BlackRock Smaller Companies Trust Plc - Portfolio Update
PR Newswire
London, July 28
The information contained in this release was correct as at 30 June 2021. 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 2021 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* | 1.0 | 11.8 | 52.2 | 27.7 | 121.8 |
| Share price* | -0.6 | 9.3 | 53.0 | 27.2 | 142.6 |
| Numis ex Inv Companies + AIM Index | -1.3 | 5.4 | 49.9 | 18.3 | 61.2 |
*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): | 2,073.14p |
| Net asset value Capital only (debt at fair value): | 2,062.44p |
| Net asset value incl. Income (debt at par value)1: | 2,087.22p |
| Net asset value incl. Income (debt at fair value)1: | 2,076.53p |
| Share price: | 1,952.00p |
| Discount to Cum Income NAV (debt at par value): | 6.5% |
| Discount to Cum Income NAV (debt at fair value): | 6.0% |
| Net yield2: | 1.7% |
| Gross assets3: | £1,113.8m |
| Gearing range as a % of net assets: | 0-15% |
| Net gearing including income (debt at par): | 8.4% |
| Ongoing charges ratio (actual)4: | 0.8% |
| Ordinary shares in issue5: | 48,829,792 |
Includes net revenue of 14.08 p
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 12.8 pence per share (announced on 5 November 2020, ex-dividend on 12 November 2020, paid on 26 November 2020) and the final dividend of 20.5 pence per share (announced on 7 May 2021, ex-dividend on 20 May 2021, paid on 18 June 2021).
Includes current year revenue.
As reported in the Annual Financial Report for the year ended 28 February 2021 the Ongoing Charges Ratio (OCR) was 0.8%. 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 ordinary shares held in treasury.
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| Ten Largest Equity Investments Company | % of portfolio |
| Watches of Switzerland | 2.5 |
| Treatt | 2.3 |
| Impax Asset Management | 2.2 |
| CVS Group | 2.1 |
| Breedon | 1.9 |
| Oxford Instruments | 1.7 |
| Pets At Home | 1.6 |
| Integrafin | 1.6 |
| Gamma Communications | 1.6 |
| YouGov | 1.6 |
Commenting on the markets, Roland Arnold, representing the Investment Manager noted:
During June the Company's NAV per share rose by 1.0%1 to 2,073.14p , outperforming our benchmark index, Numis ex Inv Companies + AIM Index, which fell by -1.3%1; for comparison the FTSE 100 Index rose by 0.2%1 (all figures are on a capital only basis).
Fresh concerns around the presence of the Delta variant of COVID-19 led UK small & mid-caps lower during June, while more defensive large cap indices moved marginally higher. Early in the month, OPEC (Organization of the Petroleum Exporting Countries) and its allies agreed to continue relaxing curbs on oil production signalling their confidence in improving oil demand and a drop in the global supply glut; oil prices rallied as a result. Despite another strong inflation print in the US, bond yields fell as investors focused on the transitory drivers of this inflationary spike. This view was reenforced by the FOMC (Federal Open Markets Committee) meeting during the month. Towards the end of the month, concerns began to mount that the global recovery may slow as the Delta variant of COVID-19 spread more widely. June's flash UK PMIs (Purchasing Managers' Index) suggested a modest cooling in the pace of the recovery in activity as the impact of the initial re-openings faded slightly. UK companies are also increasingly reporting some shortages in finding new staff, particularly in sectors heavily affected by COVID-19.
The Company was able to buck the trend of the falling market during June as a result of a number of core portfolio holdings continuing to deliver impressive trading updates. Shares in designer and manufacturer of customised electronics to industry, DiscoverIE, rose in response to positive full year results. After a challenging first half, the strong recovery in the second half of the year, and disciplined management of expenditure resulted in earnings for the year beating expectations. FTSE 250 listed asset manager, Liontrust, saw its shares reach an all-time high after it reported that profit before tax more than doubled year on year. The company has seen strong inflows, helped by the tailwind behind ESG (Environmental, Social, and Governance) strategies, a trend that looks well set to continue over the coming years. Shares in Oxford Instruments rose after reporting very strong results and veterinary group, CVS, also added to relative performance.
At a sector level, our underweight positioning in miners was beneficial; however, our holding in Central Asia Metals was the largest single detractor to performance. Shares in On the Beach slumped after the company reported weak results as the impact of the pandemic continues to weigh on trading and investors worried about the timing of recovery, given further travel restrictions. We continue to believe that On the Beach will be a market share winner as global travel resumes and we have therefore maintained the position. Renewed concerns around the impact of the Delta variant of the virus on broader economic growth impacted more macro-sensitive sectors as well, for example housebuilders, including our holding in Vistry.
Globally, the vaccine deployment continues to make progress, and while rising cases as a result of the Delta variant have caused some concern for investors, we still believe the vaccine will ultimately see us return to a more normal way of life. The strength of trading that we continued to see from our holdings in June reaffirms our confidence in the Company's current positioning and the outlook for many businesses across the portfolio. We also continue to see evidence of those companies that went into the COVID-19 crisis in a strong position, both financially and operationally, are emerging in even stronger positions. The ability of well financed market leading businesses to improve their relative positions in times of stress has always been one of our core beliefs, and this crisis has only reinforced that belief.
We continue to believe the ever-changing environment plays into the hands of dynamic smaller companies, those able to rapidly shift their business models to capitalise on new structural trends quickly as they emerge. We thank shareholders for their continued support.
1Source: BlackRock as at 30 June 2021
28 July 2021
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.
