TIDMBRSC
BlackRock Smaller Companies Trust plc
PERFORMANCE RECORD
FINANCIAL HIGHLIGHTS
Six months ended Six months ended Year ended
31 August 2015 31 August 2014 28 February 2015
Performance
Net asset value per share
(1,2) 1,039.98p 924.15p 954.34p
Movement in net asset value per share
(1,2) +9.0% -6.2% -3.2%
Net asset value per share (capital only)
(1) 1,026.41p 914.71p 942.91p
Movement in net asset value per share
(capital only) (1) +8.9% -6.2% -3.3%
Movement in Numis Smaller Companies plus AIM
(excluding Investment Companies) Index (2)
+2.4% -7.5% -8.5%
Share price 925.50p 800.50p 812.00p
Movement in share price +14.0% -11.8% -10.6%
Discount (3) 10.1% 12.7% 14.2%
-------- -------- --------
Revenue return per share 13.57p 9.44p 16.93p
Interim dividend per share 7.00p 5.50p 5.50p
Final dividend per share 9.00p
Change in interim dividend +27.3% +19.6% +19.6%
Change in total dividends +20.8%
-------- -------- --------
Ongoing charges ratio (4) 0.7% 0.7% 0.7%
Ongoing charges ratio (including
performance fees) 1.0% 1.0% 1.0%
Gearing as a % of net assets 5.6% 7.8% 8.6%
===== ===== =====
(1) Based on NAV with debenture at par value.
(2) Excludes income reinvested.
(3) Based on NAV with debt at fair value (see note 4 for details).
(4) Ongoing charges ratio calculated as a percentage of average shareholders'
funds and using expenses, excluding finance costs, performance fees and
taxation, in accordance with AIC guidelines.
Sources: BlackRock and Datastream.
CHAIRMAN'S STATEMENT
for the six months to 31 August 2015
Performance
During the six months ended 31 August 2015 the Company's net asset value (NAV)
increased by 9.0%1 to 1039.98p per share, outperforming its benchmark (the
Numis Smaller Companies plus AIM (excluding Investment Companies) Index) by
6.6%1. The Company's share price increased by 14.0%1 to 925.50p per share over
the same period.
The six months to 31 August 2015 were punctuated by periods of market
volatility from April when equity markets were un-nerved by fears of a possible
Greek exit from the Eurozone and later in the period by concerns over a
slowdown in economic growth in China and other emerging markets and possible
interest rate increases in the US and UK.
UK small and midcap equities have performed well over the period under review
despite the challenging macroeconomic background and changing investor
sentiment towards the sector during periods of high volatility.
The FTSE 100 Index fell by 10.1%1 over the period, the FTSE 250 Index
(excluding Investment Companies) fell by 0.5%1 and the FTSE AIM Index by
2.8%1. The Company's benchmark (the Numis Smaller Companies plus AIM
(excluding Investment Companies) Index) rose by 2.4%1.
3 years 5 years 10 years
Performance to 31 August 2015 % % %
Net asset value per share 75.5 139.8 246.1
Benchmark* 36.8 56.9 45.4
Net asset value per share (with income 82.7 156.9 294.3
reinvested)
Benchmark* (with income reinvested) 47.8 77.5 86.3
Share price (with income reinvested) 94.9 187.1 339.2
* Benchmark - Numis Smaller Companies plus AIM (excluding Investment
Companies) Index from September 2007; FTSE Small Cap Index (excluding
Investment Companies) prior to that date.
1 All performance figures are in sterling terms without income reinvested.
EARNINGS AND DIVIDENDS
The Company's revenue return per share for the six months ended 31 August 2015
amounted to 13.57p per share compared with 9.44p for the corresponding period
in the previous year, an increase of 44%. After adjusting for the impact of
special dividends received, which amounted to 2.1 pence per share (2014: 0.8
pence per share), regular dividend income from portfolio companies increased by
28% over the same period.
The Board is pleased to declare an interim dividend of 7.00p per share (2014:
5.50p per share) representing an increase of 27% over the previous interim
dividend. The interim dividend will be paid on 30 November 2015 to shareholders
on the Company's register on 6 November 2015.
GEARING
The Company has in place a range of borrowing options in order to maximise
flexibility and to reduce dependency on short term borrowings. In addition to
the Company's GBP15 million debenture, the Company has a GBP35 million three year
revolving loan facility with Scotia Bank (Ireland) Limited and an uncommitted
overdraft facility of GBP15 million with Bank of New York.
It is the Board's intention that gearing will not exceed 15% of the net assets
of the Company at the time of the drawdown of the relevant borrowings. Under
normal operating conditions it is envisaged that gearing will be within a range
of 0%-15% of net assets.
Gearing levels and sources of funding are reviewed regularly and the Board
continues to believe that moderate gearing is in the long term interests of
shareholders; for the period under review, gearing contributed to performance
by approximately 0.4%. At the period end, the Company's gearing was 5.6% of net
assets.
