Last checked at 1 Apr 2022 15:43
BlackRock Smaller Companies Trust Plc - Portfolio UpdateBlackRock Smaller Companies Trust Plc - Portfolio Update
PR Newswire
London, April 1
The information contained in this release was correct as at 28February 2022. 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 28 February 2022 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 year % | Three years % | Five years % | |
| Net asset value | -4.4 | -8.9 | 7.8 | 42.8 | 67.2 |
| Share price | -7.5 | -13.7 | 0.9 | 34.8 | 75.7 |
| Numis ex Inv Companies + AIM Index | -4.9 | -7.0 | 1.5 | 28.5 | 34.6 |
Sources: BlackRock and Datastream
At month end
| Net asset value Capital only (debt at par value): | 1,856.27p |
| Net asset value Capital only (debt at fair value): | 1,860.54p |
| Net asset value incl. Income (debt at par value)1: | 1,878.69p |
| Net asset value incl. Income (debt at fair value)1: | 1,882.96p |
| Share price: | 1,684.00p |
| Discount to Cum Income NAV (debt at par value): | 10.4% |
| Discount to Cum Income NAV (debt at fair value): | 10.6% |
| Net yield2: | 2.0% |
| Gross assets3: | £1,026.8 |
| Gearing range as a % of net assets: | 0-15% |
| Net gearing including income (debt at par): | 4.3% |
| Ongoing charges ratio (actual)4: | 0.8% |
| Ordinary shares in issue5: | 48,829,792 |
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| Ten Largest Equity Investments Company | % of portfolio |
| Oxford Instruments | 2.5 |
| Watches of Switzerland | 2.4 |
| Gamma Communications | 2.3 |
| Treatt | 2.1 |
| Next Fifteen Communications | 2.0 |
| 4imprint Group | 2.0 |
| Impax Asset Management | 2.0 |
| YouGov | 1.9 |
| CVS Group | 1.9 |
| Breedon | 1.8 |
Commenting on the markets, Roland Arnold, representing the Investment Manager noted:During February the Company’s NAV per share fell by -4.4%1 to 1,882.96p on a total return basis with debt at fair value, while our benchmark index which fell -4.9%1; for comparison the FTSE 100 Index rose 0.3%1 on a total return basis.
Market volatility remained high during February, driven by a combination of hawkish pivots by developed market central banks and concerns over Russian-Ukraine tensions. The oil price pushed through US$100/barrel and bond yields moved lower as a result of Russia’s invasion, with the ultimate outcome being a firm risk-off move across markets. Inflation remained a key issue, with headline CPI (Consumer Price Index) in the UK coming in at +5.5% year-on-year for January, and the Bank of England hiked the base rate by another +25bps.
The portfolio benefited from the rise in M&A (Merger & Acquisition) activity during the month with two of our holdings receiving bids. First was Clipper Logistics which received an offer from US listed GXO Logistics, followed by Oxford Instruments which soared after the company received a bid at a sizeable premium from rival Spectris, although this bid was swiftly retracted given market conditions. YouGov rose during February after the company issued a positive update at the end of January which highlighted growth across all divisions and upgraded full year guidance.
The escalation of the conflict between Russia and Ukraine towards the end of the month saw an early flight to safety with investors exiting risk assets. As a result, recent strong performers such as Team17 were sold off during the month. Shares in veterinary practitioner CVS Group fell after the CMA (Competition and Markets Authority) announced findings that their recent acquisition of Quality Pet Care Ltd, which consists of eight practices in the UK, raised competition concerns in the vet market. CVS has subsequently offered to divest from the business and the CMA has until May to decide whether to accept the proposal, however, the findings of the investigation were clearly disappointing to the market and the investment case for CVS.
The escalation of the conflict between Russia and Ukraine has introduced a new source of uncertainty just as the world appeared to be emerging from the challenges caused by the COVID-19 pandemic over the past two years. It goes without saying the situation remains extremely fluid with little clarity on how things will play out, but it is likely that market volatility will remain high. In the medium-term, the conflict adds further inflationary pressures, and it brings with it questions over the path for monetary policy. Despite the new challenges that have emerged we have not significantly changed portfolio positioning. We feel that the best investments in the current environment are similar to those held during the COVID-19 pandemic; high quality, nimble businesses, operated by entrepreneurial management teams, with strong market positions and resilient cash-flows. Our view on consumer spending has moderated in recent months given the increasing inflationary pressures that are faced by households. As a result, we have been reducing some holdings here at the margin, and we will use the proceeds to add to some of our highest conviction holdings that we feel have been oversold in the recent sell-off. Whilst the confusing and chaotic backdrop brings challenges, we believe the businesses we invest in have the capability to rise above the short-term noise. We thank shareholders for your ongoing support and look forward to providing further confirmation of the investment cases that we are exposed to within the portfolio in the coming months.1Source: BlackRock as at 28 February 2022
1 April 2022
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.