The
information contained in this release was correct as at
30 April
2024.
Information on
the Company’s up to date net asset values can be found on the
London Stock Exchange Website at
https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
BLACKROCK SMALLER COMPANIES TRUST PLC
(LEI:549300MS535KC2WH4082)
All
information is at
30 April
2024 and
unaudited.
Performance
at month end is calculated on a Total Return basis based on NAV per
share with debt at fair value
|
One
month
%
|
Three
months
%
|
One
year
%
|
Three
years
%
|
Five
years
%
|
Net
asset value
|
2.5
|
2.9
|
5.4
|
-16.7
|
15.3
|
Share
price
|
6.0
|
5.5
|
9.1
|
-20.6
|
9.1
|
Benchmark*
|
1.9
|
2.8
|
2.0
|
-16.0
|
12.5
|
Sources:
BlackRock and
Deutsche Numis
*With
effect from 15 January 2024 the Numis
Smaller Companies plus AIM (excluding Investment Companies) Index
changed to the Deutsche Numis Smaller Companies plus AIM (excluding
Investment Companies).
At month
end
Net
asset value Capital only (debt at par value):
|
1,488.67p
|
Net
asset value Capital only (debt at fair value):
|
1,543.45p
|
Net
asset value incl. Income (debt at par value)1:
|
1,525.95p
|
Net
asset value incl. Income (debt at fair value)1:
|
1,580.73p
|
Share
price:
|
1,410.00p
|
Discount to Cum
Income NAV (debt at par value):
|
7.6%
|
Discount to Cum
Income NAV (debt at fair value):
|
10.8%
|
Net
yield2:
|
2.9%
|
Gross
assets3:
|
£788.2m
|
Gearing range as
a % of net assets:
|
0-15%
|
Net
gearing including income (debt at par):
|
11.5%
|
Ongoing charges
ratio (actual)4:
|
0.7%
|
Ordinary shares
in issue5:
|
47,099,792
|
|
|
-
Includes net revenue of
37.28p
-
Yield calculations are based on
dividends announced in the last 12 months as at the date of release
of this announcement and comprise the first interim dividend of
15.00 pence per share (announced on
26 October 2023, ex-dividend on
2 November 2023, and paid on
4 December 2023) and the final
dividend of 25.50 pence per share
(announced on 05 May 2023, ex-date on
18 May 2023, and paid 27 June 2023).
-
Includes current year
revenue.
-
The Company’s ongoing charges are
calculated as a percentage of average daily net assets and using
the management fee and all other operating expenses excluding
finance costs, direct transaction costs, custody transaction
charges, VAT recovered, taxation and certain non-recurring items
for year ended 28 February
2023.
-
Excludes 2,893,731 ordinary
shares held in treasury.
Sector Weightings
|
% of portfolio
|
Industrials
|
32.2
|
Financials
|
17.5
|
Consumer Discretionary
|
16.7
|
Basic Materials
|
11.3
|
Technology
|
6.4
|
Consumer Staples
|
3.4
|
Health Care
|
3.1
|
Real Estate
|
2.7
|
Telecommunications
|
2.5
|
Energy
|
2.3
|
Communication
Services
|
1.9
|
|
-----
|
Total
|
100.0
|
|
=====
|
|
|
|
Country Weightings
|
% of portfolio
|
United
Kingdom
|
98.1
|
United
States
|
1.4
|
Ireland
|
0.5
|
|
-----
|
Total
|
100.0
|
|
=====
|
|
|
|
|
|
Ten Largest Equity Investments
Company
|
% of portfolio
|
Gamma
Communications
|
2.5
|
4imprint
Group
|
2.5
|
Hill
& Smith
|
2.4
|
Chemring
Group
|
2.3
|
Breedon
|
2.3
|
Workspace
Group
|
2.0
|
Bloomsbury
Publishing
|
2.0
|
IntegraFin
|
1.9
|
TT
Electronics
|
1.7
|
Oxford
Instruments
|
1.7
|
|
|
|
Commenting
on the markets, Roland Arnold,
representing the Investment Manager noted:
During April the
Company’s NAV per share retuned 2.5% to 1,580.73p on a total return
basis, outperforming our benchmark index which returned 1.9%. For
comparison the large cap FTSE 100 Index outperformed small and
mid-caps, returning 2.7%.1
UK
markets showed resilience as signs of easing inflation,
expectations of early interest rate cuts by the Bank of
England and attractive prices have
helped boost investor interest in UK equities. Blue chip companies
in particularly had strong gains. The FTSE 100 Index rose steadily
over the month, before reaching a record high of 8,147 points,
thanks to a substantial exposure to mining and energy sectors which
benefitted from the strength in oil, copper, and precious metals.
