Interim Management Statement
10 December 2008 - 11:12PM
UK Regulatory
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
elysium@elysiumfundman.com info@midasim.co.uk
Tel: +44 1481 810 100 Tel: 0161 228 1709
Fax: +44 1481 810 120 Fax: 0161 228 2510
This information is provided by RNS
The company news service from the London Stock Exchange
END
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