TIDMGSCT
RNS Number : 9915W
Global Smaller Cos. Trust PLC (The)
15 December 2023
LONDON STOCK EXCHANGE ANNOUNCEMENT
The Global Smaller Companies Trust PLC
Unaudited Statement of Results
for the half year ended 31 October 2023
Legal Entity Identifier: 2138008RRULYQP8VP386
Information disclosed in accordance with Disclosure Guidance and
Transparency Rule 4.1
SUMMARY OF UNAUDITED RESULTS FOR THE HALF YEARED 31 OCTOBER
2023
-- Net Asset Value with debt at fair value ("NAV") decreased to
153.67p per share, giving a total return of -6.3% compared to the
Benchmark total return of -3.6%
-- The share price ended the period at 130.6p, delivering a
total return to shareholders of -8.6%
-- Interim dividend increased by 7.9% to 0.68p per ordinary share
Date: 15 December 2023
Contact: Peter Ewins
Columbia Threadneedle Investment Business Limited
020 7464 5000
Chairman's Review
The first half of the 2023/24 financial year saw a continuation
of some of the trends from the previous twelve months. In
particular, the dominant talking point has been how long the period
of heightened inflationary pressures will last, and consequently
for how long interest rates need to remain at present or even
higher levels. Very sadly too, geopolitical developments have
remained in focus, with the outbreak of conflict in the Middle East
a further complicating factor alongside the Ukraine war and the
strained political and trading relationship between the US and
China.
It was, therefore, perhaps unsurprisingly a challenging period
for equities. With a risk averse mood in markets, smaller companies
lagged in most parts of the world. Although many of our holdings
continued to navigate the tricky environment well and produced
solid results, there were exceptions to this and our investment
portfolio in overall terms had a difficult six months in comparison
to the Company's Benchmark (20% Numis UK Smaller Companies
excluding investment companies Index/80% MSCI World All Countries
ex UK Small Cap Index (net)). Taking the Company's long term
liabilities at fair value, the NAV fell to 153.67p, a -6.3% total
return for the six months, compared to a return of -3.6% from the
Benchmark.
The negative market environment put more pressure on investment
trust discounts and the Company's share price fell by 9.7% in the
six months to 130.6p, or by 8.6% in total return terms. As a
result, the discount ended the period at 15.0%. The Board continued
to use its buyback powers actively, repurchasing 10.7m shares over
the six months. In parallel the Board has worked with the Manager
to increase its efforts to bring the advantages of investing in the
Company to a wider audience of institutional and retail
investors.
Dividends
While capital returns have been pressured, we can take some
comfort from another strong period in terms of income from the
portfolio. Revenue returns per share rose by 23.1% to a new high at
the interim stage. As a consequence, the Board decided to increase
the interim dividend by 7.9% to 0.68p per share. Shareholders on
the register on 29 December 2023 will receive this dividend on 25
January 2024.
Board Changes
Having followed a formal recruitment process, the Company
appointed two new Directors, Bulbul Barrett and Randeep Grewal, on
1 December 2023. On 11 December 2023, David Stileman retired as a
Director. From the date of his appointment in 2015, David has
contributed significantly to the Company, bringing wide-ranging
international experience to the Board. We record our appreciation
and gratitude to David for his dedicated service to the
Company.
Lead Manager Change
Having been involved in the management of the Company for more
than 26 years and Lead Manager since August 2005, Peter Ewins has
indicated his intention to step down from his role and retire from
Columbia Threadneedle Investments in June 2024. The Board has been
fully engaged with Columbia Threadneedle Investments in ensuring a
smooth handover of Peter's responsibilities and we are pleased to
announce that Nish Patel will become joint Lead Fund Manager of the
Company, alongside Peter, with effect from 1 January 2024 and Lead
Fund Manager with effect from 1 May 2024. Nish has worked closely
with Peter for a long period of time, managing assets for the
Company for more than 15 years.
Peter has made an important contribution in continuing the
Company's strong record of delivering long-term growth in capital
and income and we are confident that Nish, supported by the wider
investment resources within Columbia Threadneedle Investments, will
build on Peter's achievements.