The healthcare and consumer staples sectors, which are significant
dollar earners, also contributed to the UK market's relative
performance, aided by sterling's weakness against the US currency.
Although not quite to the same extent, we did witness performance
trickling down to UK small and mid-cap stocks, a healthy signal of
market breadth.
The
pace of M&A (mergers and acquisitions) activity continued
through April, with the portfolio benefiting via our holding in UK
self-storage provider, Lok’nStore. The company agreed to the £378mn
takeover bid by the Belgian Listed rival Shurgard, a circa 30%
premium to the share price on the day. This was yet another example
of UK listed business trading far below the price that strategic
buyers are willing to pay. TT Electronics contributed positively to
performance as the share price reacted to the new CEO Peter France’s plans to improve performance and
create long term value for stakeholders. Shares in XPS Pensions
Group performed well after the company released its pre-close
trading update, stating that full year results will be ahead of
previously upgraded guidance.
YouGov was the
largest detractor during the month. The company reported in-line
results.
However, the
underlying mix has proved to be worrying, with a marked slowdown in
its core data products business and a larger than expected
weighting to H2 to meet their full year guidance. Having recently
acquired the Consumer Panel Services business from Gfk, YouGov has
moved from net cash to net debt, and with the slowdown in its core
business, we have moderated the holding slightly. Gamma
Communications was another detractor as the share price drifted
downward during the month on no fundamental news. Auction
Technology Group (ATG) also detracted from performance after
releasing financial results which showed lower than expected profit
before tax causing a selloff in the shares. We continue to believe
there are signs ATG is through the worst of the post COVID trading
disruption, and that the shares offer considerable value once end
markets normalise.
Since
the end of 2021 rising interest rates have been weighing on the
valuations of long-duration, higher growth shares in the stock
market. As a result, UK small and mid-caps have continued to
underperform large caps and we are now in the deepest and longest
cycle of underperformance in recent history; worse than the Global
Financial Crisis, COVID, Brexit, Tech sell-off or Black Monday. The
fourth quarter of 2023 saw markets reflect the expectation of rate
cuts in 2024 in response to easing inflation data. However, as we
have entered 2024, the backup in bond yields has led to a volatile
start to the year in equity markets.
Against this
backdrop, the question remains, what are the catalysts for this
trend to change? Unfortunately, there is no simple answer. While
there are many headwinds to the UK SMID market; economic
uncertainty, political uncertainty, the structural flow issues in
the UK market, the risk of more pervasive inflation, to name a few,
we remind ourselves and take comfort in the fact that many of our
holdings continue to deliver against their objectives. Furthermore,
inflation and mortgage rates are falling, business confidence is
improving, and consumers are experiencing real wage growth for the
first time in years. At some point, we are confident that investors
will decide the balance of probabilities is in favour of the
opportunities, that the risks are more than adequately priced in,
and that an increased allocation to UK small and mid-caps is
warranted.
As
ever, we remain focused on the micro, industry level change and
stock specific analysis and the opportunities we are seeing today
in our universe are as exciting as ever. Historically, periods of
heightened volatility have been followed by strong returns for the
strategy and presented excellent investment
opportunities.
We
thank shareholders for your ongoing support.
1Source: BlackRock
as at 30 April 2024
28 May 2024
ENDS
Latest
information is available by typing www.blackrock.com/uk/brsc on the
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on
Topic 3 (ICV terminal).
Neither the
contents of the Manager’s website nor the contents of any website
accessible from hyperlinks on the Manager’s website (or any other
website) is incorporated into, or forms part of, this
announcement.