Global Smlr Cos.Tst - Annual Financial Report
26/06/2024 07:00
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RNS Number : 8624T Global Smaller Cos. Trust PLC (The) 26 June 2024
LONDON STOCK EXCHANGE ANNOUNCEMENT
The Global Smaller Companies Trust PLC
Statement of Audited Results
for the year ended 30 April 2024
Legal Entity Identifier: 2138008RRULYQP8VP386
Information disclosed in accordance with Disclosure Guidance and Transparency
Rule 4.1
Financial highlights
Net Asset Value ('NAV') with debt at fair value total return of 9.0% (2023:
-2.9%) versus 11.3% from the Benchmark (2023: -2.1%)
The NAV with debt at fair value rose to 178.1p from 165.7p.
Share price total return of 12.7% (2023: -6.2%)
The share price ended the year at 160.2p (2023: 144.6p).
Total dividend of 2.81 pence (2023: 2.30p)
54th consecutive annual increase, up by 22.2% (2023: up by 25.0%).
Shares ended the year at a discount to the NAV of 10.0% (2023: 12.7%)
Date: 26 June 2024
Contact: Nish
Patel
Columbia Threadneedle
Investment Business Limited
020 7464 5000
Chairman's Statement
It was pleasing to see equity markets bounce back during the financial year
under review. Foremost in investors' minds was the outlook for inflation and
interest rates. While inflation fell significantly in most parts of the world,
tight labour markets meant that it remained higher than central bank targets
and as a consequence authorities delayed cutting interest rates. As the year
progressed it became increasingly evident that within developed economies
consumers were operating at two different speeds: spending by higher income
earners was supported by rising asset prices and interest income whilst
consumption by the lower income cohort was hampered by higher costs of living
that were not sufficiently covered by wage increases. Despite this mixed
consumer environment, the global economy continued to grow and performed
significantly better than had been feared at the start of the year. Sadly,
geopolitical tensions continued to rise in the year with conflict breaking out
in the Middle East, exacerbating an already tense backdrop with the war in
Ukraine showing no sign of ending soon and unease between China and the US
growing.
Given these uncertainties, it was only natural that investors gravitated
towards the safety that larger companies offer and smaller companies lagged as
a consequence. In the US, market returns were driven by a handful of larger
companies that were in some way exposed to the fast-growing areas of
Artificial Intelligence ('AI') and cloud computing. On the whole, developed
market equities performed well, particularly in North America and Japan. A
sense of optimism returned to Japan with corporations adopting more
shareholder-friendly policies and the country moving from deflation to
inflation. It was very encouraging to see Japanese smaller companies deliver
earnings growth well in excess of other major developed markets in this
financial year. China was laden by a slowdown in its domestic economy, which
appears to be working through a downturn in its real estate sector. Outside of
China, emerging markets showed strength, especially in the case of India.
Four years on from the onset of the COVID 19 pandemic, several industries were
still adjusting to a new environment, with some suffering from normalisation
in activity levels and others benefitting from recovery. On the bright side,
this did create opportunities for your Company to purchase interests in high
quality businesses with good long term prospects at attractive valuations. As
businesses and investors became more confident that interest rates had peaked,
capital markets transactions picked up, resulting in increased takeover
activity and it was pleasing that your Company was a beneficiary of this. The
Company has several holdings that have been owned for many years, initially
bought when they were much smaller businesses. Many of them delivered another
year of shareholder value creation. In the Lead Manager's Review you will be
pleased to learn that we have added to this cohort of long term winners;
companies that we think will be instrumental in generating future returns for
your Company.
Performance and the Discount
Having fallen by 6.3% in the first half of the financial year, the Company's
Net Asset Value ('NAV') total return (with long term borrowings at fair value)
recovered well in the second half to end the financial year up 9.0%.
The total return from the Company's Benchmark, a blend of two indices, the
MSCI All Country World ex UK Small Cap Index net (80%) and the Deutsche Numis
UK Smaller Companies (excluding investment companies) Index (20%) for the year
to 30 April 2024 was 11.3%. Longer term total returns from the NAV, Benchmark
and share price are shown in the following table, highlighting the strong
returns that the asset class has delivered to patient investors.
