REG - Global Smlr Cos.Tst - Annual Financial Report
01/07/2025 07:00
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RNS Number : 0658P Global Smaller Cos. Trust PLC (The) 01 July 2025
LONDON STOCK EXCHANGE ANNOUNCEMENT
The Global Smaller Companies Trust PLC ("Company")
Statement of Audited Results
for the year ended 30 April 2025 and Final dividend announcement
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 -4.8% (2024:
+9.0%) versus -0.8% from the Benchmark (2024: +11.3%)
The NAV per share with debt at fair value fell to 167.1p from 178.1p.
Share price total return of -5.6% (2024: +12.7%)
The share price ended the year at 148.6p (2024: 160.2p).
Total dividend of 3.00p (2024: 2.81p)
55th consecutive annual increase, up by 6.8% (2024: up by 22.2%).
The Company's shares ended the year at a discount to the NAV of 11.0% (2024:
10.0%)
Date: 1 July 2025
Contact: Nish
Patel
Columbia Threadneedle
Investment Business Limited
020 7464 5000
Chairman's Statement
Although the past 12 months has been a challenging time for the portfolio, I
am confident that the changes made have put your Company on a strong footing
for the future. The Company's Net Asset Value ('NAV') total return (with long
term borrowings at fair value) was -4.8% in the financial year. 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%), was -0.8% for
the year to 30 April 2025. 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 -4.8 0.7 48.7 93.3 608.0
Benchmark total return -0.8 8.1 61.4 103.6 588.5
Company share price total return 43.9 725.8
-5.6 -0.2 71.8
Source: Columbia Threadneedle Investments
Financial markets continued to be affected by shifting geopolitics during the
financial year ended 30th April 2025. Persistent inflation, wealth inequality
and immigration were key issues leading to electorates unseating incumbent
parties. Furthermore, the dramatic reorientation of American trade and foreign
policy, following the election of Donald Trump, challenged the post-World War
II international order and affects the outlook for inflation and economic
growth. The new US government's approach to peace negotiations between Russia
and Ukraine and its proposed territorial expansions overseas alarmed European
allies. This was compounded by the US no longer being unequivocally committed
to NATO Article 5 (collective defence). Consequently, this prompted European
governments to increase their spending on defence in the years ahead. Despite
new approaches by the US administration, conflicts in Ukraine and the Middle
East are still ongoing. Only time will tell if President Trump's policies will
work, however, it is clear that the benefits are uncertain and the costs are
real. Recent events in Iran have further added to these difficulties.
In the UK the newly elected Labour government promised faster economic growth.
However, tight budgetary constraints soon impacted progress on some of those
initiatives, while ongoing imbalances in the labour market led to UK inflation
remaining higher than hoped for. Populism was on the march in continental
Europe, exemplified by the far right AFD party's unprecedented 20% share of
the vote in Germany's general election.
For most of the financial year, major economies successfully navigated a
higher interest rate environment and appeared to be on course for a 'soft
landing.' Labour markets remained healthy with solid wage growth. Momentum in
world economic growth slowed towards the end of the period as uncertainty over
the new US administration's trade and foreign policy weighed on business and
consumer sentiment.
With inflation moderating across developed markets, central banks started to
ease monetary policy. The European Central Bank led in June, followed by other
major central banks, resulting in cumulative cuts of 2.00% in the Eurozone,
1.00% in the US, and 0.75% in the UK. Japan remained an outlier, with a long
awaited return to inflation leading to two rate hikes in the year by the Bank
of Japan.
Unusually, despite most central banks lowering interest rates, 10 year
government bond yields remained at elevated levels compared to the last 15
years. This reflected investor concerns over the future path of inflation and
the size of government deficits. In the case of the US, lower demand from
foreigners and diminished confidence in the country's 'safe haven' status and
governance, raised yields on US Treasury bonds. Similarly, we saw a
significant weakening in the US Dollar against major currencies.
The US economy was, however, supported by higher asset prices, fiscal spending
and artificial intelligence-related capital expenditure. In contrast the US
housing sector was hurt by higher interest rates. The UK economy was
challenged by low productivity growth, stubborn services inflation and higher
costs for businesses, although signs of life did appear towards the end of the
financial year. European economies continued to be divided, with
tourism-focussed countries performing well but the more industrial driven
countries challenged by elevated energy costs, competition from China and now
tariffs. However, Germany's suspension of its "debt brake" and commitment to
approximately €900 billion in spending on defence and infrastructure could
prove to be a turning point for "The Old Continent". Wage growth in Japan
helped domestic consumption. In addition, the lower yen encouraged inbound
tourism and the end of negative interest rates helped the country's financial
sector.
