The information contained in this release was correct as at 31
August 2020. 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 31 August
2020 and unaudited.
Performance at month end is calculated on a capital only
basis
|
One
month
% |
Three
months
% |
One
year
% |
Three
years
% |
Five
years
% |
Net asset value* |
5.3 |
4.9 |
-1.9 |
0.3 |
39.5 |
Share price* |
0.8 |
-4.2 |
-12.8 |
-0.8 |
32.9 |
Numis ex Inv Companies
+ AIM Index |
6.1 |
9.3 |
-2.3 |
-12.5 |
7.6 |
*performance calculations based on a capital only NAV with debt
at par, without income reinvested. Share price performance
calculations exclude income reinvestment.
Sources: BlackRock and Datastream
At month end |
Net asset value Capital only (debt
at par value): |
1,431.48p |
Net asset value Capital only (debt
at fair value): |
1,414.47p |
Net asset value incl. Income (debt
at par value)1: |
1,436.09p |
Net asset value incl. Income (debt
at fair value)1: |
1,419.08p |
Share price |
1,230.00p |
Discount to Cum Income NAV (debt at
par value): |
14.4% |
Discount to Cum Income NAV (debt at
fair value): |
13.3% |
Net yield2: |
2.6% |
Gross assets3: |
£770.8m |
Gearing range as a % of net
assets: |
0-15% |
Net gearing including income (debt
at par): |
4.1% |
Ongoing charges
ratio4: |
0.7% |
Ordinary shares in
issue5: |
48,829,792 |
-
Includes net revenue of 4.61p.
-
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 12.80
pence per share (announced on 5
November 2019, ex-dividend on 14
November 2019) and the second interim dividend of
19.70 pence per share (announced on
3 June 2020, ex-dividend on
11 June 2020).
-
includes current year revenue.
-
As reported in the Annual Financial Report for the year ended
29 February 2020 the Ongoing Charges
Ratio (OCR) was 0.7%. The OCR is calculated as a percentage of net
assets and using operating expenses, excluding performance fees,
finance costs and taxation.
-
excludes 1,163,731 shares held in treasury.
Sector
Weightings |
% of
portfolio |
|
|
Industrials |
28.3 |
Financials |
20.6 |
Consumer Services |
16.5 |
Consumer Goods |
10.8 |
Technology |
9.0 |
Basic Materials |
5.5 |
Health Care |
5.1 |
Oil & Gas |
1.9 |
Materials |
1.2 |
Telecommunications |
1.1 |
|
----- |
Total |
100.0 |
|
===== |
|
|
Country
Weightings |
% of
portfolio |
|
|
United Kingdom |
98.0 |
United States |
0.9 |
Singapore |
0.6 |
Ireland |
0.5 |
|
----- |
Total |
100.0 |
|
===== |
Ten Largest Equity
Investments |
|
Company |
% of
portfolio |
|
|
YouGov |
2.9 |
Avon Rubber |
2.1 |
Breedon |
2.0 |
IntegraFin |
1.9 |
Games Workshop |
1.8 |
Impax Asset
Management |
1.8 |
Watches of
Switzerland |
1.7 |
Treatt |
1.7 |
Stock Spirits
Group |
1.6 |
Pets at Home |
1.6 |
Commenting on the markets, Roland
Arnold, representing the Investment Manager noted:
During August the Company’s NAV per share rose by 5.3%1
to 1,431.48p, underperforming our benchmark index which returned
6.1%1; for comparison the FTSE 100 Index rose by just
1.1%1 (all calculations are on a capital only
basis).
Markets around the world rose during August as expectations for
further US fiscal stimulus, improving US/China trade developments and hopes for a
COVID-19 vaccine helped drive investor risk appetite. Despite
flare-ups of virus cases throughout Europe, and high levels of cases in a number
of US states, economic activity across the globe has shown signs of
improving. However, the re-imposed lockdowns in various countries,
including Spain, Italy and Greece serve as a reminder that the situation
remains highly vulnerable to setbacks if cases of the virus are not
contained. Dollar weakness during the month resulted in small &
mid-cap companies outperforming large cap companies as a result of
the currency’s impact on overseas earners.
Despite some positive updates from a number of our core
holdings, the portfolio failed to keep pace with the market rally
during the month. While we can attribute some of this relative
underperformance to company specifics, we would also highlight a
number of benchmark positions that we do not own which saw their
shares perform very strongly during the month to help drive the
benchmark higher, for example William
Hill and Plus500. The largest stock specific detractor came
from our holding in Serco. Despite reporting strong profit growth
in the first half of the year, Serco fell in response to a more
cautious outlook where the company reminded investors that
uncertainty in its business is likely to persist well into 2021.
4imprint, a long-term core holding in the portfolio, fell after the
company reported a 99% fall in profits in the first half of the
year as COVID-19 had resulted in a collapse in customer demand.
This is a business that has been a strong contributor to relative
performance over a number of years, having consistently delivered
strong revenue growth through taking share in its highly fragmented
end markets. While there remain challenges to the business as a
result of COVID-19 uncertainties, we remain confident that the
company’s leading market position and flexible, capital light
business model will ensure that the business will successfully
navigate the current environment and emerge from the pandemic in a
stronger position relative to its peers.
The largest positive contributor was YouGov, the research and
data analytics business. The shares have been strong since the
company provided a positive trading update at the end of July,
which confirmed continued growth in profits and revenues despite
ongoing economic uncertainty. Shares in luxury watch retailer,
Watches of Switzerland rallied in
response to a strong trading update, with revenue growth ahead of
management’s expectations, resulting in broker upgrades.
Pre-lockdown trading was extremely strong; however, the company’s
ability to adapt to the challenges brought on by COVID-19 ensured
that ecommerce channels also experienced a strong uplift in sales
since retail stores closed. Shares in cell-based therapy developer,
Maxcyte, rose in response the announced extension of a cancer
treatment trial following encouraging preliminary results in
May.
The current environment continues to present a number of
challenges as the outlook remains highly uncertain and investors
are inconsistent on how they are pricing coronavirus risks. The
smaller end of the market remains very narrow and, in our opinion,
continues to inconsistently value risk. This can be seen in
valuations of the winners which have continued to stretch, while
the losers compress. This has also been evident in a number of
cases where share prices have become completely detached from
fundamentals, and we can point to a number of examples where
investment cases are playing out, but the share price is telling a
different story. This disconnect certainly cannot last
forever. We must all remind ourselves that in the short-term share
prices are driven by supply and demand (investor sentiment),
however, in the long-term it is company earnings that will drive
share prices.
We therefore remain confident in our strategy on a medium-term
view. Market volatility presents us with a fantastic investment
opportunity. The Company’s investment strategy is focussed on
quality growth investments in smaller companies, a style that has
demonstrably worked for the long-term, and historically periods of
sudden underperformance, such as this, have proven to be excellent
investment opportunities.
1Source: BlackRock as at 31
August 2020
16 September 2020
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.