BlackRock Smaller Companies Trust Plc - Portfolio Update

Date : 12/23/2019 @ 12:10PM
Source : PR Newswire (US)
Stock : Blackrock Smaller Co Trust Plc (BRSC)
Quote : 1484.0  -88.0 (-5.60%) @ 4:35PM
Blackrock Smaller share price Chart

BlackRock Smaller Companies Trust Plc - Portfolio Update

Blackrock Smaller (LSE:BRSC)
Historical Stock Chart

3 Months : From Nov 2019 to Feb 2020

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All information is at 30 November 2019 and unaudited.
Performance at month end is calculated on a capital only basis

One month
Three months
Net asset value* 5.4 6.1 13.8 41.8 75.9
Share price* 7.3 11.2 28.5 74.6 105.0
Numis ex Inv Companies + AIM Index 4.0 5.7 5.0 12.6 24.4

*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): 1,548.49p
Net asset value Capital only (debt at fair value): 1,536.99p
Net asset value incl. Income (debt at par value)1: 1,566.30p
Net asset value incl. Income (debt at fair value)1: 1,554.80p
Share price 1,568.00p
Premium to Cum Income NAV (debt at par value): 0.1%
Premium to Cum Income NAV (debt at fair value): 0.8%
Net yield2: 2.0%
Gross assets3: £799.7m
Gearing range as a % of net assets: 0-15%
Net gearing including income (debt at par): 2.5%
2019 Ongoing charges ratio4: 0.7%
Ordinary shares in issue5: 47,879,792
  1. includes net revenue of 17.81p.

  2. Yield calculations are based on dividends announced in the last 12 months as at the date of release of this announcement, and comprise of the final dividend of 19.20 pence per share, (announced on 03 May 2019, ex-dividend on 16 May 2019) and the interim dividend of 12.8 pence per share (announced on 5 November 2019, ex-dividend on 14 November 2019).

  3. includes current year revenue.

  4. As reported in the Annual Financial Report for the year ended 28 February 2019 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.

  5. excludes 2,113,731 shares held in treasury.

Sector Weightings % of portfolio
Industrials 32.3
Financials 20.8
Consumer Services 16.8
Consumer Goods 9.1
Health Care 6.5
Technology 5.3
Oil & Gas 4.2
Basic Materials 4.2
Telecommunications 0.8
Total 100.0


Ten Largest Equity Investments
Company % of portfolio
4imprint Group 2.6
YouGov 2.4
IntegraFin 2.1
Avon Rubber 1.9
Workspace Group 1.8
Johnson Service Group 1.8
Oxford Instruments 1.7
Big Yellow 1.6
Central Asia Metals 1.5
Bovis Homes Group 1.5

Commenting on the markets, Roland Arnold, representing the Investment Manager noted:

During November the Company’s NAV per share rose by 5.4%1 to 1,548.49p, whilst our benchmark index, Numis ex Inv Companies + AIM Index, returned 4.0%1; the FTSE 100 Index rose by 1.4%1 (all calculations are on a capital only basis).

The equity market continued to rise during the month despite ongoing geopolitical risks. Trade negotiations between the US and China were yet to be concluded, but the month was absent of any further escalation in tariffs and sentiment was buoyed throughout the month with hopes of a deal. In the UK, the election meant domestic politics, rather than Brexit, dominated headlines. Sterling continued to strengthen and domestic shares rallied in anticipation of a Conservative majority in Parliament.

The largest contributor during the month was Oxford Instruments, which rose after the company reported strong growth in half-year revenues and profits accompanied with a positive outlook for the second half of the year. DiscoverIE Group, the maker of customised electronics, reported a 22% rise in first half profits with improving margins. Despite some challenging market conditions, orders into the second half have remained strong and the group remains on track to meet full year expectations, which resulted in broker upgrades. Shares in Consort Medical rallied in response to the proposed acquisition from Swedish company, Recipharm. Bodycote added to performance after issuing a positive trading update, highlighting an improving trend on first half performance.

Fuller Smith & Turner fell after the company warned that costs associated with the sale of its brewing business have been materially higher than expected. As a result, profits before tax are expected to be unchanged from last year. Eco Animal Health Group fell after the company issued a profit warning in response to a sharp slowdown in sales in China, where demand has fallen sharply in response to the African Swine Fever epidemic that has significantly reduced the pig herd and where the impact on revenues was far greater than we had anticipated. The company’s decision to maintain the cost base, so they are well placed to benefit from the recovery in demand once the outbreak is contained meant the reduction in revenues had a disproportionate impact on profitability.

The significant Conservative majority in the General Election should begin to remove the cloud that has been hanging over the UK equity market. As a result of the increased stability in Government, the political risk premium is certainly eroding and we would expect this to clear the way for fundamentals to be the key driver to returns.  In the mid to long-term, we would expect this outcome to result in increased business confidence, and subsequently result in a return/uptick in corporate spending. We would expect this to be beneficial to our portfolio given our exposure to high quality, well capitalised companies, that have capital available to invest for growth. In recent months we have been adding to our domestic exposure through purchases of Pets At Home and OneSavings Bank, for example, but these purchases were based on the underlying fundamentals of these businesses, rather than a deliberate attempt to increase our exposure to the UK. Given our focus on bottom up fundamentals, we would therefore not expect to chase any subsequent sterling rally, much of which had already happened ahead of the election result. As stated many times in the past, our approach to portfolio construction will remain focussed on bottom-up company fundamentals, with a bias towards high quality market leading global businesses, which are operating in attractive end markets and run by strong management teams.

23 December 2019

1Source: BlackRock as at 30 November 2019


Latest information is available by typing 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.

Copyright r 23 PR Newswire

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