China continued to face challenges with weak consumer confidence, although
during the year the government increased efforts to stimulate the economy and
the property market showed signs of stabilisation. Taiwan benefitted from the
ongoing investment cycle in artificial intelligence. Growth in India, which
has been strong for some time, lost a little momentum this year and interest
rates were cut as inflation moderated. In Latin America, stubborn inflation
and concerns over the fiscal deficit held back Brazil. On the other hand, in
Argentina, sentiment improved as President Javier Milei's deregulation and
deficit reduction efforts bore fruit.
Performance and the Discount
The Lead Manager's Review starting on page 14 of the Annual Report and
Financial Statements covers the year from a market and portfolio view in
detail. The chart below shows how our regional portfolios performed in the
year compared to their relevant local smaller company indices. Relative to
local small cap market returns, performance in the UK and Europe was
disappointing and actions which have been taken to address this are outlined
in the Lead Manager's Review. North America was slightly behind the regional
index. In Japan, the portfolio's one remaining third party fund was insourced
in the financial year, resulting in this geography now being completely
managed by Columbia Threadneedle Investments' internal Japanese equities team.
It was pleasing to see early success from this transition with the Japanese
portfolio delivering strong outperformance in the financial year. The Rest of
World, while down, delivered relative outperformance in the period.
Geographical performance (total return sterling adjusted)
for the year ended 30 April 2025
Portfolio Local smaller companies index(†)
UK -13.4% 4.0%
Europe -1.8% 6.0%
North America -4.8% -4.0%
Japan 11.0% 6.6%
Rest of World* -3.1% -7.2% (Asia Pacific ex Japan)
-9.8% (Latin America)
Source: Columbia Threadneedle Investments
*Performance of the Rest of World portfolio is shown here against both the
Asian and Latin American smaller company indices.
(†)See Lead Manager's Review in the Annual Report and Financial Statements
Over the last few years UK investment trust company discounts have widened,
given increased caution around the economic and geopolitical outlook and the
ongoing trend towards passive, index-based global investment funds. There have
been outflows from UK based equity funds in general and smaller company funds
in particular have been hurt by this trend. Starting the financial year at
10.0%, your Company's discount widened slightly to 11.0%. The wider discount
meant that on a total return basis the Company's share price fell by 5.6% over
the year.
The Board continues to believe that a consistently applied approach to share
buy-backs is in the best interests of shareholders, providing liquidity for
those in need of an exit along with NAV accretion to remaining holders. The
pace of buy-backs was again stepped up compared to previous years with some
47.3m shares bought back, representing 9.6% of the starting share capital
(2024: 30.2m shares) repurchased across some 222 trading days, enhancing the
NAV per share by 1.0% in the process. The chart on page 11 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. The Board is fully cognisant that the discount is
currently wider than its target of 5% or less in normal market conditions. To
address this, the Company has increased its efforts on marketing and PR,
aiming to attract interest in the shares from both existing and new investors.
Share repurchasing is another tool employed by the Company to address the
discount. The Manager has also taken measures to improve investment
performance relative to the Company's Benchmark, these include: changes within
the investment team, a reduction in the number of investments held by the
Company, refinement of the Company's approach to selling investments and
increased use of additional resources within Columbia Threadneedle
Investments.
Dividends
The companies in the portfolio continue to deliver healthy levels of income as
a result of their cash generative nature. Following on from the 2.9% increase
in the interim dividend, the Board has decided to recommend the payment of a
final dividend of 2.30p, meaning the full year payment will be up by 6.8% to
3.00p. This will be paid to shareholders on 20 August 2025 and will be the
55th consecutive increase in the Company's dividend.
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.
The Manager is also able to make use of the facility to take advantage of new
investment opportunities and for funding buy-backs without being forced to
make immediate, simultaneous disposals. At the end of the financial year,
effective gearing was 5.3% compared to 4.7% a year earlier, reflecting use of
cash for share buy-backs. Borrowings were made up of £35m 2.26% sterling loan
notes maturing in 2039 and £16.1m 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.
Costs
Ongoing charges (excluding performance fees from collective holdings) for the
year reduced slightly over the year moving from 0.78% to 0.74%. Ongoing
charges including performance fees from collective holdings were 0.74% (2024:
0.80%). We are pleased to report that these remain low compared to many
smaller company funds in the market.
