Portfolio Update

BLACKROCK SMALLER COMPANIES TRUST PLC (LEI: 549300MS535KC2WH4082)
 

All information is at 28 February 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*	1.8	1.9	-6.8	41.6	42.1
Share price*	2.7	9.0	0.4	54.1	46.5
Numis ex Inv Companies + AIM Index	1.1	0.7	-8.2	19.7	4.6

*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):	1,386.21p
Net asset value Capital only(debt at fair value):	1,378.90p
Net asset value incl. Income(debt at par value)1:	1,407.90p
Net asset value incl. Income(debt at fair value)1:	1,400.60p
Share price	1,330.00p
Discount to Cum Income NAV (debt at par value):	5.5%
Discount to Cum Income NAV (debt at fair value):	5.0%
Net yield4:	2.1%
Gross assets2:	£716.3m
Gearing range as a % of net assets:	0-15%
Net gearing including income (debt at par):	4.9%
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 21.69p

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	30.9
Financials	23.9
Consumer Services	15.1
Health Care	7.7
Basic Materials	6.4
Consumer Goods	6.0
Oil & Gas	5.0
Technology	4.6
Utilities	0.4
	-----
Total	100.0
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Ten Largest Equity Investments
Company	% of portfolio
4imprint Group	2.3
IntegraFin	2.1
YouGov	2.1
Central Asia Metals	2.0
Big Yellow	1.9
Robert Walters	1.9
Advanced Medical Solutions	1.7
Fuller Smith & Turner – A Shares	1.6
Morgan Sindall	1.6
Workspace Group	1.6

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

During February the Company’s NAV per share rose by 1.8%¹ to 1,386.21p, whilst our benchmark index, Numis ex Inv Companies + AIM Index, rose by 1.1%¹; the FTSE 100 Index rose by 1.5%¹ (all performance figures are on a capital only basis).

The equity market recorded a second positive month in February, once again shrugging off the ongoing geopolitical uncertainty and softening global economic data and recovering some of the lost ground from the tail end of last year.

Some of the largest contributors to performance during February came from our holdings within the media sector, in particular Future, Next Fifteen Communications and Tarsus. Future, a specialist media publisher, rallied after providing a trading update stating that it expects both first half year and full year results to be “significantly ahead” of market expectations as the strong trading seen in the first quarter has continued into the second quarter. Shares in Next Fifteen continued to rise following the recent trading update confirming that revenue growth “continued to outrun sector averages”, whilst also commenting on a positive outlook. Tarsus delivered positive full year results showing strong like-for-like revenue growth. Management commented on the strong start made in the first two months of 2019 and gave a positive outlook for the full year.

The largest single detractor during the month was Gooch & Housego. The shares fell after the company issued an AGM trading update warning that growth in 2019 would slow compared to last year as a result of downturn in demand, particularly from China, and more recently the impact of US/China tariffs. We retain our confidence in the business and its medium-term potential.

Markets have made a strong start to 2019, however we believe that elevated levels of volatility may persist as economic uncertainty increases and the range of possible outcomes remains wide. Whilst this has been a long cycle there are few of the traditional signs we would expect ahead of a global recession, and therefore portfolio positioning remains largely unchanged. As noted in the midst of the market falls experienced last year, we took steps to materially reduce the gearing within the Company, however in recent weeks we have begun to reinvest some of the cash. Recent activity has included new purchases in Grafton and Bovis, whilst adding to Ibstock.

2 April 2019

¹Source: BlackRock as at 28 February 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.