Blackrock Smaller Companies Trust plc (LON:BRSC) has provided the following portfolio update.
All information is at 31 August 2021 and unaudited.
To learn more about the BlackRock Smaller Companies Trust plc please follow this link: blackrock.com/uk/brsc
Performance at month end is calculated on a capital only basis
| One month % | Three months % | One year % | Three years % | Five years % | |
| Net asset value* | 5.5 | 10.0 | 57.7 | 40.9 | 112.1 |
| Share price* | 6.4 | 9.5 | 74.8 | 44.8 | 140.1 |
| Numis ex Inv Companies + AIM Index | 4.2 | 3.7 | 45.2 | 24.8 | 53.1 |
*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): | 2,257.97p |
| Net asset value Capital only (debt at fair value): | 2,246.27p |
| Net asset value incl. Income (debt at par value)1: | 2,278.01p |
| Net asset value incl. Income (debt at fair value)1: | 2,266.31p |
| Share price: | 2,150.00p |
| Discount to Cum Income NAV (debt at par value): | 5.6% |
| Discount to Cum Income NAV (debt at fair value): | 5.1% |
| Net yield2: | 1.5% |
| Gross assets3: | £1,112.3m |
| Gearing range as a % of net assets: | 0-15% |
| Net gearing including income (debt at par): | 6.9% |
| Ongoing charges ratio (actual)4: | 0.8% |
| Ordinary shares in issue5: | 48,829,792 |
- Includes net revenue of 20.04p
- Yield calculations are based on dividends announced in the last 12 months as at the date of release of this announcement, and comprise the first interim dividend of 12.8 pence per share (announced on 5 November 2020, ex-dividend on 12 November 2020, paid on 26 November 2020) and the second interim dividend of 20.5 pence per share (announced on 7 May 2021, ex-dividend on 20 May 2021, paid on 18 June 2021).
- Includes current year revenue.
- As reported in the Annual Financial Report for the year ended 28 February 2021 the Ongoing Charges Ratio (OCR) was 0.8%. The OCR is calculated as a percentage of net assets and using operating expenses, excluding performance fees, finance costs and taxation.
- Excludes 1,163,731 ordinary shares held in treasury.
| Sector Weightings | % of portfolio |
| Industrials | 30.7 |
| Consumer Discretionary | 20.3 |
| Financials | 16.2 |
| Consumer Staples | 10.7 |
| Technology | 8 |
| Basic Materials | 4.6 |
| Health Care | 3.9 |
| Energy | 3.4 |
| Telecommunications | 1.7 |
| Real Estate | 0.5 |
| —– | |
| Total | 100 |
| ===== | |
| Country Weightings | % of portfolio |
| United Kingdom | 98.4 |
| United States | 1.3 |
| Guernsey | 0.3 |
| —– | |
| Total | 100 |
| ===== |
| Ten Largest Equity Investments Company | % of portfolio |
| Watches of Switzerland | 2.5 |
| Impax Asset Management | 2.1 |
| Treatt | 2.0 |
| CVS Group | 1.9 |
| Ergomed | 1.8 |
| Auction Technology | 1.8 |
| Stock Spirits Group | 1.8 |
| Integrafin | 1.8 |
| Oxford Instruments | 1.8 |
| Gamma Communications | 1.7 |
Commenting on the markets, Roland Arnold, representing the Investment Manager noted:
During August the Company’s NAV per share rose by 5.5%1 to 2,257.97p, outperforming our benchmark index, Numis ex Inv Companies + AIM Index, which returned 4.2%1; for comparison the FTSE 100 Index rose by 1.2%1 (all figures are on a capital only basis).Equity markets continued to rise in August as central banks around the world, led by the Federal Reserve, provided reassurance that current supportive monetary policy will continue, curbing concerns around inflation and a possible taper tantrum. Growing fears around rising Delta variant cases were more than offset by ongoing positive corporate earnings, and the continued pace of M&A (Mergers & Acquisition) activity.
The Company outperformed during the month, helped by a continuation of the above factors. The largest positive contributor was Stock Spirits, a premium spirits producer focused in Eastern Europe, which accepted a £767m takeover approach from a private equity group. Shares in Auction Technology Group have continued to rise since the company acquired Live Auctioneers, the leading player in the US Art & Antiques market. SigmaRoc, the construction materials group, rose in response to the announced purchase of Finnish limestone developer Nordalk. We participated in the c.£260m raise, which will make SigmaRoc the market-leading quarried materials group in Nothern Europe.
The largest detractor was Avon Protection which fell after warning of delayed orders, which the company attributed to a combination of COVID-19 and supply chain disruptions. Disappointingly this is the second warning this year, however, our view is that this is a short-term issue and ultimately these contracts will come through. Other detractors included Fuller Smith & Turner and video game developer Team17 which both fell back slightly during the month on no particular news.
The strength of trading that we have seen from many of our holdings reaffirms our confidence in current positioning and the outlook for many businesses across the portfolio. We continue to see evidence of companies that went into the COVID crisis in a strong position, both financially and operationally, emerging in even stronger positions. The ability of well financed, market leading businesses to improve their relative positions in times of stress has always been one of our core beliefs, and this crisis has only reinforced that view.
We continue to believe the ever-changing environment plays into the hands of dynamic smaller companies, those able to rapidly shift their business models to capitalise on new structural trends quickly as they emerge. We thank shareholders for their continued support.
1Source: BlackRock as at 31 August 2021
To learn more about the BlackRock Smaller Companies Trust plc please follow this link: blackrock.com/uk/brsc