I would like to express our warmest thanks to Peter for his
commitment and contribution to the Company.
Graham Oldroyd
Interim Chairman
14 December 2023
Lead Manager's Review
Market background
Throughout the period under review, economic data was closely
monitored particularly in relation to inflation and what signals
this was sending concerning the outlook for interest rates. While
headline inflation rates have moderated considerably over the
period in the US, Europe, the UK and elsewhere over the last six
months, they mostly remain above targeted levels, which prompted
further interest rate increases. Labour markets remained generally
tight reflecting demographics and the impact of the pandemic in
many developed countries. This has driven elevated wage inflation
impacting upon the corporate profit margin outlook.
Tighter monetary policy has been unhelpful for equity market
sentiment and valuations. There is more competition for investors'
capital with higher investment yields now available on government
and corporate bonds and more satisfactory returns also available
from deposit accounts. Higher interest rates have acted as planned
by central banks to slow their local economies. With fiscal policy
providing more support plus the benefit of better momentum heading
into 2023, the US economy remained more resilient than those in
Europe and the UK, where the impact of higher energy and food
prices has been more significant on the cost of living. Within
Asia, the Chinese economy failed to pick up as much as had been
expected following the easing of pandemic restrictions early in
2023 with the property market still suffering from over supply.
Japan has remained something of an outlier, with no move up in
interest rates driving further weakness in the yen and helping to
deliver a relatively steady stock market performance.
Regional portfolio performance
The chart below shows how the different geographical regional
portfolios performed over the period versus the local smaller
companies comparator indices, with all total return numbers
measured in sterling.
Geographical performance (total return sterling adjusted)
for the half year ended 31 October 2023
Local smaller companies
Portfolio index
North America -3.0% -1.9%
UK -12.6% -9.7%
Europe -12.4% -11.0%
Japan -1.0% 0.0%
Rest of World -1.4% +2.1% (Asia Pacific
ex Japan)
+2.8% (Latin America)
------------------------- ---------------------------
Source: Columbia Threadneedle Investments
North America
Small cap stocks, as measured by the MSCI North American Small
Cap index (net), delivered a modest negative sterling total return
in the period, albeit this would have been worse had it not been
for a strengthening of the dollar. Our portfolio's -3% return was
worse than this with positive stock selection in Healthcare more
than offset by underperformance from our Financial and Basic
Materials holdings.
In aggregate, our Healthcare holdings did well and we benefitted
from not holding individual biotechnology stocks which were under
pressure. Managed care provider Molina Healthcare announced
encouraging results and rose by 11.8% with medical claims costs
lower than anticipated. Syneos Health , the clinical services
company was taken over during the period, lifting its shares, while
our holding in care services company The Ensign Group once again
delivered a resilient operational performance despite cost
pressures. In contrast, diagnostic testing services company
QuidelOrtho saw a fall off in business activity, partly due to a
slowdown in Covid-19 related business.
Within Financials, PRA Group , a purchaser and servicer of
consumer loans was a weak performer, falling 66.1% as the market
became cautious around credit card delinquencies on its balance
sheet. This more than offset a positive contribution from insurance
broking company Brown & Brown , which continues to execute its
acquisition strategy successfully, also benefiting from higher
insurance pricing.
In Basic Materials, a weaker gold and general commodity pricing
backdrop led to falls in the shares of Wheaton Precious Metals and
Lundin Mining , with graphite electrode supplier GrafTech
International suffering from a cyclical downturn in the steel
industry and concern about its borrowings. Our holdings in
construction related businesses Eagle Materials and Martin Marietta
Materials in contrast, performed well again, helped by signs that
spending in the infrastructure market was rising on the back of
government investment, with their earnings growth also benefiting
from higher product selling prices. Another strong performer which
we bought into in the last financial year was Curtiss-Wright . This
is a manufacturer of niche, mission-critical components for the
aerospace, industrial, defence and power sectors. The company is
seeing good growth in most of its businesses because of favourable
long-term trends and it also benefitted from an easing in supply
chain related constraints.
