MonEuroSmllCosTst - Half-year Report
12/12/2024 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241212:nRSL7476Pa&default-theme=true
RNS Number : 7476P Montanaro European Smaller C.TstPLC 12 December 2024
Montanaro European Smaller Companies Trust plc
LEI: 213800CWSC5B8BG3RS21
Unaudited Half-Yearly Report for the Six Months Ended 30 September 2024
The Board of Montanaro European Smaller Companies Trust plc (the 'Company' or
'MESCT') announces the unaudited half-yearly results of the Company for the
six months ended 30 September 2024.
Highlights
Performance
6 months 1 year 3 year 5 year 10 year MAM*
Capital Returns%²
Share price 1.8 21.4 (27.5) 41.8 206.0 354.2
Net Asset Value ('NAV') per Ordinary share** 0.1 19.3 (16.8) 51.0 216.0 383.4
Benchmark (Composite) ¹** (0.9) 10.8 (8.8) 25.1 105.6 185.0
Total Returns%²
Share price 2.4 22.4 (25.9) 46.7 235.4 460.5
NAV per Ordinary share** 0.7 20.2 (15.2) 55.8 243.4 483.3
Benchmark (Composite)¹** 1.0 13.4 (2.1) 38.1 148.8 304.9
Sources: Morningstar Direct, Association of Investment Companies ('AIC'),
Montanaro Asset Management Limited ('MAM').
As at As at 12 month As at 6 month
30 September 30 September % change 31 March % change
2024 2023 2024
(Audited)
Ordinary share price 145.0p 119.4p 21.4% 142.5p 1.8%
NAV per Ordinary share** 165.2p 138.5p 19.3% 165.1p 0.1%
(Discount)/Premium to NAV² (12.2%) (13.8%) (13.7%)
Net assets** (£'000s) 313,020 262,360 19.3% 312,720 0.1%
Market capitalisation** (£'000s) 274,670 226,177 21.4% 269,934 1.8%
Net gearing employed² 1.7% 2.2% 2.9%
6 months 6 months % change 12 months
ended ended ended
30 September 30 September 31 March
2024 2023 2024
(Audited)
Revenue return per Ordinary share 1.56p 1.37p 13.9% 1.42p
Dividend per Ordinary share 0.3p 0.225p 1.125p
Ongoing charges (annualised)² 1.0% 1.1% - 1.0%
Portfolio turnover (annualised)** 10.0% 12.0% 16.0%
*From 5 September 2006, when MAM was appointed as Investment Manager.
**Details provided in the Glossary below.
(1)From 5 September 2006, the benchmark was the MSCI Europe SmallCap Index.
The benchmark was changed on 1 June 2009 to the MSCI Europe SmallCap (ex-UK)
Index (in sterling terms).
(2)Refer to Alternative Performance Measures below.
Chairman's Statement
Performance
In the first six months of the financial year the Net Asset Value of your
Company rose by 0.1% to 165.2p per share. The Benchmark (MSCI Europe SmallCap
(ex-UK) Index) fell by 0.9%.
During the period, the discount narrowed from 13.7% to 12.2%. The share price
increased by 1.8%, leading to a share price total return of 2.4%. The Board
continues to monitor the level of the discount closely and stands ready to act
should it be deemed to be in the best interest of shareholders.
Montanaro take a long-term approach to investing and over 5 and 10 years your
Company has delivered NAV per share total returns of 55.8% and 243.4%
respectively, outperforming the Benchmark by 17.7% and 94.6% respectively. It
is encouraging that performance has returned to form over the past year after
a hiatus for a couple of years. Since Montanaro were appointed in September
2006, the annualised NAV total return has been 10.2%, 2.2% p.a. ahead of the
Benchmark.
Earnings and Dividends
Revenue earnings per share rose to 1.56p in the period (2023: 1.37p). The
Board has declared an interim dividend of 0.3p per share (2023: 0.225p per
share) payable on 22 January 2025 to shareholders on the register on 20
December 2024. This increase is being proposed both to reflect the timing of
when revenues are received and to provide a better balance between the interim
and final dividends.
Borrowings
At the end of the period, the Company had gearing, net of cash, of 1.7%
compared to 2.9% at 31 March 2024. The Company's borrowing facilities are due
to mature on 13 September 2026.
