Information  X 
Enter a valid email address

BlackRock Smll Cos (BRSC)

  Print      Mail a friend       Annual reports

Tuesday 03 December, 2019

BlackRock Smll Cos

Portfolio Update


All information is at 31 October 2019 and unaudited.
Performance at month end is calculated on a capital only basis

One month
Three months
Net asset value* -0.2 -1.3 5.8 37.7 70.5
Share price* 5.9 4.6 11.6 62.8 87.1
Numis ex Inv Companies + AIM Index 0.5 -1.3 -1.2 8.6 20.1

*performance calculations based on a capital only NAV with debt at par, without income reinvested. Share price performance calculations exclude income reinvestment.

Sources:  BlackRock and Datastream

At month end
Net asset value Capital only(debt at par value): 1,468.88p
Net asset value Capital only(debt at fair value): 1,456.84p
Net asset value incl. Income(debt at par value)1: 1,497.76p
Net asset value incl. Income(debt at fair value)1: 1,485.72p
Share price 1,462.00p
Discount to Cum Income NAV (debt at par value): 2.4%
Discount to Cum Income NAV (debt at fair value): 1.6%
Net yield2: 2.2%
Gross assets3: £766.8m
Gearing range as a % of net assets: 0-15%
Net gearing including income (debt at par): 1.5%
2019 Ongoing charges ratio4: 0.7%
Ordinary shares in issue5: 47,879,792
  1. includes net revenue of 28.88p.

  2. Yield calculations are based on dividends announced in the last 12 months as at the date of release of this announcement and comprise of the final dividend of 19.20 pence per share, (announced on 3 May 2019, ex-dividend on 16 May 2019) and the interim dividend of 12.80 pence per share (announced on 5 November 2019, ex-dividend on 14 November 2019).

  3. includes current year revenue.

  4. As reported in the Annual Financial Report for the year ended 28 February 2019 the Ongoing Charges Ratio (OCR) was 0.7%. The OCR is calculated as a percentage of net assets and using operating expenses, excluding performance fees, finance costs and taxation.

  5. excludes 2,113,731 shares held in treasury.

Sector Weightings % of portfolio
Industrials 31.5
Financials 21.2
Consumer Services 17.3
Consumer Goods 8.6
Health Care 6.5
Technology 5.3
Basic Materials 4.4
Oil & Gas 4.4
Telecommunications 0.8
Total 100.0


Ten Largest Equity Investments
Company % of portfolio
4imprint Group 2.6
YouGov 2.3
IntegraFin 2.0
Johnson Service Group 1.8
Avon Rubber 1.7
Big Yellow 1.7
Workspace Group 1.7
Fuller Smith & Turner – A Shares 1.6
Central Asia Metals 1.6
Oxford Instruments 1.6

Commenting on the markets, Roland Arnold, representing the Investment Manager noted:

During October the Company’s NAV per share fell by 0.2% to 1,468.88p, whilst our benchmark index, Numis ex Inv Companies + AIM Index, returned 0.5%; the FTSE 100 Index fell by 2.2% (all calculations are on a capital only basis).

The macro environment continued to drive markets during October, with ongoing trade tensions between the US and China remaining front and centre as investors await signs that the dispute can finally be resolved. The market rotation which began in September, continued during the month, particularly in the UK where the pound leapt to a three-month high as a ‘no-deal’ Brexit was taken off the table for the time being. This resulted in domestic focussed stocks outperforming and the continued outperformance of value versus growth.

The largest detractor during the month was Zotefoams, a global manufacturer of speciality foams, which cost the portfolio c.40bps in relative performance. The company, which makes technical foams for Nike trainers, reported growth in these high-performance products, however the challenging economic growth environment has resulted in a slowdown in sales in its industrial division. Shares in Trifast, the international manufacturer of industrial fastenings, fell after the company issued a profit warning. The difficult conditions highlighted in July have continued into the second quarter, particularly within the automotive sector, resulting in downgrades to forecast.

Despite the challenging end markets facing some of our holdings, the portfolio continued to benefit from companies that have continued to deliver strong updates. Specialist media publisher, Future, rose in response to an underlying earnings upgrade, while also announcing a significant accretive acquisition of TI Media, the publisher of titles like Marie Claire UK and Country Life. Shares in Eland Oil & Gas rallied after the company received a bid from Nigerian-based oil and gas company, Seplat Petroleum, at the start of the month. Elsewhere the improving sentiment towards the UK resulted in some domestic shares, including our holding in self-storage group, Big Yellow, outperforming during the month.

It is clear that end market conditions are getting tougher across many industries, and the outlook remains clouded with uncertainty over the outlook for global economic growth. Meanwhile equity markets remain sensitive to the ongoing US/China trade dispute. While in the short term, spikes in volatility and market rotations can prove to be a challenge for our style, longer term we believe our positioning towards high quality, financially strong companies, with strong market positions will continue to drive performance of the portfolio regardless of the economic backdrop. As stated many times in the past, the Brexit process remains uncertain and our approach to portfolio construction remains focussed on bottom-up company fundamentals. However, the aversion away from the UK market is creating relative valuation opportunities. This has certainly been a key driver in the increase in mergers and acquisitions in recent months, and we have also been taking the opportunity to add to high quality UK businesses at attractive valuations.

1Source: BlackRock as at 31 October 2019

3 December 2019


Latest information is available by typing on the internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3 (ICV terminal).  Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.

a d v e r t i s e m e n t