20 Jun 2022 07:00
LONDON STOCK EXCHANGE ANNOUNCEMENT
The Global Smaller Companies Trust PLC
(formerly BMO Global Smaller Companies PLC)
Audited Statement of Results
for the year ended 30 April 2022
Legal Entity Identifier: 2138008RRULYQP8VP386
Information disclosed in accordance with Disclosure Guidance and Transparency Rule 4.1
Financial highlights
Net Asset Value with debt at fair value ('NAV') total return of -0.2% versus -3.2% from the Benchmark
The NAV fell to 172.8p from 174.9p.
Share price total return of -6.4%
The share price ended the year at 156.2p.
Total dividend of 1.84 pence
52nd consecutive annual increase, up by 5.1%.
Shares ended the year at a discount to the NAV of 9.6%
Date: 20 June 2022
Contact: Peter Ewins
BMO Investment Business Limited
020 7628 8000
Chairman's Statement
After the strong recovery in markets in the previous financial year and a satisfactory first six months, market conditions deteriorated towards the end of the year under review. The on-off pandemic lock-downs, supply chain challenges, surging inflation and the more recent tragedy of the war in Ukraine were just some of the issues confronting investors.
While a number of global stockmarket indices managed to post gains and hit record highs during the year, smaller company shares underperformed their larger counterparts in most markets, a reversal of the pattern from the prior year. This can happen at times where uncertainties and risks are elevated, so given the myriad of issues emerging in recent months, it is perhaps not surprising that small caps have been under some pressure.
Performance and the discount
Returns from the Company's portfolio were in positive territory for most of the year. However, a late sell-off following the commencement of the conflict in Ukraine and a shift up in expectations for the key US interest rate outlook, meant that the Company's Net Asset Value ('NAV') total return (with long term borrowings at fair value) over the twelve months was -0.2%. The NAV ended the year at 172.83p per share. For context, pleasingly, this compared favourably to the -3.2% total return from the Company's Benchmark index (30% Numis UK Smaller Companies excluding investment companies Index/70% MSCI All Countries World ex UK Small Cap Index). The Manager's conservative approach to stock selection, focusing on established, profitable business franchises, paid off in a period where more speculative and loss making growth stocks have seen a savage de-rating, at least in part due to the increase in longer term interest rate expectations. Performance also benefitted from elevated takeover activity, with no fewer than 17 of our holdings being the subject of bid approaches or mergers during the year.
With investors becoming more cautious about the global economic outlook, discounts on most smaller company investment trusts have widened considerably. Over the year the discount of our share price to NAV increased from 3.6% to 9.6%. The share price total return was -6.4%, with the share price closing at 156.2p. While share buybacks were unable to prevent the discount from widening in the year, those repurchases, at a discount to the prevailing NAV, added some 0.4% to NAV performance in the year. They also enhanced liquidity for shareholders who wanted, or needed to, sell their holdings. The Board's consistently applied share buyback policy stands in contrast to that of some peers which have allowed their discounts to widen without taking any action. While a more favourable market backdrop may be needed, the Board continues to aim for the discount to be below 5%. In the meantime, further shares have been bought in during the early part of the new financial year with the aim of minimising the absolute level and volatility of the discount.
Long term returns of both NAV and share price continue to be favourable as shown below, with the compound share price and compound NAV total returns over the last 25 years being 10.7% and 10.2% respectively. Returns have also been well ahead of the 3.1% Retail Prices Index annual increase over the same timeframe.
Performance: Total returns over the long-term | |||||
1 year % | 3 years % | 5 years % | 10 years % | 25 years % | |
NAV total return | -0.2 | 27.3 | 44.4 | 221.1 | 1,041.7 |
Benchmark total return | -3.2 | 28.3 | 42.5 | 196.5 | 827.2 |
Share price total return | -6.4 | 20.4 | 29.9 | 195.2 | 1,181.1 |
Source: BMO GAM
Costs
Ongoing charges for the year were down from 0.78% to 0.75%, with a higher average value of net assets in the calculation the main reason for this.