Performance: Total returns over the long-term
1 year 3 years 5 years % 10 years 25 years
% % % %
Company NAV total return 9.0 5.5 34.6 136.6 859.8
Benchmark total return 11.3 5.6 39.8 135.0 717.6
Company share price total return 27.2 1,016.9
12.7 -1.0 114.4
Source: Columbia Threadneedle Investments
Over the last few years UK investment trust company discounts have widened,
given increased caution around the economic and geopolitical outlook. There
have been outflows from UK based equity funds in general and smaller company
funds have been hurt even more than larger company funds by this trend.
Starting the financial year at 12.7%, your Company's discount reached 17.7% in
July 2023 before closing at 10.0%, still some way from the Board's target of
less than 5%. The narrower discount meant that the share price rose by 10.8%
over the year, or by 12.7% on a total return basis, ahead of the Benchmark.
The Board continue to believe that a consistently applied share buyback
approach is in shareholder's best interests, providing liquidity for those in
need of an exit along with NAV accretion to remaining holders. The pace of
buybacks stepped up compared to previous years with some 30.2m shares bought
back, representing 5.8% of the starting share capital (2023: 24.6m shares)
repurchased across some 214 trading days, enhancing the NAV by 0.6% in the
process. The chart on page 4 of the Annual Report and Financial Statements
illustrates the Company's discount (and premium) over the last 10 years and
that of the wider investment trust sector, providing a reminder that
discounts/premiums in the investment trust sector tend to be cyclical. Good
investment performance, share repurchases and increased interest in the shares
from both existing and new investors will be key in helping to address the
discount in the medium term.
Given the attractive relative and absolute valuations on offer in equities of
smaller companies, marketing activity over a number of channels increased
significantly over the course of the year. In order to seek to maximise the
effectiveness of our marketing initiatives, the Board engaged a specialist
third party marketing agency to sharpen the Company's principal selling
points. The Global Smaller Companies Trust offers a simple, lower risk way to
access the faster growth potential of the world's most exciting smaller
companies; it uses a long-term approach to investing in high quality
businesses that are undervalued and this has resulted in a track record of
delivering strong total returns to shareholders with lower levels of
volatility.
Dividends
It was another positive year on the income front. Revenue returns per share
rose by a healthy 21.4% (2023: 28.6%) as income from both UK and overseas
based holdings grew strongly. Following on from the 7.9% increase in the
interim dividend, the Board has decided to recommend the payment of a final
dividend of 2.13p, meaning the full year payment will be up by 22.2% to 2.81p.
This will be paid to shareholders on 20 August 2024, and will be the 54th
consecutive increase in the Company's dividend.
Costs
Ongoing charges (excluding performance fees from collective holdings) for the
year reduced slightly over the year moving from 0.79% to 0.78%. Ongoing
charges including performance fees from collective holdings were 0.80% (2023:
0.79%). These remain low compared to many smaller company funds in the market.
Performance by Region
The Lead Manager's Review starting on page 8 of the Annual Report and
Financial Statements covers the year from a market and portfolio view in
detail.
Geographical performance (total return sterling adjusted)
for the year ended 30 April 2024
Portfolio Local smaller companies index(†)
UK 5.2% 7.2%
Europe 4.5% 4.1%
North America 10.3% 13.4%
Japan 10.1% 8.6%
Rest of World* 10.8% 16.9% (Asia Pacific ex Japan)
14.5% (Latin America)
Source: Columbia Threadneedle Investments
*Performance of the Rest of World portfolio is shown here against both Asian
and Latin American smaller company indices
(†)See Lead Manager's Review in the Annual Report and Financial Statements
The table above shows how our regional portfolios performed in the year
compared to their relevant local smaller company indices. Relative to the
local small cap market returns, we were behind in North America and the UK,
while in Europe we were ahead. After careful consideration and following
extensive discussions with the Board, the Manager insourced approximately half
of the Company's exposure to Japanese equities, making further use of the
additional resources available at Columbia Threadneedle Investments. This is
covered in more detail in the Lead Manager's Review in the Annual Report and
Financial Statements. It was pleasing to see early results from this change
with the Japanese portfolio on the whole outperforming its benchmark in the
year. The Rest of World portfolio of collectives was behind its benchmark,
hurt by widening discounts on the two investment trust companies held.