Responsible Investment
The Company is not an investment trust with ESG or sustainable
characteristics. However, as part of its overall risk management process, the
Manager integrates the consideration of financially material environmental,
social, and governance ('ESG') factors into its research and investment
process and encourages stronger ESG practices to be adopted by issuers through
its engagement and voting activities. Some examples of this are outlined in
the section on Responsible Investment on pages 24 to 27 of the Annual Report
and Financial Statements.
Board Changes
Following the Annual General Meeting on 13 August 2024, Jo Dixon retired from
the Board. Jo was Chair of the Audit and Management Engagement Committee and
Senior Independent Director and following her retirement Nick Bannerman and
Graham Oldroyd were appointed to these roles respectively.
As reported in the Half-Year Report, as part of its succession plan, and
having followed a formal recruitment process, assisted by the use of
professional search consultants, the Board was pleased to appoint Zoe King as
a non-executive Director, with effect from 12 December 2024.
I was appointed to the Board on 1 June 2015 so have now served for just over
ten years. In accordance with the Board's long-term planning, I will retire
following the conclusion of the forthcoming Annual General Meeting on 15
August 2025. I am pleased to report that the Board intends to appoint Graham
Oldroyd to succeed me as Chairman. Graham is currently the Senior Independent
Director and has in-depth investment knowledge, expertise and experience in
international investment management as well as leadership skills and has made
a significant contribution to the Company since joining the board in October
2019. As a consequence, Bulbul Barrett has agreed to take on the role of
Senior Independent Director, from Graham from the conclusion of the
forthcoming AGM.
Cancellation of the Share Premium Account and Capital Redemption Reserve
As I noted earlier, the pace of share buy-backs carried out by the Company has
continued to increase as part of the Board's efforts to moderate discount
volatility and to reduce the discount to NAV at which the Company's shares
trade. The Company has a sizeable share premium account and capital redemption
reserve, however these two reserve accounts are non-distributable. Cancelling
the amounts standing to the credit of such reserves will provide the Company
with additional flexibility as the resultant distributable reserves will be
able to be used in future, if required, to fund share buy-backs, dividends and
other returns of capital in accordance with applicable law. The Board is
therefore seeking shareholder authority for the cancellation of the Company's
share premium account and capital redemption reserve at the forthcoming Annual
General Meeting.
Annual General Meeting
The Annual General Meeting will take place at Chartered Accountants' Hall, 1
Moorgate Place, London EC2R 6EA on Friday, 15 August 2025 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-smallercompanies-trust-plc/register
(https://www.investormeetcompany.com/the-global-smallercompanies-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.
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
The outlook for the world economy is complicated by the presence of numerous
crosscurrents. What seems clear is that uncertainty is likely to remain high
and there is a wide range of potential future outcomes.
There are several unanswered questions on which we may have more clarity in
the coming 12 months. We don't yet know the final level of tariffs and what
the impact of those might be on world economic growth and inflation. In recent
years vast amounts of capital have been deployed on projects related to
artificial intelligence and it will be interesting to see if those investments
start to produce an adequate return this year. The size of fiscal deficits has
been a concern for some time now and recent rising government bond yields
suggest that the market is becoming more sensitive to this issue. This will be
something to watch closely.
Positively, as deregulation takes hold, taxes are potentially cut and tariffs
are finalised, the prospects for the US could improve. We now seem to have
some political stability in the UK and strong consumer balance sheets, low
exposure to tariffs and housing sector reform are all supportive factors for
this economy. For Europe, rising fiscal spending and lower energy costs could
also be helpful. Implementation of some of Mario Draghi's proposals for
increased European competitiveness would be very welcome. Our expectation is
that over the longer term, Japan will continue to benefit from corporate
reform and a return to inflation. Finally, the weakening of the US Dollar is
not all bad news, as this has historically been helpful for Emerging Markets
and the Company has good exposure to this region.
Many of the factors that kept inflation benign for several years now appear to
be reversing. Investors should take comfort that if the environment has
changed, your Company is well prepared. Its portfolio of high quality
companies have pricing power, robust balance sheets and strong free cash flow
generation. Although last year was a difficult year, the Board is reassured
that the portfolio is well diversified by sector and geography and the Manager
is very well resourced. As illustrated in the Lead Manager's report, by
refining the investment team approach and introducing a portfolio with higher
conviction, the Manager can take advantage of the very best investment
opportunities whatever is happening in the world.