DISCOUNT
During the period, the Company's shares traded at an average discount to NAV
(with debt at fair value) of 12.1% and this stood at 10.1% at 31 August
2015. The Company's shares traded at a discount of 11.8% as at close of
business on 22 October 2015.
The Board recognises that it is in the long term interests of shareholders that
shares do not trade at a significant discount to their prevailing net asset
value, and believes that the best way of addressing the discount over the long
term is to create demand for the shares in the secondary market. To this
end, your Board is encouraging the Investment Manager to devote considerable
effort to broadening the awareness of the Company's attractions, particularly
to wealth managers and to the wider retail shareholder market.
OUTLOOK
With the uncertainty surrounding the outcome of the UK General Election now
removed, investors now have a clearer idea of the likely domestic political and
economic policy landscape over the next couple of years. For the first time in
many years the UK working population is also now experiencing real earnings
growth, which should support domestic consumption.
Abroad, the slowdown in China's economy and resulting decline in demand for
commodities has had a knock-on impact on many of the emerging markets, and has
also had a powerful disinflationary effect, allowing central banks to sustain
low interest rates for much longer than previously expected.
In the context of equity valuations generally, and following strong relative
performance, UK smaller companies are no longer conspicuously cheap compared to
their larger counterparts. However, we are encouraged by the current trading in
the majority of our portfolio companies and continue to focus on enterprises
which show good earnings growth, positive cash flow and balance sheet strength.
Nicholas Fry
Chairman
26 October 2015
INVESTMENT MANAGER'S REPORT
for the six months ended 31 August 2015
MARET REVIEW AND OVERALL INVESTMENT PERFORMANCE
This has been a reasonable six months for UK small and midcap equities, against
a very mixed macroeconomic background. At the start of the period we saw
continued nervousness over events in Greece, and by the end of August attention
had moved to China and its slowing GDP growth.
Over the six months to 31 August 2015 the Company's NAV per share rose by 9.0%
to 1039.98p and the benchmark rose by 2.4%, both significantly outperforming
the FTSE100 Index, which fell by 10.1% (all in sterling terms without income
reinvested). The Company's revenue return per share for the six months ended 31
August 2015 of 13.57p per share represented an increase of 44% compared with
9.44p for the corresponding six period in the previous year. This significant
growth in revenue was driven by an increase in underlying regular portfolio
dividends, which were up by 28%, and also by special dividends of 2.1 pence per
share (compared with special dividends of 0.8 pence per share for the same
period in 2014).
PERFORMANCE REVIEW
Outperformance was mainly due to good stockpicking, although sector allocation
and gearing also contributed positively. The largest positive contributors to
stock selection during the period were our holdings in CVS Group, Betfair
(MORE TO FOLLOW) Dow Jones Newswires
October 26, 2015 08:20 ET (12:20 GMT)
Group, Fevertree Drinks and Topps Tiles.
CVS Group, the UK's leading provider of integrated veterinary services, has
continued to see strong trading with total revenues up by 17.0%, like-for-like
revenues up by 6.8% and earnings per share up by 30% in its year ended 30 June
2015. It also continues to consolidate market share, acquiring 29 surgeries
during the period. Betfair Group announced a good trading update, with revenue
for the period to 31 July 2015 up by 15% despite strong comparatives. In
addition the company announced a merger with Paddy Power, which was well
received by markets.
Shares in Fevertree Drinks continued to be in demand as the company delivered
on high growth expectations; interim revenues for the six months to 30 June
2015 were up by 62% and EBITDA was up by 68% with all areas performing
strongly. Fevertree Drinks' share price rose by 105% during the period.
Topps Tiles announced interim results for the six months to 28 March 2015
showing like-for-like revenue growth of 5.3% and earnings per share growth of
14%. Trading remains good and management were in confident mood when we met
with them.
The largest detractor from relative outperformance during the period was
Northbridge Industrial Services. The company is being impacted by the decline
in the oil price which in turn is affecting their loadbank rental operations in
Singapore and Dubai, and their oil tools business in Australia. Forecasts have
been substantially reduced.
Sector allocation benefited most from our overweight position in housebuilders
and from our underweight position in oil and gas producers.
ACTIVITY
During the period the Company benefited from several bids for our portfolio
holdings, including Quintain Estates, HellermannTyton, Anite and Alent. Given
the volatile market conditions we sold our holdings in these companies.
The main additions to the portfolio were in SSP Group, JD Sports, Eurocell and
Shawbrook. SSP Group is a leading operator of food and beverage outlets in
travel outlets worldwide. The holding was via a placing during which SSP's
private equity backers sold their remaining stake. SSP Group is a significant
international business which reported interim revenue of GBP859 million; most
recently like-for-like revenue growth for the six months to 31 March 2015 was
3.2%. JD Sports is a leading retailer and distributor of branded sportswear and
fashionwear. The group now has over 800 stores across six countries. Growth has
been strong and the company recently announced that it expects current year
profits of approximately GBP110 million, about 10% ahead of prior expectations.
