Interim Management Statement

RNS Number : 0866T

F&C U.S. Smaller Companies PLC

14 November 2013

 



F&C US Smaller Companies PLC

Interim Management Statement

For the four months ended 31 October 2013

Investment Objective

To achieve long-term capital growth by investing in a diversified portfolio primarily of quoted US smaller and medium sized companies.

Performance summary

	31 October  2013	30 June  2013	Movement
Net assets	£156.20m	£147.69m	5.8%
Net asset value ("NAV") per      share	653.97p	618.35p	5.8%
Russell 2000 Index      (sterling adjusted)	684.77	644.48	6.3%
Share price	661.00p	644.00p	2.6%
Premium to NAV per share	1.1%	4.7%

Four month review

The NAV per share rose by 5.8% in the four months to 31 October 2013.  This compares to a gain of 6.3% in the benchmark, the Russell 2000 Index (sterling adjusted) during the same period. This period was a difficult time for value stocks, the kind favoured by the Company's conservative approach to investment (the Russell 2000 Value index underperformed the Russell 2000 index by 1.9% in the four months). Over the long term, however, the Company's approach produces good capital performance.

In the four month period, the market rose as the Fed signalled that quantitative easing would not be reduced soon.

The best performing stocks that had most impact were the provider of contract services to the oil and gas industry, Willbros Group, helped by a refinancing and improved results, Grand Canyon Education (online college) where growth in enrolment exceeded expectations, and Alere, where management are under pressure to deliver a turnaround. Disappointing performance came from Premiere Global Services which saw lower profits forecasts because of foreign exchange, the portfolio holding cash in a rising market, and ViaSat, which saw profit taking after earlier strong performance.

We bought one new holding, Mercury Systems (defence electronics) and sold one, Allied Nevada Gold (gold mining). There were significant additions to Genesee & Wyoming and reductions of The Andersons, Gulfmark Offshore and Grand Canyon Education.

The Company is not currently geared.

There have been no share buybacks or share issues during the period.

Ten Largest Holdings

31 Oct  2013	30 Jun 2013	Company Description	Percentage of  total investments
1	2	Rex Energy Oil and gas exploration and production.	3.0
2	6	Alere Diagnostic tools.	2.8
3	9	Orbital Sciences Small rockets and satellites.	2.6
4	4	Atlantic Tele-Network Telecommunication holding company	2.5
5	18	Airgas Distributor of bottled gases.	2.5
6	30	The Chefs' Warehouse Specialised food distributor.	2.4
7	1	ViaSat Satellite equipment and services.	2.4
8	11	Conn's Retailer of home appliances, furniture and consumer electronics.	2.4
9	38	Bottomline Technologies Automated payment software.	2.4
10	15	ACI Worldwide Electronic funds transfer software for banks.	2.3

Industrial Classification

	31 October 2013 Percentage of total investments	30 June 2013 Percentage of total investments
Producer Durables	25.2	25.4
Financial Services	17.3	17.3
Consumer Discretionary	16.7	17.6
Technology	10.9	9.1
Healthcare	10.4	10.2
Consumer Staples	5.5	6.7
Energy	5.1	4.1
Utilities	4.5	5.0
Materials & Processing	4.4	4.6

Outlook

The most recent Institute of Supply Management's manufacturing report suggests that growth in the United States has accelerated. The timing and pace of a reduction in quantitative easing remains a key concern for investors.

The Board is not aware of any significant events or transactions which have occurred between 31 October 2013 and the date of publication of this statement which would have a material impact on the financial position of the Company.

Management

The Board announced on 21 October 2013 that it had been informed that Robert Siddles, the Company's portfolio manager, had resigned from F&C and would be leaving at the end of the year. The Board has served protective notice of termination of the management contract on F&C with a view to retaining the services of Mr Siddles as the Company's investment manager at his new employer.

Daily and Key Information

Further information regarding the Company, including monthly factsheets and daily NAVs published since the end of the period are available on the internet at www.fandcussmallers.com

By order of the Board

F&C Management Limited, Secretary

14 November 2013

 

END

 

 

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