Interim Management Statement

RNS Number : 5590G

Montanaro European Smaller C.TstPLC

02 February 2010

 



Montanaro European Smaller Companies Trust plc

Interim Management Statement

For the Three Month Period from 1 October 2009 to 31 December 2009

Investment Objective

Montanaro European Smaller Companies Trust plc aims to achieve capital growth by investing principally in European quoted smaller companies.

Performance Summary

Capital Return	As at 31 December 2009	As at  30 September 2009	Movement
Net asset value (000's)	£63,814	£61,589	3.6%
Net asset value per share	385.04p	371.62p	3.6%
Benchmark *	150.70	152.47	-1.2%
Share price	346.00p	329.00p	5.2%
Discount	-10.1%	-11.5%
Net gearing	10.9%	8.9%

* Composite benchmark based upon MSCI Europe SmallCap Index prior to 31/5/09; MSCI Europe SmallCap (ex-UK) Index thereafter.

Review for the Period

The Company's net asset value per share, on an undiluted basis, increased by 3.6% during the three month period ended 31 December 2009. This compares to a decrease of 1.2% in the benchmark index.

Towards the end of 2009 there were signs of improving global economic conditions. However, investors remained concerned over fiscal deficits, the lack of political will to address them and consequent sovereign credit risk, not just in peripheral Europe and the Middle East but also in developed countries. 

Following a period of good absolute returns but relative underperformance in the six months through 30 September 2009 as a result of the strong rally in low quality companies, the Company enjoyed good relative performance for the three month period ending 31 December 2009, as the higher quality, less leveraged companies (of the type invested in by the Company), began once again to outperform during October 2009.

Discount Management Policy

During the period, the Company announced a change to its discount management policy to the effect that it will in future target a buy back of shares if the discount is greater than 10% for a sustained period of time. Its previous policy had been to target buy backs if the discount was greater than 5% for a sustained period of time. 

Top Ten Holdings as at 31 December 2009

Company	Country	Percentage of total assets
Prosegur Seguridad	Spain	3.7
Fuchs Petrolub	Germany	3.2
Andritz	Austria	3.2
AF Group	Sweden	2.9
Virbac	France	2.8
Azimut	Italy	2.8
Poyry	Finland	2.8
TGS Nopec Geophysical	Norway	2.7
Arcadis	Netherlands	2.7
Koninklijke Vopak	Netherlands	2.7
Total		29.5

Geographical Analysis as at 31 December 2009

Country	Percentage of total assets
Netherlands	13.9
Finland	12.6
France	12.3
Sweden	11.9
Germany	11.3
Spain	10.5
Austria	5.2
Switzerland	5.2
Norway	3.9
Ireland	2.9
Italy	2.8
Greece	2.5
Belgium	1.1
Liquidity	3.9
Total	100.0

Sector Distribution as at 31 December 2009

Sector	Percentage of total assets
Industrials	38.9
Financials	12.5
Consumer Discretionary	11.2
Energy	9.2
Information Technology	8.2
Healthcare	7.9
Consumer Staples	5.1
Materials	3.2
Liquidity	3.8
Total	100.0

The Board is not aware of any significant events or transactions which have occurred since 31 December 2009 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Daily and Key Information

This statement and further information regarding the Company, including monthly factsheets, can be found at the Manager's website: www.montanaro.co.uk.

For further information please contact:

Charles Montanaro

Montanaro Asset Management Limited

Tel: [phone]

 

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