Interim Results

PRESS RELEASE 17 November 2006 SVM UK EMERGING FUND plc Unaudited results for the six months to 30 September 2006 KEY POINTS * Net asset value rose by 2.7% to 50.82p as at 30 September 2006, compared to an fall of 14.9% in the FTSE AIM Index, the company's benchmark index. * Net asset value up 58.0% against rises of 12.11% in AIM Index and 39.5% in FTSE 100 Index since remit changed in September 2004. * Cash freed up prior to the May market correction has been deployed into the recent small cap market weakness. * Well placed to take advantage of the increased size and reach of the AIM index. - Ends - For further information, please contact: Donald Robertson SVM Asset Management 0131 226 6699 Roland Cross Broadgate 020 7726 6111 SVM UK EMERGING FUND PLC Chairman's Statement Unaudited results for the six months to 30 September 2005 Commenting on the results for the six months to 30 September, Chairman, Peter Dicks, said: "The last few months has seen a significant shift in investor risk appetite and a rush to the perceived safety of large companies. As a result, there has been a marked de-rating of smaller companies against larger ones, which can be starkly demonstrated by the performances of the relevant indices - FTSE 100 (for large companies) and FTSE AIM (for small companies). In the six months to the end of September 2006, the FTSE 100 rose by 1.6% against a fall of 14.9% in the AIM Index, the Fund's benchmark index. Against this background, I am pleased to report another positive six months for the Company both on an absolute and relative basis. At 30 September 2006, the asset value per share was 50.82 pence. This rise of 2.7% compares credibly against the substantial fall of 14.9% in the FTSE AIM Index, a near 18 percentage point out-performance. The end of September also saw the second anniversary of the change in the Fund's investment remit and name. Over this period, the asset value has increased by 58.0% against rises of 12.1% in the AIM Index and 39.5% in the FTSE 100 Index. When markets corrected in mid May, the initial mark-down was indiscriminate and many "risky" asset classes (emerging markets, minor currencies, smaller companies and commodities) were hit aggressively. Subsequently, when sentiment returned, smaller companies appear to have been left behind. There is no single reason for the relative weakness, more a combination of a number of factors. The glut of questionable new issues, the demise of the internet gaming sector and perceived regulatory concerns have been particularly unhelpful. However, the AIM market continued to be the market of choice for small companies globally. With in excess of 1,500 companies capitalised at £75bn, there is no shortage of investment opportunities but one has to be very careful as a substantial number of these companies offer limited attractions. Having freed up cash in late April and early May, the Fund was well positioned to take advantage of the weaknesses in prices to source fresh investments at attractive prices. During the six months, profits were booked through realisations in Ashley House, Billing Services (formerly United Clearing), Fun Technologies and Petrel Resources while new investments have been made in financial company Impax Group, commodity company Monto Minerals and on-line research company Toluna. The Board and the Managers believe that the Fund should continue to extend the recent out-performance and is well placed to deliver long term capital growth." Peter Dicks Chairman 17 November 2006 SVM UK Emerging Fund plc Summarised Unaudited Income Statement Six months to 30 September Six months to 30 September 2006 2005 Revenue Capital Total Revenue Capital Total £'000 £'000 £'000 £'000 £'000 £'000 Gains / (losses) on - 179 179 - (340) (340) sale of investments Movement in - (69) (69) - 605 605 unrealised depreciation -------- -------- -------- -------- -------- -------- Gains on investments - 110 110 - 265 265 Income 3 - 3 - - - Investment - - - - - - management fees Other expenses (20) - (20) (29) - (29) -------- -------- -------- -------- -------- -------- Return before (17) 110 93 (29) 265 236 interest and taxation Bank overdraft (18) - (18) (12) - (12) interest -------- -------- -------- -------- -------- -------- Transfer from (35) 110 75 (41) 265 224 reserves -------- -------- -------- -------- -------- -------- Return per ordinary (0.65p) 2.01p 1.36p (0.75p) 4.85p 4.10p Share . Unaudited Balance Sheet As at As at 30 September 30 September 2006 2005 £'000 £'000 Investments 2,645 2,157 Net current assets 130 88 --------- --------- Ordinary shareholders' funds 2,775 2,245 --------- --------- Net asset value per ordinary share 50.82p 41.12p . Summarised Unaudited Cash Flow Six months to Six months Statement to 30 September 30 September 2006 2005 £'000 £'000 Net cash flow from operating (42) (51) activities Capital expenditure and financial 131 281 investment Servicing of finance (18) (12) -------- -------- Movement in cash 71 218 -------- -------- Notes 1. The accounts have been prepared in accordance with applicable accounting standards and the 2005 Statement of Recommended Practice (SORP) issued by the Association of Investment Trust Companies 2. Return per share is based on a weighted average of 5,460,000 (2005 - same) ordinary shares in issue during the period. Total return per share is based on the total return for the period of £75,000 (2005 - £224,000). Capital return per share is based on net gains during the period of £110,000 (2005 - £ 265,000). Revenue return per share is based on the revenue loss after taxation for the period of £35,000 (2005 - £41,000). The number of shares in issue at 30 September 2006 was 5,460,000 (2005 - same). 3. Due to the size of the Company, the Investment Managers waived their fees for the period to 30 September 2005 and 2006. 4. The above figures do not constitute full accounts in terms of Section 240 of the Companies Act 1985. The accounts for the year to 31 March 2006, on which the auditors issued an unqualified report, have been lodged with the Registrar of Companies. The interim report will be mailed to shareholders towards the end of November 2006. Copies will be available for inspection at 7 Castle Street, Edinburgh, the registered office of the Company. ENDS

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