Interim Management Statement

RNS Number : 0781Q

Montanaro European Smaller C.TstPLC

28 July 2010

 



Montanaro European Smaller Companies Trust plc

Interim Management Statement

For the Period from 1 April 2010 to 28 July 2010

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 30 June 2010	As at  31 March 2010	Movement
Net asset value (000's)	£62,497	£71,059	-12.0%
Net asset value per share	377.10p	428.76p	-12.0%
Benchmark*	137.60	165.60	-16.9%
Share price	351.50p	373.00p	-5.8%
Discount	-6.8%	-13.0%
Net gearing	9.9%	11.3%

* MSCI Europe SmallCap (ex UK) Index (in Sterling terms)

Review for the Period

The Company's net asset value per share decreased by 12.0% during the three month period ended 30 June 2010. This compares to a decrease of 16.9% in the benchmark index.

European stockmarkets were weak during the period as investors became concerned about the effect of fiscal austerity measures, the downgrading of Greece's government debt and the likelihood of debt restructuring or default spreading to other countries in the region.

However, although there are concerns over the economic health of some European countries, others, mainly in Northern Europe, are performing well. In particular Germany, which alone accounts for 27% of Euro GDP, is emerging as the uncontested economic power house of Europe as it reaps the benefit of a weaker Euro. The weaker Euro is also benefiting other export economies such as Finland and the Netherlands.

Although it was disappointing that the net asset value fell during the period, the outperformance of the Company relative to the benchmark was pleasing. The best performing stocks included the Company's largest investment, Virbac, the French based provider of veterinary products, which produced better than expected Q1 results; Vacon, the Finnish manufacturer of AC drives, which reported an improved outlook statement; and Viscofan, a Spanish company which produces artificial cases for the meat industry.

Top Ten Holdings as at 30 June 2010

Company	Country	Percentage of total assets
Virbac	France	3.2
Viscofan	Spain	3.2
Prosegur Seguridad	Spain	3.2
Andritz	Austria	3.2
AF Group	Sweden	3.0
Fuchs Petrolub	Germany	2.9
GFK	Germany	2.9
Arcadis	Netherlands	2.9
Vopak	Netherlands	2.8
Vacon	Finland	2.7
Total		30.0

Geographical Analysis as at 30 June 2010

Country	Percentage of total assets
Sweden	14.7
Germany	13.8
Netherlands	12.1
France	12.0
Finland	11.6
Spain	8.2
Austria	4.9
Italy	4.4
Switzerland	4.0
Ireland	2.6
Greece	2.6
Denmark	2.3
Norway	1.6
Belgium	1.3
Liquidity	3.9
Total	100.0

Sector Distribution as at 30 June 2010

Sector	Percentage of total assets
Industrials	39.3
Consumer Discretionary	16.1
Financials	11.5
Healthcare	9.7
Energy	7.2
Materials	5.2
Information Technology	3.9
Consumer Staples	3.2
Liquidity	3.9
Total	100.0

Dividend

A second interim dividend in respect of the year ended 31 March 2010, of 2.75p per share, was paid on 1 April 2010. This made a total dividend of 4.5p per share for the year.

The Board is not aware of any significant events or transactions which have occurred since 30 June 2010 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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