Interim Management Statement

RNS Number : 7115R

Standard Life UK Small.Co's Tst PLC

08 November 2011

 



Standard Life UK Smaller Companies Trust PLC

Interim Management Statement

Three months ended 30 September 2011

To the members of Standard Life UK Smaller Companies Trust plc ('the Company')

This Interim Management Statement ('IMS') has been produced solely to provide additional information to shareholders as a body to meet the relevant requirements of the UK Listing Authority's Disclosure and Transparency Rules. It should not be relied upon by any other party or for any other purpose.

This IMS relates to the period from 1 July 2011 to 30 September 2011 and contains information that covers this period, and up to the date of publication of this IMS, unless otherwise specified.

Investment objective

The objective of Standard Life UK Smaller Companies Trust plc is to achieve long term capital growth by investment in UK quoted smaller companies.

Benchmark

Hoare Govett Smaller Companies Index (excluding Investment Trusts).

Material events

On 17, 22 and 26 August 2011 and 7 September 2011, the Company issued new Ordinary shares of 200,000, 50,000, 100,000 and 75,000 at prices per Ordinary share of 213.75p, 204.00p, 205.00p and 214.75p, respectively. As at 30 September 2011, the Company had a capital structure comprising £25m nominal amount of Convertible Unsecured Loan Stock 2018 ('CULS') and 64,972,556 Ordinary shares in issue, with voting rights, and no Ordinary shares held in treasury.

On 3 October 2011, the Company issued 22,003 new Ordinary issues further to the conversion date of 30 September 2011 in relation to the CULS which resulted in a capital structure, as at date of this IMS, comprising £24,947,766 nominal amount of CULS and 64,994,559 Ordinary shares in issue, with voting rights; no Ordinary shares were held in treasury.

All resolutions put to the Annual General Meeting of the Company, held on 11 October 2011, were duly passed by shareholders, including approval of a final dividend of 1.75 pence per Ordinary share, and a special dividend of 1.00 pence per Ordinary share. Both dividends were paid on 14 October 2011 to shareholders on the register as at close of business on 16 September 2011. The ex-dividend date was 14 September 2011.

Manager's Investment Review & Outlook

Market Review

The UK smaller companies market experienced a volatile quarter. Concerns about the pace of global economic recovery and the ongoing sovereign debt worries weighed on the market. Consumer spending remained weak over the period.

Environment

Persistent market turbulence was the defining theme of recent months, with UK equities witnessing a spike in risk aversion. Indeed, the FTSE Small Cap Index was volatile throughout the quarter and finished the period slightly behind the FTSE All-Share.

The underlying source of the market's turmoil remained unchanged, with Euro-zone sovereign debt fears, stagnant domestic economic conditions and worries over the future direction of growth combining to fuel investor discomfort.

Global economic events exerted a malignant influence over the quarter. In particular, sentiment was dealt a blow by news that the US had lost its coveted S&P AAA credit rating, while fears over European sovereign debt contagion continued to reverberate.

European leaders did agree further financial aid for Greece, but the time taken to finalise the package's details, together with the lack of a lasting resolution, did not help to calm investors' nerves.

The UK economy remained listless over the three months. Second quarter GDP growth stalled at 0.2%, while consumer confidence measures slipped back again after their recovery earlier in the year. In addition, business surveys demonstrated a marked deterioration in sentiment. Against this backdrop, there were calls for the government to relax its cuts agenda and increase public spending. Furthermore, the monetary policy committee indicated that it was willing to boost its quantitative easing programme in an attempt to provide further economic stimulus.

Performance

Positive contributions to performance came from the Company's holdings in Telecom Plus, which produced good results, and Paddy Power, which reported strong trading. The shares of Blinkx, the world's largest video search engine, also performed strongly. On the downside, the Company's exposure to online clothing retailer ASOS detracted from performance amid concerns about UK trading. The shares of mining company First Quantum also fell as worries about the outlook for the global economy dominated markets.

Activity

Key purchases during the quarter included water dispenser company Waterlogic, web hosting firm Group NBT and the oil & gas explorer Cove Energy. We took profits in a number of holdings including Mulberry Group, Cineworld, engineering company Aveva and polymer manufacturer Victrex.