Asset allocation
Asset allocation positioning hurt relative performance in the year, largely
reflecting the fact that we were overweight the UK and underweight North
America. Over the course of the year, there were some movements in absolute
geographic weightings. Our exposure to Asian markets increased at the expense
of North America, the UK and Europe. The Manager believes that smaller company
valuations are more attractive in the UK, Europe and Japan in comparison to
North America and this is reflected in our year-end positioning.
Geographical distribution of the investment portfolio as at 30 April 2024
North America 40.8% (41.7%)
UK 24.7% (25.3%)
Rest of World 13.5% (12.4%)
Europe 11.5% (12.1%)
Japan 9.5% (8.5%)
The percentages in brackets are as at 30 April 2023
Source: Columbia Threadneedle Investments
The following table shows the weightings of the portfolio versus the Benchmark
at the end of the financial year.
Geographical weightings of the portfolio and the revised Benchmark
Portfolio weight (%) Benchmark weight (%)
UK 24.7 20.0
Europe 11.5 9.6
North America 40.8 46.4
Japan 9.5 8.4
Rest of World 13.5 15.6
Source: Columbia Threadneedle Investments
Gearing Policy
The Board remains of the view that making use of our borrowing powers over the
long term will serve to enhance shareholder returns as markets rise over time.
At the end of the financial year, effective gearing was 4.7% compared to 5.2%
a year earlier. Borrowings were made up of £35m 2.26% sterling loan notes
maturing in 2039 and £16.5m of drawings in US dollars, Yen and Euros under
our revolving credit facility. Reflecting the predominantly fixed rate nature
of the debt, our borrowing costs remain low, although they have risen as
interest rates have moved up.
Environmental, Social and Governance ('ESG')
While your Company is not an ESG labelled fund, the investment fund management
team carefully considers ESG factors in making their stock selections.
Analysis in this regard from the Manager's Responsible Investments team has
continued to be useful, with regular input provided to the fund managers on
specific topics of interest and new ESG developments. Engagement with the
management teams of companies held in the portfolio has continued and some
examples of this work are outlined in the Responsible Investment report on
pages 23 to 26 of the Annual Report and Financial Statements.
Board Changes
As reported in the Half-Year Report, having followed a formal recruitment
process, the Company was pleased to appoint two new non-executive Directors,
Bulbul Barrett and Randeep Grewal, with effect from 1 December 2023. On 11
December 2023, David Stileman retired from the Board and Jo Dixon will also
retire following the conclusion of the forthcoming Annual General Meeting. Jo
is the Chairman of the Audit and Management Engagement Committee and the
Senior Independent Director and following her retirement Nick Bannerman and
Graham Oldroyd will fulfil these roles respectively.
David and Jo were appointed in 2015, and both have contributed significantly
to the Company, bringing their wide-ranging experience to the Board. We record
our appreciation and gratitude to David and Jo for their dedicated service to
the Company and wish them well for the future.
Retirement of Peter Ewins
Peter Ewins stepped down as joint Lead Manager on 1 May 2024 and will retire
from Columbia Threadneedle Investments this summer. Since he became Lead
Manager of the portfolio in August 2005 he and his team produced excellent
returns for shareholders. In fact, the NAV total return was 517.6%, virtually
matched by a share price total return of 517.0% over his tenure. This was
achieved with lower volatility than a number of other smaller company
investment vehicles over this period. We are extremely grateful for Peter's
dependable contribution and dedicated service and for his mentorship of Nish
Patel, our new Lead Manager. We wish Peter a long and happy retirement.
Annual General Meeting
The Annual General Meeting will take place at The Chartered Accountants Hall,
1 Moorgate Place, London EC2R 6EA on Tuesday, 13 August 2024 at 12.00 noon. We
hope as many shareholders as possible will attend. Nish Patel, the Lead
Manager, will give a review of the year together with his view on the outlook.
We will also be streaming the meeting live on the internet so that those
shareholders who cannot attend in person will be able to view the proceedings.