The Board
We are very pleased to welcome Hillary Williams as a non-executive Director of
the Company. Her appointment was with effect from 6 September 2024 and she has
also been appointed as a member of the Audit, Remuneration and Nomination
Committees from this date. Ms Williams brings extensive experience as a senior
financial services marketing leader to the Board.
Outlook
We have previously commented on the outperformance of large companies versus
their smaller counterparts in the last few years. This contrasts with the
longer-term historical trend - termed the "SmallCap Effect" by academics -
whereby smaller companies delivered higher returns than large ones (the excess
return averaged 4.2% per annum in Continental Europe since December 2000).
It is too early to say whether the recent underperformance of smaller
companies has ended, but the headwind has certainly abated: in the six-month
period to 30 September 2024, smaller companies in Europe outperformed their
larger counterparts by 2%.
Perhaps we should not be surprised. Confirmation that inflation is back to a
"normal" level has allowed the European Central Bank to start cutting interest
rates once again, which is typically positive for smaller companies. In
addition, as we have highlighted before, the valuation of smaller companies on
the Continent looks cheap compared to its own history: at 12.3x, the forward
P/E ratio is more than one standard deviation below its long-term average and
at a record discount (13%) to the forward P/E of the broad European market.
The backdrop of disinflation coupled with attractive valuations is in turn
boosting M&A activity in the smaller companies space.
Not everything is rosy, however. The economies within Europe remain shaky and
it is clear from speaking to companies that Germany in particular is grappling
with a significant cyclical downturn, partly fuelled by the challenges faced
by China, one of its key export markets. In these circumstances we get comfort
from the high quality and structural growth focus of the companies in your
portfolio. We also note that while the three largest holdings in the portfolio
at the quarter end are listed in Germany, they have extremely strong positions
in structurally growing end markets. Their financial performance continues to
reflect this.
If SmallCap is entering a new, multi-year cycle of outperformance, MESCT
stands to benefit. The companies in your portfolio continue to deliver high
returns on equity, far in excess of their cost of capital, and they have
strong balance sheets. Moreover, consensus expectations suggest they will grow
their earnings at double digit rates in 2025. Their continued progress and the
constant oversight by Montanaro mean we look forward to the future with
confidence.
Portfolio Summary
Twenty Largest Holdings
As at 30 September 2024
Holding Country Description Value % of Net
£'000 Assets
MTU Aero Engines Germany Aircraft engine components 16,335 5.22
CTS Eventim Germany Event ticketing solutions 14,391 4.60
ATOSS Software Germany Workforce management software 12,892 4.12
NCAB Sweden Printed circuit boards 12,314 3.93
VZ Holding Switzerland Independent wealth management 11,978 3.83
Fortnox Sweden Cloud accounting solutions 11,603 3.71
IMCD Netherlands Specialty chemical distribution 11,033 3.52
Belimo Holding Switzerland Actuators, sensors and valves 9,869 3.15
Reply Italy IT consulting services 9,008 2.88
AAK Sweden Specialty vegetable oils 8,568 2.74
Brunello Cucinelli Italy Luxury goods 8,461 2.70
Rational Germany Professional cooking equipment 8,438 2.70
Kitron Norway Electronic manufacturing services 8,115 2.59
Melexis Belgium Automotive sensors 8,028 2.56
Esker France Document process automation 7,707 2.46
Sectra Sweden Medical imaging software 7,280 2.33
Brembo Italy Automotive braking systems 6,961 2.22
Bachem Switzerland Peptide manufacturing 6,924 2.21
Thule Group Sweden Outdoor lifestyle products 6,818 2.18
Amadeus FiRe Germany Staffing and training 6,183 1.98
Twenty Largest Holdings 192,906 61.63
Geographical Analysis
As at 30 September 2024
Source: Juniper Partners Limited
Sector Analysis
As at 30 September 2024
Source: Juniper Partners Limited
Interim Management Report
The important events that have occurred during the period under review and the
key factors influencing the financial statements are set out in the Chairman's
Statement above.