In the strongly performing Energy sector, three of our holdings
did well as the oil price rallied. Bristow Group , a provider of
helicopter transportation services to offshore energy locations saw
an improvement in pricing as industry spending continues to
recover. Vitesse Energy which has interests mainly in North Dakotan
oil and gas assets rose 28.9% as it delivered solid numbers
following its listing in the previous year. Kosmos Energy , an oil
and gas exploration and production company, also did well as it
advanced its major West African LNG project, bringing a significant
improvement in cashflow into sight.
In terms of other winners and losers in the period, in the
former camp was Spectrum Brands which rose as the company completed
the long-awaited sale of its hardware business to a larger peer.
Also doing well were Avnet and CDW, both distributors of technology
products, with the former seeing an improvement in profitability
largely driven by better operational execution while the latter
benefitted from resilient spending by its customer base. MaxLinear
, on the other hand, saw its shares fall 37.8% as the consumer
related semiconductor market turned down and the company was forced
to abort a planned acquisition. Our holding in recycled car parts
business LKQ also fell by 23.9%, with margins weaker as a result of
a worse business mix, lower metal prices and strike activity.
Agricultural chemicals producer American Vanguard fell in common
with peers as destocking took hold in this sector. Real estate was
a weak sector in the face of the higher interest rates, and medical
office buildings company Healthcare Realty Trust underperformed, as
the gains from its merger with a peer in 2022 were slow to emerge
and further acquisitions were paused in light of relatively high
leverage. Finally, Nomad Foods , the European orientated branded
frozen foods company, lagged as volumes were pressured by a move by
hard pressed consumers into private label products.
UK
The UK small cap market underperformed other markets, excluding
Europe, in the six months. Higher interest rates and the phased
rolling off of fixed rate mortgage deals at the low rates from a
few years ago, hurt the housing market. This, in combination with
general inflationary pressures, dented consumer sentiment, while UK
company management teams have also had to recognise higher
inflation than elsewhere in wage settlements placing pressure on
margins.
Our portfolio was behind the local small cap market performance.
As with other markets, a number of holdings have faced individual
challenges or business issues as the period progressed. Within
Financials, shares in buy to let mortgage lender OSB Group fell
39.6% in the period, undermined by the consequences of higher
interest rates, which was changing the behaviour of its landlords
at the time of loan renewals and, thereby, reducing the company's
anticipated profit margins. While this was disappointing, more
recent updates from the company have been more encouraging. Another
casualty was an IPO in which we participated in the period, CAB
Payment Systems , a payments services company serving customers
across a number of emerging markets, shocked the market by shortly
after the float flagging an effective ceasing of business in two
markets.
The slowdown in the housing market prompted large downgrades to
profit expectations among housebuilders, with our holding in Crest
Nicholson unable to buck the trend. Specialist natural ingredients
supplier Treatt fell, with demand from some of its food and
beverages customers impacted by destocking. Watches of Switzerland
shares had been weak on fears of a demand downturn but they fell
again after its most important supplier Rolex announced the
acquisition of a European based peer retailer, raising fears around
product availability looking forward.
Other poor performers on the UK portfolio included Next 15 Group
, Energean and XP Power . Media services companies have generally
been weak in 2023 so far, as fears have grown that more
discretionary services could be cut back by companies seeking to
make economies to save costs, but Next 15 has delivered a resilient
performance so far, despite its share price sell-off. Energean
shares fell sharply after the attack on Israel; the company is an
offshore supplier of gas into the Israeli market and the risk
profile of the company has clearly gone up. XP Power, a provider of
power control components to the electronics industry fell after a
profit warning flagged up a sudden slowdown in business, especially
in the Chinese market.
More positively, a number of our holdings surprised to the
upside despite the macro backdrop. Ashtead Technology Holdings ,
which rents equipment out to operators in the offshore energy and
renewables sectors rose 40.8% as it guided up its expectations
given an uptick in activity in these areas. In software and
services, Bytes Technology also beat expectations with its strong
relationship with Microsoft continuing to help it to gain market
share. Shares in leasing software business Alfa Financial Software
were also up over the period as two bid approaches were made for
the company, albeit no firm offer emerged. Ascential rose strongly
late in the period as it announced the sale of its digital
marketing and product design units, leaving it focused on its
events business and opening the path to a material return of
capital to shareholders.
