BlackRock Smaller Companies Trust Plc - Portfolio Update
PR Newswire
LONDON, United Kingdom, March 27
The information contained in this release was correct as at 28 February 2025. Information on the Company's up to date net asset values can be found on the London Stock Exchange Website at
https://www.londonstockexchange.com/exchange/news/market-news/market-news-home.html.
BLACKROCK SMALLER COMPANIES TRUST PLC (LEI:549300MS535KC2WH4082)
All information is at 28 February 2025 and unaudited.
Performance at month end is calculated on a Total Return basis based on NAV per share with debt at fair value
| One month | Three months | One | Three | Five |
Net asset value | -4.6 | -7.3 | 0.0 | -16.2 | 5.5 |
Share price | -6.9 | -7.2 | -1.4 | -17.7 | -2.7 |
Benchmark* | -3.6 | -2.8 | 6.2 | -7.5 | 17.2 |
Sources: BlackRock and Deutsche Numis
*With effect from 15 January 2024 the Numis Smaller Companies plus AIM (excluding Investment Companies) Index to Deutsche Numis Smaller Companies plus AIM (excluding Investment Companies).
At month end
Net asset value Capital only (debt at par value): | 1,374.66p |
Net asset value Capital only (debt at fair value): | 1,434.65p |
Net asset value incl. Income (debt at par value)1: | 1,403.44p |
Net asset value incl. Income (debt at fair value)1: | 1,463.43p |
Share price: | 1,270.00p |
Discount to Cum Income NAV (debt at par value): | 9.5% |
Discount to Cum Income NAV (debt at fair value): | 13.2% |
Net yield2: | 3.3% |
Gross assets3: | £684.3m |
Gearing range as a % of net assets: | 0-15% |
Net gearing including income (debt at par): | 13.3% |
Ongoing charges ratio (actual)4: | 0.7% |
Ordinary shares in issue5: | 43,804,792
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- Includes net revenue of 28.78p
- Yield calculations are based on dividends announced in the last 12 months as at the date of release of this announcement and comprise the final dividend of 27.00 pence per share (announced on 14 May 2024, ex-date on 23 May 2024, and paid 24 June 2024) and Interim dividend of 15.50 pence per share (announced on 25 October 2024, ex-date on 31 October 2024, and paid on 04 December 2024)
- Includes current year revenue.
- The Company's ongoing charges are calculated as a percentage of average daily net assets and using the management fee and all other operating expenses excluding finance costs, direct transaction costs, custody transaction charges, VAT recovered, taxation and certain non-recurring items for year ended 29 February 2024.
- Excludes 6,188,731 ordinary shares held in treasury.
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Ten Largest Equity Investments | % of portfolio |
Breedon | 2.6 |
IntegraFin | 2.6 |
XPS Pensions | 2.6 |
Hill & Smith | 2.6 |
Alpha Group International Plc | 2.2 |
Bloomsbury Publishing | 2.2 |
Tatton Asset Management | 2.2 |
Gamma Communications | 2.1 |
Boku | 1.9 |
Workspace Group | 1.8 |
| |
Commenting on the markets, Roland Arnold, representing the Investment Manager noted:
During February the Company's NAV per share returned -4.6% to 1,463.43p on a total return basis, while our benchmark index, the Deutsche Numis Smaller Companies plus AIM (excluding Investment Companies) Index, returned -3.6%. For comparison the large cap FTSE 100 Index rose by 2.0%.1
Tariffs dominated the headlines during February and caused a broad-based move lower in risk assets across markets, with areas such as technology and consumer discretionary being the hardest hit. In the UK, large-caps benefited from being relatively shielded from tariff discussions and the market's low-technology exposure. The Bank of England struck a dovish tone with a 25bps rate cut halfway through February, as the Governor, Andrew Bailey, pointed to the UK economy's stagnation, despite a slightly stronger fourth quarter of 2024 for GDP. The move was highly anticipated by markets, but the 7-2 vote split did provide a mild surprise, with two members voting for a larger 50bps cut. Inflation data surprised to the upside for January, rising 3% against expectations of 2.8% year-on-year, its highest in 10 months. The increase was driven largely by a smaller-than-usual drop in air fares in December, and the implementation of VAT on private school fees. The economy also grew in Q4 2024, up 0.1%, defying expectations of a contraction.
Shares in IntegraFin weakened during the month, giving back some of their outperformance after the positive trading update in January. Oxford Biomedica released a trading update reporting a slightly higher than expected EBITDA (earnings before interest, taxes, depreciation, and amortisation) loss as a result of the integration of recently acquired OXB France and investments made in technical and operational hires. In our view demand and revenue growth have been strong and therefore the additional costs are understandable from a business that is fundamentally repositioning itself. Shares in Boku fell on no news flow. Numbers in January were positive and therefore we see the fall as not being related to fundamentals, but more a result of selling pressure in the market, particularly for AIM listed shares.
Chemring was the largest positive contributor during the month, experiencing a rise after Bain Capital, a US Private Equity firm, reportedly offered £1 billion for the UK-based defence business. Analysts believe this offer significantly undervalues the company. At the end of the month, Chemring issued a robust trading update, announcing a £40 million share buyback and expressing a positive outlook for future growth. Shares in XPS Pensions also increased after the company upgraded its full-year revenue guidance. This growth was driven by strong demand for its services, which was influenced by regulatory changes, new client acquisitions, and the inflation-linked nature of its contracts. Alfa Financial Software saw continued growth following strong full-year results at the end of January, which revealed operating profits that exceeded market expectations by 5%. The company has successfully shifted its business model towards software as a service (SaaS) licenses to meet customer demand and has a strong pipeline to support future growth.
The economic backdrop remains fluid, with lots of moving pieces. We continue to keep a close eye on inflation and UK unemployment, both of which remain at acceptable levels, but are likely to move as companies respond to National Insurance increases. Importantly, the valuation of UK SMID companies is attractive on a historic basis. As we move through this near-term noise, the opportunity presented by the UK Small and Mid-cap will present itself, and maybe we will finally see investors looking to allocate back to what has historically been an outperforming asset class.
We thank shareholders for your ongoing support.
1Source: BlackRock as at 28 February 2025
27 March 2025
ENDS
Latest information is available by typing www.blackrock.com/uk/brsc 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.
