REG-BlackRock Smaller Companies Trust Plc: Portfolio Update

Blackrock Smaller Companies TrustAnnouncement

23/09/2025 11:30

The information contained in this release was correct as at 31 August 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 31 August 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      
                   %           %              year     years     years    
                                              %        %         %        
 Net asset value  -2.6        -0.7           -9.7     2.0       17.3      
 Share price      -1.8        0.6            -11.6    6.5       21.3      
 Benchmark*       -0.7        3.3            3.0      14.4      30.6      

 

Sources:  BlackRock and Deutsche Numis

*With effect from 15 January 2024 the Numis Smaller Companies plus AIM
(excluding Investment Companies) Index changed to Deutsche Numis Smaller
Companies plus AIM (excluding Investment Companies).

 

 

At month end

 Net asset value Capital only (debt at par value):      1,383.93p   
 Net asset value Capital only (debt at fair value):     1,450.73p   
 Net asset value incl. Income (debt at par value) 1 :   1,410.36p   
 Net asset value incl. Income (debt at fair value) 1 :  1,477.17p   
 Share price:                                           1,304.00p   
 Discount to Cum Income NAV (debt at par value):        7.5%        
 Discount to Cum Income NAV (debt at fair value):       11.7%       
 Net yield 2 :                                          3.4%        
 Gross assets 3 :                                       £657.2m     
 Gearing range as a % of net assets:                    0-15%       
 Net gearing including income (debt at par):            5.5%        
 Ongoing charges ratio (actual) 4 :                     0.8%        
 Ordinary shares in issue 5 :                           41,665,792  
                                                                    

 
1. Includes net revenue of 26.43p
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 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) and final dividend of 28.50 pence
per share (announced on 07 May 2025, ex-date on 15 May 2025, and paid on 26
June 2025).
3. Includes current year revenue.
4. 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 28 February 2025. 
5. Excludes 8,327,731 ordinary shares held in treasury.

                         
 Sector Weightings       % of portfolio  
 Industrials             30.0            
 Financials              29.0            
 Consumer Discretionary  9.6             
 Consumer Staples        8.6             
 Basic Materials         7.4             
 Real Estate             4.9             
 Health Care             4.2             
 Energy                  2.3             
 Technology              2.0             
 Utilities               1.1             
 Communication Services  0.9             
                         -----           
 Total                   100.0           
                         =====           
                                         
                                         
 Country Weightings      % of portfolio  
 United Kingdom          97.1            
 United States           2.9             
                         -----           
 Total                   100.0           
                         =====           
                                         
                                           

 

 Ten Largest Equity Investments  % of portfolio  
  Company                                        
 Boku                            2.9             
 XPS Pensions                    2.8             
 Tatton Asset Management         2.7             
 IntegraFin                      2.6             
 Great Portland Estates          2.5             
 Greencore Group Plc             2.4             
 Morgan Sindall                  2.3             
 Ithaca Energy                   2.3             
 Serco Group                     2.2             
 Rosebank                        2.2             
                                                 

 

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

During August the Company’s NAV per share fell -2.6% to 1,477.17p on a total
return basis, while our benchmark index, the Deutsche Numis Smaller Companies
plus AIM (excluding Investment Companies) Index, returned -0.7%.(1)

 

August delivered another strong month for global equities. However, the UK
underperformed global indices, and UK small & mid-caps underperformed
large-caps, with domestic conditions remaining challenging. The Bank of
England cut the base rate to 4% — its fifth cut this year — as inflation
hovered around 3.8%. The decision was narrowly split (5-4), suggesting a more
cautious outlook for the rest of the year as expectations for a November rate
cut are cast in doubt. Unemployment edged up to 4.7%, while CPI (Consumer
Price Index) remained elevated. Stagflation concerns grew later in the month,
as long-term UK borrowing costs surged. The 30-year gilt yield hit 5.64%, its
highest since 1998, before easing to 5.6%. This rise, driven by global bond
pressures alongside domestic fiscal uncertainty, has increased scrutiny on
Chancellor Rachel Reeves ahead of the Autumn Budget. Domestic and
rate-sensitive shares continue to struggle as interest rate expectations shift
to higher-for-longer. Consumer shares in general have struggled in the face of
months of budget related uncertainty. Finally, property has struggled from
both a shift in yield potentially reducing net asset values, coupled with
economic uncertainty potentially impacting demand.

