of results for the year ended 30 September 2006 CHAIRMAN'S STATEMENT The year to 30 September 2006 saw the net asset value of the trust rise by 19.8% to 133.4 pence per Share, a creditable result for our new investment policy and well ahead of the 14.7% delivered by the FTSE All-Share Total Return Index. Our Company's Share price rose by 11.2% over the financial year and our shares moved from trading at a small premium against net asset value to a 6.6% discount. Since the year end the discount has narrowed and as at 8 December 2006 was 5.3%. The Board stands ready to use the share repurchase powers granted by the shareholders when appropriate and early in the Company's accounting year authorised the repurchase of 1,718,042 Shares for cancellation. This added 0.2 pence per share to the net asset value. The net revenue return for the year was 2.3 pence per Share. After eliminating brought forward revenue losses, the Board recommends the payment of a final dividend of 1 pence per Share for the year ended 30 September 2006. Future dividend payments will more closely reflect the revenue return generated in the relevant accounting year. When we changed the Company's investment objective in April 2005 the Board and the Manager felt that, primarily for reasons of liquidity, we should invest in constituents of the FTSE All-Share Index. Since that time we have seen a remarkable expansion in the AIM market as it has captured most new issues and a number of companies have moved from the main market (including some that the Manager had been evaluating as potential investments). Having reviewed the situation, the Board now feels that the exclusion of AIM is restricting the Manager's access to interesting and suitable situations and thus limiting the scope for performance. The Board is, therefore, seeking shareholder approval for the Manager also to invest in AIM stocks subject to their market capitalisation exceeding the minimum required to qualify for the FTSE All-Share Index at the time of investment. Resolution 6 at the Annual General Meeting requests that approval. The Board would like to thank Marshall Securities for their work on behalf of the Company at its inception and over the past three years and has recently appointed Cenkos Securities as stockbroker to the Company, with a view to raising the profile of the Fund and increasing the liquidity of its Shares. Since the year end, the FTSE All-Share Total Return Index has risen by 4.7% and the Company's net asset value has been outperforming, rising by 7.3% over the period from 1 October 2006 until 8 December 2006. Because the Manager concentrates on special situations, like structural alterations, management change, and asset realisations, the Company's performance is not expected directly to mirror overall market movements. Also, sentiment changes affect discount levels and investor confidence that special situations will be resolved. This is reflected in the valuation of the portfolio during active market phases, both bull and bear. The general outlook for the UK economy is for a consumer slowdown, but only a small rise in interest rates. The tightening of liquidity that is occurring now makes the general outlook for the equity market more difficult, as consumers adjust their expenditure and the availability of finance for corporate restructuring is curtailed. Nevertheless, the environment for our Manager's style is generally satisfactory and we remain optimistic for 2007. The Annual General Meeting of the Company will be held on 30 January 2007 at 9.00 am at 1 Le Marchant Street, St. Peter Port, Guernsey. Christopher Clark 14 December 2006 Shareholders may contact the Chairman directly on ADFChairman@pro-asset.com INCOME STATEMENT For the year ended 30 September 2006 2006 2005 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains on investments - realised - 3,221 3,221 - 3,078 3,078 - unrealised 1,667 1,667 - (1,240) (1,240) Capital losses on currency movements - - - - (121) (121) Net gains 4,888 4,888 - 1,717 1,717 Income 1,107 - 1,107 509 - 509 Investment management fee (304) (162) (466) (128) (192) (320) Other expenses (227) - (227) (203) - (203) Return on ordinary activities before 576 4,726 5,302 178 1,525 1,703 taxation Taxation - - - - - - Return on ordinary activities after 576 4,726 5,302 178 1,525 1,703 taxation Return per Redeemable Preference Share 2.27p 18.64p 20.91p 0.85p 7.32p 8.17p BALANCE SHEET At 30 September 2006 2006 2005 £'000 £'000 FIXED ASSETS Investments 31,493 28,683 CURRENT ASSETS Sales for future settlements 700 202 Other debtors 132 139 Cash at bank and in hand 1,465 1,530 2,297 1,871 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Purchases for future settlement - (429) Accrued liabilities (107) (54) Performance fee (162) - (269) (483) NET CURRENT ASSETS 2,028 1,388 TOTAL NET ASSETS 33,521 30,071 