Portfolio Update

BLACKROCK SMALLER COMPANIES TRUST PLC (LEI: 549300MS535KC2WH4082)
 

All information is at 31 March 2019 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*	2.6	9.5	-2.9	39.9	48.4
Share price*	2.6	13.8	1.5	57.1	57.5
Numis ex Inv Companies + AIM Index	0.2	6.6	-6.6	15.2	7.6

*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):	1,422.04p
Net asset value Capital only(debt at fair value):	1,412.55p
Net asset value incl. Income(debt at par value)1:	1,445.77p
Net asset value incl. Income(debt at fair value)1:	1,436.28p
Share price	1,365.00p
Discount to Cum Income NAV (debt at par value):	5.6%
Discount to Cum Income NAV (debt at fair value):	5.0%
Net yield4:	2.1%
Gross assets2:	£734.4m
Gearing range as a % of net assets:	0-15%
Net gearing including income (debt at par):	4.8%
2018 Ongoing charges ratio (actual)3	0.7%
2018 Ongoing charges ratio (restated)3:	0.8%
2018 Ongoing charges ratio (including performance fees)3	1.0%
Ordinary shares in issue5:	47,879,792

1. includes net revenue of 23.73p

2. includes current year revenue

3. As reported in the Annual Financial Report for the year ended 28 February 2018, the ongoing charges ratio is calculated as a percentage of net assets and using operating expenses, excluding performance fees, finance costs and taxation. As announced on 17 April 2018, with effect from 1 March 2018 the Company’s management fee arrangements have changed. Under the new fee basis BlackRock receives an annual fee which is calculated based on 0.60% in respect of the first GBP 750 million of the Company's total assets less current liabilities, reducing to 0.50% thereafter. The performance fee has been removed. This will impact the Ongoing Charges ratio for the Company. The restated Ongoing Charges Ratio for the year to 28 February 2018 had the new fee arrangements been in place for the full year is estimated to have been 0.77% on this basis.

4. 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 16.00 pence per share, (announced on 27 April 2018, ex-dividend on 17 May 2018) and the interim dividend of 12.00 pence per share (announced on 29 October 2018 and gone ex-dividend on 8 November 2018)

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

Sector Weightings	% of portfolio
Industrials	30.1
Financials	23.2
Consumer Services	15.3
Health Care	8.0
Consumer Goods	7.0
Basic Materials	6.1
Oil & Gas	5.7
Technology	4.2
Utilities	0.3
Telecommunications	0.1
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Total	100.0
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Ten Largest Equity Investments
Company	% of portfolio
4imprint Group	2.8
YouGov	2.1
Robert Walters	2.0
IntegraFin	1.9
Advanced Medical Solutions	1.8
Central Asia Metals	1.8
Big Yellow	1.7
Fuller Smith & Turner – A Shares	1.7
Diversified Gas & Oil	1.6
Zotefoams	1.6

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

During March the Company’s NAV per share rose by 2.6%¹ to 1,422.04p, whilst our benchmark index, Numis ex Inv Companies + AIM Index, rose by 0.2%¹; the FTSE 100 Index rose by 2.9%¹ (all calculations are on a capital only basis).

UK equities rose for the third month in a row during March, with the total return for the first quarter of 2018 almost erasing the declines experienced in the prior three months. It has been pleasing to see that fundamentals once again seem to be the primary driver of share prices.

Shares in 4imprint, rose in response to strong full year results delivering organic revenue and profits growth ahead of expectations and raising guidance. The company markets promotional products and its investment in brand marketing has resulted in a strong increase in new customers whilst driving growth in existing customer orders. The business generates 97% of its revenues in the US, where it is the market leader despite having a small share of what is a highly fragmented market. We believe this means that there is significant opportunity for future growth. Shares in recruiter Robert Walters rose after the company reported strong performance for the full year, with profits coming in ahead of expectations, resulting in upgrades to forward guidance. Ongoing uncertainty around Brexit will inevitably impact their UK business, however 73% of net fee income is generated from overseas, and the company may benefit from any increased movement of businesses and staff away from the UK to the EU. Other notable contributors included Diversified Gas & Oil, Fuller Smith & Turner and Dechra Pharmaceuticals.

Detractors during the month were limited with no individual holdings acting as a significant detractors to relative performance.

The sharp increase in volatility that was witnessed at the tail end of last year has not continued into 2019 but we recognise the potential for volatility to increase again on any renewed concerns around the health of the global economy. We have therefore kept gearing below normal levels but as mentioned previously, we have been reinvesting in attractive opportunities as they arise. 

We remain confident in the outlook for the companies in our portfolio given our exposure to market leading global businesses, which are operating in attractive end markets and run by strong management teams. As we progress through to the later stages of the economic cycle we take comfort in the merits of our proven investment process over the long term.

29 April 2019

¹Source: BlackRock as at 31 March 2018

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.