Interim Management Statement

    RNS Number : 8820J
  Osprey Smaller Cos Income Fund Ltd
  10 December 2008
   


 OSPREY SMALLER COMPANIES INCOME FUND LIMITED
 INTERIM MANAGEMENT STATEMENT
 FOR THE PERIOD ENDED 30 NOVEMBER 2008

 This unaudited interim management statement has been prepared solely to provide additional information to shareholders as a body
 to meet the relevant requirements of the UK Listing Authority's Disclosure and Transparency Rules and should not be relied upon by
 any other party or for any other purpose.


 This interim management statement may contain forward-looking statements, and these statements:
 * have been made by the Directors in good faith based on the information available to them up to the time of their approval of
 this report; and
 * should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying
 such forward-looking information.

 This unaudited interim management statement relates to the period from 1 September 2008 to 30 November 2008 and contains
 information that covers that period, unless otherwise stated.

 Investment objective
 The principal investment objective of Osprey Smaller Companies Income Fund Limited (the "Company") is to provide an attractive
 level of income to shareholders with potential for both income and capital growth by investing primarily in companies traded on
 the London Stock Exchange or AIM with market capitalisations of less than £1 billion at the point of initial investment.


 Investment approach
 The Company's portfolio is invested in the securities of smaller United Kingdom companies. The Company aims to provide both income
 and capital growth from a portfolio that consists of approximately 30 companies. 


 Although the Company's investment objective is to invest in smaller company securities it may, from time to time, hold a
 proportion of its assets in gilts or other fixed interest securities or cash deposits if the Board and the Investment Adviser
 consider it appropriate to do so.

 Financial performance - capital gain statistics
                                 30                                          31                                          % change
                                 November                                    August2008
                                 2008
 Net asset value[1]              103.76p                                     141.57p                                     -26.71%
 Share price[2]                  68.50p                                      97.50p                                      -29.74%
 Discount                        33.98%                                      31.13%                                      +9.16%
 Hoare Govett Smaller Companies  2,211.47                                    3,407.35                                    -35.10%
 Index
 FTSE Small Cap Index            1,506.58                                    2,485.00                                    -39.37%

 Financial performance - total return statistics
                                 30                                          31                                          % change
                                 November                                    August 2008
                                 2008
 Net asset value[3]              142.01p                                     179.82p                                     -21.03%
 Share price[4]                  106.75p                                     135.75p                                     -21.36%
 Discount                        24.83%                                      24.51%                                      +1.31%
 Hoare Govett Smaller Companies  4,586.01                                    6,978.80                                    -34.29%
 Index
 FTSE Small Cap Index            1,764.99                                    2,871.45                                    -38.53%

 [1] Investments valued at bid prices.
 [2] The Company's share price, as referred to above, is the mid price. The share price had a spread of 9.00p at 30 November 2008.
 [3] Investments valued at bid prices with dividends paid since launch added back.
 [4] The Company's share price, as referred to above, is the mid price with dividends paid since launch added back. The share price
 had a spread of 9.00p at 30 November 2008.

 Commentary
 The continuing difficulties in the world equity markets have been reflected in the performance of the Company, with the net asset
 value decreasing by 26.71% to 103.76p[1]. The Company did however outperform its two closest benchmarks, the FTSE Small Cap Index,
 which fell by 39.37%, and the Hoare Govett Smaller Companies Index, which fell by 35.10%. The share price fell 29.74% to 68.50p at
 30 November 2008 and the discount increased from the year end by 9.16% to 33.98%.


 November showed some signs of stability relative to October which was extremely welcome.  The Company continued its strategy of
 slowly investing cash back into the market into FTSE 250 stocks and attempting to reduce our holdings in non-FTSE 250 stocks.  Our
 optimistic hope is that the market may well range trade for a number of months now between levels on the FTSE 100 of 3,800 and
 4,400.  We believe that the larger companies by market capitalisation will outperform smaller companies and this is why we are
 focusing on FTSE 250 exposure rather than Smaller Caps.
 We maintain our hope that the forthcoming recession will be similar in stature to the early 1980s and early 1990s recessions and,
 if so, very good value is available in multinational businesses that may show some resilience to an economic slowdown, whilst
 offering an attractive dividend yield/valuation

 Portfolio
 Top ten holdings as at 30 November 2008

 Stock name                      Sector                                                            % of portfolio
 i Shares FTSE 100               Equity investment instruments                                     9.78
 Consort Medical                 Health care equipment & services                                  5.94
 BT Group                        Fixed line telecommunications                                     5.86
 De La Rue                       Support services                                                  3.63
 Aberdeen Asset Management       General financial                                                 3.34
 Weir Group                      Industrial engineering                                            2.99
 Abacus Group                    Electronic and electrical equipment                               2.51
 WSP Group                       Support services                                                  2.23
 Acal                            Electronic and electrical services                                2.12
 Mouchel Group                   Support services                                                  2.11

 Material events
 The annual report and financial statements for the year ended 31 August 2008 was published on 5 November 2008.

 During November 2008, as a result of the investment market downturn and following negotiations with Bank of Scotland, the bank
 loan covenants were amended until 11 May 2009, stating that 80% of the Permitted Investments must have a market capitalisation of
 £100,000,000 or greater.

 On 10 December 2008, an Ordinary resolution was passed at the Annual General Meeting appointing Grant Thornton Limited as Auditors
 of the Company.

 There were no other material events to report during the period, or up to 10 December 2008, being the date of publication of this
 interim management statement, other than those material transactions described below.

 Material transactions
 During October 2008, the Company voluntarily repaid £3,000,000 of the loan facility with Bank of Scotland. Following this partial
 repayment, £7,500,000 of the bank loan remains outstanding.

 On 21 October 2008 the Company announced that they would buy back 2,707,388 Ordinary Shares for £2,563,960. Following the purchase
 the Company cancelled these shares together with the 500,000 shares already held as Treasury Shares.

 In order to exert a positive influence over the discount of the share price to the net asset value, on 5 December 2008, the Board
 purchased 100,000 Ordinary Shares, to be held as Treasury Shares, for 64p per share. On 9 December 2008, the Board purchased a
 further 30,000 Ordinary Shares to be held as Treasury Shares, for 63p per share. Following the purchases, the issued share capital
 of the Company comprised 10,699,612 Ordinary Shares of 10p each.

 R Prosser
 Chairman
 10 December 2008


 Enquiries to:
 Elysium Fund Management Limited                       Midas Investment Management Limited
 2nd Floor                                             2nd Floor 
 No. 1 Le Truchot                                      Arthur House
 St Peter Port                                         Chorlton Street
 Guernsey                                              Manchester
 GY1 3JX                                               M1 3FH


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