3i Smaller Quoted Co's Trust PLC
11 February 2005
3i SMALLER QUOTED COMPANIES TRUST plc
All information is at 31 January 2005 and unaudited.
Performance at month end is calculated on a capital only basis
One Three One Three Five
Month Months Year Years Years
Net asset value 6.9% 16.5% 21.9% 32.8% -2.6%
Share price 7.4% 14.9% 32.1% 37.6% -5.5%
FTSE Small Cap Index (ex IC's) 4.6% 11.0% 10.7% 23.6% 5.5%
Sources: Merrill Lynch Investment Managers and Datastream.
At month end
Net asset value: 270.51p
Share price: 224.00p
Discount to NAV: 17.2%
Net yield: 2.0%
Total assets: £153.1m
Gearing: 10.7%
Ordinary shares in issue: 51,163,523
Ten Largest Sector
Weightings % of Total Assets
Support Services 12.8
Software & Computer Services 9.6
Media & Entertainment 8.2
Construction & Building Materials 7.7
Leisure & Hotels 7.4
General Retailers 5.5
Mining 5.5
Oil & Gas 4.5
Speciality & Other Finance 4.4
IT Hardware 3.9
----
Total 69.5
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Ten Largest Equity Investments
Company % of Total Assets
BSS Group 2.8
Brewin Dolphin 2.6
Aveva Group 2.5
Parkdean Holidays 2.4
Dechra Pharmaceuticals 2.1
Holidaybreak 2.0
Blacks Leisure Group 2.0
Consolidated Minerals 2.0
Chaucer Holdings 1.9
Dicom Group 1.8
----
Total 22.1
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Commenting on the markets, Mike Prentis, representing the Investment Manager
noted:
January was a good month for the Trust and the smallcaps in general. The Trust's
NAV per share rose by 6.9% to 270.5 pence, compared to a 4.6% increase in the
benchmark index. The Trust's share price rose by 7.4% to 224 pence. This was
the fifth consecutive month of rises in the smallcap sector.
Amongst larger holdings, strong share price performances were again seen in
Consolidated Minerals and Torex Retail. Autologic shares bounced after a
comforting pre close update and on rekindled hopes of news of a possible
restructuring of Continental European operations. Good rises were also seen in
Xaar and two smaller holdings, Neteller, which supplies payment systems to most
internet betting sites, and Bright Things, which is making progress developing
an interactive educational terminal for under 5s.
Late December and early January is a time when many companies put out pre close
trading updates. Within the retail sector many of these were awaited with a
sense of trepidation this year. In fact, the Trust's holdings fared relatively
well, with Ottakar's and Whittards of Chelsea providing the greatest
disappointments. The former was also affected by additional, unexpected running
costs in relation to an acquisition. Given the increasingly competitive nature
of the book market, we decided to sell the remainder of the holding in
Ottakar's.
The Trust's strategy remains as indicated last month; a further gradual
reduction in the Trust's exposure to consumer orientated companies, and an
increase in investment in companies benefiting from greater business spending.
We are also looking to add companies that are most favoured by the MLIM UK
smallcap team. In this context, in January the Trust bought holdings in Renishaw
and Rotork. Both companies had been held by the Trust before, and both are core
holdings in other MLIM UK smallcap funds. Renishaw, which makes a variety of
high precision measuring instruments delivered excellent results during the
month, and management were in confident form when we met them. Rotork supplies
value actuators, a high proportion of which end up in the Far East, and a lot of
which are used in the oil & gas sector. Over the next few years it is well
placed to benefit from growing demand.
The Trust has remained almost fully invested during January and this has
continued into early February. Newsflow from smaller companies generally seems
good, and we expect this to persist. Valuations are no longer as compelling as
they were, and some pull back in prices is possible over the next few months.
However, given the strong fundamentals we do expect any setback to be
shortlived.
Latest information is available by typing www.mlim.co.uk/its on the internet,
"MLIMINDEX" on Reuters, "MLIM" on Bloomberg or "8800" on Topic 3 (ICV terminal).
11 February 2005
This information is provided by RNS
The company news service from the London Stock Exchange
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