Last checked at 25 Feb 2022 14:25
BlackRock Smaller Companies Trust Plc - Portfolio UpdateBlackRock Smaller Companies Trust Plc - Portfolio Update
PR Newswire
London, February 25
The information contained in this release was correct as at 31 January 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 31 January 2022 and unaudited.Performance at month end is calculated on a Total Return basis
| One month % | Three months % | One year % | Three years % | Five years % | |
| Net asset value | -10.0 | -8.6 | 15.3 | 51.3 | 80.0 |
| Share price | -14.2 | -7.9 | 12.8 | 49.6 | 101.0 |
| Numis ex Inv Companies + AIM Index | -6.4 | -5.7 | 11.6 | 36.6 | 44.9 |
Sources: BlackRock and Datastream
At month end
| Net asset value Capital only (debt at par value): | 1,949.13p |
| Net asset value Capital only (debt at fair value): | 1,949.61p |
| Net asset value incl. Income (debt at par value)1: | 1,969.32p |
| Net asset value incl. Income (debt at fair value)1: | 1,969.80p |
| Share price: | 1,820.00p |
| Discount to Cum Income NAV (debt at par value): | 7.6% |
| Discount to Cum Income NAV (debt at fair value): | 7.6% |
| Net yield2: | 1.8% |
| Gross assets3: | £1,071.1m |
| Gearing range as a % of net assets: | 0-15% |
| Net gearing including income (debt at par): | 5.2% |
| Ongoing charges ratio (actual)4: | 0.8% |
| Ordinary shares in issue5: | 48,829,792 |
Includes net revenue of 20.19p
Yield calculations are based on dividends announced in the last 12 months as at the date of release of this announcement and comprise 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) and the first interim dividend of 13.0 pence per share (announced on 2 November 2021, ex-dividend on 11 November 2021, and pay date 2 December 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.
|
| Ten Largest Equity Investments Company | % of portfolio |
| Watches of Switzerland | 2.4 |
| Treatt | 2.3 |
| Oxford Instruments | 2.2 |
| Gamma Communications | 2.2 |
| Impax Asset Management | 2.1 |
| CVS Group | 2.1 |
| 4imprint Group | 1.9 |
| Team 17 | 1.9 |
| Next Fifteen Communications | 1.9 |
| Robert Walters | 1.9 |
Commenting on the markets, Roland Arnold, representing the Investment Manager noted:During January the Company’s NAV per share fell by -10.0%1 to 1,969.32 on a total return basis, underperforming our benchmark index which fell -6.4%1; for comparison the FTSE 100 Index rose 1.1%1 on a total return basis.
2022 begun with very volatile market moves and the largest monthly outperformance of value versus growth in more than 20 years. Inflation and concerns around central bank tightening as well as tensions in Eastern Europe led to a sharp increase in volatility, and growth stocks trading on ‘optically’ high valuations saw significant selling. This dynamic weighed heavily on the UK small and mid-cap market, notably in areas that had previously benefited from the ‘stay at home’ trend, however there was little variance between those companies that were simply a short-term Covid beneficiary and those that should continue to see strong growth.
The market dynamics in January created a challenging backdrop for the Company. The key driver of underperformance during the month was the market rotation away from growth and into value, which acted as a headwind to our quality growth investment style. The largest 5 detractors during the month were all companies that fell more than 20% despite no negative newsflow. The largest detractors included Impax Asset Management, Auction Technology Group, YouGov, Ergomed and Baltic Classifieds. The common theme across all of these holdings was that they had all been strong performers in 2021. Therefore, we remain confident that the falls are more a result of broader market moves rather than any fundamental change to the outlook for the businesses.
On the positive side the strength in the oil price (which hit $90 per barrel for the first time since October 2014) benefitted most companies within the Energy sector, for example our holdings in oil services business Hunting and E&P business Gulf Keystone Petroleum which also reported production in 2021 at the upper end of guidance. Shares in Bloomsbury publishing rose after the company said that profits would be materially ahead of expectations as the pandemic has driven a trend in reading which has continued despite many countries beginning to return to normality.
Unlike many other parts of the developed world, there was somewhat of a vacuum of corporate newsflow across the UK equity market during January, and therefore share price moves appear to be amplified as a result of the macro concerns and market volatility. This is felt to an even greater extent in the land of small & mid-caps where liquidity is limited. While corporate newsflow in recent weeks has been limited, where we have heard from companies within the portfolio, trading has remained in line with our expectations for the most part, and this reaffirms our confidence in the portfolio’s current positioning and the outlook for many businesses across the portfolio. Ultimately, we believe we own well-invested firms with pricing power, in markets where latent demand is high. 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 31 January 2022
25 February 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.