BlackRock Smaller Companies Trust Plc - Portfolio Update
PR Newswire
LONDON, United Kingdom, July 28
tThe information contained in this release was correct as at 30 June 2025. 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 2025 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 | Three | Five |
Net asset value | 0.9 | 9.6 | -4.0 | 6.4 | 26.1 |
Share price | 1.9 | 10.0 | -6.1 | 12.3 | 18.4 |
Benchmark* | 3.2 | 13.6 | 7.8 | 15.2 | 42.1 |
Sources: BlackRock and Deutsche Numis
*With effect from 15 January 2024 the Numis Smaller Companies plus AIM (excluding Investment Companies) Index to Deutsche Numis Smaller Companies plus AIM (excluding Investment Companies).
At month end
Net asset value Capital only (debt at par value): | 1,419.84p |
Net asset value Capital only (debt at fair value): | 1,482.41p |
Net asset value incl. Income (debt at par value)1: | 1,438.74p |
Net asset value incl. Income (debt at fair value)1: | 1,501.30p |
Share price: | 1,320.00p |
Discount to Cum Income NAV (debt at par value): | 8.3% |
Discount to Cum Income NAV (debt at fair value): | 12.1% |
Net yield2: | 3.3% |
Gross assets3: | £679.9m |
Gearing range as a % of net assets: | 0-15% |
Net gearing including income (debt at par): | 8.3% |
Ongoing charges ratio (actual)4: | 0.8% |
Ordinary shares in issue5: | 42,422,792
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- Includes net revenue of 18.90p
- 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 15.50 pence per share (announced on 25 October 2024, ex-date on 31 October 2024, and paid on 04 December 2024) and final dividend of 28.50 pence per share (announced on 07 May 2025, ex-date on 15 May 2025, and paid on 26 June 2025).
- 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 2025.
- Excludes 7,570,731 ordinary shares held in treasury.
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Ten Largest Equity Investments | % of portfolio |
IntegraFin | 2.7 |
Boku | 2.7 |
XPS Pensions | 2.5 |
Tatton Asset Management | 2.4 |
Great Portland Estates | 2.4 |
Chemring Group | 2.1 |
Rosebank | 2.0 |
Morgan Sindall | 2.0 |
PayPoint | 1.9 |
Premier Foods | 1.9 |
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Commenting on the markets, Roland Arnold, representing the Investment Manager noted:
During May the Company's NAV per share rose 0.9 to 1,501.30p on a total return basis, while our benchmark index, Deutsche Numis Smaller Companies plus AIM (excluding Investment Companies) Index, returned 3.2%.1
June began with renewed inflationary pressures and ongoing uncertainty in the UK. Chancellor Rachel Reeves faced mounting economic headwinds ahead of the June spending review, including a policy reversal on welfare spending and concerns over a potential funding gap. Bank of England Governor, Andrew Bailey, urged caution on further rate cuts, citing inflation volatility and trade-related risks. The Bank ultimately held rates steady at 4.25% mid-month, in-line with market expectations.
In Europe, the ECB (European Central Bank) implemented a widely anticipated rate cut, reducing the deposit facility rate to 2.00% in an "almost unanimous" decision. The move followed a drop in eurozone inflation to 1.9% in May, marking the first sub-2% reading since September 2024. Across the Atlantic, the Federal Reserve (Fed) maintained its policy stance, keeping rates unchanged despite mounting political pressure from President Donald Trump, although the Fed continues to project two rate cuts in 2025.
While the first half of June was relatively calm, geopolitical tensions escalated later in the month. Israel launched a series of strikes on Iranian nuclear facilities and senior military figures, prompting a sharp 13% overnight spike in oil prices and a modest pullback in equities. However, the well-telegraphed nature of the attack meant the market reaction remained largely contained. Markets partially recovered following President Trump's announcement of a "substantial chance of negotiations" with Iran and a decision on potential US military involvement. A ceasefire was later confirmed by both Israeli Prime Minister Netanyahu and Iranian Foreign Minister Araghchi. Markets also rallied later in the month on news that the US and China had reached an agreement to de-escalate trade tensions, although exact specifics are yet to be determined.
M&A (mergers and acquisitions) activity in the UK remained elevated, with several high-profile takeover bids from foreign investors targeting British firms. Notably, US-based institutions made offers for Alphawave and Spectris. Year-to-date, there have been 30 bids for UK-listed companies with market capitalisations over £100 million, totalling £25 billion in value.
The largest detractors to performance this month were notably UK domestic shares Breedon, Ibstock and MJ Gleeson. Breedon shares struggled as poor weather in the US alongside concerns that volume recovery has been pushed to the right dampened investor sentiment. However, whilst temporary challenges may weigh on the share price, the medium-term investment case has not been derailed. Ibstock lowered guidance during the month, citing higher than expected costs coupled with weaker prices, despite encouraging signs of a recovery in the UK housing market. MJ Gleeson sold off as higher costs and planning delays hit profits for the year. Despite reporting a solid first half trading statement and encouraging signs of a recovery in demand, the group reported significant headwinds through the year including increased build costs, soft selling prices, and the continued use of bulk sale transactions.
The largest contributor was Paypoint, which released a resilient set of results during the month, forecasting 5-8% of revenue growth for the next 3 years. The company also increased and extended its share buyback programme, as well as increasing the dividend. Boku shares rose on no stock-specific news but benefitted from increased liquidity as some selling pressure that had been compressing the share price cleared towards the end of the month. Tatton Asset Management reported record assets under management and net inflows in its full-year results, with net inflows up 22% from the previous year.
For the last few months we have been more constructive on the outlook for the UK market. Rates have been falling, unemployment whilst rising is still at historically low levels, real wage growth continues, and the government has made inroads into reducing regulatory over burden which has the potential to start to lift the country out of the productivity malaise of the last few years. However, we have to acknowledge the last few weeks have not been supportive of this stance, with Labour backtracking on a number of initiatives, and the bond market's reaction to Rachel Reeves' emotional appearance at Prime Minister's Questions highlights the fragile nature of government finances. Once again, the predictability of the government is being called into question, once again this will lead to company management pausing on decisions, and once again it will raise the spectre of tax increases at the next budget.
All is not lost however, and whilst Trump's tariffs will no doubt have significant and far-reaching consequences, the recent signing of several trade deals has settled both bond and equity markets. Once the rules of engagement are known, companies can then begin to plan for the medium to long term. The release of the fiscal break in Germany has the potential to reinvigorate European investment, something that many UK companies will benefit from, and perhaps reminds investors there are profitable opportunities outside of the US equity market.
The pace of M&A shows little signs of slowing, with 15 deals in the first quarter of the year, and this has accelerated since the start of Q2, highlighting the valuation anomaly that sits within the UK. This is the deepest and longest period of underperformance of UK SMID vs large we have seen in over 40 years. Whilst the outlook may still be difficult for many companies, we feel this is more than captured in valuations. With all the uncertainty in the US equity market and investors looking for other places to allocate money, a stabilising and cheap UK market could be a valid and attractive alternative.
We thank shareholders for your ongoing support.
1Source: BlackRock as at 30 June 2025
28 July 2025
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.