Dividends
In last year's Annual Report, I highlighted that income from the investment portfolio had suffered badly as a consequence of the Covid-19 pandemic, necessitating the use of the revenue reserve to maintain our record of dividend progression. Over the last twelve months, a faster than expected rebound in corporate earnings has prompted a rapid recovery in dividend receipts from the portfolio.
For the year, revenue returns per share rose by no less than 44.4% to a new high of 1.82p per share. Although the economic outlook has weakened recently, the Board has decided to recommend the payment of a final dividend of 1.27p, making a total for the year of 1.84p, an increase of 5.1% on the year. If approved by shareholders at the AGM, the dividend will be paid on 4 August. This will be the 52nd consecutive year of dividend growth for the Company.
Market and portfolio performance
After the previous year's 47.9% rise in NAV, on the back of investor optimism around the potential for global economic recovery from the coronavirus pandemic, it is perhaps unsurprising that markets found further progress harder to achieve. The emergence of new variants of the virus, necessitating further lockdowns and reigniting supply chain challenges, was clearly unhelpful for share prices, as was the rise in inflation around the globe. Late in the year, the invasion of the Ukraine by Russia further darkened the outlook.
With inflation increasingly prevalent, a number of emerging market central banks moved to tighten monetary policy early in the year. Eventually, the US Federal Reserve also signalled a plan to increase interest rates to curb inflation, having abandoned the view that higher prices would be transitory. This prompted a sharp increase in global interest rates and bond yields, feeding into lower equity prices, which were then further undermined by developments in Eastern Europe. With the cost of capital rising, there has been a significant de-rating of more growth orientated equities, especially those with little or no near-term profit to speak of. A number of previously popular technology orientated investments and biotechnology stocks, were particularly hard hit. More stable, established and lower rated stocks held up better in an increasingly risk averse market.
The table below shows how our regional portfolios performed in the year, and the Lead Manager's review on pages 12 to 22 of the Report and Accounts covers the background to these figures in detail. After a number of difficult years for emerging markets in a smaller company sense, while there were notable exceptions, these markets did better than developed markets for a change. Some markets, such as Brazil, are beneficiaries of higher commodity prices. Europe's markets were under pressure late in the year, unsurprisingly given their proximity to Ukraine, and the impact of higher European gas prices on consumers and energy intensive companies.
Geographical performance (total return sterling adjusted) | ||
for the year ended 30 April 2022 | ||
Portfolio | Local smaller companies index | |
UK | -3.5% | -7.4% |
Europe | -16.0% | -6.9% |
North America | 7.8% | -8.3% |
Japan | -14.1% | -9.1% |
Rest of World* | 4.0% | 4.4% (Pacific ex Japan) 5.4% (Latin America) |
Source: BMO GAM
*Performance of the Rest of World portfolio is shown here against both Asian and Latin American smaller company indices
Most important in terms of the relative performance of the Company overall was the strength of the investment team's stock selection in North America. Avoiding speculative investments and most of the more overvalued growth stocks were the main drivers of this performance. Stock selection was also positive in the UK, where we were helped by a succession of takeover bids for our holdings. Elsewhere, returns were close to the local smaller company indices in the Rest of World segment mainly targeting Asia and Latin America. We struggled in Europe in the second half of the year as, with the benefit of hindsight, the portfolio here was too exposed to higher valuation names which suffered a de-rating. The Japanese collectives portfolio also had a weaker second half, having been ahead of the local small cap index in the first half. A fall in the yen further undermined returns in sterling terms.
Asset allocation
Over the course of the year, the main changes in geographic weightings were an increase in North American exposure and a reduction in Europe and the UK. This has principally been performance driven. With all of the main regional small cap indices down by similar amounts, there was no material impact to relative performance as a result of asset allocation during the year.
