BlackRock Smll Cos Portfolio Update

 
TIDMBRSC 
 
The information contained in this release was correct as at 31May2022. 
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 31 May 2022 and unaudited. 
Performance at month end is calculated on a Total Return basis based on NAV per 
share with debt at fair value 
 
 
                                            One     Three     One    Three      Five 
                                          month    months    year    years     years 
                                              %         %       %        %         % 
 
Net asset value                            -2.0      -6.4   -13.6     22.1      37.0 
 
Share price                                -3.2     -10.8   -23.0     11.7      32.0 
 
Numis ex Inv Companies + AIM Index         -1.7      -2.6   -11.7     20.8      19.4 
 
Sources:  BlackRock and Datastream 
 
At month end 
 
Net asset value Capital only (debt at par value):                             1,708.20p 
 
Net asset value Capital only (debt at fair value):                            1,726.74p 
 
Net asset value incl. Income (debt at par value)1:                            1,721.49p 
 
Net asset value incl. Income (debt at fair value)1:                           1,740.04p 
 
Share price:                                                                  1,478.00p 
 
Discount to Cum Income NAV (debt at par value):                                   14.1% 
 
Discount to Cum Income NAV (debt at fair value):                                  15.1% 
 
Net yield2:                                                                        2.4% 
 
Gross assets3:                                                                   £925.1 
 
Gearing range as a % of net assets:                                               0-15% 
 
Net gearing including income (debt at par):                                        1.9% 
 
Ongoing charges ratio (actual)4:                                                   0.7% 
 
Ordinary shares in issue5:                                                   48,829,792 
 
 
 1. Includes net revenue of 13.29p 
 2. 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 13.0 pence per share (announced on 2 November 2021, 
    ex-dividend on 11 November 2021, and pay date 2 December 2021), and the 
    final ex-dividend of 22.00 pence per share (announced on 29 April 2022, 
    ex-date on 12 May 2022, and pay date 17 June 2022). 
 3. Includes current year revenue. 
 4. As reported in the Annual Financial Report for the year ended 28 February 
    2022 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 1,163,731 ordinary shares held in treasury. 
 
Sector Weightings                                          % of portfolio 
 
Industrials                                                          28.9 
 
Consumer Discretionary                                               22.4 
 
Financials                                                           13.9 
 
Technology                                                            9.9 
 
Consumer Staples                                                      6.4 
 
Energy                                                                5.8 
 
Basic Materials                                                       5.1 
 
Health Care                                                           3.9 
 
Telecommunications                                                    2.4 
 
Real Estate                                                           1.3 
 
                                                                    ----- 
 
Total                                                               100.0 
 
                                                                    ===== 
 
 
 
 
Country Weightings                                         % of portfolio 
 
United Kingdom                                                       99.5 
 
United States                                                         0.5 
 
                                                                    ----- 
 
Total                                                               100.0 
 
                                                                    ===== 
 
 
 
 
Ten Largest Equity Investments                             % of portfolio 
Company 
 
CVS Group                                                             2.6 
 
Gamma Communications                                                  2.5 
 
Treatt                                                                2.3 
 
Watches of Switzerland                                                2.3 
 
YouGov                                                                2.2 
 
Next Fifteen Communications                                           2.2 
 
Auction Technology                                                    2.0 
 
Workspace Group                                                       1.9 
 
Oxford Instruments                                                    1.9 
 
4imprint Group                                                        1.9 
 
 
Commenting on the markets, Roland Arnold, representing the Investment Manager 
noted: 
 
During May the Company's NAV per share fell by -2.0%1 to 1,740.04p on a total 
return basis (with debt at fair value), while our benchmark index fell -1.7%1; 
for comparison UK large caps continued to outperform during the month with the 
FTSE 100 Index rising by 1.1%1 on a total return basis. 
 