Statement of Principal Risks and Uncertainties:
Most of the principal risks that could threaten the Company's objective,
strategy, future returns and solvency are market related and comparable to
those of other investment trusts investing primarily in quoted securities. The
principal risks faced by the Company are investment and strategic, gearing,
financial, discount volatility, regulatory, operational, cyber security, ESG
and manager risks. These risks and the way in which they are mitigated are
described in more detail under the heading 'Principal and Emerging Risks and
Uncertainties and Risk Mitigation' within the Business Model and Strategy
section on pages 16 to 19 of the Company's Annual Report for the year ended 31
March 2024. The Company's principal risks and uncertainties have not changed
materially since the date of that report and are not expected to change
materially for the remaining six months of the Company's financial year.
Related Party Transactions:
Related party transactions are disclosed in note 13 below. There have been no
material changes to the related party transactions described in the last
Annual Report.
Going Concern:
The Directors are satisfied that the Company has sufficient resources to
continue in operation for the foreseeable future and for a period of at least
12 months from the date of this report. Accordingly, they continue to adopt
the going concern basis in preparing the condensed financial statements.
Directors' Responsibility Statement in respect of the Half-Yearly Report
We confirm that to the best of our knowledge:
· the condensed set of financial statements have been prepared in
accordance with IAS 34 'Interim Financial Reporting' and give a true and fair
view of the assets, liabilities, financial position and profit or loss of the
Company;
· the Interim Management Report includes a fair review of the
information required by the Disclosure Guidance and Transparency Rule ('DTR')
4.2.7R, being an indication of important events that have occurred during the
first six months of the financial year and their impact on the financial
statements;
· the Statement of Principal Risks and Uncertainties shown above is
a fair review of the information required by DTR 4.2.7R; and
· the Chairman's Statement, together with the condensed set of
financial statements, include a fair review of the information required by DTR
4.2.8R, being related party transactions that have taken place in the first
six months of the financial year and that have materially affected the
financial position or performance of the Company during the period, and any
changes in the related party transactions described in the last Annual Report
that could do so.
The Half-Yearly Report and Accounts were approved by the Board and the above
responsibility statement was signed on its behalf by:
R M CURLING
Chairman
11 December 2024
Condensed Income Statement (unaudited)
for the six months to 30 September 2024
Six months to Six months to Year to
30 September 30 September 31 March
2024 2023 2024
£'000 £'000 (audited)
£'000
Note Revenue Capital Total Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
(Losses)/gains on investments at
fair value through profit or loss - (50) (50) - (37,997) (37,997) - 13,543 13,543
Exchange gains - 61 61 - 115 115 - 135 135
Revenue
Investment income 3 4,386 - 4,386 3,745 - 3,745 4,692 - 4,692
Total income 4,386 11 4,397 3,745 (37,882) (34,137) 4,692 13,678 18,370
Expenditure
Management expenses 4 (431) (800) (1,231) (413) (766) (1,179) (803) (1,490) (2,293)
Other expenses (370) - (370) (362) - (362) (689) - (689)
Total expenditure (801) (800) (1,601) (775) (766) (1,541) (1,492) (1,490) (2,982)
Return before finance costs and taxation 2,970 (38,648) (35,678) 3,200 12,188 15,388
3,585 (789) 2,796
Finance costs (85) (159) (244) (41) (97) (138) (134) (248) (382)
Return before taxation 3,500 (948) 2,552 2,929 (38,745) (35,816) 3,066 11,940 15,006
Taxation (547) - (547) (340) - (340) (376) - (376)
Return after taxation 2,953 (948) 2,005 2,589 (38,745) (36,156) 2,690 11,940 14,630
1.56p (0.50p) 1.06p 6.30p 7.72p
Return per share 5 1.37p (20.45p) (19.08p) 1.42p
The total column of this statement represents the Company's Income Statement
and Statement of Comprehensive Income, prepared in accordance with UK-adopted
International Accounting Standards in conformity with the Companies Act 2006.
The supplementary revenue return and capital return columns are both prepared
under guidance published by the AIC.
All revenue and capital items in the above statement derive from continuing
operations. No operations were acquired or discontinued during the period.