Eurocell and Shawbrook were both added via IPOs. Eurocell is a leading
vertically integrated manufacturer and merchant of PVC profiles for doors,
windows and roofline products in the UK. Shawbrook is a niche banking business
which is growing well. We were impressed by the management team
in both companies.
PORTFOLIO POSITIONING
We feel most positive about the growth prospects for the UK and US economies.
Within the UK our focus is on the UK consumer who has benefitted from improving
employment levels, growing wages, lower energy costs, higher house prices and
rising confidence. Our exposure has been to housing related stocks including
the housebuilder Redrow, construction materials companies such as Marshalls,
and housing improvement companies like Topps Tiles and Headlam Group. We remain
positive about this theme and the companies we hold.
Exposure to the US economy is through companies including 4imprint Group and
Hill & Smith, although various other holdings also provide good US exposure. We
expect economic growth in continental Europe to gradually increase, although in
the current market and political climate signs of this happening are patchy.
Holdings such as Hansteen, Lavendon and Acal all give good exposure to
continental Europe and are attractively valued.
We remain cautious about developing markets and companies exposed to these
economies, and where we do have exposure, it is to more consumer orientated
companies, such as Hutchison China Meditech.
We have remained well diversified with a clear emphasis on companies that are
trading well, seeing good share price momentum, are attractively valued and are
generally small relative to our benchmark. Our aim is to own a portfolio of
companies which can grow into much larger businesses ideally without having to
return to shareholders for more capital.
Gearing has been in the range 5% to 10% of net assets during the period,
finishing at the lower end of this range as we sold holdings which had
attracted bids in the market prior to the period end.
OUTLOOK
The economic growth slowdown in China, and the steps taken by the Chinese
authorities to stimulate their economy, have unsettled global stockmarkets.
Markets also remain worried by the likelihood that interest rates could rise in
the US and UK, and by the volatility in the oil price. At the company level we
have seen generally good results from our portfolio, and outlooks which suggest
that this is likely to continue. We believe that it is safest to stick with our
predominant exposure to developed markets demand, especially from the consumer
sector.
Mike Prentis
BlackRock Investment Management (UK) Limited
26 October 2015
INVESTMENT EXPOSURE
INVESTMENT SIZE AS AT 31 AUGUST 2015
Number of investments Market value of investment as %
of portfolio
GBP0m to GBP1m 29 3.3
GBP1m to GBP2m 53 14.6
GBP2m to GBP3m 33 15.4
GBP3m to GBP4m 20 13.4
GBP4m to GBP5m 12 10.7
GBP5m to GBP6m 11 11.4
GBP6m to GBP7m 8 9.9
GBP7m to GBP8m 4 5.8
GBP8m to GBP9m 5 8.1
GBP9m to GBP10m 2 3.5
GBP10m to GBP11m 2 3.9
Source: BlackRock.
MARKET CAPITALISATION OF OUR PORTFOLIO COMPANIES AS AT 31 AUGUST 2015
% Market capitalisation of
investment of portfolio
GBP0m to GBP100m 6.7
GBP100m to GBP400m 41.0
GBP400m to GBP1bn 27.3
GBP1bn+ 25.0
Source: BlackRock.
TWENTY LARGEST INVESTMENTS
as at 31 August 2015
Market
value % of total
Company GBP'000 portfolio Business activity
CVS Group 10,588 2.0 Operation of veterinary surgeries
4imprint Group 10,059 1.9 Supply of promotional merchandise in the US
Savills 9,227 1.8 Provision of property services
Lookers 8,996 1.7 Supply of cars and after market parts and
services
Topps Tiles 8,972 1.7 Sourcing and retail of ceramic tiles
Workspace Group 8,799 1.7 Supply of flexible workspace to businesses in
London
Rathbone Brothers 8,292 1.6 Private client fund management
Ted Baker 8,174 1.6 Design and sale of fashion clothing
Headlam Group 7,999 1.5 Distribution of carpets and other floor
coverings
Polar Capital 7,921 1.5 Investment management
Holdings
Hutchison China 7,912 1.5 Development and supply of traditional Chinese
Meditech medicines to the Chinese market
Avon Rubber 7,481 1.4 Production of safety masks and dairy related
products
Marshalls 7,188 1.4 Manufacture and sale of concrete and stone
paving and related products
Northgate 6,919 1.3 Van rental
Cineworld 6,757 1.3 Operation of cinemas
Redrow 6,657 1.3 Housebuilding
Tyman 6,533 1.2 Manufacture and supply of window and door
components
Dechra 6,520 1.2 Development and supply of pharmaceutical and
Pharmaceuticals other products focused on the veterinary
market
Hill & Smith 6,493 1.2 Production of infrastructure products and
supply of galvanizing services
Grainger 6,306 1.2 Ownership and rental of residential property
--------- --------
Twenty largest 157,793 30.0
investments
---------- --------
Remaining investments 368,031 70.0
---------- --------
Total 525,824 100.0
====== ====
Details of the full portfolio are available on the Company's website at
(MORE TO FOLLOW) Dow Jones Newswires
October 26, 2015 08:20 ET (12:20 GMT)
blackrock.co.uk/brsc
DISTRIBUTION OF INVESTMENTS
as at 31 August 2015
ANALYSIS OF PORTFOLIO VALUE BY SECTOR
% of portfolio
Aerospace & Defence 3.3
Banks 1.6
Beverages 1.0
Chemicals 3.2
Construction & Materials 5.2
Electronic & Electrical Equipment 2.6
Equity Investment Instruments 0.2
Financial Services 7.3
Fixed Line Telecommunications 0.6
General Industrials 0.2
General Retailers 9.7
Health Care Equipment & Services 3.2
Household Goods & Home Construction 6.7
Industrial Engineering 3.5
Industrial Transportation 1.6
Leisure Goods 0.2
Media 5.7
Mining 3.3
Nonlife Insurance 0.6
Oil & Gas Producers 2.5
Personal Goods 1.6
Pharmaceuticals & Biotechnology 5.1
Real Estate Investment & Services 4.7
Real Estate Investment Trusts 3.9
Software & Computer Services 6.8
Support Services 9.8
Technology Hardware & Equipment 0.6
Travel & Leisure 5.3
Source: BlackRock.
