Results analysis from Kepler Trust Intelligence

Schroder BSC Social Impact Trust

28 March 2025

 

Schroder BSC Social Impact (SBSI)

28/03/2025

Results analysis from Kepler Trust Intelligence

Schroder BSC Social Impact (SBSI) has released its half year results for the period ending 31/12/2024. Over this six-month period, the trust saw a NAV per share total return increase of 0.3%.

Performance was largely driven by investment income, largely driven by the debt and equity for social enterprises portion continuing to mature. This was somewhat offset by downwards revisions to portfolio valuations, in particular in the high impact housing portion.

The trust delivered on several social outcomes, with highlights including completing on contracts for nearly 200 affordable homes, a new residential facility for those with learning difficulties being registered by Ofsted and the expansion of important social housing tenancy schemes.

Portfolio activity was limited with some return of capital, two partial repayments post-period end and an earlier investment in a housing fund asset beginning to be drawn down. The managers divide the portfolio into the high impact portfolio plus liquidity assets. As at period end, the high impact portfolio was split to debt and equity for social enterprises at 41% of NAV, high impact housing at 43% and to social outcomes contracts at 3%.

SBSI increased its dividend by 28%, and representing a yield of 4.2%.

Despite the resilient NAV and board undertaking NAV-accretive share buy backs, the discount widened in the period and subsequently.

The managers remain positive on the outlook. The new government has indicated considerable support, best demonstrated by a new advisory group specifically focussed on the sector.

Chair Susannah Nicklin commented on SBSI's status as "a unique proposition to investors, delivering deep positive impact to disadvantaged communities across the UK", adding the trust has "a promising pipeline of opportunities […] emerging in diverse and critical thematic areas."

Kepler View

There has been a notable improvement in Schroder BSC Social Impact's (SBSI) backdrop, following the encouraging signs from the new government. This has arguably been reflected in the resilient NAV performance in a period of volatility. The majority of this was driven by investing income from the maturing portfolio. We believe this is encouraging as it demonstrates that the assets are developing as expected and showing a return on their investment, arguably with future value baked in.

This says nothing of the trust's social impact. SBSI, in our opinion, is one of the premier investment vehicles for investors looking to 'do good' with their capital, which will have a significant emotive response for many, and puts SBSI at the top of any potential shortlist for this space, in our view.

We believe SBSI's resilience makes for a very compelling defensive option, which is arguably enhanced by the current discount. This widened during the year and has accelerated since which we believe could provide an attractive entry point to a unique portfolio with appealing characteristics.

The discount also improves the trust's dividend picture, which has increased in every year since launch supported by good income generation. The historic yield is now 4.2% adding to SBSI's investment case.

CLICK HERE TO READ THE FULL REPORT 

Visit Kepler Trust Intelligence for more high quality independent investment trust research.

Important information

This report has been issued by Kepler Partners LLP.  The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research.

Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that if you are a private investor independent financial advice should be taken before making any investment or financial decision.

Kepler Partners is not authorised to make recommendations to retail clients. This report has been issued by Kepler Partners LLP, is based on factual information only, is solely for information purposes only and any views contained in it must not be construed as investment or tax advice or a recommendation to buy, sell or take any action in relation to any investment.

The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country. In particular, this website is exclusively for non-US Persons. Persons who access this information are required to inform themselves and to comply with any such restrictions.

The information contained in this website is not intended to constitute, and should not be construed as, investment advice. No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice.

This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only.  

Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm's internal rules. A copy of the firm's Conflict of Interest policy is available on request.

PLEASE SEE ALSO OUR TERMS AND CONDITIONS

Kepler Partners LLP is authorised and regulated by the Financial Conduct Authority (FRN 480590), registered in England and Wales at 70 Conduit Street, London W1S 2GF with registered number OC334771.

 

END