Condensed Balance Sheet (unaudited) as at 30 September 2024
Note As at As at As at
30 September 30 September 31 March
2024 2023 2024
£'000 £'000 £'000
(audited)
Non-current assets
Investments held at fair value through profit and loss 7 318,654 268,485 321,676
Current assets
Trade and other receivables 812 748 885
Cash and cash equivalents 2,804 2,808 242
3,616 3,556 1,127
Total assets 322,270 272,041 322,803
Current liabilities
Trade and other payables (983) (1,099) (754)
Revolving credit facility 8 - - (856)
(983) (1,099) (1,610)
Non-current liabilities
Interest-bearing bank loans 8 (8,267) (8,582) (8,473)
Total liabilities (9,250) (9,681) (10,083)
Net assets 313,020 262,360 312,720
Capital and reserves
Called-up share capital 9 9,471 9,471 9,471
Share premium account 44,057 44,057 44,057
Capital redemption reserve 2,212 2,212 2,212
Capital reserve 251,573 201,836 252,521
Revenue reserve 5,707 4,784 4,459
262,360 312,720
Total shareholders' funds 313,020
Net asset value per share 10 165.2p 138.5p 165.1p
Condensed Statement of Changes in Equity (unaudited)
for the six months ended 30 September 2024
Share capital Share premium account Capital redemption Capital reserve Revenue reserve Total
£'000 £'000 reserve £'000 £'000 £'000
£'000
As at 1 April 2024 9,471 44,057 2,212 252,521 4,459 312,720
Return after taxation - - - (948) 2,953 2,005
Dividends paid - - - - (1,705) (1,705)
Balance at 30 September 2024 9,471 44,057 2,212 251,573 5,707 313,020
for the six months ended 30 September 2023
Share capital Share premium account Capital redemption Capital reserve Revenue reserve Total
£'000 £'000 reserve £'000 £'000 £'000
£'000
As at 1 April 2023 9,471 44,057 2,212 240,581 3,654 299,975
Return after taxation - - - (38,745) 2,589 (36,156)
Dividends paid - - - - (1,459) (1,459)
Balance at 30 September 2023 9,471 44,057 2,212 201,836 4,784 262,360
for the year ended 31 March 2024 (audited)
Share capital Share premium account Capital redemption Capital Reserve Revenue reserve Total
£'000 £'000 reserve £'000 £'000 £'000
£'000
As at 1 April 2023 9,471 44,057 2,212 240,581 3,654 299,975
Return after taxation - - - 11,940 2,690 14,630
Dividends paid - - - - (1,885) (1,885)
Balance at 31 March 2024 9,471 44,057 2,212 252,521 4,459 312,720
Condensed Statement of Cash Flows (unaudited)
for the six months ended 30 September 2024
Six months to Six months to Year to
30 September 30 September 31 March
2024 2023 2024
£'000 £'000 (audited)
£'000
Net cash inflow from operating activities 5,515 5,376 2,991
Net cash outflow from financing activities (2,792) (5,968) (5,804)
2,723 (592) (2,813)
Exchange (losses)/gains (161) 64 (170)
Increase/(decrease) in cash and cash equivalents 2,562 (528) (2,983)
Reconciliation of profit before finance costs and taxation to net cash inflow
from operating activities
Return before taxation 2,552 (35,678) 15,006
Losses/(gains) on investments held at fair value 50 37,997 (13,543)
Exchange gains (61) (115) (135)
Finance costs 244 226 381
Withholding tax (567) (340) (374)
Purchases of investments (12,113) (14,403) (33,701)
Sales of investments 15,308 17,805 35,136
Changes in working capital and other non-cash items (116) 221
102
Net cash inflow from operating activities 5,515 5,376 2,991
Notes to the Accounts (unaudited)
1. The condensed unaudited financial statements have been
prepared in accordance with International Financial Reporting Standard
('IFRS') IAS 34 'Interim Financial Reporting' and the accounting policies set
out in the statutory accounts of the Company for the year ended 31 March 2024.
The condensed financial statements do not include all the information required
for a complete set of IFRS financial statements and should be read in
conjunction with the financial statements of the Company for the year ended 31
March 2024, which were prepared in accordance with the requirements of the
Companies Act 2006 and in accordance with UK-adopted international accounting
standards.
2. Earnings for the first six months should not be taken as a
guide to the results for the full year.
3. Income for the period is derived from:
Six months to Six months to Year to
30 September 30 September 31 March
2024 2023 2024
£'000 £'000 £'000
(audited)
Overseas dividend income 4,353 3,661 4,582
Exchange/(losses) (6) (4) (6)
Other income 39 88 116
Total 4,386 3,745 4,692
4. Management fee
As set out in the Company's Annual Report, the management fee is linked to the
size of the Company, as follows:
· 0.90% p.a. of the amount of the Company's market
capitalisation up to £500 million;
· 0.75% p.a. of the amount of the Company's market
capitalisation between
£500 million and £750 million; and
· 0.65% p.a. of the amount of the Company's market
capitalisation above £750 million.