Geographical distribution of the investment portfolio as at 30 April 2022 | |
North America | 43.4% (39.7%) |
UK | 26.8% (28.6%) |
Rest of World | 12.2% (11.5%) |
Europe | 10.8% (13.2%) |
Japan | 6.8% (7.0%) |
The percentages in brackets are as at 30 April 2021
Source: BMO GAM
Geographical weightings against Benchmark as at 30 April 2022 | |
North America | +2.1% |
UK | -3.2% |
Europe | +1.8% |
Japan | +0.4% |
Rest of World | -1.1% |
Source: BMO GAM & MSCI
Gearing Policy
The Board remains of the view that making use of the ability to gear as an investment trust makes sense for long term returns and the Manager consistently maintained some leverage over the year, with effective gearing ending the year at 4.6%, compared with 3.8% a year ago. Borrowings were made up of £35m of 2.26% sterling loan notes maturing in 2039 and £19.8m equivalent drawings in yen and euros under our revolving credit facility. The fair value of the loan notes fell by £5.2m in the year, reflecting the rise in market yields.
The Manager and Company Name
Last year we reported that Bank of Montreal ('BMO') had taken the decision to sell its asset management business in Europe, the Middle East and Africa to Ameriprise Financial Inc, the parent of Columbia Threadneedle Investments ('Columbia Threadneedle'). The Board has been kept up to date with the integration of the BMO and Columbia Threadneedle businesses and it is pleased that the Company's investment management team remains unchanged and indeed has been augmented by additional research input from the enlarged Columbia Threadneedle investment team. Columbia Threadneedle's commitment towards the stable of former BMO managed investment trust companies and the savings scheme operations has also been encouraging.
The sale by BMO necessitates a change in the Company's name from BMO Global Smaller Companies PLC and after due consideration the Board has resolved that the Company be re-named The Global Smaller Companies Trust PLC. This emphasises more clearly the mandate of the Company and removes the potential for confusion with other smaller company products managed by Columbia Threadneedle. The name change is effective immediately and the Columbia Threadneedle team are rolling out a publicity programme to ensure that the news is recognised in the market. Regular investors in the Company through the BMO savings schemes are unaffected and there is no change to the Company's objective or the way in which it will be managed as a result of the new name. With effect from early July 2022, the Company's new website address will be globalsmallercompanies.co.uk. The Manager's name will also change, to Columbia Threadneedle Investment Business Limited.
Environmental, Social and Governance ('ESG')
Incorporating ESG factors into investment decisions is becoming more mainstream but both BMO and Columbia Threadneedle have long had a commitment to ESG integration into their investment processes. The investment management team have continued to work closely with their Responsible Investment team colleagues during the year, which is important given the fast-moving nature of some of the issues around ESG. Some practical illustrations of this work are outlined in the Responsible Investment report on pages 23 to 26 of the Report and Accounts.
Annual General Meeting
After two years of being unable to meet shareholders in person thankfully we are able to return to an in-person AGM this year. The meeting will take place at the Chartered Accountants Hall, 1 Moorgate Place, London EC2R 6EA on Thursday, 28 July 2022 at 12.00 noon. We hope as many shareholders as possible will attend. The Lead Manager will, as usual, give a review of the year together with his view on the outlook. This year we will also be streaming the meeting live on the internet so that those shareholders who cannot attend in person will be able to view the proceedings. Details of how to watch the meeting are included in the Form of Proxy/Form of Direction.
Voting at this year's AGM will be conducted by way of a poll and therefore you are requested to lodge your votes ahead of the meeting by completing your Form of Proxy or Form of Direction in accordance with the instructions shown thereon. Their completion and return will not preclude you from attending the meeting and voting in person.
Shareholders who are unable to attend the AGM are requested to submit any questions you may have with regard to the resolutions proposed at the AGM or the performance of the Company, in advance of the meeting to gscagm@bmogam.com. Following the AGM, the Fund Manager's presentation will be available on the Company's website globalsmallercompanies.co.uk.
Outlook
The start of the new financial year has seen more volatility in equity markets, with 2022 and 2023 economic growth forecasts being scaled back given the ongoing war in Ukraine and the anticipated rise in interest rates globally. While these are clear headwinds for share prices, it is possible that the extent of monetary policy adjustment may be more limited than presently expected if economies continue to slow and inflationary pressures moderate.