 

The top detractor last month was Great Portland Estates (GPE), which sits
squarely in the cross hairs of yield and demand. Recent share price weakness
has GPE now back to a c.50% discount to NAV, which seems absurd for a
portfolio of assets that remain near fully occupied, with positive development
activities and a business that is unlikely to be impacted by the upcoming
budget. Costain reported its H1’25 results which saw revenues fall nearly
18%, spooking investors. The decline was attributable to a reduction in
transportation as a result of expected road project completions and delays in
some major infrastructure contracts, including a rephased schedule from HS2.
However, pretax profit rose 7.1% in the first half, and the company more than
doubled its interim dividend. We believe the sell-off in the shares was an
overreaction, given the Government’s infrastructure commitments and
regulation in water and energy driving investment, which should underpin the
group’s future growth prospects. WH Smith sold off following the
announcement that the company has identified an ‘overstatement’ in trading
EBIT (earnings before interest and tax) of c.£30m in its North American
division. The shares were down c.40% on the day, and we have exited the
position.

 

Oxford Biomedica announced a proposed placing to raise capital for strategic
investments, with plans including the expansion of its U.S. business, and
strengthening its CDMO (Contract Development and Manufacturing Organization)
network. The company announced the equity placement together with new mid-term
targets implying revenue upside, which saw the shares rally. Ithaca Energy
released strong first half 2025 results, upgrading their full-year production
guidance alongside lower cost guidance. The company also declared an interim
dividend, and an expected acceleration of a second interim dividend to
December 2025. FRP Advisory Group released FY 25 results midway through the
month, with revenue +19% year-on-year, driven by strong trading across all
service pillars.

 

For the last few months, we have been more constructive on the outlook for the
UK market. Rates have been falling, unemployment whilst rising is still at
historically low levels, real wage growth continues, and the government has
made inroads into reducing regulatory over burden which has the potential to
start to lift the country out of the productivity malaise of the last few
years. However, we have to acknowledge more recent developments have not been
supportive of this stance, with Labour backtracking on a number of
initiatives, and the bond market’s reaction to Rachel Reeves’ emotional
appearance at Prime Minister’s Questions highlights the fragile nature of
government finances. Once again, the predictability of the government is being
called into question, once again this will lead to company management pausing
on decisions, and once again it will raise the spectre of tax increases at the
next budget.

 

All is not lost however, and whilst Trump’s tariffs will no doubt have
significant and far-reaching consequences, the recent signing of several trade
deals has settled both bond and equity markets. Once the rules of engagement
are known, companies can then begin to plan for the medium to long term. The
release of the fiscal break in Germany has the potential to reinvigorate
European investment, something that many UK companies will benefit from, and
perhaps reminds investors there are profitable opportunities outside of the US
equity market.

 

The pace of M&A (mergers and acquisitions) shows little signs of slowing, with
more than 40 bids year to date, highlighting the valuation anomaly that sits
within the UK. This is the deepest and longest period of underperformance of
UK SMID vs large we have seen in over 40 years. Whilst the outlook may still
be difficult for many companies, we feel this is more than captured in
valuations. With all the uncertainty in the US equity market and investors
looking for other places to allocate money, a stabilising and cheap UK market
could be a valid and attractive alternative.

 

We thank shareholders for your ongoing support.

 

     1Source: BlackRock as at 31 August 2025

 

23 September 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.

 Release (https://mb.cision.com/Main/22402/4238549/3683372.pdf)  



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