Anja Balfour
Chairman
30 June 2025
Forward-looking statements
This document may contain forward-looking statements with respect to the
financial condition, results of operations and business of the Company. Such
statements involve risk and uncertainty because they relate to future events
and circumstances that could cause actual results to differ materially from
those expressed or implied by forward-looking statements. The forward-looking
statements are based on the Directors' current view and on information known
to them at the date of this document. Nothing should be construed as a profit
forecast.
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. During the year, such risks included
ongoing macroeconomic and geopolitical concerns and the impact on financial
markets of US trade tariffs. 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 US trade tariffs.
Increase in risk during 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 42 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 over the medium
and long term, notwithstanding the more difficult investment environment over
the past year. At each meeting of the Board, the Directors consider and
discuss the Company's investment performance with Nish Patel, the Lead
Manager, and also meet with the Managers of the regional portfolios during the
year. 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.
Continuing income generation from the investment portfolio over the year and
the healthy level of distributable reserves has resulted in the dividend for
the year increasing by 6.8%. In overall terms, this risk is considered
increased.
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
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 42 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. 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 2025, 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 2025 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
30 June 2025
Income Statement
for the year ended 30 April 2025 2024
Revenue Capital Total Revenue Capital Total
£'000s £'000s £'000s £'000s £'000s £'000s
(Losses)/gains on investments - (53,702) (53,702) - 57,049 57,049
Foreign exchange (losses)/gains (56) 431 375 (10) 335 325
Income 17,031 1,660 18,691 18,597 - 18,597
Management fee (1,046) (3,138) (4,184) (1,050) (3,148) (4,198)
Other expenses (1,168) (40) (1,208) (1,267) (34) (1,301)
Net return before finance costs and taxation 14,761 (54,789) (40,028) 16,270 54,202 70,472
Finance costs (378) (1,133) (1,511) (391) (1,172) (1,563)
Net return on ordinary activities before
taxation 14,383 (55,922) (41,539) 15,879 53,030 68,909
Taxation on ordinary activities (1,040) - (1,040) (1,319) - (1,319)
Net return attributable to equity shareholders
13,343 (55,922) (42,579) 14,560 53,030 67,590
Return per share (basic and diluted) - pence 2.84 (11.90) (9.06) 2.84 10.33 13.17
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 2025
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 2024 15,513 212,639 16,158 605,607 20,145 870,062
Movements during the year
ended 30 April 2025
Dividends paid - - - - (13,536) (13,536)
Shares repurchased by the
Company and held in treasury - - - (77,132) - (77,132)
Net return attributable to equity
shareholders - - - (55,922) 13,343 (42,579)
Balance at 30 April 2025 15,513 212,639 16,158 472,553 19,952 736,815
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
Balance Sheet
at 30 April 2025 2024
£'000s £'000s
Fixed assets
Investments 774,733 910,498
Current assets
Debtors 3,685 6,446
Cash at bank and in hand 12,490 11,021
Total current assets 16,175 17,467
Creditors: amounts falling due within one year
Bank loans (16,050) (16,463)
Creditors (3,043) (6,440)
Total current liabilities (19,093) (22,903)
Net current liabilities (2,918) (5,436)
Total assets less current liabilities 771,815 905,062
Creditors: amounts falling due after more than one year
Loan notes (35,000) (35,000)
Net assets 736,815 870,062
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 472,553 605,607
Revenue reserve 19,952 20,145
Total shareholders' funds 736,815 870,062
Net asset value per share (debt at par value) - pence 164.67 175.88
Statement of Cash Flows
for the year ended 30 April 2025 2024
£'000s £'000s
Cash flows used in operating activities before dividends received and interest
paid
(6,500) (6,550)
Dividends received 18,262 17,270
Interest received 349 528
Interest paid (1,516) (1,593)
Cash inflows from operating activities 10,595 9,655
Investing activities
Purchases of investments (310,330) (147,474)
Sales of investments 393,096 202,370
Cash inflows from investing activities 82,766 54,896
93,361 64,551
Financing activities
Ordinary dividends paid (13,536) (12,186)
Cash flows from share buybacks for treasury shares (78,318) (43,397)
Cash outflows from financing activities (91,854) (55,583)
Net movement in cash at bank and in hand 1,507 8,968
Cash at bank and in hand at the beginning of the year 11,021 2,292
Effect of movement in foreign exchange (38) (239)
Cash at bank and in hand at the end of the year 12,490 11,021
Represented by:
Cash at bank 3,740 613
Short-term deposits less than 3 months 8,750 10,408
Cash at bank and in hand at the end of the year 12,490 11,021
Notes
1 Return per share
Basic returns per share attributable to ordinary shareholders are based on the
following data.