INTERIM MANAGEMENT REPORT AND RESPONSIBILITY STATEMENT
The Chairman's Statement and the Investment Manager's Report give details of
the important events which have occurred during the period and their impact on
the financial statements.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks faced by the Company can be divided into various areas as
follows:
- Performance;
- Market;
- Income/dividend;
- Regulatory;
- Operational; and
- Financial.
The Board reported on the principal risks and uncertainties faced by the
Company in the Annual Report and Financial Statements for the year ended 28
February 2015. A detailed explanation can be found in the Strategic Report on
pages 8 and 9, and in note 18 on pages 51 to 56 of the Annual Report and
Financial Statements which is available on the website maintained by BlackRock,
at blackrock.co.uk/brsc.
In the view of the Board, there have not been any changes to the fundamental
nature of these risks since the previous report and these principal risks and
uncertainties are equally applicable to the remaining six months of the
financial year as they were to the six months under review.
GOING CONCERN
The Directors, having considered the nature and liquidity of the portfolio, the
Company's investment objectives and the Company's projected income and
expenditure, are satisfied that the Company has adequate resources to continue
in operational existence for the foreseeable future, and is financially sound.
For this reason, they continue to adopt the going concern basis in preparing
the financial statements. The Company is able to meet all of its liabilities
from its assets and income generated from these assets and the ongoing charges
(excluding performance fees, finance costs and taxation) are approximately 0.7%
of net assets. Ongoing charges with performance fees included were 1.0% of net
assets for the year ended 28 February 2015, and as the performance fee is
capped at 0.25% of total assets less current liabilities, ongoing charges
calculated on this basis are not likely to significantly exceed this going
forward.
RELATED PARTY DISCLOSURE AND TRANSACTIONS WITH THE AIFM AND INVESTMENT MANAGER
BlackRock Fund Managers Limited (BFM) was appointed as the Company's AIFM with
effect from 2 July 2014. BFM has (with the Company's consent) delegated certain
portfolio and risk management services, and other ancillary services, to
BlackRock Investment Management (UK) Limited (BIM (UK)). Both BFM and BIM (UK)
are regarded as related parties under the Listing Rules. Details of the
management and performance fees payable are set out in note 3 on page 21 and
note 9 on page 26. The related party transactions with the Directors are set
out in note 10.
DIRECTORS' RESPONSIBILITY STATEMENT
The Disclosure and Transparency Rules (DTR) of the UK Listing Authority require
the Directors to confirm their responsibilities in relation to the preparation
and publication of the Interim Management Report and Financial Statements.
The Directors confirm to the best of their knowledge that:
- the condensed set of financial statements contained within the half
yearly financial report has been prepared in accordance with applicable
Financial Reporting Council's Standard, FRS 104 'Interim Financial Reporting';
and
- the Interim Management Report together with the Chairman's Statement and
Investment Manager's Report, include a fair review of the information required
by 4.2.7R and 4.2.8R of the FCA's Disclosure and Transparency Rules.
This half yearly report has been reviewed by the Company's Auditor and their
report is set out later in this announcement.
The half yearly financial report was approved by the Board on 26 October 2015
and the above responsibility statement was signed on its behalf by the
Chairman.
