Portfolio Update

The information contained in this release was correct as at 31 March  2022.  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 March 2022 and unaudited.
Performance at month end is calculated on a Total Return basis based on NAV per share with debt at fair value
 

	One month %	Three months %	One  year %	Three  years %	Five  years %
Net asset value	-0.2	-13.5	3.3	39.5	63.3
Share price	-1.9	-22.1	-5.9	28.8	74.8
Numis ex Inv Companies + AIM Index	0.6	-10.4	-2.1	28.8	32.1

Sources:  BlackRock and Datastream

At month end

Net asset value Capital only (debt at par value):	1,852.13p
Net asset value Capital only (debt at fair value):	1,859.86p
Net asset value incl. Income (debt at par value)1:	1,878.14p
Net asset value incl. Income (debt at fair value)1:	1,885.87p
Share price:	1,652.00p
Discount to Cum Income NAV (debt at par value):	12.0%
Discount to Cum Income NAV (debt at fair value):	12.4%
Net yield2:	2.0%
Gross assets3:	£1,001.5
Gearing range as a % of net assets:	0-15%
Net gearing including income (debt at par):	4.8%
Ongoing charges ratio (actual)4:	0.7%
Ordinary shares in issue5:	48,829,792

1. Includes net revenue of 26.01p
2. Yield calculations are based on dividends announced in the last 12 months as at 31 March 2022, 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 2022 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 ordinary shares held in treasury.

Sector Weightings % of portfolio Industrials 29.2 Consumer Discretionary 22.2 Financials 14.6 Technology 9.4 Consumer Staples 7.0 Energy 5.2 Basic Materials 5.0 Health Care 3.8 Telecommunications 2.3 Real Estate 1.3 ----- Total 100.0 ===== Country Weightings % of portfolio United Kingdom 99.5 United States 0.5 ----- Total 100.0 =====

Ten Largest Equity Investments Company	% of portfolio
Next Fifteen Communications	2.5
Treatt	2.5
Watches of Switzerland	2.3
Gamma Communications	2.3
CVS Group	2.1
YouGov	2.1
4imprint Group	2.0
Robert Walters	2.0
Impax Asset Management	1.9
Oxford Instruments	1.9

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

During March the Company’s NAV per share fell by -0.2%¹ to 1,885.87p on a total return basis with debt at fair value, while our benchmark index returned +0.6%¹; for comparison large-cap outperformance continued during the month with the FTSE 100 Index rising 1.4%¹ on a total return basis.

Equity markets recovered moderately in March to conclude a tough first quarter of 2022. Geopolitical tensions, rising inflation, weakening consumer sentiment and record high energy prices put pressure on risk assets during the month. High energy prices on the back of Russian oil sanctions created headwinds for global growth whilst many central banks planned fiscal support withdrawal in response to high inflation. The U.S. 10-year Treasury yield rose to its highest level since early 2019. The Bank of England delivered a third bank rate increase in three meetings raising rates +25bp to 0.75% as UK inflation accelerated to 6.2%, a 30-year high. The cost of living crisis remains a key concern for the UK and continued to influence the equity market during the month. The Chancellor’s Spring Statement received a lot of criticism as the measures announced failed to provide much support to the poorest households.

The largest detractor during the month was Oxford Instruments which fell after Spectris decided against pursuing the acquisition of the group. We do not believe the withdrawal detracts from our investment thesis for Oxford and the outlook for the business remains positive. Johnson Service Group fell on concerns over rising energy prices and broader inflationary pressures. Essensys, which provides software to the property sector, fell after the company warned that full year results would be below consensus as COVID-related uncertainty had resulted in a fall in sales bookings in the year to date.

Serica Energy continued to benefit from the higher oil price while also confirming that they had resumed production at the Rhum field following a successful operation to replace a faulty component which had temporarily shut down production. Shares in OSB Group rose after the company reported record annual profits for 2021 due to lower cost of retail funds and an impairment credit for the year. Ingredients manufacturer, Treatt, rallied during March having been impacted by the sell-off in UK small & mid-cap growth shares earlier in the year.

The ongoing conflict between Russia and Ukraine has remained a source of uncertainty just as the world appeared to be emerging from the challenges caused by COVID-19 over the past two years. It goes without saying the situation remains extremely fluid with little clarity on how things will play out, but it is likely that market volatility will remain high. In the medium-term, the conflict adds further inflationary pressures, and it brings with it questions over the path for monetary policy. Despite the new challenges that have emerged we have not significantly changed portfolio positioning. We feel that the best investments in the current environment are similar to those held during the COVID pandemic; high quality, nimble businesses, operated by entrepreneurial management teams, with strong market positions and resilient cash-flows. Our view on consumer spending has moderated in recent months given the increasing inflationary pressures that are faced by households. As a result we have been reducing some holdings here at the margin, and we will use the proceeds to add to some of our highest conviction holdings that we feel have been oversold in the recent sell-off. 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. We thank shareholders for your ongoing support and look forward to providing further confirmation of the investment cases that we are exposed to within the portfolio in the coming months.

   ¹Source: BlackRock as at 31 March 2022

3 May 2022

ENDS
 

Latest information is available by typing www.blackrock.com/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.