Year ended Year ended
30 April 2025 30 April 2024
£'000s £'000s
Revenue return attributable to shareholders - £'000s 13,343 14,560
Capital return attributable to shareholders - £'000s (55,922) 53,030
Total return attributable to shareholders - £'000s (42,579) 67,590
Revenue return per share - pence 2.84 2.84
Capital return per share - pence (11.90) 10.33
Total return per share - pence (9.06) 13.17
Weighted average number of ordinary shares in 469,806,386 513,545,620
issue during the period
2 Dividend
The Directors have proposed a final dividend in respect of the year ending 30
April 2025 of 2.30p per share, payable on 20 August 2025 to all shareholders
on the register at close of business on 11 July 2025, with an ex-dividend date
of 10 July 2025. The recommended final dividend is subject to approval by
shareholders at the Annual General Meeting.
3 Share capital
Shares held in Shares entitled Total shares Issued and fully
treasury to dividend in issue paid nominal
Equity share capital Number Number Number £'000s
Ordinary shares of 2.5p each
Balance at 30 April 2024 125,835,954 494,697,816 620,533,770 15,513
Shares repurchased by the Company and held in treasury
47,254,387 (47,254,387) - -
Balance at 30 April 2025 173,090,341 447,443,429 620,533,770 15,513
During the year ended 30 April 2025, 47,254,387 ordinary shares were
repurchased and held in treasury incurring a cost of £77,132,000. Since the
year end, and up to 26 June 2025 a further 3,499,088 ordinary shares have been
bought back and held in treasury.
4 Net asset value per ordinary share
30 April 2025 30 April 2024
NAV with debt at par value
Net assets attributable at the year end - £'000s 736,815 870,062
Number of ordinary shares in issue at the year end, excluding shares held in
treasury
447,443,429 494,697,816
Net asset value per share with debt at par value - pence 164.67 175.88
30 April 2025 30 April 2024
NAV with debt at fair value
Net assets attributable at the year end - £'000s 736,815 870,062
Add back: Debt as par - £'000s 51,050 51,463
Deduct: Debt at fair value - £'000s (40,392) (40,608)
Net assets with debt at fair value - £'000s 747,473 880,917
Number of ordinary shares in issue at the year end, excluding shares held in
treasury
447,443,429 494,697,816
Net asset value per share with debt at fair value - pence 167.05 178.07
5 Going concern
In assessing the going concern basis of accounting, the Directors have had
regard to the guidance issued by the Financial Reporting Council. They have
also considered the Company's objective, strategy and policy, the current cash
position of the Company, the availability of its loan facilities, compliance
with its covenants and the operational resilience of the Company and its
service providers. It is recognised that the Company is mainly invested in
readily realisable, globally listed securities that can be sold, if necessary,
to repay indebtedness.
Based on this information, the Directors believe that the Company has the
ability to meet its financial obligations as they fall due for a period of at
least twelve months from the date of approval of these financial statements.
Accordingly, these financial statements have been prepared on a going concern
basis.
6 Transactions with related parties and the Manager
The Board of Directors is defined as a related party. Under the FCA UK Listing
Rules, the Manager is also defined as a related party. However, the existence
of an independent Board of Directors demonstrates that the Company is free to
pursue its own financial and operating policies and therefore under the AIC
SORP, the Manager is not considered a related party for accounting purposes.
The Directors receive aggregated remuneration for services as Directors and
for which there were no outstanding balances at the year end. There have been
no transactions with related parties during the current financial year that
have materially affected the financial position or performance of the Company
during the year. The related party transactions are described in the Annual
Report and Financial Statements.
Management fees to the Manager are set out in note 4 and note 13 in the Annual
Report and Financial Statements, where accrued management fees are disclosed.
7 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.
8 Annual Report and Financial Statements
This statement was approved by the Board on 30 June 2025. It is not the
Company's statutory accounts. The statutory financial statements for the
financial year ended 30 April 2025 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 2024 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
30 June 2025
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 2025
will be posted to shareholders and made available shortly on the Company's
website at www. (http://www.globalsmallercompanies.co.uk)
globalsmallercompanies.co.uk (http://www.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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