Corporate earnings are coming under some pressure now given recent events, however valuations in the markets are beginning to appear more attractive for some of the more beaten down smaller cap growth stocks. The investment management team is hopeful that it can take advantage of this in the coming months. Continuing to monitor individual companies' newsflow and their success in dealing with higher inflationary pressures will remain key.
Anja BalfourChairman17 June 2022
Principal Risks and Future Prospects
The Board's processes for monitoring the principal risks and identifying emerging risks are set out on page 54 of the Report and Accounts and in note 23 to the Accounts. Any emerging risks that are identified and that are considered to be of significance are included on the Company's risk assessment together with any mitigations. These principal and emerging risks are reviewed regularly by the Audit and Management Engagement Committee and by the Board. The effects of Covid-19 have eased but its impact will be felt for some time to come. There is a risk that the current high levels of inflation will be sustained and of course geo-political risk has been heightened as a result of the war in Ukraine, but the Board cannot mitigate against such events. The principal risks are largely unchanged from those reported in the prior year. Those identified as most relevant to the assessment of the Company's future prospects and viability were those relating to the potential impact from sustained high inflation, inappropriate business strategy, potential investment portfolio underperformance and its effect on the Company's share price discount/ premium and dividends, as well as threats to security over the Company's assets.
Principal Risk: Service providers and systems security - Errors, fraud or control failures at service providers or loss of data through business continuity failure or cyber attacks could damage reputation or investors' interests or result in loss. Cyber risks remain heightened.
Unchanged throughout the year.
Mitigation by strategy: The ancillary functions of administration, company secretarial, accounting and marketing services are all carried out by the Manager. Custody and depositary services are provided by third party suppliers.
The Board monitors the effectiveness and efficiency of service providers' processes through internal efficiency KPIs.
Actions taken in the year: The Audit and Management Engagement Committee and the Board have regularly reviewed the Company's risk management framework with the assistance of the Manager. Regular control reports are provided by the Manager which cover risk, compliance and oversight of third-party service providers, including IT security and cyber-threats. Reports from the Depositary, which is liable for the loss of any of the Company's securities and cash held in custody unless resulting from an external event beyond its reasonable control, were reviewed. The Board is satisfied that the continuity arrangements of all key suppliers continued to work well during the restrictions imposed as a result of Covid-19 and continue to do so under the new "hybrid" working arrangements adopted by most. As such, this risk is unchanged.
Principal Risk: Investment performance - Inappropriate business strategy or policy, or ineffective implementation, could result in poor returns for shareholders. Failure to access the targeted market or meet investor needs or expectations, including Responsible Investment and climate change in particular, leading to significant pressure on the share price. Political risk factors could also impact performance as could market shocks such as those experienced in relation to Covid-19.
Unchanged throughout the year.
Mitigation by strategy: Under our Business Model, a manager is appointed with the capability and resource to manage the Company's assets, asset allocation, gearing, stock and sector selection and risk. The individual regional investment portfolios are managed to provide in combination a well-diversified, lower volatility and lower risk overall portfolio structure. The Board holds a separate strategy meeting each year and considers investment policy review reports from the Manager at each Board meeting. The performance of the Company relative to its Benchmark, its peers and inflation is a KPI measured by the Board on an ongoing basis and is reported on page 11 of the Report and Accounts.
Actions taken in the year: Columbia Threadneedle (formerly BMO GAM) has been retained as Manager and continues to deliver on the Company's objective. It operates within a responsible investment culture under a corporate commitment to four key Sustainability Principles: Social Change, Financial Resilience, Community Building and Environmental Impact. Through the Manager, the Company has the flexibility to innovate, adapt and evolve as Responsible Investment necessities and expectations change. Marketing and investor relations campaigns continued throughout the year, including presentations by the Lead Manager to wealth managers across the country. Detailed reports provided by the Lead Manager have been reviewed by the Board at each of its meetings. As reported in the Key Performance Indicators on page 11 of the Report and Accounts, long-term performance remains in line with expectations and the dividend for the year has increased. This risk is considered unchanged.