The live stream can be accessed by registering here:
https://www.investormeetcompany.com/the-global-smaller-companies-trust-plc/register
(https://www.investormeetcompany.com/the-global-smaller-companies-trust-plc/register)
.
Voting on all resolutions at the AGM will be conducted by way of a poll, the
results of which will be announced and posted on the Company's website
following the meeting. You are therefore encouraged to lodge your votes prior
to the meeting by completing your form of proxy or form of direction in
accordance with the instructions shown. Their completion and return will not
preclude you from attending the meeting or from shareholders voting in person.
Shareholders who are unable to attend the AGM are requested to submit any
questions they may have with regard to the resolutions proposed at the AGM or
the performance of the Company in advance of the meeting to
gscagm@columbiathreadneedle.com. Following the AGM, the Lead Manager's
presentation will be available on the Company's website at
globalsmallercompanies.co.uk.
Outlook
In the near term investors are likely to continue to pay particular attention
to the direction of inflation and labour markets in major economies as well as
geopolitical developments more widely. Our Manager will continue to focus on
identifying companies that will do well regardless of what happens in the
wider economy. The fund management team are still finding such opportunities
within our very extensive investment universe and the Board has confidence in
the Manager's lengthy experience in investing in this asset class.
Despite the recent underperformance of smaller companies relative to larger
companies, it remains an attractive asset class over the long term. Smaller
companies have the potential to deliver faster earnings growth as well as
valuation expansion as they are more widely recognised. Furthermore, it is an
area where active management can genuinely add value. The Manager has
constructed a portfolio of investments in high quality businesses that are
attractively valued and we look forward with optimism.
Anja Balfour
Chairman
25 June 2024
Principal and Emerging Risks and Long-Term Viability: Five Year Horizon
The Board's processes for monitoring the principal risks and identifying
emerging risks are set out on page 57 of the Annual Report and Financial
Statements and in note 23 to the financial statements. Any emerging risks that
are identified and that are considered to be of significance are included on
the Company's risk assessment together with any mitigations. These principal
and emerging risks are reviewed regularly by the Audit and Management
Engagement Committee and by the Board. Russia's invasion of Ukraine and
increased conflict in the Middle East have added to the continuing economic
and market uncertainty and political instability, with elections in the UK and
US also on the horizon. The principal risks are largely unchanged from those
reported in the prior year. Those identified as most relevant to the
assessment of the Company's future prospects and viability were those relating
to inappropriate business strategy, potential investment portfolio
under-performance and its effect on the Company's share price discount/premium
and dividends, as well as threats to security over the Company's assets.
Principal Risk: Service providers and systems security - Errors, fraud or
control failures at service providers or loss of data through business
continuity failure or cyber attacks could damage reputation or investors'
interests or result in loss. Cyber risks remain heightened.
Unchanged throughout the year.
Mitigation by strategy: The ancillary functions of administration, company
secretarial, accounting and marketing services are all carried out by the
Manager. Custody and depositary services are provided by third party
suppliers.
The Board reviews and monitors the services provided and the effectiveness of
service providers' processes through the review of internal controls reports
and internal efficiency KPIs.
Actions taken in the year: The Audit and Management Engagement Committee and
the Board have regularly reviewed the Company's risk management framework with
the assistance of the Manager. Regular control reports are provided by the
Manager which cover risk, compliance and oversight of its own third-party
service providers, including IT security and cyber-threats. Reports from the
Depositary, which is liable for the loss of any of the Company's securities
and cash held in custody unless resulting from an external event beyond its
reasonable control, were reviewed. The Board is satisfied that the continuity
arrangements of all key suppliers continued to work well and as such, this
risk is unchanged.
Principal Risk: Investment performance - Inappropriate business strategy or
policy, or ineffective implementation, could result in poor returns for
shareholders. Failure to access the targeted market or meet investor needs or
expectations, including Responsible Investment and climate change in
particular, leading to significant pressure on the share price. Political risk
factors could also impact performance as could market shocks such as those
experienced in relation to Covid-19 and the war in Ukraine
Unchanged throughout the year.
Mitigation by strategy: Under our Business Model, a manager is appointed with
the capability and resources to manage the Company's assets, asset allocation,
gearing, stock and sector selection and risk. The individual regional
investment portfolios are managed to provide in combination a
well-diversified, lower volatility and lower risk overall portfolio structure.
