Last checked at 18 Feb 2021 13:00
BlackRock Smaller Companies Trust Plc - Portfolio UpdateBlackRock Smaller Companies Trust Plc - Portfolio Update
PR Newswire
London, February 18
The information contained in this release was correct as at 31 January 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 31 January 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* | -0.3 | 22.8 | 0.6 | 13.7 | 74.0 |
| Share price* | -5.6 | 25.2 | -4.4 | 21.6 | 81.1 |
| Numis ex Inv Companies + AIM Index | 0.6 | 20.9 | 6.3 | 3.2 | 39.2 |
*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): | 1,729.58p |
| Net asset value Capital only (debt at fair value): | 1,712.90p |
| Net asset value incl. Income (debt at par value)1: | 1,735.96p |
| Net asset value incl. Income (debt at fair value)1: | 1,719.27p |
| Share price: | 1,642.00p |
| Discount to Cum Income NAV (debt at par value): | 5.4% |
| Discount to Cum Income NAV (debt at fair value): | 4.5% |
| Net yield2: | 2.0% |
| Gross assets3: | £937.3m |
| Gearing range as a % of net assets: | 0-15% |
| Net gearing including income (debt at par): | 7.0% |
| Ongoing charges ratio (actual)4: | 0.7% |
| Ordinary shares in issue5: | 48,829,792 |
Includes net revenue of 6.38p
Yield calculations are based on dividends announced in the last 12 months as at the date of release of this announcement, and comprise the second interim dividend of 19.7 pence per share (announced on 3 June 2020, ex-dividend on 11 June 2020) and 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).
Includes current year revenue.
As reported in the Annual Financial Report for the year ended 29 February 2020 the Ongoing Charges Ratio (OCR) was 0.7%. 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 |
| YouGov | 2.3 |
| Treatt | 2.2 |
| Impax Asset Management | 2.0 |
| Ergomed | 1.9 |
| IntegraFin | 1.9 |
| Stock Spirits Group | 1.9 |
| Calisen Plc | 1.7 |
| CVS Group | 1.7 |
| Breedon | 1.7 |
\* These percentages reflect portfolio exposure per stock and include more than one holding per stock where relevant.
Commenting on the markets, Roland Arnold, representing the Investment Manager noted:During January the Company’s NAV per share fell by -0.3%1 to 1,729.58p, underperforming our benchmark index which returned 0.6%1; for comparison the FTSE 100 Index fell by -0.8%1 (all calculations are on a capital only basis).
Equity markets made a positive start in January in anticipation of an activity restart and persistently low interest rates, however, many major indices finished the month in negative territory as COVID-19 infections continued to accelerate and lockdown measures were extended. In the UK, small & mid-caps bucked the trend of their larger peers and finished the month in positive territory as the removal of the risk associated with a no-deal Brexit saw more domestic UK small & mid-caps remain a focus for investors.
Despite trailing the benchmark during January, a number of holdings within the portfolio made a positive start to the year, reporting strong trading and upgrading guidance. Performance during the month reflects broader market moves rather than a result of any stock specific disappointments or fundamental changes to the outlook for our holdings. The largest positive contributor was ingredients maker Treatt, which issued a strong trading update with profits ahead of previous expectations. Positive organic revenue growth and an improving product mix has resulted in progress on margins, and with this current momentum the group expect full year profits to exceed consensus expectations. Specialist sustainable investing fund manager, Impax Asset Management, reported a 24.8% increase in assets under management, as the trend of increasing investor demand for sustainable products continued through the quarter. Shares in recruiter, Robert Walters, rose after the company reported fourth quarter results which showed an improving trend on previous quarters. Despite the challenging market environment, the company said there were signs of improvement in its forward-looking indicators, particularly in the Asia-Pacific region, which is its largest market.
The detractors to performance were mainly shares that had performed well in recent weeks which gave back some of this recent strong performance. For example, shares in Games Workshop fell despite no negative stock specific newsflow. We view the move as being driven by profit taking rather than anything fundamental as the company has demonstrated the resilience of its business model during the pandemic, with strong demand for their content and high levels of repeat business from new customers. Shares in housebuilders and other construction related sectors, including our holding in Vistry, suffered during January as investors began to consider what would happen to the current supportive housing policies.
Newsflow around the deployment of the vaccine continues to look encouraging, particularly in the UK which has made significant progress. However, as January showed us, and as we have mentioned in previous communications, the road to recovery will not be smooth and we expect the market to remain vulnerable to setbacks and negative virus related newsflow.
Despite the inevitable volatility, there is light at the end of the tunnel and many businesses can now look ahead to a return to some level of normality. Some of the structural shifts that have been witnessed through the pandemic have accelerated and these changes will be permanent, while others are less certain. What is important is that we focus on differentiated companies with compelling offerings, that are well financed and therefore have the ability to adapt to ongoing changes in consumer behaviour and take advantage as capacity from weaker peers exits the market. This Company, in our opinion contains a number of such companies and we continue to find exciting opportunities within our universe. We therefore remain optimistic about the opportunity ahead for this Company and thank shareholders for their ongoing support.
1Source: BlackRock as at 31 January 2021
18 February 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.