Nicholas Fry
For and on behalf of the Board
26 October 2015
INCOME STATEMENT
for the six months ended 31 August 2015
Notes Revenue GBP Revenue GBP Revenue GBP Capital GBP Capital GBP Capital GBP Total GBP Total GBP'000 Total GBP
'000 '000 '000 '000 '000 '000 '000 Six months '000
Six months Six months Year Six months Six months Year Six months ended Year
ended ended ended ended ended ended ended 31.08.14 ended
31.08.15 31.08.14 28.02.15 31.08.15 31.08.14 28.02.15 31.08.15 (unaudited) 28.02.15
(unaudited) (unaudited) (audited) (unaudited) (unaudited) (audited) (unaudited) (audited)
Gains/
(losses) on
investments
held at
fair value
through
profit or 2 - - - 41,765 (27,624) (12,578) 41,765 (27,624) (12,578)
loss
Exchange
losses - - - (2) (2) - (2) (2) -
Income from
investments
held at
fair value
through
profit or 2 7,350 5,333 9,741 - 127 127 7,350 5,460 9,868
loss
Other
income 2 22 21 24 - - - 22 21 24
Investment
management
and
performance
fees 3 (345) (316) (620) (2,321) (2,189) (3,120) (2,666) (2,505) (3,740)
Other
operating
expenses (313) (290) (611) (11) (17) (26) (324) (307) (637)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net profit/
(loss)
before
finance
costs and 6,714 4,748 8,534 39,431 (29,705) (15,597) 46,145 (24,957) (7,063)
taxation
Finance
costs (205) (211) (413) (613) (633) (1,239) (818) (844) (1,652)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net profit/
(loss) on
ordinary
activities
before
taxation 6,509 4,537 8,121 38,818 (30,338) (16,836) 45,327 (25,801) (8,715)
Taxation on
ordinary
activities (12) (16) (16) - - - (12) (16) (16)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net profit/
(loss) on
ordinary
activities
after
taxation 6,497 4,521 8,105 38,818 (30,338) (16,836) 45,315 (25,817) (8,731)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Earnings/
(loss) per
ordinary
share 4 13.57p 9.44p 16.93p 81.07p (63.36p) (35.17p) 94.64p (53.92p) (18.24p)
======== ======== ======== ======== ======== ======== ======== ======== ========
The total column of this statement represents the Company's Profit and Loss
Account. The supplementary revenue and capital columns are both prepared under
guidance published by the Association of Investment Companies (AIC). All items
in the above statement derive from continuing operations and no operations were
acquired or discontinued during the period. All income is attributable to the
equity holders of BlackRock Smaller Companies Trust plc.
The Company does not have any other recognised gains or losses. The net profit/
(MORE TO FOLLOW) Dow Jones Newswires
October 26, 2015 08:20 ET (12:20 GMT)
(loss) for the period disclosed above represents the Company's total
comprehensive income.
There is no material difference between the profit/(loss) on ordinary
activities before taxation and the profit/(loss) for the financial periods
stated above and their historical equivalents.
STATEMENT OF CHANGES IN EQUITY
for the six months ended 31 August 2015
Called
up Share Capital
share premium redemption Capital Revenue
capital account reserve reserves reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
For the six months ended 31 August
2015 (unaudited)
At 28 February 2015 12,498 38,952 1,982 389,390 14,114 456,936
Total comprehensive income:
Profit for the period - - - 38,818 6,497 45,315
Transactions with owners, recorded
directly to equity:
Dividend paid(a) - - - - (4,309) (4,309)
-------- -------- -------- -------- -------- --------
At 31 August 2015 12,498 38,952 1,982 428,208 16,302 497,942
-------- -------- -------- -------- -------- --------
For the six months ended 31 August
2014 (unaudited)
At 28 February 2014 12,498 38,952 1,982 406,226 12,185 471,843
Total comprehensive income:
(Loss)/profit for the period - - - (30,338) 4,521 (25,817)
Transactions with owners, recorded
directly to equity:
Dividend paid(b) - - - - (3,543) (3,543)
-------- -------- -------- -------- -------- --------
At 31 August 2014 12,498 38,952 1,982 375,888 13,163 442,483
-------- -------- -------- -------- -------- --------
For the year ended 28 February 2015
(audited)
At 28 February 2014 12,498 38,952 1,982 406,226 12,185 471,843
Total comprehensive income:
(Loss)/profit for the year - - - (16,836) 8,105 (8,731)
Transactions with owners, recorded
directly to equity:
Dividends paid(c) - - - - (6,176) (6,176)
-------- -------- -------- -------- -------- --------
At 28 February 2015 12,498 38,952 1,982 389,390 14,114 456,936
====== ====== ====== ====== ====== ======
(a) Final dividend of 9.00p per share for the year ended 28 February 2015,
declared on 27 April 2015 and paid on 25 June 2015.
(b) Final dividend of 7.40p per share for the year ended 28 February 2014,
declared on 25 April 2014 and paid on 17 June 2014.
(c) Final dividend of 7.40p per share for the year ended 28 February 2014,
declared on 25 April 2014 and paid on 17 June 2014, and interim dividend of
5.50p per share for the six months ended 31 August 2014, declared on 24 October
2014 and paid on 3 December 2014.