The Board holds a separate strategy meeting each year and considers investment
policy review reports from the Manager at each Board meeting. The performance
of the Company relative to its Benchmark, its peers and inflation is a KPI
measured by the Board on an ongoing basis and is reported on page 40 of the
Annual Report and Financial Statements.
Actions taken in the year: Columbia Threadneedle Investments has been retained
as Manager and continues to deliver on the Company's objective. It operates
within a responsible investment culture under a corporate commitment to four
key Sustainability Principles: Social Change, Financial Resilience, Community
Building and Environmental Impact. Through the Manager, the Company has the
flexibility to innovate, adapt and evolve as Responsible Investment
necessities and expectations change. Marketing and investor relations
campaigns continued throughout the year, including presentations by the Lead
Manager to wealth managers, private clients and institutions across the
country. Detailed reports provided by the Lead Manager have been reviewed by
the Board at each of its meetings. Strong operational performance from the
investment portfolio over the year has resulted in the dividend for the year
increasing by 22.2%. In overall terms, this risk is considered unchanged.
Principal Risk: Discount/premium - A significant share price discount or
premium to the Company's NAV per share, or related volatility, could lead to
high levels of uncertainty or speculation and the potential to reduce investor
confidence. Increased uncertainty in markets due to an event such as Covid-19
or the significant rise in inflation could lead to falls and volatility in the
Company's NAV
Unchanged throughout the year but this risk has remained heightened.
Mitigation by strategy: The Board has established share buy-back and share
issue policies, together with a dividend policy, which aim to moderate the
level and volatility of the share price discount or premium to the NAV per
share and it seeks shareholder approval each year for the necessary powers to
implement those policies. The discount/premium to NAV at which the Company's
shares trade is a KPI measured by the Board on an ongoing basis and is
reported on page 40 of the Annual Report and Financial Statements.
Actions taken in the year: Despite actively buying in shares on a regular,
ongoing basis in order to address the imbalance between the supply and demand
of the Company's shares, the discount has remained wider than desired although
it did fall during the period. During the course of the year, the Manager has
continued to increase marketing activity over a number of channels and has
enhanced the messaging around the core investment proposition. This activity
aims to stimulate demand for the Company's shares from existing and new
investors. Given the continued higher prevailing discount level the risk is
considered to have remained heightened during the year
Long-Term Viability: Five Year Horizon
Through a series of stress tests ranging from moderate to extreme scenarios,
including the impact of market shocks and based on historical information, but
forward looking over the five years commencing 1 May 2024, the Board assessed
the risks of:
· Sustained high levels of inflation.
· Potential illiquidity of the Company's portfolio.
· Substantial falls in investment values on the ability to meet
loan covenant requirements and to repay and re-negotiate funding.
· Significant falls in income on the ability to continue paying
steadily-rising dividends and maintaining adequate revenue reserves.
The Board also took into consideration the operational robustness of its
principal service providers and the effectiveness of business continuity plans
in place, potential effects of regulatory changes and the potential threat
from competition.
Based on its assessment and evaluation of the Company's future prospects, the
Board has a reasonable expectation that the Company will be able to continue
in operation and meet its liabilities as they fall due over the coming five
years. This period has been chosen because it is consistent with the advice
provided by many investment advisers, that investors should invest in equities
for a minimum of five years. The Company's business model, strategy and the
embedded characteristics listed below have helped define and maintain the
stability of the Company over many decades. The Board expects this to continue
and will continue to assess viability over subsequent five year rolling
periods.
· The Company has a long-term investment strategy under which it
invests mainly in readily realisable, publicly listed securities and which
restricts the level of borrowings.
· The Company's business model and strategy are not time limited
and, as a global investment trust company, are unlikely to be adversely
impacted as a direct result of political uncertainties.
· The Company is inherently structured for long-term
outperformance, rather than short-term opportunities, with five years
considered as a sensible time-frame for measuring and assessing long-term
investment performance.
· The Company is able to take advantage of its closed-end
investment trust structure, such as having borrowing arrangements in place and
the ability to secure additional finance in excess of five years.