While consumer activity has been impacted by higher interest
rates, The Restaurant Group (company of Wagamama and other
brands/pubs) also attracted attention from external parties and,
late in the period, agreed to accept an offer from a private equity
operator. Ten pin bowling company Hollywood Bowl was another good
performer in the leisure arena, with trading remaining resilient
and the company progressing its international expansion in Canada.
Baltic Classifieds Group which operates a number of leading
consumer facing portals in Eastern Europe reported an impressive
19% organic growth in its latest results and started a share
buyback programme which helped its share price recover. 4imprint
was strong again as its promotional products sales mainly focused
in North America beat earlier projections.
Two other companies doing well were Kier Group and Workspace
Group . Construction and infrastructure services company Kier has
been executing its pipeline better in recent times and a much
improved balance sheet position allowed the company to return to
making dividend payments. While real estate in the UK as in other
markets was a weak sector, Workspace Group announced strong results
with rents continuing to grow in its flexible leased properties
serving the dynamic SME business community in London and the South
East.
Europe
European small caps struggled in the period with investor
sentiment souring as interest rates were pushed up by the European
Central Bank and corporate earnings came under pressure.
Destocking by customers undermined several holdings, with helmet
technology company MIPS still suffering from an inventory
correction in the bike channel which has taken longer than expected
to work through. Chemicals distribution company IMCD also produced
weaker results as its customers also reduced their stock levels
amid the macro slowdown. In beverages markets, a number of
companies are suffering from similar issues, with cognac company
Remy Cointreau impacted by sluggish sales trends in both the US and
China. Bottle manufacturer Vidrala fell in the summer as weaker
beer consumption trends in Germany led to a drop-off in
volumes.
Two of the weakest performers were medical equipment company
Tecan Group and facility management business Coor Service
Management . Tecan fell despite solid first half results, partly
because the market is concerned about the demand outlook given
funding pressures in the biotechnology sector despite the company
having little exposure to this space. Coor lost a significant
contract in the period prompting earnings downgrades and a
derating. Niche construction equipment supplier Engcon fell as the
outlook for its home Scandinavian market deteriorated, while
Industrial stocks Indutrade and Interpump also declined despite
reporting solid results to date.
While it has been a tough period, we still had a number of
strong performers. Top of the list in terms of contribution was
semiconductor equipment business ASM International , which jumped
18.4% as results held up better than feared amid a slowdown in the
semiconductor market and investors took the view that the company
was an AI winner. In the same area, a new position in Technoprobe
also benefitted from enthusiasm in relation to AI. While higher
interest rates have pressured ratings for many consumer staples,
our holdings in Lotus Bakeries and Glanbia were up 11.8% and 8.2%
respectively. The former reported excellent 21% organic sales
growth and has managed cost pressures well, showing good pricing
power with its core biscuit lines. Glanbia too has managed its cost
base well and a more efficient supply chain plus more focused brand
approach in performance nutrition led to upgrades to forecasts.
Three Financial stocks served us well, with Scandinavian
pension, asset management and insurance company Storebrand
benefiting from higher interest rates which, in combination with a
disposal, have improved its solvency position allowing it to return
more cash to shareholders. In Denmark, Ringkjoebing Landbobank was
upgraded as the company announced better than expected loan growth,
low credit losses and higher net interest income. Italian asset
manager Azimut was also an outperformer as it continued to see
inflows to its fund range, which is encouraging given a tough
overall market for fund management companies.
Other European risers included Fluidra , CTS Eventim and
Siegfried Holdings . Swimming pool supplies company Fluidra
announced better than expected numbers despite destocking pressures
in the sector, with cost savings coming through well. CTS Eventim,
the leading ticketing business, produced excellent numbers as live
music and events returned strongly post the pandemic ending.
Siegfried Holdings, a supplier of medical technology rose after it
was upgraded on the back of solid first half results, bucking this
sector's trend.
