Final Results

Aberforth Smaller Companies Tst PLC
22 January 2002





ABERFORTH SMALLER COMPANIES TRUST plc

PRELIMINARY RESULTS

For the Year to 31 December 2001


FEATURES



•          Fully Diluted Net Asset Value Total Return          +7.9%



•          Benchmark Index Total Return                       -13.0%



•          Increase in Dividends per Ordinary Share            +5.2%





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





CHAIRMAN'S STATEMENT TO SHAREHOLDERS



•         REVIEW OF 2001 PERFORMANCE



The year to December 2001 has seen global stockmarkets generate negative
returns.  In the UK the total return from ASCoT's benchmark index - the Hoare
Govett Smaller Companies Index (excluding investment companies) was a negative
13.0% while the total return for the FTSE All-Share Index (representative of '
larger companies') was a negative 13.3%.



ASCoT has performed well against this background recording a positive total
return for 2001 of 7.9%, therefore significantly outperforming its benchmark
index.



The Board is pleased to recommend a final dividend of 5.90p, which produces
total dividends for the year of 9.10p, an increase of  5.2% on the total
dividends paid for the previous year.  Subject to Shareholders' approval, the
final dividend of 5.90p per share will be paid on 1 March 2002 to Shareholders
on the register at close of business on 1 February 2002.



The factors that dominated stockmarkets in 2000 continued to do so in the first
half of 2001.  The continued derating of the so-called 'TMT' sectors
(Technology, Media and Telecommunications) gradually gave way to concerns of a
more broadly based economic slowdown around the developed world.  In the face of
these concerns financial authorities, not least the Federal Reserve Board in the
USA, have made frequent and significant reductions in short term interest rates.


The process of monetary easing is normally followed by economic recovery and,
ultimately, rising corporate profits.  Clearly this process was severely
destabilised by the effects on confidence of the terrorist attacks in New York
City and Washington D.C. in September.  The immediate impact of these events on
stockmarkets was to produce sharp declines coincident with the combination of
greater uncertainty and perceived risk.



Smaller companies as an asset class performed relatively poorly in a rapidly
declining market where investor sentiment was driven by a desire for liquidity.
In September the benchmark index declined by 18.8% as against the 9.4% decline
recorded by FTSE All-Share Index.  However, following the further reductions in
short term interest rates, stock markets recovered substantially and against a
rise of 18.8% in the benchmark index in the final quarter of the year ASCoT's
total return was 17.4%.



Consequently the combination of substantial outperformance in the first nine
months followed by minor underperformance in the fourth quarter has allowed
ASCoT to record another year of satisfactory returns both in absolute and
particularly in relative terms.



ASCoT did not make use of its debt facilities during the period under review.
This position was a reflection of the Managers' generally cautious view of the
likely levels of absolute returns from stockmarkets which prevailed throughout
the period.  However, the gearing facility remains available and it is the
intention to utilise it when the Board and Managers consider the opportunity to
be appropriate.  Shareholders can be assured that there is no cost involved in
having the facility available but unutilised.



•         CONTINUATION VOTE



Shareholders will be aware that an ordinary resolution is proposed at every
third Annual General Meeting to the effect that the Company continues to manage
its affairs as an investment trust.  Such a resolution will be proposed at the
forthcoming AGM on 26 February 2002, the two previous resolutions in 1996 and
1999 having been carried unanimously.



In the three years since the last continuation vote, ASCoT's fully diluted net
asset value has provided a compound annual total return of 23.0% which compares
with 11.2% from the Hoare Govett Smaller Companies Index (excluding investment
companies) and 0.4% from the FTSE All-Share Index.



The past three years have seen considerable fluctuation in the relative success
of the application of the growth and value investment styles.  Clearly the
period from August 1999 until March 2000 was one of relatively poor performance
for ASCoT; however it is pleasing to note that for the majority of the past
three years ASCoT outperformed its investment benchmark, resulting in the
significant overall outperformance.



After considering these factors the Board recommends that Shareholders vote in
favour of  ASCoT's continuation.


•         BOARD COMPOSITION



I mentioned in last year's annual report that in maintaining its commitment to
corporate governance the Board would continue to keep its composition under
review.  I also mentioned that this process was constrained by the availability
of suitable individuals.



I am therefore delighted to welcome two new members to the Board.  Marco
Chiappelli and Eddie Cran were appointed to the Board on 17 July 2001. Each has
a long experience at board level in listed public companies and has much to
contribute to the Board's deliberations.



As I intimated in my Interim Statement, Dr. Finlay MacKenzie will be retiring
from the Board following the Annual General Meeting on 26 February 2002. Finlay
has been a Director of ASCoT since it was established in 1990 and he has made a
singular and valued contribution to the Company's affairs.  I would like to
record my thanks in addition to those of my fellow Directors for his reliable
and sterling efforts over the eleven years that he has been involved with ASCoT.
  His wise and thoughtful counsel will be missed.