The management fee is payable monthly in arrears.
MAM is also paid a fee of £25,000 per annum for acting as the Company's
Alternative Investment Fund Manager ('AIFM').
5. Return per Share
Earnings per Ordinary Share is based on a weighted average of 189,427,600
Ordinary Shares in issue during the period (year ended 31 March 2024:
189,427,600 and six months ended 30 September 2023: 189,427,600), excluding
those shares bought back and held in treasury (nil at 30 September 2024).
6. Dividends
The interim dividend relating to the year ended 31 March 2025 of 0.3p per
Ordinary Share will be paid on 22 January 2025 to shareholders on the register
on 20 December 2024. In accordance with IFRS, this dividend has not been
recognised in these financial statements. The ex-dividend date for this
payment is 19 December 2024.
A final dividend relating to the year ended 31 March 2024 of 0.9p per Ordinary
Share was paid during the six months to 30 September 2024 and amounted to
£1,705,000.
7. Investments at fair value through profit or loss
30 September 30 September 31 March
2024 2023 2024
£'000 £'000 £'000
(audited)
Opening book cost 193,353 193,796 193,796
Holding gains 128,323 116,512 116,512
Opening fair value 321,676 310,308 310,308
Purchases at cost 12,333 13,991 43,002
Sales - proceeds (15,305) (17,817) (45,177)
Gains on sales 5,562 5,450 1,732
Holding (losses)/gains (5,612) (43,447) 11,811
Closing fair value 318,654 268,485 321,676
Closing book cost 195,943 195,420 193,353
Holding gains 122,711 73,065 128,323
Closing valuation 318,654 268,485 321,676
8. Borrowings
Revolving credit facility
Six months to Six months to Year to
30 September 30 September 31 March
2024 2023 2024
£'000 £'000 £'000
(audited)
Opening balance 856 4,391 4,391
Repaid loan (859) (4,327) (4,327)
Draw down loan - - 856
Foreign currency exchange loss/(gain)
3 (64) (64)
Closing balance - - 856
The Company has a three-year secured revolving credit
facility with ING Bank N.V. ('ING') which will mature on 13 September 2026.
As at 30 September 2024, no amounts were drawn down under this facility.
Interest bearing bank loans
Six months to Six months to Year to
30 September 30 September 31 March 2024
2024 2023 (audited)
£'000 £'000 £'000
Opening balance 8,473 8,787 8,787
Set up costs - (99) (98)
Amortisation of set-up costs 16 6 22
Non-cash foreign currency movements (222) (112) (238)
Closing balance 8,267 8,582 8,473
The Company has a €10 million three year secured loan at a fixed rate of
5.105% per annum (previously 1.33%) with ING Bank N.V. ('ING'). This loan will
mature on 13 September 2026.
The carrying value of the balances above approximates to fair value.
9. Share Capital
30 September 31 March
2024 2024
(audited)
Number of shares £'000 Number of shares £'000
Allotted, called-up and fully paid:
Ordinary shares of 2p each (31 March 2024: 2p each)
Balance at beginning of period
189,427,600 9,471 189,427,600 9,471
Balance at end of period 189,427,600 9,471 189,427,600 9,471
10. Net Assets Value per Ordinary Share
The NAV per Ordinary Share was based on 189,427,600 Ordinary Shares in issue
at the end of the period (31 March 2024: 189,427,600 and 30 September 2023:
189,427,600), excluding those shares bought back and held in treasury. As at
30 September 2024, there were no Ordinary Shares held in treasury (31 March
2024: nil and 30 September 2023: nil).
11. Fair Value Hierarchy
The Company measures fair values using the following fair value hierarchy that
reflects the significance of the inputs used in making the measurements.
Categorisation within the hierarchy has been determined on the basis of the
lowest level input that is significant to the fair value measurement of the
relevant assets as follows:
· Level 1 - valued using quoted prices unadjusted in active markets
for identical assets or liabilities.
· Level 2 - valued by reference to valuation techniques using
observable inputs for the asset or liability other than quoted prices included
within Level 1.