CAPITAL AND RESERVES Share capital 252 269 Share premium account 19,052 19,052 Share purchase reserve 6,217 8,069 Capital redemption reserve 17 - Realised capital reserve 5,628 2,569 Unrealised capital reserve 1,929 262 Revenue reserve 426 (150) SHAREHOLDERS' FUNDS 33,521 30,071 Net assets per Redeemable Preference Share 133.35p 111.97p RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS For the year ended 30 September 2006 Share Share Capital Realised Unrealised Share Premium Purchase Redemption Capital Capital Revenue Capital Account Reserve Reserve Reserve Reserve Reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Opening 269 19,052 8,069 - 2,569 262 (150) 30,071 shareholders' funds Adjustment to opening balance for - - - - - (187) - (187) bid price valuation of investments Purchase of (17) - (1,852) 17 - - - (1,852) own shares Profit for - - - - 3,059 1,854 576 5,489 the year* Closing 252 19,052 6,217 17 5,628 1,929 426 33,521 shareholders' funds For the year ended 30 September 2005 Share Share Capital Realised Unrealised Share Premium Purchase Redemption Capital Capital Revenue Capital Account Reserve Reserve Reserve Reserve Reserve Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Opening 163 7,613 8,069 - (201) 1,507 (328) 16,823 shareholders' funds Shares issued 106 11,694 - - - - - 11,800 during the year Share issue - (255) - - - - - (255) expenses Profit for - - - - 2,770 (1,245) 178 1,703 the year Closing 269 19,052 8,069 - 2,569 262 (150) 30,071 shareholders' funds * excluding adjustment to opening balance for bid price valuation of investments. CASH FLOW STATEMENT For the year ended 30 September 2006 2006 2005 £'000 £'000 OPERATING ACTIVITIES Cash inflow from investment income and bank 1,110 378 interest Cash outflow from management expenses (474) (548) Cash inflow from disposal of investments 13,668 43,307 Cash outflow from purchase of investments (12,517) (53,172) Cash inflow from foreign exchange forward contracts - 152 1,787 (9,883) NET CASH FLOW FROM OPERATING ACTIVITIES FINANCING Repurchase of own shares (1,852) - Issue of share capital (net of expenses) - 11,545 Decrease in bank borrowings - (132) NET CASH FLOW FROM FINANCING (1,852) 11,413 (DECREASE) / INCREASE IN CASH (65) 1,530 2006 2005 £'000 £'000 Opening cash balance (as previously stated) 1,530 (132) Reclassification of bank overdraft as financing - 132 Opening balance (as restated) 1,530 - Cash inflow/(outflow) (65) 1,530 Balance at 30 September 1,465 1,530 NOTES The Company is a closed-ended investment company incorporated and resident in Guernsey. This report has been prepared in accordance with applicable United Kingdom accounting standards and with the Statement of Recommended Practice 'Financial Statements of Investment Trust Companies ("SORP") issued by the Association of Investment Companies. The accounts have been prepared in accordance with the SORP as it is considered best practice. The Company is not an investment trust and as an overseas company does not meet all the criteria set out in the SORP. Changes to accounting policy Valuation of investments In the comparative figures for the year ended 30 September 2005, securities were valued at their mid market prices. The impact of valuing the portfolio at market bid price as at 30 September 2005 would have resulted in a downward adjustment of £186,810, equivalent to 0.70p per Share. Under the transitional provisions of FRS 26, the comparative figures for 2005 have not been adjusted. Returns per share Returns per Redeemable preference share are based on the weighted average of 25,355,426 (2005: 20,840,309) Redeemable Preference Shares in issue during the year. Net assets per share The figure for net assets per Redeemable Preference Share is based on 25,137,453 (2005:26,855,495) Redeemable Preference Shares in issue at the Balance Sheet date. The figure for net assets per Redeemable Preference Share as stated at 30 September 2005 adjusted for bid price valuation of investments was 111.27p. Dividend The directors recommend a final dividend of 1p per share. If approved by shareholders at the Annual General Meeting, the dividend will be paid on 7 February 2007 to shareholders on the register at 12 January 2007. Status of the financial information These financial statements are not the Company's statutory accounts. The annual report will be sent to shareholders and copies will be made available to the public at the registered office of the Company and at the address of the UK Administration Agent. The preliminary announcement was approved by the Board on 14 December 2006. REGISTERED OFFICE 1 Le Marchant Street St Peter Port Guernsey GY1 4HP UK ADMINISTRATION AGENT Cavendish Administration Limited Crusader House 145-157 St John Street London EC1V 4RU 14 December 2006 ---END OF MESSAGE---

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