BALANCE SHEET
as at 31 August 2015
31 August 2015 31 August 2014 28 February 2015
GBP'000 GBP'000 GBP'000
Notes (unaudited) (unaudited) (audited)
Fixed assets
Investments held at fair value
through profit or loss 8 525,824 477,214 496,332
-------- -------- --------
Current assets
Other receivables 629 886 2,607
Cash and cash equivalents 16,410 7,343 2,414
-------- -------- --------
17,039 8,229 5,021
-------- -------- --------
Current liabilities - amounts falling
due within one year (5,022) (3,075) (4,525)
Net current assets 12,017 5,154 496
-------- -------- --------
Total assets less current liabilities 537,841 482,368 496,828
Creditors - amounts falling due after
more than one year 6 (39,899) (39,885) (39,892)
-------- -------- --------
Net assets 497,942 442,483 456,936
======== ======== ========
Capital and reserves
Called up share capital 7 12,498 12,498 12,498
Share premium account 38,952 38,952 38,952
Capital redemption reserve 1,982 1,982 1,982
Capital reserves 428,208 375,888 389,390
Revenue reserve 16,302 13,163 14,114
-------- -------- --------
Total shareholders' funds 4 497,942 442,483 456,936
-------- -------- --------
Net asset value per ordinary share
(debenture at par value) 4 1,039.98p 924.15p 954.34p
======== ======== ========
Net asset value per ordinary share
(debenture at fair value) 4 1,029.43p 916.71p 946.91p
======== ======== ========
CASH FLOW STATEMENT
for the six months ended 31 August 2015
Six months Six months Year
ended ended ended
31 August 2015 31 August 2014 28 February 2015
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Operating activities
Net profit/(loss) before taxation 45,327 (25,801) (8,715)
Add back interest paid 818 844 1,652
(Gains)/losses on investments held at fair (41,765) 27,624 12,578
value
Net movement on foreign exchange 2 2 -
Sales of investments held at fair value
through profit or loss 104,458 105,411 204,076
Purchases of investments held at fair value
through profit or loss (89,652) (99,891) (203,832)
Increase in other receivables (328) (429) (132)
Increase/(decrease) in other payables 271 (226) 419
-------- -------- --------
Net cash inflow from operating activities
before interest and taxation 19,131 7,534 6,046
-------- -------- --------
Interest paid (812) (829) (1,639)
-------- -------- --------
Taxation on investment income included within
gross income (12) (4) (4)
-------- -------- --------
Net cash inflow from operating activities 18,307 6,701 4,403
======== ======== ========
Financing activities
Dividends paid (4,309) (3,543) (6,176)
-------- -------- --------
Net cash outflow from financing activities (4,309) (3,543) (6,176)
-------- -------- --------
Increase/(decrease) in cash and cash 13,998 3,158 (1,773)
equivalents
-------- -------- --------
Cash and cash equivalents at start of period 2,414 4,187 4,187
Effect of foreign exchange rate changes (2) (2) -
-------- -------- --------
(MORE TO FOLLOW) Dow Jones Newswires
October 26, 2015 08:20 ET (12:20 GMT)
Cash and cash equivalents at end of period 16,410 7,343 2,414
-------- -------- --------
Comprised of:
Cash and cash equivalents 16,410 7,343 2,414
-------- -------- --------
NOTES TO THE FINANCIAL STATEMENTS
for the six months ended 31 August 2015
1. Principal activity and basis of preparation
The Company conducts its business so as to qualify as an investment trust
company within the meaning of sub-sections 1158-1165 of the Corporation Tax Act
2010.
This is the first year that the Company has presented its results and financial
position under FRS 102, "The Financial Reporting Standard applicable in the UK
and Republic of Ireland" (FRS 102), which forms part of revised Generally
Accepted Accounting Practice (New UK GAAP) issued by the Financial Reporting
Council (FRC) in 2013. The last financial statements prepared under the
previous UK GAAP were for the year ended 28 February 2015.
The condensed set of financial statements has been prepared on a going concern
basis in accordance with FRS 102 and 'Interim Financial Reporting' (FRS 104)
issued by the FRC in March 2015 and the revised Statement of Recommended
Practice - "Financial Statements of Investment Trust Companies and Venture
Capital Trusts" (SORP) issued by the Association of Investment Companies (AIC)
in November 2014.
As a result of the first time adoption of New UK GAAP and the revised SORP,
comparative amounts and presentation formats have been amended where required.
The changes to accounting policies relate to the change in the presentation of
cash flows (see below) and fair value hierarchy of financial instruments (see
note 8) and there were no adjustments to the Company's income statement for the
financial year ended 28 February 2015 and the total equity as at 1 March 2014
and 28 February 2015 between UK GAAP as previously reported and FRS 102 as a
result of changes to accounting policies. There were no adjustments to the
Company's balance sheet at 1 March 2014 or 28 February 2015 on transition to
FRS 102.
The Company's cash flow statement reflects the presentation requirements of FRS
102, which are different to that prepared under FRS 1. In addition the cash
flow statement reconciles to cash and cash equivalents whereas under previous
UK GAAP the cash flow statement reconciled to cash. Cash and cash equivalents
are defined in FRS 102 as "cash on hand and demand deposits and short term
highly liquid investments that are readily convertible to known amounts of cash
and that are subject to an insignificant risk of changes in value" whereas cash
is defined in FRS 1 as "cash in hand and deposits repayable on demand with any
qualifying institution, less overdrafts from any qualifying institution
repayable on demand". The FRS 1 definition is more restrictive. The comparative
figures in the Cash Flow Statement have been restated with the increase/
(decrease) in cash and cash equivalents remaining unchanged.