· Level 3 - valued by reference to valuation techniques using
inputs that are not based on observable market data for the asset or
liability.
The tables below set out fair value measurements of financial instruments as
at the period end, by the level in the fair value hierarchy into which the
fair value measurement is categorised.
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
30 September 2024
Investments 318,654 - - 318,654
Loan - (8,327) - (8,327)
30 September 2023
Investments 268,485 - - 268,485
Loan - (8,582) - (8,582)
31 March 2024 (audited)
Investments 321,676 - - 321,676
Loan - (9,405) - (9,405)
There were no transfers between levels during the period ended 30 September
2024 (year ended 31 March 2024 and period ended 30 September 2023: None).
Other aspects of the Company's financial risk management objectives and
policies are consistent with those disclosed in the financial statements, as
at and for the year ended, 31 March 2024.
12. Rates of Exchange (to Sterling)
30 September 30 September 31 March
2024 2023 2024
£'000 £'000 £'000
(audited)
Danish Krone 8.95 8.60 8.72
Euro 1.20 1.15 1.17
Norwegian Krone 14.10 13.03 13.65
Swedish Krona 13.58 13.32 13.44
Swiss Franc 1.13 1.12 1.14
13. Related Parties
The following are considered related parties: the Board of Directors. The
Directors of the Company received fees for their services and dividends from
their shareholdings in the Company as outlined below.
The amount charged by the Manager during the period was £1,231,000 (six
months to 30 September 2023: £1,179,000; year to 31 March 2024: £2,293,000).
At 30 September 2024, the amount due to the Manager, included in creditors,
was £631,000. The existence of an independent Board of Directors demonstrates
that the Company is free to pursue its own financial and operating policies.
Directors' Emoluments
At 30 September 2024, the Board consisted of four non-executive Directors. All
Directors are considered to be independent of the Manager. None of the
Directors has a service contract with the Company. The Chairman receives an
annual fee of £43,000, the Chair of the Audit Committee receives an annual
fee of £37,500 and non-executive Directors receive £31,000 per annum.
At 30 September 2024, the amount outstanding in respect of Directors' fees was
£nil (31 March 2024: £nil).
At 30 September 2024, the interests of the Directors in the Ordinary Shares of
the Company were as follows:
30 September 2024 31 March 2024
No. of shares No. of shares
R M Curling 150,000 150,000
C A Roxburgh 62,833 62,833
G Neilly 62,604 62,293
Hillary Williams - -
The following changes in the Directors' interests occurred between 30
September 2024 and the date of this report:
C A Roxburgh acquired 369 shares on 14 October 2024 and 6,855 shares on 22
October 2024.
14. Statutory Accounts
These are not statutory accounts in terms of Section 434 of the Companies Act
2006 and have not been audited or reviewed by the Company's Auditor. The
information for the year ended 31 March 2024 has been extracted from the
latest published financial statements and which have been filed with the
Registrar of Companies. The Auditor's report on those accounts was not
qualified, did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying the report and did not
contain statements under section 498 (2) or (3) of the Companies Act 2006. No
statutory accounts in respect of any period after 31 March 2024 have been
reported on by the Company's Auditor or delivered to the Registrar of
Companies.
Alternative Performance Measures ("APMs")
The Company uses the following APMs:
Share Price and NAV Returns
Capital Return measures the effect of any rise or fall in the share price or
NAV, excluding any dividends paid.
Total Return measures the effect of any rise or fall in the share price or
NAV, plus dividends paid which are reinvested at the prevailing NAV or share
price on the ex- dividend date.
Share Price Return calculations as at 30 September 2024
Share price as at 30 September 2024 145.00 (a)
Share price as at 31 March 2024 142.50 (b)
Share price Capital Return 1.8% ((a-b)/b)
Impact of dividends reinvested 0.6% (Note 1)
Share Price Total Return 2.4%
Note 1 - Share Price impact of dividends reinvested
Dividend PPS Dividend XD date Share price at dividend XD date Impact of dividend reinvested
(a) (b) (a)/(b)
Final dividend 0.90 16 August 2024 145.00 0.6%
NAV Return calculations as at 30 September 2024
NAV per share as at 30 September 2024 165.24 (a)
NAV per share as at 31 March 2024 165.10 (b)
NAV Capital Return 0.1% ((a-b)/b)
Impact of dividends reinvested 0.6% (Note 1)
NAV Total Return 0.7%
Note 1 - NAV impact of dividends reinvested
Dividend PPS Dividend XD date NAV at dividend XD date Impact of dividend reinvested
(a) (b) (a)/(b)
Final dividend 0.90 16 August 2024 162.20 0.6%
Discount or Premium to NAV
If the share is less than its NAV per share, the shares are trading at a
discount. If the share price is greater than the NAV per share, the shares are
trading at a premium.