Principal Risk: Discount/premium - A significant share price discount or premium to the Company's NAV per share, or related volatility, could lead to high levels of uncertainty or speculation and the potential to reduce investor confidence. Increased uncertainty in markets due to an event such as Covid-19 could lead to falls and volatility in the Company's NAV.
Risk has increased during the year.
Mitigation by strategy: The Board has established share buyback and share issue policies, together with a dividend policy, which aim to moderate the level and volatility of the share price discount or premium to the NAV per share and it seeks shareholder approval each year for the necessary powers to implement those policies. The discount/premium to NAV at which the Company's shares trade is a KPI measured by the Board on an ongoing basis and is reported on page 11 of the Report and Accounts.
Actions taken in the year: Despite actively buying in shares on a regular, ongoing basis in order to address the imbalance between the supply and demand of the Company's shares, the discount has remained wider than desired. Therefore the risk is considered to have increased during the year.
Five Year Horizon
Through a series of stress tests ranging from moderate to extreme scenarios, including the impact of market shocks and based on historical information, but forward looking over the five years commencing 1 May 2022, the Board assessed the risks of:
• Sustained high levels of inflation.
• Potential illiquidity of the Company's portfolio.
• Substantial falls in investment values on the ability to meet loan covenant requirements and to repay and re-negotiate funding.
• Significant falls in income on the ability to continue paying steadily-rising dividends and maintaining adequate revenue reserves.
The Board also took into consideration the operational robustness of its principal service providers and the effectiveness of business continuity plans in place, in particular given the impact of Covid-19, potential effects of regulatory changes and the potential threat from competition.
Based on its assessment and evaluation of the Company's future prospects, the Board has a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the coming five years. This period has been chosen because it is consistent with the advice provided by many investment advisers, that investors should invest in equities for a minimum of five years. The Company's business model, strategy and the embedded characteristics listed below have helped define and maintain the stability of the Company over many decades. The Board expects this to continue and will continue to assess viability over subsequent five year rolling periods.
Statement of Directors' Responsibilities in Respect of the Financial Statements
In accordance with Chapter 4.1.12 of the Disclosure Guidance and Transparency Rules the Directors confirm, in respect of the annual report for the year ended 30 April 2022 of which this statement of results is an extract, to the best of their knowledge that:
· the financial statements, prepared in accordance with applicable accounting standards, give a true and fair view of the assets, liabilities, financial position and loss of the Company;
· the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces; and
· in the opinion of the Directors the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's position and performance, business model and strategy.
On behalf of the Board
Anja Balfour
Chairman
17 June 2022
Income Statement
for the year ended 30 April | 2022 | 2021 | ||||
| Revenue | Capital | Total | Revenue | Capital | Total |
| £'000s | £'000s | £'000s | £'000s | £'000s | £'000s |
|
|
|
| |||
(Losses)/gains on investments | - | (16,127) | (16,127) | - | 325,701 | 325,701 |
Foreign exchange gains/(losses) | 16 | 517 | 533 | (6) | (1,737) | (1,743) |
Income | 13,418 | 581 | 13,999 | 10,216 | 762 | 10,978 |
Management fee | (1,251) | (3,753) | (5,004) | (1,058) | (3,174) | (4,232) |
Other expenses | (955) | (22) | (977) | (872) | (27) | (899) |
Net return before finance costs and taxation | 11,228 | (18,804) | (7,576) | 8,280 | 321,525 | 329,805 |
Finance costs | (233) | (699) | (932) | (199) | (598) | (797) |
Net return on ordinary activities before taxation |
10,995 |
(19,503) |
(8,508) |
8,081 |
320,927 |
329,008 |
Taxation on ordinary activities | (754) | - | (754) | (665) | - | (665) |
Net return attributable to equity shareholders |
10,241 |
(19,503) |
(9,262) |
7,416 |
320,927 |
328,343 |
|
|
|
| |||
Return per share (basic and diluted) - pence | 1.82 | (3.46) | (1.64) | 1.26 | 54.50 | 55.76 |
|
|
|
| |||
The total column of this statement is the profit and loss account of the Company.