The accounting policies applied for the condensed set of financial statements
with regard to measurement and classification are as set out in the Company's
Annual Report for the year ended 28 February 2015. This is reflective of the
Company's application of Sections 11 and 12 of FRS 102, in relation to
financial instruments, in full. References to prior, individual Financial
Reporting Statements (FRS) should now be taken to reference FRS 102.
2. Income
Six months Six months Year
ended ended ended
31 August 2015 31 August 2014 28 February 2015
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Investment Income:
UK listed dividends 5,666 4,592 8,005
UK listed special dividends 1,006 374 1,085
Property income dividends 167 49 153
Overseas listed dividends 511 318 498
-------- -------- --------
7,350 5,333 9,741
-------- -------- --------
Other income:
Deposit interest 5 1 4
Underwriting commission 17 20 20
-------- -------- --------
22 21 24
-------- -------- --------
Total 7,372 5,354 9,765
===== ===== =====
Gains/(losses) on investments held at fair value through profit or loss
Six months Six months Year
ended ended ended
31 August 2015 31 August 2014 28 February 2015
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Realised gains on sales 18,812 35,870 53,146
Movement in investment holding gains 22,953 (63,494) (65,724)
-------- -------- --------
Total 41,765 (27,624) (12,578)
===== ===== =====
There were no special dividends recognised in the capital column of the Income
Statement (six months ended 31 August 2014 and year ended 28 February 2015: GBP
127,000).
3. Investment management and performance fees
Six months Six months Six months Six months Six months Six months
ended ended ended ended ended ended Year Year Year
31 August 31 August 31 August 31 August 31 August 31 August ended ended ended
2015 2015 2015 2014 2014 2014 28 28 28
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) February February February
Revenue Capital Total Revenue Capital Total 2015 2015 2015
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 (audited) (audited) (audited)
Revenue Capital Total
GBP'000 GBP'000 GBP'000
Investment
management
fee 345 1,036 1,381 316 947 1,263 620 1,861 2,481
Performance
fee - 1,285 1,285 - 1,242 1,242 - 1,259 1,259
------ -------- -------- ------- -------- -------- ------ -------- --------
Total 345 2,321 2,666 316 2,189 2,505 620 3,120 3,740
=== ===== ===== ==== ===== ===== === ==== ====
The investment management fee is calculated based on 0.65% in respect of the
first GBP50 million of the Company's total assets less current liabilities,
reducing to 0.50% thereafter. A performance fee is payable at the rate of 10%
of the annualised excess performance over the benchmark, the Numis Smaller
Companies plus AIM (excluding Investment Companies) Index, in the two previous
financial years, applied to the average of the total assets less current
liabilities of the Company. The fee is payable annually in April and is capped
at 0.25% of the average of the total assets less current liabilities of the
Company.
Performance fees have been wholly allocated to capital reserves as the
performance has been predominantly generated through capital returns of the
investment portfolio. A performance fee of GBP1,285,000 has been accrued for the
six month period ended 31 August 2015 (six months ended 31 August 2014: GBP
1,242,000 and year ended 28 February 2015: GBP1,259,000). This is based on
outperformance of 5.7% against the benchmark resulting from an NAV return of
2.5% against the benchmark return of -3.2%. These percentage returns are the
annualised performance from 28 February 2014 to 29 February 2016 using actual
performance for the period 28 February 2014 to 31 August 2015 and assuming the
performance is in line with the benchmark for the six months ended 29 February
2016.
4. Earnings and net asset value per share
Revenue and capital returns per share are shown below and have been calculated
using the following:
(MORE TO FOLLOW) Dow Jones Newswires
October 26, 2015 08:20 ET (12:20 GMT)
Six months Six months Year
ended ended ended
31 August 2015 31 August 2014 28 February 2015
(unaudited) (unaudited) (audited)
Net revenue profit attributable to ordinary
shareholders (GBP'000) 6,497 4,521 8,105
-------- -------- --------
Net capital profit/(loss) attributable to
ordinary shareholders (GBP'000) 38,818 (30,338) (16,836)
-------- -------- --------
Total profit/(loss) (GBP'000) 45,315 (25,817) (8,731)
-------- -------- --------
Total shareholders' funds (GBP'000) 497,942 442,483 456,936
-------- -------- --------
The actual and weighted average number of
ordinary shares in issue at the end of each
period, on which the return and net asset
value per ordinary share was calculated was: 47,879,792 47,879,792 47,879,792
-------- -------- --------
Revenue earnings per share 13.57p 9.44p 16.93p
Capital earnings per share 81.07p (63.36p) (35.17p)
----------- ----------- -----------
Total earnings per share 94.64p (53.92p) (18.24p)
----------- ----------- -----------
Net asset value per share (debt at par value) 1,039.98p 924.15p 954.34p
------------ ----------- -----------
Net asset value per share (debt at fair value) 1,029.43p 916.71p 946.91p
======= ======= =======
Share price (mid-market) 925.50p 800.50p 812.00p
======= ======= =======
5. Dividend
In accordance with FRS 102 Section 32 "Events After the End of the Reporting
Period", the final dividend payable on ordinary shares is recognised as a
liability when approved by shareholders. Interim dividends are recognised only
when paid.