As at 30 September 2024, the NAV per share was 165.24p and the share price was
145.00p. The discount is therefore calculated at 12.24%.
Net gearing employed
Unlike open-ended investment companies, investment trusts have the ability to
borrow to invest. This term is used to describe the level of borrowings that
an investment trust has undertaken and is stated as a percentage of
shareholders' funds. The higher the level of borrowings, the higher the
gearing ratio.
Net gearing is calculated as total debt, net of cash and cash equivalents, as
a percentage of the total shareholders' funds.
As at 30 September 2024, interest bearing bank loans were (£8,267,000), cash
and cash equivalents were £2,804,000 and net assets were £313,020,000. As at
30 September 2024, net gearing employed was therefore equal to 1.7%.
Ongoing charges (expressed as a percentage)
Ongoing charges are the Company's revenue and capital expenses (excluding
finance costs and certain non-recurring items) expressed as a percentage of
the average daily net assets of the Company during the period.
Ongoing charges calculation
Six months to Six months to Year to
30 September 30 September 31 March
2024 2023 2024
£'000 £'000 £'000
(audited)
Total expenditure (a) 1,601 1,541 2,982
Average daily net assets (b) 307,401 291,230 286,505
Ongoing charges (c = a/b)* (c) 1.0% 1.1% 1.0%
* 30 September 2024 and 30 September 2023 figures annualised for comparison (c
= (a/b) x 2).
Glossary of terms
AIFMD
Alternative Investment Fund Managers Directive. Issued by the European
Parliament in 2012 and 2013, the Directive requires that all investment
vehicles in the European Union, including investment trusts, must, with effect
from 22 July 2014, appoint a Depositary and an AIFM. The board of directors of
an investment trust, nevertheless, remains fully responsible for all aspects
of the Company's strategy, operations and compliance with regulations.
AIC
The Association of Investment Companies is the trade body for Closed-end
Investment Companies (www.theaic.co.uk).
Benchmark
This is a measure against which an investment trust's performance is compared.
The benchmark of the Company is the MSCI Europe SmallCap (ex-UK) Index (in
sterling terms). The index averages the performance of a defined selection of
companies listed in European smaller company stock markets and gives an
indication of how those markets have performed in any period.
Closed-end Investment Company
A company, including an investment trust, with a fixed issued ordinary share
capital which is traded on an exchange at a price not necessarily related to
the NAV of the company and where shares can only be issued or bought back by
the company in certain circumstances. This contrasts with an open-ended
investment company, which has units not traded on an exchange but issued or
bought back from investors at a price directly related to the NAV.
Custodian
A specialised financial institution responsible for safeguarding, worldwide,
the listed securities and certain cash assets of the Company, as well as the
income arising therefrom, through provision of custodial, settlement and
associated services. The Company's Custodian is Bank of New York Mellon SA/NV
(London branch).
Depositary
Under the AIFMD, the Company must appoint a Depositary, whose duties in
respect of investments, cash and similar assets include: safekeeping;
verification of ownership and valuation; and cash monitoring. The Depositary
has strict liability for loss of any investments or other assets where it has
safekeeping duties. The Depositary's oversight duties include, but are not
limited to, oversight of share buybacks, dividend payments and adherence to
investment limits. The Company's Depositary is The Bank of New York Mellon
(International) Limited.
Dividend
The income from an investment. Some investment trusts pay dividends on a
quarterly or monthly basis. The Company currently pays dividends twice a year.
Gearing
Gearing is calculated as total liabilities less current assets divided by net
assets.
International Accounting Standards
UK- adopted International Accounting Standards in conformity with the
requirements of the Companies Act 2006.
Investment Manager
The Company's Investment Manager is Montanaro Asset Management Limited.
