Portfolio Update

BLACKROCK SMALLER COMPANIES TRUST PLC All information is at31 January 2016 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*	-5.3	-3.6	9.7		47.7	63.6
Share price*	-8.9	-2.2	10.1		52.4	70.6
Numis ex Inv Companies + AIM	-5.7	-5.9	0.0		12.6	18.5
*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):				993.99p
Net asset value Capital only (debt at fair value):				983.77p
Net asset value incl. Income (debt at par value)**:				1007.02p
Net asset value incl. Income (debt at fair value)**:				996.80p
Share price				906.50p
Discount to Cum Income NAV (debt at par value):				10.0%
Discount to Cum Income NAV (debt at fair value):				9.1%
Net yield^^^:				1.77%
Gross assets^:				£522.1m
Gearing range as a % of net assets:				0-15%
Net gearing including income (debt at par):				7.5%
2015 Ongoing charges ratio^^				0.7%
2015 Ongoing charges ratio (including performance fees):				1.0%
Ordinary shares in issue#:				47,879,792
**includes net revenue of 13.03p ^includes current year revenue ^^ As reported in the Annual Financial Report for the year ended 28 February 2015, the ongoing charges ratio is calculated as a percentage of net assets and using operating expenses, excluding performance fees, finance costs and taxation. ^^^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 9.00 pence per share, (announced on 27 April 2015, ex-dividend date 21 May 2015) and the interim dividend of 7.00 pence per share (announced on 26 October 2015 and ex-dividend date 5 November 2015) #excludes 2,113,731 shares held in treasury.
Sector Weightings	% of portfolio
Industrials	25.7
Consumer Services	20.5
Financials	19.1
Technology	10.1
Consumer Goods	8.8
Health Care	8.3
Basic Materials	5.5
Oil & Gas	1.5
Telecommunications	0.5
	-----
Total	100.0
	=====
Ten Largest Equity Investments
Company	% of portfolio
CVS Group	2.5
4imprint Group	2.0
JD Sports	1.8
Rathbone Brothers	1.8
Restore	1.6
Ted Baker	1.6
Savills	1.6
Workspace Group	1.5
Polar Capital Holdings	1.5
Dechra Pharmaceuticals	1.5
Commenting on the markets, Mike Prentis, representing the Investment Manager noted:
During January the Company’s NAV per share fell by 5.3% on a capital only basis whilst our benchmark index fell by 5.7%; the FTSE 100 Index fell by 2.5%. Stockmarkets were very nervous during January, with significant volatility, although they finished the month in a slightly more positive tone. The nervousness is based on many factors including Chinese GDP weakness, the further weakening oil price and implications for global growth and the political stability of the Middle East, the further strengthening of the US dollar and falling exports of US manufacturers, and the decision by the US Fed to increase interest rates and whether this is the correct time to start the normalisation process. On top of these we have a US Presidential election this year, and a likely vote in the UK on Brexit with the risk of delayed corporate decision making ahead of the vote. Within the UK there is also a perception that small and mid-cap market investors have tended to be positioned the same way: long UK consumer stocks, underweight resources and industrials. Any mass shift in this positioning could cause disruption. Turning to our portfolio, gearing was 7.0% at the start of the month and with the benchmark falling sharply, gearing had a significant negative impact on relative performance of 0.4%. Relative outperformance, whilst modest in the context of the sharp absolute fall in the NAV, was mainly derived from good stock selection although sector allocation also contributed slightly during the month mainly due to our underweight position in oil & gas stocks. The largest positive contributors to stock selection during the month were our holdings in JD Sports who announced that trading over Christmas had been very positive. Like for like store sales in the core fascia were up 10.6% in the five weeks to 2 January 2016, with profits ahead of expectations. We also saw good performances from Betfair Group and Fevertree Drinks. The largest detractors from relative performance were our holdings in Avon Rubber and Workspace Group. Avon Rubber announced at their AGM that dairy market conditions remain soft, and that in the Protection and Defence business they still hope to win higher margin export orders over the coming months. We believe management have invested well, and this is seen by the success of the Dairy Cluster Exchange where take up by farms remains at encouraging levels. Workspace Group announced that like for like rents were up by 1.9% to £20.58 per square foot in the quarter to 31 December 2015. Occupancy continued to increase slightly, and letting activity has been strong in January. However the shares sold off and now trade close to NAV. We still see good growth opportunities ahead for Workspace Group. Our relative performance was also negatively impacted by not owning Home Retail shares in the portfolio, a large benchmark constituent. Home Retail was approached by Sainsbury with a view to an offer; the shares rose by 38% in the month. Portfolio activity during the month was fairly modest. 17 February 2016 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.