Japan
The Bank of Japan maintained a more relaxed approach to monetary
policy, with its core interest rate still slightly negative.
Consequently, the yen depreciated further on the currency markets.
This helped the performance of the equity market, supporting the
outlook for exporters. Consumer spending, like elsewhere, has been
underpinned by higher wage inflation and some recovery in travel.
At the corporate level, share buybacks have picked up pace, with
cash-rich companies becoming more willing to deploy this capital to
enhance their return profiles. These factors plus evidence of more
foreign interest in the market, meant that returns in Japan were
better than most other markets, with the MSCI Japan Small Cap index
(net) flat for the six months.
During the latter part of the period, we decided to sell our
holdings in the abrdn SICAV I - Japanese Smaller Companies
Sustainable Equity Fund and the Baillie Gifford Japanese Smaller
Companies Fund. These had not performed well for some time and
underperformed again in this period. Following an extensive amount
of due diligence, we have decided to use the proceeds from these
sales to invest in a portfolio of around 30 individual Japanese
small company equities and, henceforth, the investments in these
regions will appear as individually named holdings in the Company's
portfolio listing. These stocks will be selected by a team of fund
managers focusing on Japanese equities within Columbia Threadneedle
Investments, who have a strong record of performance in this market
and will report directly to the Lead Manager. In addition to being
a demonstration of the depth of the investment team within Columbia
Threadneedle Investments, this change of approach will lower the
cost of the management of the Company's exposure to Japan as the
fee payable to Columbia Threadneedle Investments is lower than what
was being incurred by holding the two funds which have been sold.
We continue to hold our position in the Eastspring Investments
Japan Smaller Companies Fund which represents just over half of our
Japanese exposure now. This delivered an excellent result in the
first half of the year, with a total sterling return of 4.3%, as
value stocks continued to be the best performing part of the small
cap market.
Rest of World
Our fund holdings here give us exposure to smaller companies
listed on Asian and Latin American markets in the main, plus
certain other global emerging markets. As a whole, these markets
did better than the main developed markets, although performance
was quite widely dispersed between markets, with China, for
example, materially lagging India, within Asia. Latin American
small caps tend to be more volatile, but markets like Brazil have
been net beneficiaries of the Ukraine war situation given their
commodity centric nature.
While our portfolio lagged the comparator small cap indices, a
significant part of the underperformance in the period was down to
a widening of the discounts of the investment trusts that we hold:
The Scottish Oriental Smaller Companies Trust and the Utilico
Emerging Markets Trust . These companies performed well in NAV
terms but share price performance was hurt by the discount moves.
The Pinebridge Asia ex Japan Small Cap Fund and the Schroder ISF
Global Emerging Markets Smaller Companies Fund underperformed in
the period. The former has suffered from an over-exposure to China
at a time when this market has struggled, while the Schroder's fund
had stock selection issues in India and Taiwan, lacking exposure to
some of the AI names.
Asset allocation
The chart below shows the exposure of the portfolio across the
different markets. Over the period, we modestly increased our
exposure to Japan and the Rest of World, while trimming back
exposure to Europe. While directionally these were the right moves,
asset allocation made a negative contribution to performance
relative to the Benchmark in the six months, as a result of being
overweight to Europe and the UK and underweight in North America
and the Rest of World.
Geographical distribution of the investment
portfolio
Portfolio weighting
31 October 30 April
2023 2023
% %
------------------------ ------------------- ---------
North America 41.9 41.7
UK 24.1 25.3
Rest of World 13.5 12.4
Europe 10.9 12.1
Japan 9.6 8.5
------------------------ ---------
Source: Columbia Threadneedle Investments
Gearing
Gearing ended the six months at 4.6%, slightly down on the 5.2%
at the end of April, as we continued to take a cautious approach to
the use of leverage for now.