•         SHARE BUY BACK AND WARRANT REPURCHASE



During the year the Company has purchased for cancellation 848,988 Warrants at
prices that enhanced Shareholder value.  The Board will continue to take
advantage of economically attractive opportunities to buy-in Warrants.  A
Warrant confers the right to subscribe for one Ordinary Share of 1p on 31 March
each year.  This right will lapse after 31 March 2003.  Consequently,
Warrantholders should be aware that only two opportunities remain for them to
exercise their rights.  One result of exercising Warrants, at the cost of 100p
each, is to entitle the holder to receive dividends declared and paid on the
Ordinary Shares after the date of exercise.  In respect of calendar 2001, the
total dividend will be 9.10p (subject to Shareholder approval at the forthcoming
Annual General Meeting).



At the Company's Annual General Meeting in February 2001 the authority to
purchase up to 14.99% of the Company's Ordinary Shares was renewed.  The Board
will be seeking a further renewal of this authority at the Annual General
Meeting to be held on 26 February 2002.  The Board has carefully considered the
circumstances under which such authority will be utilised and, should such
circumstances arise, will not hesitate to purchase Ordinary Shares.



•         SUMMARY AND OUTLOOK



ASCoT performed well in the period under review.  The major influence on
stockmarkets in 2002 will most likely be perceptions about the timing of a
recovery in the level of economic growth in the USA.




The Managers' task in the coming year will be to position the portfolio to
participate in the opportunities that the stockmarket offers - against whatever
economic background prevails.  The Managers have seen ASCoT through a remarkably
volatile year in a robust fashion and I remain confident of their abilities to
do so in the future.



William Y Hughes

Chairman

22 January 2002




The Statement of Total Return, summary Balance Sheet and summary Cash Flow
Statement are set out below:-




STATEMENT OF TOTAL RETURN
(Incorporating the Revenue Account*)

For the Year ended 31 December 2001
(unaudited) 
 

                                                                                                                      
                                             12 months to                                    12 months to
                                          31 December 2001                                31 December 2000
                                 Revenue        Capital          Total           Revenue        Capital          Total
                                   £'000          £'000          £'000             £'000          £'000          £'000
  Realised                             -         19,592         19,592                 -         22,235         22,235
  gains/(losses) on                                                                                                   
  sales                                                                                                               
  Unrealised                           -        (3,336)        (3,336)                 -         12,019         12,019
  gains/(losses)                                                                                                      
                            ------------   ------------   ------------      ------------   ------------   ------------
  Gains/(losses) on                    -         16,256         16,256                 -         34,254         34,254
  investments                                                                                                         
  Deemed cost of                                                                                                      
  Warrants                                                                                                            
  purchased for                        -        (1,443)        (1,443)                 -           (41)           (41)
  cancellation                                                                                                        
  Dividend income                  9,436              -          9,436             9,310              -          9,310
  Interest income                    979              -            979               563              -            563
  Other income                        17              -             17                25              -             25
  Investment                     (1,065)        (1,775)        (2,840)             (945)        (1,576)        (2,521)
  management fee                                                                                                      
  Other expenses                   (233)              -          (233)             (196)              -          (196)
                            ------------   ------------   ------------      ------------   ------------   ------------
  Net return before                                                                                                   
  finance                                                                                                             
  costs and taxation               9,134         13,038         22,172             8,757         32,637         41,394
  Interest payable                     -              -              -              (41)           (69)          (110)
  and similar charges                                                                                                 
                            ------------   ------------   ------------      ------------   ------------   ------------
  Return on ordinary               9,134         13,038         22,172             8,716         32,568         41,284
  activities                                                                                                          
  before tax                                                                                                          
  Tax on ordinary                      -              -              -                 -              -              -
  activities                                                                                                          
                            ------------   ------------   ------------      ------------   ------------   ------------
  Return                                                                                                              
  attributable to                                                                                                     
  equity shareholders              9,134         13,038         22,172             8,716         32,568         41,284
  Dividends in                   (7,610)              -        (7,610)           (7,202)              -        (7,202)
  respect of equity                                                                                                   
  shares                                                                                                              
                            ------------   ------------   ------------      ------------   ------------   ------------
  Transfer to                      1,524         13,038         14,562             1,514         32,568         34,082
  reserves                                                                                                            
                                 =======        =======        =======           =======        =======        =======
  Returns per                                                                                                         
  Ordinary Share                                                                                                      
  Basic                           10.93p         15.61p         26.54p            10.48p         39.17p         49.65p
  Diluted                         10.75p         15.34p         26.09p            10.25p         38.31p         48.56p
  Dividends per                    9.10p              -          9.10p             8.65p              -          8.65p
  Ordinary Share  

                                                                                                    
NOTES

The calculations of revenue return per Ordinary Share are based on net revenue of £9,134,000 (2000 - £8,716,000) and
on Ordinary Shares numbering 83,537,525 (2000 - 83,135,270) in the case of basic returns and 84,989,235 (2000 -
85,016,516) in the case of diluted returns.

