RCS - Schroder BSC Social - Results analysis from Kepler Trust Intelligence
30/10/2023 15:53
For best results when printing this announcement, please click on link below: http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20231030:nRSd7540Ra&default-theme=true RNS Number : 7540R Schroder BSC Social Impact Trust 30 October 2023 Schroder BSC Social Impact (SBSI) 30/10/2023 Results analysis from Kepler Trust Intelligence Schroder BSC Social Impact (SBSI) has released its financial results for the year ending 30/06/2023. Over the year, the trust saw its NAV increase by 0.8% on a total return basis, which compares to an average NAV total return of -5.8% for the AIC Flexible sector. The portfolio consists of investments in projects that are designed to provide a meaningful impact on those otherwise underserved. These are private, illiquid assets whose valuations are affected by factors such as development milestones or revenue changes and valued regularly. During the year, the board decided to value the whole portfolio quarterly in future to provide more clarity to investors, rather than semi-annually as before. In the period, the key drivers of the NAV performance were valuation gains in the high impact housing portfolio, and capital and income gains in social outcomes contracts, though this was somewhat offset from a write down in one holding. The period also saw an increase in net revenue mostly because of higher interest generation from floating rate loans and mature investments. This improved revenue has led to a final dividend of 2.3p per share versus 1.3p in 2022. Chair Susannah Nicklin commented on the managers delivering both NAV returns and a social impact, saying: "the social impact created by the company's investments is needed more than ever". She also highlighted that the "portfolio has shown resilience within a turbulent market". Kepler View SBSI has shown good resilience with a stable NAV performance which we believe demonstrates the benefits of social investment as an asset class. The managers categorise the portfolio into committed capital, called the high impact portfolio which are divided into different maturities, and undrawn commitments. The investment phase holdings contributed the most to returns in the period, adding 1.58% to NAV, with the more mature holdings contributing 0.17% and liquidity assets, which is capital invested in best-in-class, liquid ESG funds in order to fund capital commitments in future, contributing 0.16%. The key drivers behind the performance in the period came from the high impact housing portfolio. Two projects completed development which meant they began producing income which has led to valuation uplifts. A number of holdings in the social outcomes contracts delivered a combination of both capital gains and income for the trust. With the exception of a write-off in Skills Training UK, the trust's holdings in the high impact portfolio contributed positive returns in the period. This shows the performance has come from across the portfolio, rather than any one holding driving performance which we believe is evidence of diversification. An increase in revenue has supported an increase in the dividend for this year. The managers believe this improvement is sustainable and have therefore upgraded the long-term guidance. We have previously described the dividend as a positive, supplementary feature of the investment case, though this change in policy could, in our opinion, increase the attraction for potential investors. Despite the resilience shown, the trust has fallen to a wide discount. The board has begun trying to narrow this with share buybacks which we believe could be a turnaround catalyst. For investors, this could prove a compelling entry point with the discount around its widest level since inception. CLICK HERE TO READ THE FULL REPORT (https://www.trustintelligence.co.uk/investor/articles/news-investor-results-analysis-schroder-bsc-social-impact-retail-oct-2023?utm_source=RNS&utm_medium=news) Visit Kepler Trust Intelligence (http://www.trustintelligence.co.uk/investor?utm_source=RNS&utm_medium=news) for more high quality independent investment trust research. Important information This report has been issued by Kepler Partners LLP. The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research. Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that if you are a private investor independent financial advice should be taken before making any investment or financial decision. Kepler Partners is not authorised to make recommendations to retail clients. This report has been issued by Kepler Partners LLP, is based on factual information only, is solely for information purposes only and any views contained in it must not be construed as investment or tax advice or a recommendation to buy, sell or take any action in relation to any investment. The information provided on this website is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Kepler Partners LLP to any registration requirement within such jurisdiction or country. In particular, this website is exclusively for non-US Persons. Persons who access this information are required to inform themselves and to comply with any such restrictions. The information contained in this website is not intended to constitute, and should not be construed as, investment advice. No representation or warranty, express or implied, is given by any person as to the accuracy or completeness of the information and no responsibility or liability is accepted for the accuracy or sufficiency of any of the information, for any errors, omissions or misstatements, negligent or otherwise. Any views and opinions, whilst given in good faith, are subject to change without notice. This is not an official confirmation of terms and is not a recommendation, offer or solicitation to buy or sell or take any action in relation to any investment mentioned herein. Any prices or quotations contained herein are indicative only. Kepler Partners LLP (including its partners, employees and representatives) or a connected person may have positions in or options on the securities detailed in this report, and may buy, sell or offer to purchase or sell such securities from time to time, but will at all times be subject to restrictions imposed by the firm's internal rules. A copy of the firm's Conflict of Interest policy is available on request. PLEASE SEE ALSO OUR TERMS AND CONDITIONS (http://www.trustintelligence.co.uk/investor/terms?utm_source=RNS&utm_medium=news) Kepler Partners LLP is authorised and regulated by the Financial Conduct Authority (FRN 480590), registered in England and Wales at 70 Conduit Street, London W1S 2GF with registered number OC334771. This information is provided by Reach, the non-regulatory press release distribution service of RNS, part of the London Stock Exchange. 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 NRABUBDGDUXDGXG