Interim Management Statement

RNS Number : 6378P
F&C Global Smaller Companies PLC
20 August 2014
 



Date:        20 August 2014

 

Contact:    Peter Ewins                                                          

                 F&C Investment Business Limited                           

                 020 7628 8000                                                      

 

 

F&C Global Smaller Companies PLC

Interim Management Statement

for the quarter ended 31 July 2014

 

Objective

 

F&C Global Smaller Companies PLC invests in smaller companies worldwide in order to secure a high total return.

 

Summary of results

 

Capital return

 

 

Attributable to equity shareholders

 

31 July 2014

 

30 April 2014

 

% Change

 

 

 

 

Share price

851.00p

840.00p

+1.3

 

 

 

 

Net asset value per share

(debenture at nominal value)

844.28p

841.78p

+0.3

 

 

 

 

Net asset value per share

(debenture at market value)

843.50p

840.50p

+0.4

 

 

 

 

 

Manager's review

 

During the period under review equity performance was mixed with strong positive returns in Asia,   including Japan, broadly flat markets in the UK and US, while European stocks fell back. The weakness in Europe in part reflected generally disappointing economic data over the second quarter of 2014, and company earnings have been under some pressure as a consequence. Geopolitical developments in the Ukraine and the Middle East have clearly not been helpful for the performance of equities around the world.

 

The Company's benchmark, which is a blended index of the returns of 30% Numis UK Smaller Companies (excluding investment companies) Index and 70% MSCI All Country World ex UK Small Cap Index, recorded a total return in sterling terms of 0.5% for the three months. The Company's net asset value ("NAV") per share total return of 1.0% was therefore ahead of the benchmark. The share price increased by 1.3%, moving on to a small premium to the NAV. A total of 467,000 new ordinary shares (0.9% of share capital) were issued during the period to satisfy demand in the market.

 

Stock selection was generally positive in the three months, most notably in the UK and Japan, with the latter producing a 12.9% total return in sterling terms. The worst absolute returns came from our European small cap portfolio, which was down 4.8% in sterling total return terms but this was better than the local small cap index.

 

On the asset allocation front, the portfolio's exposure to both Japan and the Rest of World increased. While these moves were partly due to the stronger relative performance compared to the other markets, we also added to our investments in our fund holdings targeting Japanese and Asian small cap stocks. The relative valuation argument towards Asian and emerging markets in general looks more appealing now compared to some of the main developed markets and this is leading to more interest from global investors once again after a long period of underperformance. We reduced our European and UK weightings over the period. These markets have delivered particularly strong returns for us over the last few years.

As previously announced, in July the Company issued £40m of Convertible Unsecured Loan Stock to provide structural gearing for the coming years. Part of the proceeds of this issue were immediately deployed into the markets before the end of July and the Company therefore ended the period in a

6.0% geared position compared to a 1.3% net cash position at the end of April 2014.

 

 

Geographical distribution of the investment portfolio at 31 July 2014

 

 

31 July 2014

% of total investments

30 April 2014

% of total investments

North America

39.7

39.7

United Kingdom

27.6

28.5

Continental Europe

11.2

12.7

Rest of World

11.8

10.3

Japan

9.7

8.8

 

The portfolio obtains exposure to Japanese, Asian, Latin American and African markets via a number of collective funds as opposed to individual holdings. F&C is responsible for selecting the appropriate funds to use for these markets.

 

 

Ten largest holdings at 31 July 2014

 

 

31 July 2014

 

30 April

2014

 

Company

Country

 

% of total assets

1

2

Aberdeen Global-Japanese Smaller Companies Fund

Japan

4.7

2

1

M&G Japan Smaller Companies Fund

Japan

4.6

3

3

The Scottish Oriental Smaller Companies Trust

Rest of World

2.7

4

4

Aberdeen Global-Asian Smaller Companies Fund

Rest of World

2.6

6

5

Manulife Global Fund- Asian Small Cap Equity Fund

Rest of World

2.6

5

6

Utilico Emerging Markets

Rest of World

1.7

7

13

Alere

United States

1.1

8

22

Covanta Holding

United States

0.9

9

12

Genesee & Wyoming "A"

United States

0.9

10

26

Wex

United States

0.9


 

 

 

 

 

 

 

 

 

Ten largest holdings (excluding collective funds) at 31 July 2014

 

 

31 July 2014

Company

Country

% of total assets

1

Alere

United States

1.1

2

Covanta Holding

United States

0.9

3

Genesee & Wyoming "A"

United States

0.9

4

Wex

United States

0.9

5

Hub Group "A"

United States

0.9

6

Premiere Global Services

United States

0.9

7

Vail Resorts

United States

0.9

8

Cinemark Holdings

United States

0.9

9

Airgas

United States

0.9

10

Allscripts Healthcare Solutions

United States

0.9

 

Further information

 

Further information, including monthly factsheets and NAVs published since the end of the quarter, can be found on the www.fandcglobalsmallers.com website.

 

Since 31 July 2014 a further 140,000 new ordinary shares have been issued, raising additional capital of £1.2m.

 

Since the Company published its 12 month prospectus on 11 March 2014 in relation to the issue of 12.5 million new shares, it has published its annual report and accounts and a prospectus in relation to the issue of CULS.  Both of these events were considered to be significant and as such the Company published a supplementary prospectus on 18 July 2014 updating the relevant parts of the 12 month prospectus.

 

The Board is not aware of any significant events or transactions that have occurred between 30 April 2014 and the date of publication of this statement which would have a material impact on the financial position of the Company except as mentioned above.

 

This interim management statement has been prepared solely to provide information to meet the requirements of the UK Listing Authority's Disclosure and Transparency Rules.

 

 

By order of the Board

F&C Investment Business Limited, Secretary

Exchange House, Primrose Street, London EC2A 2NY

20 August 2014


This information is provided by RNS
The company news service from the London Stock Exchange
 
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