The
information contained in this release was correct as at
30 June
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 June
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
|
-4.0
|
6.0
|
12.9
|
-16.7
|
21.2
|
Share
price
|
-3.1
|
11.2
|
17.8
|
-19.2
|
14.0
|
Benchmark*
|
-3.2
|
5.0
|
10.0
|
-13.5
|
17.6
|
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):
|
1,537.00p
|
Net
asset value Capital only (debt at fair value):
|
1,589.61p
|
Net
asset value incl. Income (debt at par value)1:
|
1,556.75p
|
Net
asset value incl. Income (debt at fair value)1:
|
1,609.36p
|
Share
price:
|
1,452.00p
|
Discount to Cum
Income NAV (debt at par value):
|
6.7%
|
Discount to Cum
Income NAV (debt at fair value):
|
9.8%
|
Net
yield2:
|
2.9%
|
Gross
assets3:
|
£802.7m
|
Gearing range as
a % of net assets:
|
0-15%
|
Net
gearing including income (debt at par):
|
12.8%
|
Ongoing charges
ratio (actual)4:
|
0.7%
|
Ordinary shares
in issue5:
|
47,099,792
|
|
|
-
Includes net revenue of 19.75p
-
Yield calculations are based on dividends
announced in the last 12 months as at the date of release of this
announcement and comprise the Interim dividend of 15.00 pence per share (announced on 26 October 2023, ex-date on 02 November 2023, and paid 04 December 2023) and the final dividend of
27.00 pence per share (announced on
14 May 2024, ex-date on 23 May 2024, and paid 24
June 2024).
-
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
|
31.2
|
Financials
|
19.2
|
Consumer
Discretionary
|
16.2
|
Basic
Materials
|
12.2
|
Technology
|
6.6
|
Consumer
Staples
|
3.3
|
Health
Care
|
2.8
|
Real
Estate
|
2.7
|
Telecommunications
|
2.6
|
Communication
Services
|
1.7
|
Energy
|
1.5
|
|
-----
|
Total
|
100.0
|
|
=====
|
|
|
|
Country Weightings
|
% of portfolio
|
United
Kingdom
|
98.1
|
United
States
|
1.6
|
Ireland
|
0.3
|
|
-----
|
Total
|
100.0
|
|
=====
|
|
|
|
Ten Largest Equity Investments
Company
|
% of portfolio
|
Hill
& Smith
|
2.6
|
Gamma
Communications
|
2.6
|
Breedon
|
2.4
|
Workspace
Group
|
2.4
|
IntegraFin
|
2.4
|
4imprint
Group
|
2.1
|
Chemring
Group
|
2.1
|
Bloomsbury
Publishing
|
2.1
|
Baltic
Classifieds Group
|
2.0
|
Tatton Asset
Management
|
1.9
|
|
|
|
Commenting
on the markets, Roland Arnold,
representing the Investment Manager noted:
During June the
Company’s NAV per share retuned -4.0% to 1,609.36p on a total
return basis, while our benchmark index returned -3.2%. For
comparison the large cap FTSE 100 Index outperformed small &
mid-caps, returning -1.1%.1
Despite market
volatility during the month, economic data from the UK continued to
show gradual improvements. Inflation fell to the Bank of
England's (BoE) 2% target for the
first time in three years, leading to speculation about potential
rate cuts later in the year. The BoE, however, maintained its
current policy, awaiting further economic data before making any
changes, which was unsurprising heading into the UK General
Election in early July. Meanwhile, both businesses and consumers in
the UK remained in a strong position, with business confidence
continuing to rise and the ASDA Income tracker hitting a three-year
high. Even with a backdrop of gradual improvement, the UK equity
market weakened during June, with small & mid-caps continuing
to lag larger companies, likely a pre-election market reaction as
opposed to any negative sentiment towards the market. The
subsequent Labour victory should provide a period of relative
political stability, which we see as broadly supportive for the UK
and in particular small and mid-caps.
The
largest positive contributor in the month was XPS Pensions, which
reported a strong fiscal year ending March
31, 2024. Revenue rose 12% to £173.5 million, and adjusted
EBITDA increased 13% to £48.5 million. All business divisions grew,
and strategic achievements included market share expansion,
successful acquisition integration, and new service launches. With
reduced net debt and a positive outlook, XPS is well-positioned for
future growth in the pensions sector. Shares in Workspace rose
after the company reported strong full-year results. Key highlights
included a 5.9% rise in net rental income and improved occupancy
and rent per sq. feet. CEO Graham
Clemett noted robust demand for flexible office spaces in
London. The company advanced its
development pipeline, refurbishing Salisbury House and opening a
suburban London location in
Wimbledon, setting the stage for
continued growth. Tatton Asset Management was another top
contributor, with strong growth in Assets Under Influence (AUI)
leading to the company upgrading its growth target to £30 billion
AUI by 2029.
The
largest detractor was data analytics business, YouGov. The company
issued a profit warning during the month, with the company
highlighting numerous issues, but most concerning is the slowdown
in its data products business, which has been its highest growth
and margin area, Furthermore, the recent deal to buy CPS, took the
company from a net cash to a net debt position. We had been
reducing the holding in recent months and have now fully exited the
position. Next 15 Group's share price fell significantly as their
trading statement indicated a higher-than-normal weighting to the
second half of the fiscal year as customers take longer to make
investment decisions. The third largest detractor in June, was John
Wood Group, a share that we do not own, but that rose having
received several bids from Dubai-based engineering group,
Sidara.
In
summary, and as we have highlighted for a long period of time now,
the current valuation of the UK market, and in particular UK small
and mid-cap companies, is about as attractive as we have ever seen.
Meanwhile, the economic backdrop is certainly improving.
Unemployment remains low, balance sheets remain strong, inflation
is falling, consumer confidence and PMIs are improving. This
backdrop gives confidence that the earnings outlook for our
businesses is broadly supportive for an earnings recovery.
Meanwhile, Labour’s victory in the General Election could now mark
the end of the persistent investor aversion from the UK and stem
the outflows from UK small & mid-caps. Labour’s business
friendly policies and some much-needed stability in government,
should provide a more positive backdrop for businesses to start
investing with some level of certainty and investors to once again
look to the UK market for an attractive return. In this scenario,
we could see an environment where small and mid-caps, and in
particular the holdings in this portfolio, could move a long way on
limited liquidity.
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 June 2024
25 July 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.