· There is rigid monitoring of the headroom under the Company's
bank borrowing financial covenants.
· Regular and robust review of revenue and expenditure forecasts is
undertaken throughout the year against a backdrop of large revenue and capital
reserves.
· The Company retains title to all assets held by the Custodian
which are subject to further safeguards imposed on the Depositary.
Statement of Directors' Responsibilities in Respect of the Financial
Statements
In accordance with Chapter 4.1.12 of the Disclosure Guidance and Transparency
Rules the Directors confirm, in respect of the annual report for the year
ended 30 April 2024 of which this statement of results is an extract, to the
best of their knowledge that:
· the financial statements, prepared in accordance with applicable
accounting standards, give a true and fair view of the assets, liabilities,
financial position and return of the Company;
· the Strategic Report includes a fair review of the development
and performance of the business and the position of the Company, together with
a description of the principal risks and uncertainties that it faces; and
· in the opinion of the Directors the Annual Report and Financial
Statements, taken as a whole, are fair, balanced and understandable and
provide the information necessary for shareholders to assess the Company's
position and performance, business model and strategy.
On behalf of the Board
Anja Balfour
Chairman
25 June 2024
Income Statement
for the year ended 30 April 2024 2023
Revenue Capital Total Revenue Capital Total
£'000s £'000s £'000s £'000s £'000s £'000s
Gains/(losses) on investments - 57,049 57,049 - (50,067) (50,067)
Foreign exchange (losses)/gains (10) 335 325 (6) 115 109
Income 18,597 - 18,597 16,214 1,656 17,870
Management fee (1,050) (3,148) (4,198) (1,082) (3,247) (4,329)
Other expenses (1,267) (34) (1,301) (1,070) (29) (1,099)
Net return before finance costs and taxation 16,270 54,202 70,472 14,056 (51,572) (37,516)
Finance costs (391) (1,172) (1,563) (269) (808) (1,077)
Net return on ordinary activities before
taxation 15,879 53,030 68,909 13,787 (52,380) (38,593)
Taxation on ordinary activities (1,319) - (1,319) (1,167) - (1,167)
Net return attributable to equity shareholders
14,560 53,030 67,590 12,620 (52,380) (39,760)
Return per share (basic and diluted) - pence 2.84 10.33 13.17 2.34 (9.73) (7.39)
The total column of this statement is the profit and loss account of the
Company.
All revenue and capital items in the above statement derive from continuing
operations.
A statement of total comprehensive income is not required as all income and
expenses of the Company have been reflected in the above statement.
Statement of Changes in Equity
for the year ended 30 April 2024
Share Capital Total
Share premium redemption Capital Revenue shareholders'
capital account reserve reserves reserve funds
£'000s £'000s £'000s £'000s £'000s £'000s
Balance at 30 April 2023 15,513 212,639 16,158 597,354 17,771 859,435
Movements during the year
ended 30 April 2024
Dividends paid - - - - (12,186) (12,186)
Shares repurchased by the
Company and held in treasury - - - (44,777) - (44,777)
Net return attributable to equity
shareholders - - - 53,030 14,560 67,590
Balance at 30 April 2024 15,513 212,639 16,158 605,607 20,145 870,062
for the year ended 30 April 2023
Share Capital Total
Share premium redemption Capital Revenue shareholders'
capital account reserve reserves reserve funds
£'000s £'000s £'000s £'000s £'000s £'000s
Balance at 30 April 2022 15,513 212,639 16,158 685,538 15,456 945,304
Movements during the year
ended 30 April 2023
Dividends paid - - - - (10,305) (10,305)
Shares repurchased by the
Company and held in treasury - - - (35,804) - (35,804)
Net return attributable to equity
shareholders - - - (52,380) 12,620 (39,760)
Balance at 30 April 2023 15,513 212,639 16,158 597,354 17,771 859,435
Balance Sheet
at 30 April 2024 2023
£'000s £'000s
Fixed assets
Investments 910,498 902,350
Current assets
Debtors 6,446 10,720
Cash at bank and in hand 11,021 2,292
Total current assets 17,467 13,012
Creditors: amounts falling due within one year
Bank loans (16,463) (17,027)
Creditors (6,440) (3,900)
Total current liabilities (22,903) (20,927)
Net current liabilities (5,436) (7,915)
Total assets less current liabilities 905,062 894,435
Creditors: amounts falling due after more than one year
Loan notes (35,000) (35,000)
Net assets 870,062 859,435
Capital and reserves
Share capital 15,513 15,513
Share premium account 212,639 212,639