Volatility continued in equity markets during May, with the narrative remaining 
unchanged and focused on concerns around inflation, monetary tightening, 
geopolitical tensions and COVID-19. The Federal Reserve (Fed) delivered the 
expected +50bps rate hike to a range of 0.75%-1%, its biggest interest rate 
increase in more than two decades, and Fed Chairman, Jerome Powell, all but 
promised the same again at the next two meetings. The Bank of England also 
increased the Bank Rate by 0.25 percentage points to 1%, India's central bank 
announced a surprise increase to its benchmark rate, and Australia's central 
bank enacted its first interest rate hike in more than a decade. Reports of 
some high-profile earnings downgrades from large U.S. retailers, Walmart and 
Target, saw significant share price moves and raised fears that there could be 
plenty more inflation or demand normalisation related warnings to come. Once 
again, the large cap FTSE 100 Index outperformed given its heavy weighting of 
defensive sectors and US Dollar earners. Meanwhile the UK small & mid-cap 
indices lagged as a result of its UK domestic and consumer facing business 
which struggled against the backdrop of the ongoing cost of living crisis. 
 
Ingredients manufacturer, Treatt, was the largest detractor during the month. 
Despite reporting growing sales during the six months to March, the shares were 
weak as investors worried about the risk to second half profits. The company 
remains confident that it will deliver its full-year targets, as sales momentum 
has continued into the second half, with the order book up by more than 25% 
compared to last year. Next Fifteen Communications was another top detractor 
during the month. The shares were weak after the group announced the takeover 
of M&C Saatchi. Shares in Robert Walters were also weak during the month as 
concerns around the outlook for the global economy and therefore the job market 
weighed on recruitment businesses. 
 
The largest contributor to performance was Auction Technology Group, a company 
which had been a detractor in recent months as investors worried about the 
earnings, however, results were accompanied by an outlook statement that was 
indeed better than expected. Shares in regulatory and compliance software 
provider, Ideagen, soared following a flurry of takeover interest from private 
equity buyers. The de-rating that we have seen across the UK small & mid-cap 
market year-to-date coupled with weakness in Sterling, has resulted in a spike 
in interest from corporate and overseas buyers in recent weeks. We believe this 
is a positive sign of the value that our universe continues to offer and is a 
trend that we do not see slowing in the coming months if the market continues 
to price in overly bearish scenarios on all companies regardless of the outlook 
for the underlying businesses. Other notable contributors included YouGov and 
Baltic Classifieds which both rebounded following recent share price weakness. 
 
The ongoing conflict between Russia and Ukraine has remained a source of 
uncertainty just as the world appeared to be emerging from the challenges 
caused by COVID-19 over the past 2 years. It goes without saying the situation 
remains extremely fluid with little clarity on how things will play out, but it 
is likely that market volatility will remain high as ultimately, the range of 
outcomes has significantly widened. In the medium-term, the conflict adds 
further inflationary pressures, and it brings with it questions over the path 
for monetary policy. Despite the new challenges that have emerged we have not 
significantly changed portfolio positioning. We feel that the best investments 
in the current environment are similar to those held during the COVID-19 
pandemic; high quality, nimble businesses, operated by entrepreneurial 
management teams, with strong market positions and resilient cash-flows. Our 
view on consumer spending has moderated in recent months given the increasing 
inflationary pressures that are faced by households. As a result, we have been 
reducing some holdings here at the margin, and we will use the proceeds to add 

to some of our highest conviction holdings that we feel have been oversold in 
the recent sell-off. Whilst the confusing and chaotic backdrop brings 
challenges, we believe the businesses we invest in have the capability to rise 
above the short-term noise. We thank shareholders for your ongoing support and 
look forward to providing further confirmation of the investment cases that we 
are exposed to within the portfolio in the coming months. 
 
     1Source: BlackRock as at 31 May 2022 
 
 
22 June 2022 
 
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. 
 
 
 
END 
 
 

(END) Dow Jones Newswires

June 22, 2022 07:27 ET (11:27 GMT)