All revenue and capital items in the above statement derive from continuing operations.
A statement of total comprehensive income is not required as all income and expenses of the Company have been reflected in the above statement.
Statement of Changes in Equity
for the year ended 30 April 2022 |
|
|
|
|
|
| ||||
|
|
Share |
Capital |
|
|
Total |
| |||
Share | premium | redemption | Capital | Revenue | shareholders' |
| ||||
capital | account | reserve | reserves | reserve | funds |
| ||||
£'000s | £'000s | £'000s | £'000s | £'000s | £'000s |
| ||||
|
|
|
|
|
|
| ||||
Balance at 30 April 2021 | 15,513 | 212,639 | 16,158 | 747,951 | 15,247 | 1,007,508 |
| |||
Movements during the year ended 30 April 2022 |
|
|
|
|
|
|
| |||
Dividends paid | - | - | - | - | (10,032) | (10,032) |
| |||
Shares repurchased by the Company and held in treasury |
- |
- |
- |
(42,910) |
- |
(42,910) |
| |||
Net return attributable to equity shareholders |
- |
- |
- |
(19,503) |
10,241 |
(9,262) |
| |||
Balance at 30 April 2022 | 15,513 | 212,639 | 16,158 | 685,538 | 15,456 | 945,304 |
| |||
for the year ended 30 April 2021 |
|
|
|
|
|
| ||||
| Share | Capital | Total |
| ||||||
Share | premium | redemption | Capital | Revenue | shareholders' |
| ||||
capital | account | reserve | reserves | reserve | funds |
| ||||
£'000s | £'000s | £'000s | £'000s | £'000s | £'000s |
| ||||
|
|
|
|
|
|
| ||||
Balance at 30 April 2020 | 15,513 | 212,639 | 16,158 | 464,282 | 17,923 | 726,515 |
| |||
Movements during the year ended 30 April 2021 |
| |||||||||
Dividends paid | - | - | - | - | (10,092) | (10,092) |
| |||
Shares repurchased by the Company and held in treasury |
- |
- |
- |
(37,243) |
- |
(37,243) |
| |||
Costs relating to broker | - | - | - | (15) | - | (15) |
| |||
Net return attributable to equity shareholders |
- |
- |
- |
320,927 |
7,416 |
328,343 |
| |||
Balance at 30 April 2021 | 15,513 | 212,639 | 16,158 | 747,951 | 15,247 | 1,007,508 |
| |||
Balance Sheet
at 30 April |
| 2022 |
| 2021 |
| £'000s | £'000s | ||
Fixed assets |
|
| ||
Investments |
| 987,083 | 1,045,255 | |
Current assets |
|
| ||
Debtors |
| 3,604 |
| 7,021 |
Cash and cash equivalents |
| 13,354 |
| 6,870 |
Total current assets |
| 16,958 |
| 13,891 |
|
|
| ||
Creditors: amounts falling due within one year |
|
| ||
Bank loans |
| (19,782) |
| (8,521) |
Creditors |
| (3,955) |
| (8,117) |
Total current liabilities |
| (23,737) |
| (16,638) |
Net current liabilities |
| (6,779) | (2,747) | |
Total assets less current liabilities |
| 980,304 | 1,042,508 | |
Creditors: amounts falling due after more than one year |
|
| ||
Loan notes |
| (35,000) | (35,000) | |
Net assets |
| 945,304 | 1,007,508 | |
Capital and reserves |
|
| ||
Share capital |
| 15,513 | 15,513 | |
Share premium account |
| 212,639 |
| 212,639 |
Capital redemption reserve |
| 16,158 |
| 16,158 |
Capital reserves |
| 685,538 |
| 747,951 |
Revenue reserve |
| 15,456 |
| 15,247 |
Total shareholders' funds |
| 945,304 | 1,007,508 | |
|
|
| ||
Net asset value per share (debt at par value) - pence |
| 172.04 | 175.02 | |
|
|
|
Statement of Cash Flows
for the year ended 30 April |
|
| 2022 | 2021 |
|
| £'000s | £'000s | |
Cash flows from operating activities before dividends received and interest paid |
|
|
(5,849) |
(4,437) |
Dividends received |
|
| 12,545 | 9,005 |
Interest paid |
|
| (926) | (793) |
Cash inflows from operating activities |
|
| 5,770 | 3,775 |
Investing activities |
|
|
| |
Purchases of investments |
|
| (214,337) | (230,833) |
Sales of investments |
|
| 256,951 | 233,941 |
Transaction costs |
|
| (472) | (460) |
