BlackRock Smll Cos Portfolio Update
June 18 2020 - 12:58PM
UK Regulatory
TIDMBRSC
The information contained in this release was correct as at 31 May 2020.
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 May 2020 and unaudited.
Performance at month end is calculated on a capital only basis
One Three One Three Five
month months year years years
% % % % %
Net asset value* 5.1 -11.9 -9.6 -2.5 32.1
Share price* -2.0 -13.5 -9.1 3.1 39.3
Numis ex Inv Companies + AIM Index 4.2 -10.6 -14.0 -19.4 -5.0
*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): 1,364.42p
Net asset value Capital only (debt at fair value): 1,342.76p
Net asset value incl. Income (debt at par value)1: 1,388.66p
Net asset value incl. Income (debt at fair value)1: 1,367.01p
Share price 1,284.00p
Discount to Cum Income NAV (debt at par value): 7.5%
Discount to Cum Income NAV (debt at fair value): 6.1%
Net yield2: 2.5%
Gross assets3: GBP747.7m
Gearing range as a % of net assets: 0-15%
Net gearing including income (debt at par): 8.7%
2019 Ongoing charges ratio4: 0.7%
Ordinary shares in issue5: 48,829,792
1. includes net revenue of 24.24p.
2. Yield calculations are based on dividends announced in the last 12 months
as at the date of release of this announcement, and comprise the first
interim dividend of 12.8 pence per share (announced on 5 November 2019,
ex-dividend on 14 November 2019)and the second interim dividend of 19.7
pence per share (announced on 3 June 2020, ex-dividend on 11 June 2020).
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 1,163,731 shares held in treasury.
Sector Weightings % of portfolio
Industrials 30.1
Financials 20.4
Consumer Services 17.5
Consumer Goods 11.1
Technology 6.7
Health Care 6.0
Basic Materials 4.7
Oil & Gas 1.9
Materials 0.9
Telecommunications 0.7
-----
Total 100.0
=====
Ten Largest Equity Investments
Company % of portfolio
Avon Rubber 2.4
YouGov 2.2
Games Workshop 2.0
IntegraFin 1.8
Breedon 1.7
Stock Spirits Group 1.7
4imprint Group 1.7
IG Design Group 1.5
Treatt 1.4
Calisen Plc 1.4
Commenting on the markets, Roland Arnold, representing the Investment Manager
noted:
During May the Company's NAV per share rose by 5.1%1 to 1,364.42p,
outperforming our benchmark index, Numis ex Inv Companies + AIM Index, which
returned 4.2%1; for comparison the FTSE 100 Index rose by 3.0%1 (all
calculations are on a capital only basis).
Equity markets continued to rise during May in response to signs that the worst
of the coronavirus may have passed, with the number of daily new deaths
globally falling by half from the peak in April. Countries around the world
continued to announce measures to gradually reduce lockdown restrictions, a
positive for a number of industries that have seen demand completely halted in
recent months. Meanwhile governments continued to provide unprecedented support
to economies both directly through furlough schemes, and indirectly through
central bank policy.
May saw a market rotation towards value, which isn't a favourable backdrop for
our quality growth investment style. However, some positive stock specific
successes during the month ensured that the portfolio outperformed its
benchmark. The largest contributor to performance was Games Workshop, the
creator of the Warhammer miniatures game, which continued to rise following the
positive trading update in April. Stock Spirits rose after the company reported
strong underlying revenue growth, benefitting from their off-trade channel,
which represents c.85% of the business, as consumers shifted to drinking at
home during the lockdown period. Shares in Avon Rubber performed well on the
back of positive half year results demonstrating the business's resilience
during the coronavirus crisis. The company delivered strong organic revenue and
profit growth during the first 6 months of the year, and their long-term
contracts provide a high level of earnings visibility for the remainder of the
year.
The largest detractor to performance was Countryside Properties, which fell in
response to a weak trading update, highlighting a significant fall in profits
as a result of coronavirus restrictions. Other notable detractors included
brick manufacturer, Forterra, and recruiter, Robert Walters, which both gave
back some of their strong share price performance from April, despite no stock
specific newsflow or change to the investment case for either.
As time passes newsflow around the virus is becoming more upbeat and we are
certainly seeing signs of economies returning to normal, or perhaps we should
say returning to the 'new normal'. However, the outlook for the global economy
has never been more uncertain. There is no historical parallel to current
events. Even the Global Financial Crisis of 2008 was at its heart a banking
crisis, something investors had seen before, COVID-19 is something very
different and we will be discussing the implications and impacts on a variety
of industries for many months to come. Our immediate outlook is that volatility
remains high as COVID-19 continues to dominate global events, but we must not
allow the focus on COVID-19 to let us overlook some of the other issues that
can and will drive volatility; Brexit, US / China relations or the coming US
election.
The impact of COVID-19 is unpredictable, unavoidable and unprecedented. But it
will get better. And this provides us with confidence in our strategy on a
medium-term view. Market volatility presents us with a fantastic investment
opportunity. The Company's investment strategy is focussed on quality growth
investment opportunities in smaller companies, a style that has demonstrably
worked for the long-term, and historically periods of sudden underperformance,
such as this, have proven to be excellent investment opportunities.
1Source: BlackRock as at 31 May 2020
18 June 2020
ENDS
Latest information is available by typing www.blackrock.co.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.
END
(END) Dow Jones Newswires
June 18, 2020 12:58 ET (16:58 GMT)
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