Investment Trust
A closed-end investment company which satisfies the requirements of Section
1158 of the Corporation Tax Act 2010. Companies which meet these criteria are
exempt from having to pay tax on the capital gains they realise from sales of
the investments within their portfolios.
Leverage
As defined under the AIFMD rules, Leverage is any method by which the exposure
of an AIF is increased through borrowing of cash or securities or leverage
embedded in derivative positions. Leverage is broadly equivalent to Gearing,
but is expressed as a ratio between the assets (excluding borrowings) and the
net assets (after taking account of borrowings). Under the gross method,
exposure represents the sum of the Company's positions after deduction of cash
and cash equivalents, without taking account of any hedging or netting
arrangements. Under the commitment method, exposure is calculated without the
deduction of cash and cash equivalents and after certain hedging and netting
positions are offset against each other.
Marked to Market
Accounting for the fair value of an asset or liability that can change over
time and reflects its current market value rather than its book cost.
Market Capitalisation
The stock market value of a company as determined by multiplying the number of
shares in issue, excluding those shares held in treasury, by the market price
of the shares.
Net Asset Value ("NAV") per Ordinary Share
This is calculated as the net assets of an investment trust divided by the
number of shares in issue, excluding those shares held in treasury.
Net Assets (or Shareholders' Funds)
This is calculated as the value of the investments and other assets of an
investment trust, plus cash and debtors, less borrowings and any other
creditors. It represents the underlying value of an investment trust at a
point in time.
Net Gearing
Net Gearing is calculated as total debt, net of cash and cash equivalents, as
a percentage of the total shareholders' funds.
Ordinary Shares
The main type of equity capital issued by conventional investment trusts.
Shareholders are entitled to their share of both income, in the form of
dividends paid by the investment trust, and any capital growth. The Company
has only Ordinary Shares in issue.
Portfolio Turnover
Calculated using total sales proceeds as a percentage of the average monthly
net assets during the period, annualised.
Related Party Transactions
Under the UK Listing Rules, the Manager is regarded as a related party of the
Company.
Share Price
The value of a share at a point in time as quoted on a stock exchange. The
shares of the Company are quoted on the Main Market of the London Stock
Exchange.
SORP
Statement of Recommended Practice "Financial Statements of Investment Trust
Companies and Venture Capital Trusts" issued by the AIC.
Total Assets
This is calculated as the value of the investment and other assets of an
investment trust, plus cash and debtors.
Montanaro European Smaller Companies Trust PLC
Registered in Scotland No. SC074677
An investment company as defined under section 833 of the Companies Act 2006
Directors Registered Office
R M Curling (Chairman) 28 Walker Street
G Neilly Edinburgh EH3 7HR
C A Roxburgh
H Williams
Principal Advisers
AIFM and Investment Manager Depositary
Montanaro Asset Management Limited The Bank of New York Mellon (International) Limited
53 Threadneedle Street One Canada Square
London EC2R 8AR London E14 5AL
Tel: 020 7448 8600
enquiries@montanaro.co.uk (mailto:enquiries@montanaro.co.uk)
www.montanaro.co.uk (http://www.montanaro.co.uk/)
Company Secretary and Administrator Custodian
Juniper Partners Limited Bank of New York Mellon SA/NV
28 Walker Street, One Canada Square
Edinburgh EH3 7HR London E14 5AL
Tel: 0131 378 0500
Contact: cosec@junipartners.com
Auditor Registrar
Price Waterhouse Coopers LLP Equiniti Limited
Atria One Aspect House,
144 Morrison Street Spencer Road, Lancing
Edinburgh EH3 8EX West Sussex BN99 6DA
Registrar's Shareholder Helpline
Tel: 0371 384 2030*
*Lines are open 8.30am to 5.30pm, Monday to Friday, excluding UK public
holidays
Solicitor Stockbroker
Dickson Minto W.S. Cavendish
16 Charlotte Square One Bartholomew Close
Edinburgh EH2 4DF London EC1A 7BL
Sources of Further Information
Information on the Company, including this Half-Yearly Report is available on
the Company's website: https://montanaro.co.uk/trust/montanaro-
(https://montanaro.co.uk/trust/montanaro-) european-smaller-companies-trust/
(https://montanaro.co.uk/trust/montanaro-european-smaller-companies-trust/)
Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on this announcement (or any other website) is
incorporated into, or forms part of, this announcement.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FFMFMFELSELE