BlackRock Smaller Companies

The information contained in this release was correct as at 30 November 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 30 November 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 16.47p

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 November the Company’s NAV per share fell by -3.7%¹ to 2,062.58p, which equalled our benchmark index, Numis ex Inv Companies + AIM Index, which also fell by -3.7%¹; for comparison the FTSE 100 Index fell by -2.5%¹ (all figures are on a capital only basis).

November was a difficult month across many global markets as investor concerns were focused on the recurring themes of supply chain disruption, inflation and rising interest rates. The second half bought the return of an unwelcome theme as Covid-19 reasserted itself across Europe, lockdowns were once again imposed, and volatility increased.

Whilst the market may have been volatile, we saw significant positive returns from the two biggest positions in the portfolio; Impax Asset Management and Watches of Switzerland. Impax rallied as investors anticipated the flows published in monthly reports would lead to an upgrade with the preliminary numbers, a prediction that proved correct when numbers were released on the 2nd December. Watches of Switzerland once again showed how changes to their operating model have not only allowed the group to weather Covid-19 pandemic but have produced enduring improvements to the business leading to further upgrades.

The two biggest detractors to relative performance came from shares we don’t own, as a bid for Vivo Energy, and decent numbers from index heavyweight Investec saw both companies deliver positive returns. Auction Technology and Grafton both drifted through the course of the month, with no significant news flow to provide support for the shares. The only trading disappointment of note was from Avon Protection, which surprised the market with a new product certification issue.

The market continues to react to short term news, one moment fixating on inflation, the next supply chain, flitting from lockdown fears to the re-opening trade. This volatility is symptomatic of a lack of consensus from investors on the outlook. Is the world still suffering from the Covid-19 hangover, have industries fundamentally changed, will supply chains ever be fixed, are interest rates going up or will central bank support be maintained in the face of rising covid numbers?

This is precisely why we try not to think too much about the short-term macro picture. Ultimately, we believe we own well-invested firms with pricing power, in markets where latent demand is high. 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. 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 30 November 2021

16 December 2021

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.