Capital redemption reserve 16,158 16,158
Capital reserves 605,607 597,354
Revenue reserve 20,145 17,771
Total shareholders' funds 870,062 859,435
Net asset value per share (debt at par value) - pence 175.88 163.73
Statement of Cash Flows
for the year ended 30 April 2024 2023
£'000s £'000s
Cash flows used in operating activities before dividends received and interest
paid
(6,022) (4,787)
Dividends received 17,270 15,308
Interest paid (1,593) (1,038)
Cash inflows from operating activities 9,655 9,483
Investing activities
Purchases of investments (147,474) (191,230)
Sales of investments 202,370 219,670
Cash inflows from investing activities 54,896 28,440
64,551 37,923
Financing activities
Ordinary dividends paid (12,186) (10,305)
Cash flows from share buybacks for treasury shares (43,397) (36,034)
Repayment of bank loans - (10,287)
Drawdown of bank loans - 7,870
Cash outflows from financing activities (55,583) (48,756)
Net movement in cash at bank and in hand 8,968 (10,833)
Cash at bank and in hand at the beginning of the year 2,292 13,354
Effect of movement in foreign exchange (239) (229)
Cash at bank and in hand at the end of the year 11,021 2,292
Represented by:
Cash at bank 613 979
Short-term deposits less than 3 months 10,408 1,313
Cash at bank and in hand at the end of the year 11,021 2,292
Notes
1 Dividend
The Directors have proposed a final dividend in respect of the year ended 30
April 2024 of 2.13 pence per share, payable on 20 August 2024 to all
shareholders on the register at close of business on 12 July 2024, with an
ex-dividend date of 11 July 2024. The recommended final dividend is subject to
approval by shareholders at the Annual General Meeting.
2 Financial Risk Management
The Company is an investment company, listed on the London Stock Exchange, and
conducts its affairs so as to qualify in the United Kingdom (UK) as an
investment trust under the provisions of Section 1158 of the Corporation Tax
Act 2010. In so qualifying, the Company is exempted in the UK from corporation
tax on capital gains on its portfolio of fixed asset investments.
The Company invests in smaller companies worldwide in order to secure a high
total return. In pursuing the objective, the Company is exposed to financial
risks which could result in a reduction of either or both of the value of the
net assets and the profits available for distribution by way of dividend.
These financial risks are principally related to the market (currency
movements, interest rate changes and security price movements), liquidity and
credit. The Board, together with the Manager, is responsible for the Company's
risk management.
The full details of financial risks are contained in note 23 of the Annual
Report and Financial Statements.
3 Annual Report and Financial Statements
This statement was approved by the Board on 25 June 2024. It is not the
Company's statutory accounts. The statutory financial statements for the
financial year ended 30 April 2024 have been approved and audited and received
an independent auditor's report which was unqualified and did not include a
reference to any matters to which the auditor drew attention by way of
emphasis without qualifying the report. The statutory financial statements for
the financial year ended 30 April 2023 also received an independent auditor's
report which was unqualified and did not include a reference to any matters to
which the auditor drew attention by way of emphasis without qualifying the
report.
Ian Ridge
Columbia Threadneedle Investment Business Limited,
Company Secretary
26 June 2024
ENDS
A copy of the Annual Report and Financial Statements will be submitted to the
National Storage Mechanism and will shortly be available for inspection at
data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
The Annual Report and Financial Statements for the year ended 30 April 2024
will be posted to shareholders and made available shortly on the Company's
website at globalsmallercompanies.co.uk, where up to date information on the
Company, including daily NAV and share prices, factsheets and portfolio
information can also be found. Copies may also be obtained from the Company's
registered office, Cannon Place, 78 Cannon Street, London EC4N 6AG.
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on the Company's website (or any other website) is
incorporated into, or forms part of, this announcement.
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. END ACSQKPBPFBKDFAB
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