Edison review on Standard Life UK Smaller Co's

RNS Number : 2754N

Standard Life UK Small.Co's Tst PLC

07 August 2017

 

London, UK, 7 August 2017

Edison issues review on Standard Life UK Smaller Companies (SLS)

Standard Life UK Smaller Companies Trust (SLS) has been managed by Harry Nimmo since 2003. He aims to generate long-term capital growth from a diversified portfolio of smaller-cap UK equites. While a little more cautious on the near-term outlook for small caps given, their strong start to the year and Brexit-related uncertainty, Nimmo remains very positive on the longer-term outlook. He suggests that the portfolio's companies have potential earnings growth of 10-15% pa, which bodes well for SLS's dividend growth. The trust has a very strong performance track record; it has outperformed its Numis Smaller Companies ex-Investment Companies Index benchmark over one, three, five and 10 years. Over the last 10 years, SLS's dividend has compounded at an annual rate of 23.5%; its current yield is 1.5%.

SLS's current 6.3% share price discount to cum-income NAV is only slightly lower than its 12-month average of 6.6%, but has narrowed meaningfully from its five-year high of 11.8% in July 2016. The board has an active discount management policy, aiming to keep the discount at or below 8%. Share repurchases are the preferred method and are supplemented with discretionary six-month tender offers.  

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