The Board has declared an interim dividend of 7.00p per share (2014: 5.50p per
share), payable on 30 November 2015 to shareholders on the register as at 6
November 2015; the ex dividend date is 5 November 2015. The total cost of this
dividend, based on 47,879,792 shares in issue at 26 October 2015, is GBP3,352,000
(2014: GBP2,633,000).
6. Creditors - amounts falling due after more than one year
Six Six
months months Year
ended ended ended
31 31 28
August August February
2015 2014 2015
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Revolving loan facility 25,000 25,000 25,000
7.75% debenture stock 2022 14,899 14,885 14,892
-------- -------- --------
Total 39,899 39,885 39,892
====== ====== =====
The fair value of the 7.75% debenture stock using the last available quoted
offer price from the London Stock Exchange as at 31 August 2015 was 133.00p per
debenture, a total value of GBP19,950,000.
The GBP15 million debenture stock was issued on 8 July 1997. Interest on the
stock is payable in equal half yearly instalments on 31 July and 31 January in
each year. The stock is secured by a first floating charge over the whole of
the assets of the Company and is redeemable at par on 31 July 2022.
The Company has in place a GBP35 million three year multi-currency revolving loan
facility with Scotia Bank (Ireland) Limited. At the period end, GBP25 million of
this facility had been utilised. Under the amended agreement the termination
date of this facility is the third anniversary of the effective date being June
2018. Interest on this facility is reset every three months and is currently
charged at the rate of 1.53156% (six months ended 31 August 2014: 1.70963%,
year ended 28 February 2015: 1.71338%).
7. Called up share capital
Total
shares
Ordinary Treasury in Nominal
shares shares issue value
(number) (number) (number) GBP'000
Allotted, called up and fully
paid share capital comprised:
Ordinary shares of 25 pence
each:
At 1 March 2015 47,879,792 2,113,731 49,993,523 12,498
-------- -------- -------- --------
At 31 August 2015 47,879,792 2,113,731 49,993,523 12,498
======== ======== ======== ========
8. Valuation of financial instruments
The Company's investments and derivative financial instruments, as disclosed in
the Company's Balance Sheet, are valued at fair value.
In accordance with FRS 102 the fair value as at the reporting date has been
estimated using the following fair value hierarchy:
Level (a) Quoted prices for identical instruments in active markets
A financial instrument is regarded as quoted in an active market if quoted
prices are readily and regularly available from an exchange, dealer, broker,
industry group, pricing service or regulatory agency, and those prices
represent actual and regularly occurring market transactions on an arm's length
basis.
Level (b) Prices of a recent transaction for identical instruments
When quoted prices are unavailable, the price of a recent transaction for an
identical asset provides evidence of fair value as long as there has not been a
significant change in economic circumstances or a significant lapse of time
since the transaction took place.
Level (c) Valuation techniques that use:
(i) Observable market data; or
(ii) Non-observable data
When the market for the asset is not active and recent transactions of an
identical asset on their own are not a good estimate, the fair value is
estimated by using an alternative valuation technique. Such valuation
techniques will, where possible, maximise the use of observable market data
inputs as opposed to non-observable entity determined data inputs.
The Investment Manager considers observable data to be that market data that is
readily available, regularly distributed or updated, reliable and verifiable,
not proprietary, and provided by independent sources that are actively involved
in the relevant market.
The analysis of the valuation basis for the financial instruments based on the
hierarchy as at 31 August 2015 is set out below. The level in the fair value
hierarchy within which the fair value measurement is categorised in its
entirety is determined on the basis of the lowest level input that is
significant to the fair value measurement in its entirety.
Financial assets at fair Level Level
value through profit or Level Level (c) (c)
loss at 31 August 2015 (a) (b) (i) (ii) Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Assets:
Equity investments 525,824 - - - 525,824
-------- -------- -------- -------- --------
Total 525,824 - - - 525,824
====== ====== ====== ====== ======
Financial assets at fair Level Level Level Level
value through profit or (a) (b) (c) (c)
loss at 31 August 2014 (i) (ii) Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Assets:
Equity investments 477,214 - - - 477,214
-------- -------- -------- -------- --------
(MORE TO FOLLOW) Dow Jones Newswires
October 26, 2015 08:20 ET (12:20 GMT)
Merrill Lynch Br.Smaller (LSE:MBS)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
Merrill Lynch Br.Smaller (LSE:MBS)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024