Outlook
As we move into the second half of the financial year, we are
seeing some individual companies exposed to more discretionary
areas of consumer and corporate spending reporting weaker trading
as the impact of previous monetary policy tightening feeds through
more broadly. However, since the end of October equity markets and
smaller company shares in particular have rallied, helped by more
encouraging inflation data and, as a consequence, the Company's
share price and NAV have recovered strongly. Performance looking
forward is likely to remain highly sensitive to perceptions around
the path of interest rates. As usual, the investment team continues
to monitor the near and medium term outlooks for the existing
portfolio, while at the same time looking for opportunities to take
advantage of lower valuations in the wider markets.
Peter Ewins
Lead Manager
14 December 2023
Unaudited Condensed Income Statement
for the half year ended 31 October 2023 2022
Revenue Capital Total Revenue Capital Total
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
-------------------------------------------- --------- ----------- ----------- --------- ----------- -----------
Losses on investments - (62,221) (62,221) - (74,769) (74,769)
Foreign exchange gains/(losses) 4 (305) (301) 33 555 588
Income 8,897 66 8,963 7,648 1,296 8,944
Management fees (517) (1,551) (2,068) (544) (1,633) (2,177)
Other expenses (715) (21) (736) (589) (17) (606)
-------------------------------------------- --------- ----------- ----------- --------- ----------- -----------
Net return before finance costs and
taxation 7,669 (64,032) (56,363) 6,548 (74,568) (68,020)
Finance costs (194) (582) (776) (120) (361) (481)
-------------------------------------------- --------- ----------- ----------- --------- ----------- -----------
Net return on ordinary activities before
taxation 7,475 (64,614) (57,139) 6,428 (74,929) (68,501)
Taxation on ordinary activities (569) - (569) (577) - (577)
-------------------------------------------- --------- ----------- ----------- --------- ----------- -----------
Net return attributable to shareholders 6,906 (64,614) (57,708) 5,851 (74,929) (69,078)
-------------------------------------------- --------- ----------- ----------- --------- ----------- -----------
Return per share - pence 1.33 (12.43) (11.10) 1.08 (13.77) (12.69)
-------------------------------------------- --------- ----------- ----------- --------- ----------- -----------
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.
Unaudited Condensed Statement of Changes in Equity
Half year ended
31 October 2023 Share Capital Total
Share premium redemption Capital Revenue shareholders'
capital account reserve reserves reserve funds
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
------------------------------------------- --------- --------- ----------- ----------- --------- --------------
Balance at 30 April 2023 15,513 212,639 16,158 597,354 17,771 859,435
Movements during the
half year ended
31 October 2023
Dividends paid - - - - (8,714) (8,714)
Shares repurchased by the Company and
held in treasury - - - (15,248) - (15,248)
Net return attributable to equity
shareholders - - - (64,614) 6,906 (57,708)
------------------------------------------- --------- --------- ----------- ----------- --------- --------------
Balance at 31 October 2023 15,513 212,639 16,158 517,492 15,963 777,765
------------------------------------------- --------- --------- ----------- ----------- --------- --------------
Half year ended
31 October 2022 Share Capital Total
Share premium redemption Capital Revenue shareholders'
capital account reserve reserves reserve funds
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
-------------------------- --------- --------- ----------- ----------- --------- --------------
Balance at 30 April
2022 15,513 212,639 16,158 685,538 15,456 945,304
Movements during
the
half year ended
31 October 2022
Dividends paid
Shares repurchased - - - - (6,941) (6,941)
by the Company and
held in treasury - - - (15,376) - (15,376)
Net return attributable
to equity
shareholders - - - (74,929) 5,851 (69,078)
-------------------------- --------- --------- ----------- ----------- --------- --------------
Balance at 31 October
2022 15,513 212,639 16,158 595,233 14,366 853,909
-------------------------- --------- --------- ----------- ----------- --------- --------------
Year ended 30 April
2023 Share Capital Total
Share premium redemption Capital Revenue shareholders'
capital account reserve reserves reserve funds
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
-------------------------- --------- --------- ----------- ----------- --------- --------------
Balance at 30 April
2022 15,513 212,639 16,158 685,538 15,456 945,304
Movements during
the year
ended 30 April 2023
Dividends paid - - - - (10,305) (10,305)
Shares repurchased
by the Company and
held in treasury - - - (35,804) - (35,804)
Net return attributable
to equity
shareholders - - - (52,380) 12,620 (39,760)
-------------------------- --------- --------- ----------- ----------- --------- --------------
Balance at 30 April
2023 15,513 212,639 16,158 597,354 17,771 859,435