Outlook

Concerns about sovereign debt, the sustainability of world economic growth and consumer spending will continue to dominate the market. Until these issues are resolved, stock picking in the smaller companies' universe will prove to be challenging. However, there continues to be bottom-up support from parts of the corporate sector: indeed, some companies are doing well - particularly those which are experiencing strong demand from overseas. Broadly speaking, smaller companies are often more exposed to growth and new innovative ways of doing business than their large company equivalents. This is an area where we expect to find further exciting investment opportunities.

(Source: Standard Life Investments)

Largest Ten holdings and Transactions in Period

Ranking as at 30 September 2011	Transaction in period	Ranking as at 30 June 2011	Investment	Market Value at 30 September 2011 (£)	Total Investments (%)
1	-	1	ASOS	6,711,846	4.9
2	-	2	Abcam	6,169,931	4.5
3	-	5	Telecom Plus	6,150,397	4.5
4	-	4	Paddy Power	5,792,256	4.2
5	-	10	Rightmove	5,023,200	3.6
6	Sale	7	New Britain Palm Oil	4,696,469	3.4
7	Sale	3	Hargreaves Lansdown	4,500,000	3.3
8	Sale	8	Andor Technology	4,322,825	3.1
9	Sale	-	Mulberry	4,256,000	3.1
10	-	-	Domino's Pizza	3,432,823	2.5
			Total		37.1

(Source: Standard Life Investments)

Net assets breakdown - Sector 30 September 2011

	%
Consumer Services	28.6
Industrials	20.4
Information Technology	17.8
Financials	9.4
Consumer Goods	8.0
Healthcare	7.5
Oil & Gas	5.3
Telecoms	4.7
Basic Materials	3.5
Net borrowings	(5.2)

(Source: Standard Life Investments)

General description of Company's financial position and performance as at 30 September 2011

Trust Managers	Standard Life Investments (Since 01/09/2003)
Gross Assets	£153.2m (30/9/2011 Source: Standard Life Investments)
Market Capitalisation	£128.8m (30/9/2011 Source: Standard Life Investments)
Share Price	198.1p (30/9/2011 Source: Standard Life Investments)
CULS Price (3.5% Convertible Unsecured Loan Stock)	108.0p (30/9/2011 Source: Standard Life Investments)
Net Asset Value (capital only)	199.8p (30/9/2011 Source: Standard Life Investments)
(Discount) / Premium	Current: (0.9%) (30/9/2011 Source: Thomson Datastream)
	12 Month High: 7.2% (30/9/2011 Source: Thomson Datastream)
	12 Month Low: (4.4%) (30/9/2011 Source: Thomson Datastream)
Yield (Net)	1.4 % (30/9/2011 Source: Thomson Datastream)
Current Equity Gearing	5.2% (30/9/2011 Source: Thomson Datastream)
Dividends Semi Annually	April/October
Trust Annual Management Fee	0.65% on equity holdings 0.20% on cash holdings
Performance Fee	Up to 0.60% of gross assets
CULS Conversion price	237.2542p
CULS Conversion and Interest Payment Date	31 March and 30 September

Performance - Capital

	3 months (%)	1 year (%)	2 years (%)	3 years (%)	4 years (%)	5 years (%)
Share price	(16.4)	13.1	70.1	98.1	67.6	88.7
Net asset value	(17.6)	9.2	50.3	63.4	43.9	60.1
HGSC (ex Investment Companies)	(15.7)	(2.7)	9.9	35.3	(8.4)	(1.1)

Source: Thomson Datastream, capital returns. The percentage growth figures are calculated over periods to 30 September 2011 on a mid to mid basis.

For further information, including the latest Ordinary share price and net asset value, please refer to the Company's website, www.standardlifeinvestments.com/its

Please note that past performance is not necessarily a guide to the future and that the value of investments and the income from them may fall as well as rise.  Investors may not get back the amount they originally invested.

For Standard Life UK Smaller Companies Trust plc

Aberdeen Asset Management PLC, Secretaries

8 November 2011

 

END

 

 

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