BLACKROCK SMALLER COMPANIES TRUST PLC

(BRSC)
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BlackRock Smaller Companies Trust Plc - Portfolio Update

01/28/2022 | 01:14pm EDT

The information contained in this release was correct as at 31 December 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 December 2021 and unaudited.
Performance at month end is calculated on NAV with debt at par and with dividends reinvested

One month
%
Three months
%
One
 year
%
Three
 years
%
Five
 years
%
Net asset value 5.2 0.8 27.9 76.2 107.4
Share price 8.6 3.6 24.0 88.1 144.0
Numis ex Inv Companies + AIM Index 4.2 -0.1 19.8 53.5 57.5

Sources:  BlackRock and Datastream

At month end

Net asset value Capital only (debt at par value): 2,167.47p
Net asset value Capital only (debt at fair value): 2,160.18p
Net asset value incl. Income (debt at par value)1: 2,187.15p
Net asset value incl. Income (debt at fair value)1: 2,179.86p
Share price: 2,120.00p
Discount to Cum Income NAV (debt at par value): 3.1%
Discount to Cum Income NAV (debt at fair value): 2.7%
Net yield2: 1.6%
Gross assets3: £1,068.0m
Gearing range as a % of net assets: 0-15%
Net gearing including income (debt at par): 5.1%
Ongoing charges ratio (actual)4: 0.8%
Ordinary shares in issue5: 48,829,792
  1. Includes net revenue of 19.68p

  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 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).

  3. Includes current year revenue.

  4. 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.

  5. Excludes 1,163,731 ordinary shares held in treasury.

Sector Weightings % of portfolio
Industrials 29.5
Consumer Discretionary 22.6
Financials 16.7
Technology 9.3
Consumer Staples 6.9
Basic Materials 5.4
Health Care 3.8
Energy 3.5
Telecommunications 1.9
Real Estate 0.4
-----
Total 100.0
=====

   

Country Weightings % of portfolio
United Kingdom 98.9
United States 1.1
-----
Total 100.0
=====

   

Ten Largest Equity Investments
Company
% of portfolio
Impax Asset Management 2.8
Watches of Switzerland 2.6
Treatt 2.6
Oxford Instruments 2.4
YouGov 2.1
Auction Technology 2.0
IntegraFin 1.9
Gamma Communications 1.9
CVS Group 1.9
Ergomed 1.8

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

During December the Company’s NAV per share rose by 5.2% to 2,187.15p, outperforming our benchmark index, Numis ex Inv Companies + AIM Index, which rose by 4.2%; for comparison the FTSE 100 Index rose 4.8% (all figures are on a total return basis).

Following the Omicron-induced sell-off in late November, risk assets remained under pressure in early December.  However, equity markets bounced back later in the month as some of the initial concerns about the new variant faded; despite daily Covid cases reaching record highs, hospitalisation rates remained contained and the Omicron variant proved less significant than initially feared. The Bank of England continued their recent run of surprises by unexpectedly raising the base rate to 0.25% after headline inflation hit a 10-year high of 5.1%.

The largest positive contributor to performance was Auction Technology Group. The company reported strong results in December and raised guidance for 2022 ahead of expectations. Shares in ingredients manufacturer, Treatt, rose following results at the end of November which showed continued demand for its fragrances and flavourings resulting in a +41% rise in profits for the year ending September 2021. Next Fifteen Communications rose after the company reported positive trading ahead of management expectations across all four of its divisions and raised full-year guidance.

The largest detractor during the month was a share that we don’t own, Clinigen, which rallied following a bid from a private equity buyer. Shares in clothing retailer Joules fell after the company warned that global supply chain issues had resulted in higher costs and stock delays, leading to pre-tax profits being lower than the previous year. Other than this, detractors were relatively small and unrelated to any stock specific newsflow, for example Gamma Communications which ended the month slightly lower.

The outlook remains unclear and the market continues to react to short-term news, one moment fixating on inflation, the next supply chain, flitting from lockdown fears to the re-opening trade. This volatility is symptomatic of a lack of consensus from investors on the outlook. Is the world still suffering from the Covid-19 hangover, have industries fundamentally changed, will supply chains ever be fixed, are central banks going to follow in the footsteps of the Bank of England and to what extent?

This is precisely why we try not to think too much about the short-term macro picture. 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. There is no financial crisis, consumers don’t have masses of debt, corporates are well capitalised and banks have capital. We don’t believe any rate rises will derail the recovery, and most importantly we are confident that we own market leading businesses. We thank shareholders for their continued support.

     1Source: BlackRock as at 31 December 2021

28 January 2022


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.


© PRNewswire 2022
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