-------------------------- --------- --------- ----------- ----------- --------- --------------
Unaudited Condensed Balance Sheet
31 October 2023 31 October 2022 30 April 2023
GBP'000s GBP'000s GBP'000s
--------------------------------------------------------- ---------------- ---------------- --------------
Fixed assets
Investments 813,434 889,706 902,350
--------------------------------------------------------- ---------------- ---------------- --------------
Current assets
Debtors 1,920 1,302 10,720
Cash and cash equivalents 15,777 22,350 2,292
--------------------------------------------------------- ---------------- ---------------- --------------
Total current assets 17,697 23,652 13,012
--------------------------------------------------------- ---------------- ---------------- --------------
Creditors: amounts falling due within one year
Bank loans (17,033) (16,874) (17,027)
Creditors (1,333) (7,575) (3,900)
Total current liabilities (18,366) (24,449) (20,927)
--------------------------------------------------------- ---------------- ---------------- --------------
Net current liabilities (669) (797) (7,915)
--------------------------------------------------------- ---------------- ---------------- --------------
Total assets less current liabilities 812,765 888,909 894,435
Creditors: amounts falling due after more than one year
Loan notes (35,000) (35,000) (35,000)
--------------------------------------------------------- ---------------- ---------------- --------------
Net assets 777,765 853,909 859,435
--------------------------------------------------------- ---------------- ---------------- --------------
Capital and reserves
Called-up share capital 15,513 15,513 15,513
Share premium account 212,639 212,639 212,639
Capital redemption reserve 16,158 16,158 16,158
Capital reserves 517,492 595,233 597,354
Revenue reserve 15,963 14,366 17,771
--------------------------------------------------------- ---------------- ---------------- --------------
Total shareholders' funds 777,765 853,909 859,435
--------------------------------------------------------- ---------------- ---------------- --------------
Net asset value per share (debt at par value) - pence 151.27 158.52 163.73
--------------------------------------------------------- ---------------- ---------------- --------------
Unaudited Condensed Statement of Cash Flows
Half year ended Half year ended
31 October 2023 31 October 2022
GBP'000s GBP'000s
---------------------------------------------------------------------------------- ---------------- ----------------
Cash flows from operating activities before dividends received and interest paid (2,901) (3,245)
Dividends received 9,926 8,744
Interest paid (783) (477)
---------------------------------------------------------------------------------- ---------------- ----------------
Cash flows from operating activities 6,242 5,022
---------------------------------------------------------------------------------- ---------------- ----------------
Investing activities
Purchases of investments (84,035) (87,071)
Sales of investments 115,449 116,165
Transaction costs - (218)
Other capital charges - (15)
---------------------------------------------------------------------------------- ---------------- ----------------
Cash flows from investing activities 31,414 28,861
---------------------------------------------------------------------------------- ---------------- ----------------
Cash flows before financing activities 37,656 33,883
---------------------------------------------------------------------------------- ---------------- ----------------
Financing activities
Ordinary dividends paid (8,714) (6,941)
Cash flows from share buybacks for treasury shares (15,162 (15,626)
Repayment of bank loans - (2,563)
Cash flows from financing activities (23,876) (25,130)
---------------------------------------------------------------------------------- ---------------- ----------------
Net movement in cash and cash equivalents 13,780 8,753
Cash and cash equivalents at the beginning of the period 2,292 13,354
Effect of movement in foreign exchange (295) 243
---------------------------------------------------------------------------------- ---------------- ----------------
Cash and cash equivalents at the end of the period 15,777 22,350
---------------------------------------------------------------------------------- ---------------- ----------------
Represented by:
Cash at bank 3,037 1,140
Short term deposits less than 3 months 12,740 21,210
---------------------------------------------------------------------------------- ---------------- ----------------
Cash and cash equivalents at the end of the period 15,777 22,350
---------------------------------------------------------------------------------- ---------------- ----------------
Unaudited Notes on the Condensed Accounts
1 Accounting policies
These condensed financial statements have been prepared on a
going concern basis in accordance with the Companies Act 2006, FRS
102, Interim Financial Reporting (FRS 104) and the Statement of
Recommended Practice "Financial Statements of Investment Trust
Companies and Venture Capital Trusts" (SORP) issued by the AIC.
