BlackRock Smaller Companies

The information contained in this release was correct as at 31 October 2021.  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 October 2021 and unaudited.
Performance at month end is calculated on a capital only basis
 

*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

1. Includes net revenue of 27.09p

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 final dividend of 20.5 pence per share (announced on 7 May 2021, ex-dividend on 20 May 2021, paid on 18 June 2021) and 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).

3. Includes current year revenue.

4. 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.

5. Excludes 1,163,731 ordinary shares held in treasury.

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

During October the Company’s NAV per share fell by 0.7% to 2,141.16p on a capital only basis, which was in line with our benchmark index which also fell by 0.7%; for comparison the FTSE 100 Index rose by 2.1% on a capital only basis.

After the September sell-off, October brought a recovery across many global markets; however UK small and mid-cap indices fell back as consumer related sectors struggled in the face of Covid-19 nervousness and concerns over potential inflation driven rate hikes from the Bank of England. Companies have broadly reported positive earnings, although supply chain issues and rising cost pressures have continued to cloud the outlook for many businesses.

Recruiter Robert Walters continued to see an acceleration in recruitment activity levels across all geographies, with the group reporting a 26% rise in Q3 gross profits. As a result, management have guided to full year profits being comfortably ahead of market expectations. Shares in IntegraFin, the operator of the Transact investment platform, rose in response to a positive update showing continued growth in funds under management, with strong retention rate for customers acquired during the pandemic. Ingredients manufacturer Treatt rose after the company reported that profits for the year ending 30 September 2021 would be in line with its previously upgraded guidance with strong demand for its healthier living categories. The outlook for the group also looks encouraging, with the order book up year-on-year and potential for the company to drive further growth through strategic investments in the coming year.

Shares in Qinetiq fell back after the defence business said that trading is in line with expectations but warned that technical and supply chain issues on a large programme could result in a write-down of short-term guidance. Shares in IG Design Group fell after the business issued a profit warning as a result of ongoing supply chain issues and rising input costs.

The current environment continues to present us with challenges and the market remains vulnerable to spikes in volatility. However, we see the current challenges as an opportunity for this strategy. While there are many concerns around supply chain issues and rising cost inflation, these issues are supply-side rather than demand-driven, and we believe that a supply-side issue in a capitalist market promotes a supply-side response, i.e. more investment. We would be much more concerned if the issues were demand-led, which would raise the spectre of stagflation.

Ultimately, we believe we own well-invested firms with pricing power, in markets where latent demand is high, so we think that we are in the right place. There is no financial crisis, consumers don’t have masses of debt, corporates are well capitalised and banks have capital. We don’t believe any rate rises will derail the recovery, and most importantly we are confident that we own market leading businesses. We thank shareholders for their continued support.

     ¹Source: BlackRock as at 31 October 2021

    22 November 2021

ENDS
 

Latest information is available by typing www.blackrock.co.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.