The calculations of capital return per Ordinary Share are based on net capital gains of £13,038,000 (2000 -
£32,568,000) and on Ordinary Shares numbering 83,537,525 (2000 - 83,135,270) in the case of basic returns and
84,989,235 (2000 - 85,016,516) in the case of diluted returns.

* The revenue column of this statement is the profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations.
No operations were acquired or discontinued in the period.

SUMMARY BALANCE SHEET

As at 31 December 2001
(unaudited) 
 

                                                                                                          
                                                                                   31-Dec           31-Dec
                                                                                     2001             2000
                                                                                    £'000            £'000
              Securities officially listed on the London Stock Exchange           305,074          286,067
                                                                           --------------   --------------
              Debtors                                                               1,094            5,430
              Cash at bank                                                         14,210           15,074
              Creditors                                                           (5,116)          (5,651)
                                                                           --------------   --------------
              Net current assets                                                   10,188           14,853
                                                                           --------------   --------------
              Total assets less liabilities                                       315,262          300,920
                                                                                 ========         ========
              Capital and reserves: equity interests                                                      
              Called up share capital (Ordinary Shares)                               836              833
              Reserves:                                                                                   
              Share premium account                                                   868              500
              Special reserve                                                     133,525          133,525
              Capital reserve - realised                                          137,455          121,672
              Capital reserve - unrealised                                         32,641           35,977
              Revenue reserve                                                       9,937            8,413
                                                                           --------------   --------------
                                                                                  315,262          300,920
                                                                                 ========         ========
              Net Asset Values per Ordinary Share                                                         
              Basic                                                                377.0p           361.4p
              Fully diluted                                                        371.6p           352.7p
              Diluted - FRS 14                                                     371.8p           353.5p
NOTES

As at 31 December 2001, the Company had 83,630,941 Ordinary Shares (2000 - 83,260,325) and 1,659,293 Warrants (2000 -
2,878,897) in issue.

On 2 April 2001, as a result of certain holders exercising the subscription rights of their Warrants, 370,616
Ordinary Shares were issued at 100p per share.

During the year to 31 December 2001, the Company bought in 848,988 Warrants for cancellation at a total cost of
£2,034,000. No Ordinary Shares were bought in during the year.

SUMMARY CASH FLOW STATEMENT

For the Year ended 31 December 2001
(unaudited) 
 

                                                                                                                      
                                                                 12 months to                        12 months to
                                                              31 December 2001                    31 December 2000
                                                            £'000            £'000              £'000            £'000
  Net cash inflow from operating activities                                  7,436                               7,014
  Returns on investment and servicing of                                                                              
  finance                                                                                                             
  Interest paid                                                 -                               (182)                 
                                                   --------------                      --------------                 
  Net cash outflow from returns on investment                                                                         
  and servicing of finance                                                       -                               (182)
  Capital expenditure and financial investment                                                                        
  Payments to acquire investments                       (119,098)                           (117,834)                 
  Receipts from sales of investments                      119,841                             146,283                 
                                                   --------------                      --------------                 
  Net cash inflow from capital expenditure and                                                                        
  financial investment                                                         743                              28,449
                                                                    --------------                      --------------
                                                                             8,179                              35,281
  Equity dividends paid                                                    (7,380)                             (6,429)
                                                                    --------------                      --------------
                                                                               799                              28,852
  Financing                                                                                                           
  Issue of Ordinary Shares                                    371                                 503                 
  Warrants purchased for cancellation                     (2,034)                                (76)                 
                                                   --------------                      --------------                 
  Net cash (outflow)/inflow from financing                                 (1,663)                                 427
                                                                    --------------                      --------------
  (Decrease)/increase in cash                                                (864)                              29,279
                                                                          ========                            ========
NOTES

1. 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 to 31 December 2000, 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.

2. The Annual Report is expected to be posted to shareholders on 25 January 2002. Members of the public may obtain
copies from Aberforth Partners, 14 Melville Street, Edinburgh EH3 7NS or from its website at www.aberforth.co.uk.

CONTACT: John Evans ' Aberforth Partners ' 0131 220 0733

Aberforth Partners, Secretaries - 22 January 2002

ANNOUNCEMENT ENDS 
 



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