The accounting policies applied for the condensed set of
financial statements are set out in the Company's annual report for
the year ended 30 April 2023.
2 Dividend
The Directors have declared an interim dividend in respect of
the year ending 30 April 2024 of 0.68p per share, payable on 25
January 2024 to all shareholders on the register at close of
business on 29 December 2023. The amount of this dividend will be
GBP3,477,000 based on 511,354,485 shares in issue at 11 December
2023. This amount has not been accrued in the results for the half
year ended 31 October 2023.
3 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 facility, 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.
4 Results
The results for the half year ended 31 October 2023 and 31
October 2022, which are unaudited and which have not been reviewed
by the Company's auditors pursuant to the Auditing Practices Board
guidance on 'Review of Interim Financial Information', constitute
non-statutory accounts within the meaning of Section 434 of the
Companies Act 2006. The latest published accounts which have been
delivered to the Registrar of Companies are for the year ended 30
April 2023; the report of the auditors thereon was unqualified and
did not contain a statement under Section 498 of the Companies Act
2006. The condensed financial statements shown above for the year
ended 30 April 2023 are an extract from those accounts.
By order of the Board
Columbia Threadneedle Investment Business Limited, Company
Secretary
Cannon Place, 78 Cannon Street, London EC2N 6AG
14 December 2023
Directors' Statement of Principal and Emerging Risks
The Company's principal and emerging risks are described in
detail under the heading "Principal and Emerging Risks" within the
strategic report in the Company's annual report for the year ended
30 April 2023. They include:
-- 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.
-- 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 ESG 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 war in
Ukraine.
-- 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 could lead to
further falls and volatility in the Company's NAV.
The Directors continue to review the key risk register for the
Company which identifies the risks that the Company is exposed to,
the controls in place and the actions being taken to mitigate them.
This is set against a backdrop of continuing uncertainty as a
result of the significant macro economic influences of higher
inflation, and interest rates.
Following the acquisition of BMO GAM EMEA by Ameriprise, the
integration of systems and legal entities with Columbia
Threadneedle Investments is now almost complete. The residual risks
from the integration are low and the Board will continue to monitor
this area until full integration is achieved.
The Board believes that there have not been any material changes
to the nature of the risks outlined above since the previous annual
report and that the principal risks and uncertainties, as
summarised, remain applicable to the remaining six months of the
financial year. The Board has considered this in relation to going
concern, as set out in note 3.
Directors' Statement of Responsibilities in Respect of the Half
Year Financial Report
In accordance with Chapter 4 of the Disclosure Guidance and
Transparency Rules, the Directors confirm that to the best of their
knowledge:
-- the condensed set of financial statements has been prepared
in accordance with applicable UK Accounting Standards on a going
concern basis, and gives a true and fair view of the assets,
liabilities, financial position and net return of the Company;
-- the half year report includes a fair review of the important
events that have occurred during the first six months of the
financial year and their impact on the financial statements;
-- the Directors' Statement of Principal and Emerging Risks
shown above is a fair assessment of the principal and emerging
risks for the remainder of the financial year; and
-- During the first six months of the current financial year, no
transactions with related parties have taken place which have
materially affected the financial position or the performance of
the Company.
On behalf of the Board
Graham Oldroyd
Interim Chairman
14 Dece mber 2023
ENDS
A copy of the Half Year Report will be submitted to the National
Storage Mechanism and will shortly be available for inspection at
data.fca.org.uk/#/nsm/nationalstoragemechanism
The Half Year Report for the six months ended 31 October 2023
will be posted to shareholders and made available shortly on the
Company's website at 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 EC2N 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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END
IR FIFEAFALELIV
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December 15, 2023 05:00 ET (10:00 GMT)
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