Other capital charges |
|
| (22) | (28) |
Cash inflows from investing activities |
|
| 42,120 | 2,620 |
Cash inflows before financing activities |
|
| 47,890 | 6,395 |
Financing activities |
|
|
| |
Ordinary dividends paid |
|
| (10,032) | (10,092) |
Cash flows from share buybacks for treasury shares |
|
| (43,168) | (37,254) |
Drawdown of bank loans |
|
| 11,297 | 8,370 |
Cash outflows from financing activities |
|
| (41,903) | (38,976) |
Net movement in cash and cash equivalents |
|
| 5,987 | (32,581) |
Cash and cash equivalents at the beginning of the year |
|
| 6,870 | 41,043 |
Effect of movement in foreign exchange |
|
| 497 | (1,592) |
Cash and cash equivalents at the end of the year |
|
| 13,354 | 6,870 |
|
|
| ||
Represented by: |
|
|
| |
Cash at bank |
|
| 2,179 | 568 |
Short-term deposits |
|
| 11,175 | 6,302 |
Cash and cash equivalents at the end of the year |
|
| 13,354 | 6,870 |
Notes
1 Dividend
The Directors have proposed a final dividend in respect of the year ended 30 April 2022 of 1.27 pence per share, payable on 4 August 2022 to all shareholders on the register at close of business on 1 July 2022. The recommended final dividend is subject to approval by shareholders at the Annual General Meeting.
2 Financial Risk Management
The Company is an investment company, listed on the London Stock Exchange, and conducts its affairs so as to qualify in the United Kingdom (UK) as an investment trust under the provisions of Section 1158 of the Corporation Tax Act 2010. In so qualifying, the Company is exempted in the UK from corporation tax on capital gains on its portfolio of fixed asset investments.
The Company invests in smaller companies worldwide in order to secure a high total return. In pursuing the objective, the Company is exposed to financial risks which could result in a reduction of either or both of the value of the net assets and the profits available for distribution by way of dividend. These financial risks are principally related to the market (currency movements, interest rate changes and security price movements), liquidity and credit. The Board, together with the Manager, is responsible for the Company's risk management.
The full details of financial risks are contained in note 23 of the Report and Accounts.
3 Report and Accounts
This statement was approved by the Board on 17 June 2022. It is not the Company's statutory accounts. The statutory accounts for the financial year ended 30 April 2022 have been approved and audited and received an independent auditors' report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report. The statutory accounts for the financial year ended 30 April 2021 also received an independent auditors' report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report.
Jonathan Latter
BMO Investment Business Limited,
Company Secretary
17 June 2022
ENDS
A copy of the Report and Accounts will be submitted to the National Storage Mechanism and will shortly be available for inspection at data.fca.org.uk/#/nsm/nationalstoragemechanism
The Report and Accounts for the year ended 30 April 2022 will be posted to shareholders and made available shortly on the Company's website at bmoglobalsmallers.com (with effect from early July, this will change to globalsmallercompanies.co.uk), where up to date information on the Company, including daily NAV and share prices, factsheets and portfolio information can also be found. Copies may also be obtained from the Company's registered office, Exchange House, Primrose Street, London EC2A 2NY.
Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.